Ancient Principle: Attracting Good Fortune and Money Through Action

Are you the type of person that when something happens to you, you think of it as an end product of hard work, but when something bad happens, it’s nothing more than bad luck?  Well, that, my friends, is not a great mindset if you want to get ahead in your personal finance journey!  In this chapter of ‘The Richest Man in Babylon we learn how to create fortune money with your own good luck!

As I read through the book, I keep learning more and more about the simple basics of personal finance.  I am falling more in love with this book, especially for beginners, because George Clason, the author, does such an amazing job about using past experiences and actual stories to teach the lessons that he has learned and wants to share with the world. 

Does this sound familiar at all?  It sounds just like Rich Dad, Poor Dad’ to me!  I think the best way to learn is through experiences, and a very close second is to learn through others experiences instead!

To summarize this chapter, I want to focus on three quotes that really stuck out to me:

“To attract good luck to oneself, it is necessary to take advantage of opportunities”

This one seems pretty straightforward to me if you really think about it.  I also think about the very common quote of “Luck Is What Happens When Preparation Meets Opportunity.”  Have you heard either of these quotes before? 

In essence, nothing is ever just luck…like ever.  Neither success nor failure are luck.  Sure, you have to sometimes be ‘lucky’ to get opportunities but if you don’t ever take advantage of them, then you never got lucky.  It was nothing more than an opportunity that passed you by and chances are, you might not have even realized that it was an opportunity at the time.

When I golf, a frequent saying that I hear is that people will say “I’d rather be lucky than good” after getting ‘lucky’ on a shot.  I mean, sure, it is good to be lucky, but I have noticed that there’s a direct correlation to how good you are and the amount of ‘luck’ that you might have.

Just like when someone gets a hole in one.  Yes, a hole in one absolutely requires some sort of luck, but if you’re a good enough golfer that will get the ball on the green every time vs. someone that might only get it on 25%, of the time, then who do you think will get more hole in ones?  Getting it on the green itself might be lucky for the bad golfer but getting a hole in one might be lucky for the good golfer.  I know it’s a stretch, but the more time, practice and dedication that you have towards anything positions you to take advantage of opportunities.

This is the exact same in personal finance and investing!  The main example that I can think of is what we currently went through with the coronavirus.  I absolutely do not advocate timing the market in regard to getting in and out at various times, but if you want to increase your contributions when you think the market is giving you an opportunity, feel free!

And that’s exactly what I did.  When the market dropped significantly in March and April due to the coronavirus, I really increased my Roth contributions.  Normally, I put $231 in every paycheck which is exactly what is needed to perfectly max out the $6000 Roth IRA over the course of the year, since I am paid on a biweekly basis. 

Instead of sticking to my $231/paycheck plan, I put some extra money into the market that I had saved up in my “opportunity fund” for various things.  I don’t view this as market timing because my time horizon is still 30+ years before I touch that money, so I really think this was simply more of just being opportunistic. 

But if I hadn’t planned way before the coronavirus then I would’ve never had any extra money to put into the market.  Could the market go down further and make my investment look worse?  Of course.  But at the time, and still today, I think that I was able to buy in at a lower point in the market than what I likely will be able to in the second half of the year.  Of course, it’s TBD, but this all occurred simply because I took advantage of an opportunity.

“Good Luck can be enticed by accepting opportunity”

This might seem pretty similar to the first quote that I had, but I do think it’s pretty different if you really think deeply about it.  The first quote was saying that to get good luck you have to take advantage of opportunities.  I read this quote more as saying that if you accept opportunities, you can help create your own good luck!

So, in other words – you might take something that nobody even perceives as good luck, but because you can act on it, that might bring good luck your way because you were able to create it out of nothing.

A story that was told in this chapter was about a man who went out looking to buy animals outside of the city but after returning after a long day of searching to no avail, to returned back to the city just to find that he was locked out and was going to have to sleep outside of the city gates that evening. 

Also, outside was a man that was offering to sell him 900 sheep.  This man said that he was selling his sheep for a discount because he needed to get the money to his family as quickly as he could and even offered to sell them for 2/3 of the price that he had negotiated with the man as long as he would pay him that night so he could be on his way back home.

Due to the fact that it was night, and the buyer couldn’t really even see all of the sheep, let count them, he refused and said that he would buy them in the morning.  Well, unfortunately for the buyer, when the morning came around, so did all of the people of the town that came out and wanted to buy the sheep.  The seller eventually sold his sheep for 3x the amount of money that he had agreed to sell them for the night prior.

The takeaway here is that the potential buyer simply didn’t have a plan to take advantage of this opportunity.  Sure, there was obviously some risk involved, but he had a prime opportunity placed before him and it slipped between the cracks simply because he didn’t pounce on it.

I am by no means urging you to be overly risky, because in a way, this situation makes me think that the buyer might have been taking a ‘flyer’ on this rather than doing his due diligence.  I mean, it somewhat seems to me like he was being asked to invest without seeing the financials (aka the amount and quality of sheep) but also there is likely a price that he could’ve negotiated to get to a point he felt comfortable, or a creative way to figure out the payment.

Long story, short – he wasn’t prepared to take advantage!  Don’t be that person!

“Good luck waits to come to that man who accepts opportunity”

This really is a perfect quote to summarize the entire chapter.  Don’t be afraid of the opportunity and be ready to pounce when it presents itself.  If I’m relating this to personal finance, I think that it really all boils down to creating your own personal P&L, or profit & loss, to give yourself those opportunities.

If you are already in the habit of spending much less than you make and saving/investing the rest, then you’re off on a great start!  If you’re not, then you need to get started ASAP and my recommendation would be to do that with Doctor Budget.

Doctor Budget is the perfect blend of the three most important pieces of a successful budget:

1 – Being simplistic!

2 – Forcing you to track your expenses (so you actually know where they’re going!)

3 – Being Customizable!

If you’re missing any three of these components, your budget won’t work for you and you will just be wasting your time or even worse, not using it at all.

Once your budget has been made and you’re on your path to financial autonomy, you can just watch your money slowly start to build up consistently and create an Opportunity Fund for you to pounce when ‘luck’ comes into your life! 

Which, as we’ve discussed, it really isn’t actually luck at all!

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