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The Role of Luck in Becoming a Millionaire
How to be lucky and become a millionaire
Zena was quite proud of her efforts to become a millionaire. Every day, on her way to the tube station, she stopped at the corner store and spent £2 for two lottery tickets. At one time, she was lucky and even won £11. She reinvested the money to buy more lottery tickets. Unfortunately, she did not win anything with these new tickets. She told me that she will win the jackpot some day, and share her winnings with her family.
Zena has been buying lottery tickets for decades and has yet to win the jackpot. If she had saved her lottery money instead, she would have a substantial nest egg today. At £2 a day, she spent £730 a year. In thirty years, that's £21,900, and that doesn't count the times she bought more, and doesn't include the compounded interest she would have earned on her savings.
The chances of winning the lottery are slim, and most people will not win. When I buy the occasional lottery ticket, I consider it a payment towards charity, or entertainment, and not as an investment.
The role of luck in becoming a millionaire
Luck is involved in your life, and will be involved in your efforts to become a millionaire. There may be a sudden surge in your chosen career field, resulting in a large boost in income. There may be a deterioration of the industry, causing you to stagnate in your career, or even lose your job. The stock market may go up after you have invested, causing your investments to suddenly increase in value, or it may crash, decreasing your net worth. Your life circumstances are also affected by luck. Your health, your choice in life partner, the number of children, and natural disasters can all be affected by luck. Unfortunately, you cannot control everything.
How to use luck in your financial decisions
Luckily, there are also many factors that are under your control. The key to using luck is to position yourself for opportunities and avoid pitfalls with the best decisions possible.
Choosing a Career
If you choose a career that you expect to grow, you will increase your income. The amount of the increase may depend on a number of factors, but if you have thought through the choice, you are more likely to find a field that will grow substantially.
Take advantage of opportunities to obtain training at your job, and stay fresh in your industry. Consider going back to school to learn even more so you can advance even faster in your career. If you lose your job, you will be more marketable, and it will be easier for you to get another job or switch careers.
Be aware. If you watch your company's actions, you will notice when they are doing well and when they are not. If you sense that there might be a problem, you can increase your savings to cushion you against loss. If you notice that things are going wrong in the company, you can prepare yourself to find another job before the pink slips are handed out. Alternatively, by being observant, you can think ahead to new job opportunities in the company and be the first to ask for them.
Likewise, open your mail and read the prospectuses and annual statements you receive from your investments, and keep abreast of the companies that you invest in. By noticing that a company is starting to do poorly, you can sell your investments before it goes bankrupt. If a company announced a new product you expect to do well, you may want to invest more in that company, and take advantage of the growth.
Take Care of Your Health
Taking care of your body by eating well and exercising, and being concerned about safety will help you ensure good health. Don't smoke. It is still possible for you to develop a disease or an illness even after you take all of these measures, but hopefully you can recover quickly when your body is strong.
Protect the Downside
- You can also take steps to protect yourself from certain downfalls. Obtaining car insurance, homeowner or rental insurance, and health insurance will help protect you from possible disasters.
- Diversifying your income streams and your investment choices will help protect you from a downgrade in any one income stream. When one stock crashes, you will have other investments that are increasing in value.
- Having a savings that is equal to six months or a year of your income will help protect you in case you lose your job or have a financial setback.
Alternatively, when luck is on your side, and you receive a sudden surge of money, have a plan for how you will invest it, so you do not wind up wasting it.
There are many ways that luck can affect whether or how quickly you can achieve your goals, including your goal to become a millionaire. Making smart choices and positioning yourself against loss can help you use luck to achieve your dreams.