Does intelligence equal wealth? Not necessarily. If you define intelligence as the ability to apply knowledge and skills, then intelligence can certainly help someone to accumulate wealth. However, there are many hardworking people who have studied hard and applied themselves only to find that their pay is average, and there is no advancement in sight.
Key Takeaways
- Intelligence appears to have no direct correlation with wealth.
- Key examples of this include famed NBA player Earvin "Magic" Johnson Jr. (who is wealthy) and Christopher Michael Langan, an American with a very high IQ (who is much less wealthy).
- Granted, there is some correlation, as Google founders Sergey Brin and Larry Page are considered very intelligent and have built a multi-billion company.
- The ability to exploit opportunities might have a higher level of correlation to wealth than intelligence, however.
Educated but Underemployed
Educated people working in disappointing jobs is not a reflection of dire recessionary times. Rather, it's because financial rewards are tied to what a producer has to offer. Every individual competes in the labor marketplace, and intelligence plays a limited role. The marketplace is nothing more than the exchange of people's accumulated wants and desires. Much of what consumers collectively consider of great value in the marketplace has little to do with intelligence.
No one expects Earvin "Magic" Johnson Jr., retired professional basketball player and current president of operations at the Los Angeles Lakers, to offer proof of the Riemann hypothesis, yet his wealth is estimated to be half a billion dollars. In Johnson's case, he developed non-academic, unique skills that he could use to obtain a high salary. By saving that salary and investing, Johnson earned far more money through passive income than by active means.
Contrast that with Christopher Michael Langan, an American known for his high IQ. Langan's story is a classic example of how little correlation there can be between intelligence and financial reward. Raised in poverty by a single mother, Langan dropped out of two colleges and has worked a series of manual labor jobs ever since. This is despite being billed as "the smartest man in America" and having an IQ measured at between 190 and 210. In between his shifts as a bouncer, Langan single-handedly devised a theory that unifies science and theology. His theory might significantly advance human understanding, but it does not pay Langan's bills as efficiently as his current job as a horse rancher.
Applying Knowledge or Practicality
Applicable intelligence, however, is still a force in the labor marketplace. Google creators Sergey Brin and Larry Page are adept programmers with strong credentials in mathematics and computer science. Upon graduating from Stanford, either could have assumed entry-level jobs at Microsoft or IBM. However, Brin and Page also had a mission. Their goal was to organize the world's information and make it available to everyone. Without intelligence, Google, or its parent company Alphabet, would have remained just a niche business instead of growing into its massive market cap.
Leveraging a gap in the market does not necessarily require acute intelligence; perhaps just practical insight. Harvey House founder, Fred Harvey, never attempted to formulate a scientific theory, but he did notice that people disembarking at train stations often wanted something to eat and a place to spend the night. Armed with that knowledge, he became one of the hospitality industry's most successful entrepreneurs.
The Bottom Line
Exploiting opportunities is a skill often far removed from what is learned in a classroom. Take two college mathematics majors. The "A" student brags about his time at grad school, his rapidly acquired lecturing job and his fully tenured professorship with a $100,000 salary. The "C" student casually mentions that she became a billionaire. "I found a product that I buy for $2 and sell for $5," she said. "It's amazing how much money you can make with that kind of markup."
FAQs
Intelligence appears to have no direct correlation with wealth. Key examples of this include famed NBA player Earvin "Magic" Johnson Jr. (who is wealthy) and Christopher Michael Langan, an American with a very high IQ (who is much less wealthy).
What is the relationship between income and intelligence? ›
One study concluded that moving from the 25th to the 75th percentile of IQ correlates with a 10% to 16% boost in earnings. That may feel significant when you get it, but it doesn't push you into a whole new socioeconomic class.
Do more intelligent people make more money? ›
New research reveals that high income doesn't necessarily depend on intelligence. We often envy top earners with their seven-figure salaries and wonder what we're doing wrong. Some of us even have the wrong impression that it comes down to intelligence, or that they're the most deserving.
Is it because the riches are more intelligent? ›
No there is no correlation between being rich and being smart.
What is the relationship between wealth and knowledge? ›
This means that while power in older times lead to knowledge through wealth, knowledge today leads to power through wealth also. So history shows that power leads to wealth, and wealth leads to knowledge, and knowledge translates itself into wealth, and wealth translates itself into political power and social status.
Where knowledge brings wealth? ›
Knowledge enables modesty & humility, through modesty & humility one attains ability (skills), with ability comes wealth. And wealth enables one to get means of comfort and happiness. Bottomline - knowledge & skills are crucial & instrumental to the path of success, comfort and happiness.
What is the relationship between intelligence and success? ›
That is, those with higher IQ scores are likely to have had more success experiences in school, become more motivated to study, develop an achievement orientation, and become optimistic about their chances of doing well, whereas those with low scores may experience just the opposite, e.g. getting “trapped” into schools ...
What is Elon Musk's IQ? ›
As mentioned earlier, Elon Musk's IQ score is believed to be between 155 and 160. Above-average IQ scores within this range are only reserved for the "Highly Gifted" IQ classification.
What is the average IQ of wealth people? ›
The average IQ of self-made deca-millionaires (over $10M net worth) is 118. The average IQ of self-made* billionaires is 133. The average IQ of self-made deca-billionaires (over $10B net worth) is 151. Of note, average incomes correlate well with IQ, however there is a much lower correlation between IQ and net wealth.
Are highly intelligent people successful? ›
Nobel Laureate in Economics James Heckman explained that erudition and intellectual abilities make up only 1-2% of career and financial success.
By the current "deviation IQ" definition of IQ test standard scores, about two-thirds of all test-takers obtain scores from 85 to 115, and about 5 percent of the population scores above 125 (i.e. normal distribution).
Are highly intelligent people attractive? ›
Researchers asked adults to rank the attractiveness of potential partners based on IQ. They found that people usually rated an IQ of 120 — which is generally higher than 90% of the population — as the most attractive.
Is income correlated with intelligence? ›
As the OP's question is stated, the answer is simply "yes". If you take a "real" IQ test (see comments below), then the result is a strong statistical predictor of multiple future life outcomes - income, education level, health, even longevity. There are hundreds of studies that confirm these correlations.
Why are the richest people not the smartest? ›
Researchers of the study argue that this "plateauing of cognitive ability" amongst the biggest earners shows that at the very top pay scales, the resources available due to someone's family background and lucky breaks in careers carry more weight than overall intelligence.
Which is more important wealth or wisdom? ›
Rather than pursuing wealth, pursue wisdom. The aggressive pursuit of wealth can lead to disappointment. Wisdom is defined as the quality of having experience, and being able to discern or judge what is true, right, or lasting. Wisdom is basically the practical application of knowledge.
Can knowledge bring wealth? ›
Many people believe that wealth comes from the amount of money one earns. However, the truth is, wealth is a result of knowledge applied.
Is there a correlation between intelligence and success? ›
It is often assumed that high IQ people will be more successful. From Jay Gatsby in “The Great Gatsby” to Steve Jobs of Apple, people often associate success with intelligence. However, evidence suggests that having a high IQ is hardly a guarantee for financial, academic, or creative success.
What is important money or intelligence? ›
It is true that intelligence is definitely one of the prime contributors to your success but it is just one spoke and a wheel with one spoke won't take you far enough. A focused mindset, perseverance, emotional intelligence are a few success factors that are as important as IQ.
What is intellectual wealth? ›
Defining Intellectual Wealth Intellectual wealth is the knowledge, skills, and expertise that individuals possess. It is the result of education, training, and experience, and is not a tangible asset that can be bought or sold.
