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Many people believe that if someone has not achieved financial success, they are not very smart. We hear this idea even in school when outstanding students are predicted to have successful careers. Furthermore, many books, movies, and comic books teach us to associate intelligence with wealth; consider the story of Tony Stark, a brilliant inventor and entrepreneur. But is it really true? We will explain.
Terman’s Research
Today, a child with superhuman intelligence is predicted to be Ilon Musk’s successor. However, in the United States at the turn of the century, such children were regarded as morbid, socially maladapted, and one-sidedly developed. Lewis Terman, a Stanford psychologist, decided to test this. In 1921, he chose 1500 children with extremely high IQs: the majority scored 150 points on IQ tests, while some scored more than 170. Scores of 85 to 115 were considered average. Terman believed that extremely high intelligence constituted genius, so he titled his work Genetic Studies of Genius.
Terman’s children, contrary to popular belief at the time, were academically successful, physically developed, healthy, and socially adjusted. Some grew up to become famous. Psychologist Lee Cronbach, for example, developed methods to improve the reliability of psychological and educational tests. Jess Oppenheimer created the hugely successful 1950s sitcom I Love Lucy. Ancel Keys, a physiologist, was one of the first to notice that a diet high in saturated fat is more harmful to the heart than sugar.
Smart Rich, but Not Because of Smarts
Terman’s study is the oldest among psychological studies, and it is still being carried out today by other scientists and with the participation of the children of gifted children. Nonetheless, the study is frequently criticized: for example, some people find errors in Terman’s IQ level calculations, and others point to the poor sample of participants – almost all of the children came from relatively wealthy families, which, of course, increases the likelihood of success in life.
The study appears to confirm it: intelligence leads to higher earnings. However, some scientists believe the correlation is too weak. CerebrumIQ believes that high intelligence is not a guarantee of good money management. People with an IQ score of 100, for example, frequently exceeded their credit card limits and defaulted on payments compared to those with an IQ score of 80. Even among the smartest people (those with IQ scores above 140), nearly 19% do not pay their bills. When we look closer at the study participants’ lives, we see that the majority of them worked as ordinary policemen, sailors, or typists and earned ordinary, not-too-high salaries. Overall, their lives and accomplishments were average.
What Really Matters
If a high level of intelligence does not guarantee a high income, what could be a more reliable indicator of financial success? Researchers have identified three factors:
Personal Qualities
More recent research has confirmed Lewis Terman’s theory that success in life is determined by a person’s self-esteem and determination rather than intelligence. Nobel Prize-winning economist James Heckman and his colleagues examined data from thousands of people, including IQ scores, school and university grades, and personality assessments. After comparing them to income, the scientists concluded that salary is only 1-2% dependent on intelligence. James Heckman believes that personal qualities determine financial success. A hardworking schoolboy with an average IQ can learn more than a smarter but lazy one. When he finishes school and university, his diligence will serve him well in adulthood.
Wealthy Parents
A few years ago, a group of American scientists decided to redo the “marshmallow test”. This time, the researchers considered various social factors, including family background and home atmosphere. They also discovered that a child’s level of self-control was associated with future financial success, albeit with a weak correlation. More important was the parents’ financial status: children from wealthy families were the most patient. Not surprisingly, they had a higher chance of success as adults.
Luck
Perhaps luck is the most important factor in determining wealth. This is clearly demonstrated by a computer simulation created by Italian scientists that modeled the career progression of hypothetical people over 40 years. Some were designed to be more talented: intelligent, curious, persistent, creative, and possessing high emotional intelligence. Others exhibited these characteristics to a lesser extent. It would appear that talent guarantees a person’s success. However, things didn’t go as planned. A small group of people were fortunate. And the mediocre were frequently more successful than the talented. However, this was due to a series of coincidences rather than hard work.
Conclusion
The bottom line is that financial success does not always imply high intelligence. According to research, personal qualities, family wealth, and basic luck can all play a significant role. While intelligence can open doors, it does not guarantee financial security or wealth. It is critical to remember that life is full of variables that influence our success and well-being, and intelligence is just one of them.
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This content is brought to you by Evelina Brown.
Photo provided by the author.
