4/26/2007

You don't have to be smart to be rich

Here is a good news for the rest of us - it doesn't take a rocket scientist to make a lot of money, according to a new research. This nationwide study (published in Intelligence) in found that people of below average intelligence were, overall, just about as wealthy as those in similar circumstances but with higher scores on an IQ test.
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Firstly, this study confirmed data discovered by other scholars that show people with higher IQ scores tend to earn higher incomes. In this study, each point increase in IQ scores was associated with $202 to $616 more income per year. This means the average income difference between a person with an IQ score in the normal range (100) and someone in the top 2% of society (130) is currently between $6,000 and $18,500 a year.
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But when it came to total wealth and the likelihood of financial difficulties, people of below average and average intelligence did just fine when compared with the super-intelligent. The study could find no strong relationship between total wealth and intelligence.
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How could high-IQ people, on average, earn higher incomes but still not have more wealth than others? Researchers suggests that high-IQ people are not saving and investing as much as others. For example, among the smartest people, those with IQ scores above 125, 6% of them have maxed out their credit cards and 11% occasionally miss payments, whereas those with an IQ of 75 and below, 7.7% have maxed out their credit cards.
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The lesson learned ? IQ is not a factor for explaining wealth. I think wealth has lot to do with people's emotional intelligence. Universities Professors tend to be very smart people, but I recall when looking at university parking lots, there were very few Professors having Rolls Royces, Porsches or other very expensive cars. Instead I saw them driving old, low-value vehicles.

2 comments:

Bernard said...

We see this everyday. People who have very deep knowledge in specialized area like scientists or Ph.D in physics are as clueless as a kid when it comes to financial matters. It's not IQ that is the difference, it is about the finanical knowledge one has.

khengsiong said...

EQ is more important than IQ.

On the other hand, wealth is not the only thing that matters...