Intelligence, education, and socio-economic status all influence a person’s income and wealth, but are wealthy individuals necessarily smarter?
Let’s take a look at self-made billionaires like Elon Musk, Jeff Bezos and Ray Dalio and how they accumulated their wealth, while top innovators in advanced fields like technology and finance often live on average incomes.
Billionaire Jeff Bezos.
So, are rich people smarter? Giovanni Sala, a psychology lecturer at the University of Liverpool, and Fernand Gobet, a psychology professor at the London School of Economics and Political Science, explain this issue on The Conversation.
According to them, intelligence is the best predictor of both academic achievement and job performance. Success in education and career is also a fairly good predictor of income, but that’s not the whole story.
A recent study from Sweden found that the cognitive test scores of the top 1% of earners did not significantly differ from those of lower-income individuals.
In fact, intelligence comprises at least two main structures: fluid intelligence and crystallized intelligence.
- Fluid intelligence involves core cognitive mechanisms, such as the speed of processing stimuli, memory capacity, and abstract reasoning.
- Conversely, crystallized intelligence refers to skills developed in social environments, such as literacy, numeracy, and knowledge of specific subjects.
Fluid intelligence can be inherited, cannot be enhanced significantly, and decreases relatively quickly with age. In contrast, crystallized intelligence tends to increase throughout most of adulthood and only begins to decline after around age 65.
That said, innate ability is not the only important factor. Education also plays a crucial role. A quantitative assessment has shown that the more years of schooling one has, the higher their intelligence scores tend to be. Therefore, access to quality education can create a significant difference in future income.
Additionally, there is another important factor: luck. According to a recent study, good intellectual capacity enhances an individual’s chances of becoming wealthy, but it does not guarantee successful wealth accumulation without a stroke of luck.
Intelligence is… luck Being born into a wealthy and well-educated family is a stroke of luck. Similarly, random luck (such as winning the lottery) does not come from many years of hard work. We could even push the argument a bit further and conclude that being intelligent itself is a form of luck. |
