3 mins
October 17, 2022

How Luck and Risk Affect Your Investing Journey

How Luck and Risk Affect Your Investing Journey

Risk and luck will always be a part of investing, but they don’t have to control us.

Investing professionals love to talk about risk, but they don’t often acknowledge the fact that risk and luck are two sides of the same coin. Sometimes when you take a risk, your success or failure will ultimately just come down to luck. 

That’s an uncomfortable thing to admit, because it makes us feel like we aren’t in control of our own futures. But the truth is, while risk and luck both play an important role in every area of our lives, we don’t have to be controlled by them. 

Is Luck Really Random?

There’s a famous quote from a Roman philosopher, “Luck is what happens when preparation meets opportunity.” 

I believe this is especially true for our finances. The most successful, most “lucky” investors are those who invested in the right vehicle at the right time, based on their knowledge and their understanding of their goals. 

When I look back on some of my biggest successes as an investor, I could attribute them to luck. I “just happened” to know the right person who introduced me to the right opportunity, and the timing “just happened” to be right for me to invest.

But the reality is, none of those circumstances were random. I spent years working to learn as much as I could about investments, build a network of people I trusted to learn, and strategically plan out my finances so that I had money set aside to invest. 

By doing the work to learn as much as I could, and then also having the courage to take the leap into new investing opportunities, I was setting myself up to be lucky, and you can do the same.

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Learn from the Risks You Take

If you’re someone who struggles to take action because you want to make sure you’re an expert before you put your money on the line, you’re certainly not alone. I spent about four years becoming a theoretical expert before I realized that knowledge was useless unless I decided to act on it. 

No investment is perfect, and no investment is free of risks. But even when I’ve made mistakes or lost money, I’ve learned lessons that I could never have gained from a book or a podcast. 

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Think about it this way: Even an imperfect investment is still moving you forward further than if you never invest at all. 

Choose Your Risks Wisely

Depending on where you are in your financial journey, where you’re trying to go, and how quickly you need to get there, the level of risk you’re willing to take on will likely vary. Make sure you understand your risk tolerance and your risk capacity so that you’re not overextending yourself or adding unnecessary anxiety into your life. 

When you understand the level of risk that makes sense for you and the specific goals you’re trying to achieve, it’s much easier to find an investment vehicle that will help you get to your destination. In this way, you can build your confidence and truly set yourself up to experience luck. 

If you’re interested in learning more about how First Generation Capital Partners can help you find tax-efficient, direct investments that align with your unique goals and risk tolerance, please fill out this form to get in touch. 

October 17, 2022
Billy Keels