There is always a demand for TV shows about the lives of the rich. In these dramas, wealthy characters are often portrayed as authoritative, fake, and unhappy, but there is no generalization about their intelligence. So let’s ask the critical question again: Are the rich rich because they’re smart?
If people’s net worth were the result of their intelligence, the vast wealth gap in societies would be more tolerable, more welcome, at least for some. For example, inequality could be seen as a price paid for “the smartest who lead us to a better future”. Or, when Prime Minister Liz Truss wanted to bring tax cuts to the richest segment of the society last year in England, she would not have left her seat in as little as 45 days and would not have gone down in history as the country’s shortest-serving prime minister.
There has always been debate about the contribution of intelligence to people’s material and professional success. For example, let’s look at names like Elon Musk, Jeff Bezos and Ray Dalio, who became billionaires without inheriting from his family. It would be a surprise if these names remained at average levels in advanced sectors such as technology and finance.
In the success stories of wealthy business people, there is either a logical decision or an unexpected lucky event. Photo: FreepikIn fact, intelligence is the best indicator of people’s educational success and job performance. Academic and professional success is also one of the best indicators of one’s future earnings. But it’s not all about that.
According to Giovanni Sala, Lecturer in the Department of Psychology at the University of Liverpool, Not all smart people have the drive to get rich. In fact, most of them have a desire to gain knowledge, Sala says, and that’s why some prefer jobs with more intellectual return and relatively low salaries, such as architecture, engineering or academics. A recent Swedish study shows that the cognitive test results of the top 1 percent earners aren’t all that different from those who earn relatively little.
Education is just as important as intelligence.
Factors such as intelligence that are innate and developed later are not enough on their own. Another important element is education. Fernand Gobet, who conducts psychology research at the London School of Economics, says that a long education life increases the intelligence score of students, but opens a parenthesis:
“There is an important point here. These improvements come from training in specific skills rather than training in developing general intelligence. So school teaches you useful things that you can use in professional achievement and performance tests.“
As we all know, education is also affected by the socio-economic status of the family. For example, expensive schools and private tutors offer the student a highly productive education. Access to quality education can also make a big difference to a person’s future income.
A quality education is also a chance for some. Photo: FreepikOf course, the impact of the socio-economic status of the family on wealth is not just education. Heritage and network are also among the most important factors. This is especially true for entrepreneurs whose investment potential and connections are critical to business success.
So luck has nothing to do with it?
Intelligence, education, socio-economic status affect people’s income. However, according to Sala and Gobet, all these factors do not explain individual differences in wealth. In fact, a recent study at Cornell University reveals that luck has a significant influence. According to the study, the statistical distribution of wealth is different from the distribution of intelligence. The study states that intelligence is “normally distributed” and is around average in most individuals. On the other hand, it is pointed out that the wealth is distributed according to the “pareto distribution”, which is a formula that shows that 80 percent of a country’s wealth is in the hands of only 20 percent of the population. In other words, according to the research in question, intelligence alone cannot explain the disproportionate inequalities between the rich and the poor in societies.
‘Neither enough nor necessary’
Wealth management expert Greg McFarlane states that intelligence, defined as the ability to access information, contributes to wealth building. He adds: “But the number of people who read well, work hard and have only average incomes is quite high.”
The study does not ignore the role of intelligence (or talent in general). Pointing out that a good intellectual ability increases the chances of getting rich, Sala and Gobet also believe that intelligence is not an element that can guarantee wealth. “A series of fortunate events can turn the underappreciated into very high-income individuals,” the duo says. In summary, when it comes to being rich, intelligence is neither sufficient nor necessary, but it is obvious that it has an effect…
Source: The Conversation, Investopedia, Crypto Coin
