There is a common myth that to be rich you need a lot more luck, but is this true? Intelligence and all other aspects of life sciences are statistically understood. The word “all” usually indicates that the person has not studied them.
It is evident that intelligence is positively correlated with wealth, meaning the smarter people are, the more likely they are to be wealthy. The correlation between intelligence and income is stronger than the correlation between intelligence and income because accumulation effects are absent.
Correlation between “rich” and “smart”
It is not a sign of a recession that educated people are employed in frustrating positions. It is because financial rewards are tied to what a producer has to offer. Intelligence has a limited role in the labor market.
Consumers collectively consider much of what they think is valuable in the marketplace to have little to do with intelligence. Hence, the marketplace is nothing more than the exchange of people’s accumulated wants and desires.
Nevertheless, applying intelligence is still a force in the labor market. It’s not so difficult to find out people who are rich and smart at the same time. Google creators Sergey Brin and Larry Page possess strong technical skills and strong qualifications in both mathematics and computer science. Both could have taken entry-level jobs at IBM or Microsoft after graduating from Stanford.
Google, or its parent company Alphabet, would have remained a niche business, rather than growing into a multi-billion dollar company, without their mission of organizing the world’s data and making it accessible to everyone.
Can you make yourself rich?
It is impossible to become a self made “Rich” person unless you have some expertise in a certain field. (For our purposes, “rich” means multiple six figures in profits or seven figures in revenue.) It doesn’t mean wealthier individuals all have high IQs. Or that they are all “Smart” in the eyes of our modern education system.
A lot of the most successful people have been placed in “Special Education” classes during their childhoods. They were actually told that they were retarded! So yes, all S.E.I. rich people are smart in some way. Despite the fact that all not all wealthy people are intelligent, it’s fair to say that almost all the self made millionaires are intelligent and smarter than the average.
According to a study last year, only eight men had wealth that was equivalent to the world’s poorest 3.8 billion. This is sometimes called the 80:20 rule: 80 percent of wealth is owned by 20 percent of the population.’
The distribution of wealth recurs across all societies at every scale. It is part of a well-studied pattern called a power law that occurs in a wide range of social phenomena. However, since it raises issues about fairness and merit, it is among the most controversial.
Why should so few people have so much wealth?
As a society, we are often regarded as having a meritocracy, which rewards talent, intelligence, effort, etc. Over time, this translates into the wealth distribution we observe, even with a healthy dose of luck at times.
Wealthy people are intentional about saving. They save ten percent to twenty percent of their net income every year. They do not put off saving for the future. Nevertheless they start saving as soon as they get paid, and they do not spend so they can save that next fifteen percent.
The mindset of the rich is to consistently do the right thing regardless of the outcome, to become a continual learner, and to consciously manage risks. These characteristics are all distinct traits of the rich. It is the mindset of the rich that keeps them rich and the poor poorer. It’s quite safe to say that the self made rich people are often smarter than the others.