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 intelligence and income? ›
People with higher incomes also score higher on IQ-tests -- up to a point. At high incomes the relationship plateaus and the top 1% score even slightly lower on the test than those whose incomes rank right below them. This suggests that one cannot infer high intelligence from high income.
What is the relationship between wealth and knowledge? ›
Today, knowledge has become the major source of wealth, and wealth has become the major source of power. This means that while power in older times lead to knowledge through wealth, knowledge today leads to power through wealth also.
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.
Does intelligence equal wealth? ›
In fact, intelligence alone might not be as influential as you'd think. Several studies reveal that for people at the top of the IQ scale, income may rise by a few hundred dollars to $12K per year, but that overall wealth is not correlated with IQ in any way.
Does wealth indicate intelligence? ›
The study does not downplay the role of intelligence (or talent in general). A fine intellectual ability improves the chances of getting rich. Nonetheless, intelligence is no guarantee of getting rich. Furthermore, a series of fortunate events can clearly turn unremarkable individuals into high earners.
What is the relationship between intelligence and success? ›
Your score on an IQ test can be an interesting way to learn more about some of your cognitive abilities, but it is essential to remember that such tests have significant limitations. And as the research has shown, IQ may predict academic success, but it doesn't necessarily correlate to other life outcomes.
What is intelligence correlated with? ›
IQ scores have been shown to be associated with such factors as nutrition, parental socioeconomic status, morbidity and mortality, parental social status, and perinatal environment.
What is Elon Musk's IQ? ›
Let's first answer the critical question — Elon Musk's IQ is around 155. For context, it is believed that Albert Einstein had an IQ between 160 to 165. As such, Elon is way more brilliant than the average person.
Can knowledge bring wealth? ›
While knowledge and money can be related in certain circ*mstances, such as when knowledge is used to create a new product or service that generates revenue, they are not inherently linked. There are many factors that can contribute to wealth, such as access to capital, business skills, market demand, and luck.
Wealth is measurable, but knowledge is not. There are situations where wealth may fail you, but knowledge will take the pride of place. For instance, you cannot buy knowledge; you need to work hard through research and study to acquire it.
Why knowledge is greater than wealth? ›
Remember, knowledge is better than wealth, because knowledge protects you, while you have to guard wealth. Wealth decreases if you spend it, but the more you make use of knowledge, the more it increases.
How intelligent are billionaires? ›
A recent Swedish study showed that cognitive test scores of the top 1 per cent of earners were not significantly different to the scores obtained by those who earned slightly less.
Does intelligence affect income? ›
Why does IQ correlate with income? IQ correlates with income simply because of the relation between intelligence level and academic performance, for the most part. Academic performance, being positively related to level of education, can predict financial status in adulthood.
What is the IQ of a billionaire? ›
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.
How does intelligence correlate with 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 ...
