Sometimes you learn lessons, sometimes you learn nonlessons.

I've recently been enjoying Max Gunther's books The Luck Factor and How to Get Lucky.

There are points where these books show their age. And in several respects, especially when it comes to financial matters, I take a very different view to Gunther. 

But there is some good stuff there, and Gunther has an affable writing style.

In both books, and perhaps especially in How to Get Lucky, Gunther stresses that it's important to distinguish the things that we can control, from the things we can't control. In other words, we should make sure we "Never confuse luck with planning". 

There are a number of reasons why it's important to make this distinction. For one thing, it's important not to be fatalistic. Luck is an important factor, but the more effectively we plan, the better our outcomes are likely to be.

It's also psychologically important to identify whether an outcome can come down to luck or planning. Over the long run, hubris (caused by thinking that the things that are attributable to luck are because of our skill or talent) can be dangerous. And when things go wrong, it can be important to realise that when things go wrong, we're not always to blame. It happens.

There's also another key reason. If we don't make this distinction, there's a good chance we'll learn "nonlessons". These are unwarranted generalisations learned from the small sampling size of our experience.

Gunther explains:

“When outcomes are brought about by random events that are not under anybody’s control - events that we would define collectively as luck – then you must be very careful in determining what lessons may be drawn from them.”

In such cases, all you might have learned is that bad luck sometimes happens.

What you did might have been sound. Or otherwise. But luck may have intervened and given you the opposite outcome of what you "deserved". 

In other words, "There are experiences in life that seem to be lessons but aren't". 

It pays to be careful when learning from our experiences. Otherwise, we can learn lessons that aren't actually lessons at all.

Sonnie Bailey

Sonnie is the founder and principal of Fairhaven Wealth.

Before founding Fairhaven Wealth, Sonnie worked in the legal and financial services industries for over a decade.

Sonnie first became involved with financial advice as a specialist financial services lawyer. For many years, he was an “adviser of advisers”, reviewing thousands of advice files prepared by hundreds of financial advisers, and providing feedback in relation to the quality and appropriateness of advice; industry best practice; risk management; and regulatory compliance. He has published work in industry publications and spoken at various financial advice conferences.

Sonnie has also worked with banks, investment management firms, insurers, and derivatives providers.

Sonnie has worked as a private client lawyer, focusing on succession, estate planning and trusts. He ran his own legal firm in Australia before relocating to New Zealand. He has also acted in independent trustee and company director positions.

Sonnie is passionate about helping people achieve their goals and manage the risks to which they are exposed.

He has written extensively on his blog, New Zealand Wealth and Risk, which can be found at www.wealthandrisk.nz.

Sonnie is married to his wonderful wife Chrissy, and has two young children, Ben and Anna.