This article is an excerpt from the Shortform book guide to "Unscripted" by MJ DeMarco. Shortform has the world's best summaries and analyses of books you should be reading.
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Do only lucky people get rich? What role does luck play in financial success?
Luck undoubtedly plays a role in acquiring wealth, but it’s only one factor. The idea that only lucky people get rich is not only untrue, but it’s also unproductive because it diminishes your sense of control over the state of your finances.
Here’s what entrepreneur and investor MJ DeMarco has to say about money and luck.
Myth Debunked: Only Lucky People Get Rich
The idea that “only lucky people get rich” implies that wealth is entirely dependent on random and uncontrollable forces. DeMarco argues that this belief convinces you that you’re not accountable for your finances by disregarding two important factors:
1) The many failures entrepreneurs face before they acquire wealth: For example, DeMarco failed several times before building a company that made him millions.
(Shortform note: Many entrepreneurs not only face failure before they acquire wealth but also after they acquire it. However, they often fight back to regain the money they lose. For example, James Altucher founded a web-design company, sold it for $10 million, then lost all his money through a series of bad investments. Instead of giving in to failure, he clawed his way back to wealth by becoming a popular author, blogger, and podcaster.)
2) The role your thoughts, behaviors, and choices play in creating your financial circumstances: For example, the reason DeMarco overcame his failures was that he chose to learn from them and take persistent actions to achieve his financial goal.
According to DeMarco, because you don’t feel accountable for your finances, you fail to see what you can do to improve them. This creates a feeling of powerlessness that prevents you from moving toward your financial goal.
(Shortform note: According to Mark Manson (The Subtle Art of Not Giving a F*ck), your level of accountability impacts your overall well-being in addition to your finances. He claims that acknowledging your role in your circumstances (by recognizing that you’re always choosing how you respond to them, thereby influencing what happens next) empowers you to make conscious choices that benefit your overall well-being. On the other hand, ignoring your role in your circumstances (for example, by believing that other people are to blame for the state of your finances) disempowers you from making choices that’ll ultimately improve your well-being—and your finances.)
Create Your Own Opportunities
DeMarco argues that the connection between money and luck is overestimated. Each choice you make initiates a limited set of potential outcomes—and that you can only experience outcomes that line up with your choices. Therefore, financial “luck” comes from making choices that set off potentially successful outcomes.
For example, you choose to rely on an hourly wage as your sole source of income and spend all your free time playing video games. Your choices limit your probability of achieving financial success because they don’t create opportunities to acquire wealth from other sources. On the other hand, choosing to spend your free time constructively—for example, by improving yourself or developing business ideas—increases your probability of achieving financial success because it creates multiple opportunities for you to improve your finances.(Shortform note: Research suggests that setting intentions will help you make choices that initiate successful outcomes. This is because intentions force you to focus on who you want to be, and they increase your self-discipline when you’re faced with conflicting choices about how to spend your time or your money. For example, if you set a clear intention to spend an hour every evening focusing on your business, you’ll know the right way to act when faced with a decision between working constructively and wasting your time on distractions.)
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Here's what you'll find in our full Unscripted summary:
- Why the only way to achieve financial success is to adopt an entrepreneurial mindset
- Eight beliefs about money that prevent you from achieving wealth
- Actionable ways to adopt an entrepreneurial mindset
