The more I journey towards financial freedom, the more I believe in luck or fate in helping or hindering us towards our goal to be financially free.

Why do I say that?

Luck, Chance of Fate

There is an element of luck or chance in life. The way we are born. The way we are endowed with certain gifts or talents (or lack thereof). That we are alive and able to make it to this world from conception till birth to life.

But luck can only go so far because we need to be equipped to handle the cards we are dealt with using our inate abilities, skills and experiences.

I count myself lucky in that my family’s decision to buy a new place resulted in me selling some of my holdings at realised gains due to the run-up in share prices since the beginning of 2010. However, recent economic events in Europe, particularly over the state of sovereign debt in countries such as Greece and Portugal, Italy, Ireland and Spain has resulted in the Euro coming under pressure and resulting in another round of fear and uncertainty about the economic recovery.

When only a few months ago people were talking about recovery and growth. Now it’s back to gloom and doom with pundits saying now there is a serious risk of double-dip recession due to the euro issues.

Even as I cashed out and locked-in my new home, my equity holdings are now at a modest and comfortable level that I can hold for long-term, i.e. 10 years+ time frame for dividends.

I count myself fortunate that the decision to upgrade my home resulted in me increasing home equity but allowed me to lock in realised gains from share holdings. The current prices of shares now are way below what was 1-2+ months ago.

Again, this reminds me that I cannot “time” the market right on my own. We make decisions looking forward and can only analyse the correctness of the decisions looking back. Thus, one needs to move forward and make the best decisions on limited information but guided by the principles of financial freedom.

Following Your Principles Creates Luck

When you follow the principles of living within your means; saving and investing; growing and protecting your means, you are creating your own luck. You are not as affected by the fickleness of the markets nor worry daily as stock or other asset prices go up (or down).

With the savings accumulated from living within one’s means, you are better able to ride out these financial storms and even scout for opportunities to buy more value-stocks in sound businesses for the long-term.

With focussing on growing your income from career or business and from prudent investments, one also grows one’s investible capital to be suitably employed for reasonable returns (at least 2 x fixed deposits for me) and safety of capital.

This luck is knowing that one is less susceptible to market forces and is responsive enough to ride out the inevitable economic cycles that is the feature of a capitalistic society like Singapore.

How have you created your own luck or found yourself lucky in your personal journey towards financial freedom?

Share with Panzer.

Be well and prosper.

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