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 an Authorised Financial Adviser (AFA) and former lawyer with experience in the financial services and trustee industries. Sonnie operates Fairhaven Wealth (www.fairhavenwealth.co.nz).