Libman Tax - March 2019

LI BMAN 'S AWESOME LETTER

LIBMAN TAX STRATEGIES

MARCH 2019

Gambling, Four-Leaf Clovers, and Charm Bracelets: The Fallacy of Luck

I want you to imagine for a second that you make a trip to Las Vegas to do a little harmless gambling. You walk into Caesar’s Palace armed with lots of hope and a fair amount of cash and scan the casino for the perfect place to test your luck: the roulette table. You place a couple small bets and win here and there, but after a few consecutive wins, as both your ego and your chip pile start to grow, you bet it all and lose. It seems any luck you had finally ran out. People approach the concept of luck in many different ways. They might carry around a rabbit's foot talisman, search fields for four-leaf clovers, make a wish when a ladybug lands on their arm, or wear a horseshoe-shaped necklace. Especially when it comes to gambling, the vast majority of people believe in some version of luck. In fact, many people think this same kind of luck plays a huge role in the events that shape their lives. They were lucky to find their partner, lucky to get their job, or lucky to have the opportunity to build a successful business. To me, no amount of success stems from sheer luck. Every client I know who has achieved their professional goals or built a successful company did so through very purposeful and time- consuming methods. They brainstormed, planned, created a great product, found an awesome and effective team, ventured out to find clients, and fulfilled their service to the best of their ability. Hardly any of that is luck.

They had to go out on a limb and really put themselves out there. Just as Woody Allen once said, “Showing up is 80 percent of life.” While you can find magical results from just showing up, to me, that still isn’t luck. Prosperity comes from effort, not a charm bracelet. Additionally, people who work hard tend to develop behaviors that increase their odds of success. I used to think the pursuit of success meant I just needed to do the opposite of failure. If I could pinpoint the activities, behaviors, or people that led me to fail, I thought I could simply avoid them, and the direct result would have to be success. I quickly learned this method doesn’t work. Success has its own rules, and in many cases, success involves a lot of failure. Just because you avoid stupid tendencies doesn’t mean you’ll immediately find eternal success, but it will help you get a step closer. In all my life, there is only one area where luck seems to exist: IRS audits. I work with several clients who have legitimate deductions, but their risk profiles are off the charts. Still, in the years that I’ve helped prepare their taxes, they’ve never been audited. Since I’m the type of guy who doesn’t believe in luck, I’m certainly not the type of guy to believe in jinxes. But with it being the middle of tax season and all, maybe we should all knock on wood — just in case.

“Prosperity comes from effort, not a charm bracelet.”

-Adam Libman

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