Luck can often play a bigger role in your wins than you may realize. But should you rely solely on it to reach your financial goals?

Some people believe financial success comes down to chance, while others say it’s all hard work and dedication. In this week’s Money Wisdom Question Series, Heath Grossman, CFP® shares why it’s likely a mix of both.

The Role of Luck

Many things in life are pure happenstance. The factors we cannot control, like family background, economic conditions, and timing, can all influence outcomes. In cases of achieving extreme wealth, some studies suggest luck may far outweigh talent.

The Role of Skill

Your level of skill, which is often a culmination of habit and diligence, also contributes to your financial success. Developing and maintaining good money habits certainly involves some degree of skill.

However, you don’t necessarily have to think of yourself as a highly skilled investor. Over time, consistency, discipline, and sound financial decisions tend to outweigh luck. Habit and diligence help you take advantage of investment opportunities when they arise.

Why It’s a Combined Effort

Luck is often described as when preparation meets opportunity. While luck may influence short-term outcomes, your habits and diligence are what truly drive long-term results and success. You can’t control luck, but preparation and hard work can increase your chances of a favorable outcome.

For example, you can control whether you develop sound financial habits. You decide whether to consistently save in a 401(k), be sensible with your expenses, and pay off debt on time. That’s where your skill, habits, and diligence come into play, as opposed to relying on luck.