[quote=davelj]Let me give you a specific example: There’s a guy that runs a boutique investment bank in NYC that’s been incredibly successful – worth well over $100 million. In an interview he recently said (and I’m paraphrasing), “I was a very average investment banker in the ’70s but I was in the right place at the right time in the right sector with the right group of partners. There was nothing that really distinguished us but we got lucky on a few deals and it was off to the races. I seriously doubt I could replicate what I’ve done if I were starting out today – it’s a different world.”[/quote]
Here’s one specific example that say randomness is not 100% of the equation: There are 2 friends, both graduated as software engineers right after the .com crash from the same school with similar grades. Both started out at the same company. Guy A worked at 2 companies over the last 12 years and bought his house in 2005. He asked guy B if he wants to buy that house with him. Guy B declined and gave him reasons why he thinks the market is a bubble and will probably crash. Guy A bought anyways. Now, with guy B, he moved to 5 different companies over the same 12 years. Now, guy B makes more than guy A. Also, since guy B didn’t buy in 2005, he was able to buy a bigger house in 2009 for less than what guy A bought his house in 2005. Also, he was able to pick up an investment property in 2011 as well as looking to pick up another investment property. All the while, guy A is trying to do a loan mod on his house. The net worth between the two are pretty drastically different for two guys who start out basically at the same place with the same amount of smartness. Both guys were dealt with the same .com crash, the same RE bubble and the same RE crash. So, in essence, both got dealt with the same good and bad luck. But guy B made some good decision that allow him to be in a better spot wrt to net worth. BTW, over that same 12 years, guy B have worked at every companies guy A worked at. It’s just that guy B jump around a few other companies in between guy A’s 1st and 2nd company transition. That allow guy B to get paid higher than guy A at his 2nd company.
