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Is it true that smart people are richer?

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A natural thought is that if you’re smart, you’re more likely to be rich, but that’s not true. There are many smart people who are poor and many stupid people who are rich. Why so? Because wealth has nothing to do with intelligence.

A study published in November 2016 in the Proceedings of the National Academy of Sciences showed that a high level of innate intelligence is no indicator of financial success.

A December 2016 article in Bloomberg cited one of the co-authors of the study, economist James Heckman. When he asks how much of the difference between people's incomes can be tied to their IQs, most people guess between 25% and 50%. The actual number is about one or two percent.

The study found that personality plays a much bigger part than IQ in financial success. The personality trait that was most strongly associated with earning a high income was conscientiousness.

Conscientiousness? What is that?

Conscientiousness implies a desire to do a task well, and to take obligations to others seriously. Conscientious people tend to be efficient and organized as opposed to easy-going and disorderly. They exhibit a tendency to show self-discipline, act dutifully, and aim for achievement; they display planned rather than spontaneous behaviour; and they are generally dependable. It is manifested in characteristic behaviours such as being neat, and systematic; also including such elements as carefulness, thoroughness, and deliberation (the tendency to think carefully before acting).

That makes sense.

The study also found that a secondary trait influencing financial success was curiosity. This is one of the nine traits commonly found in people with high emotional intelligence, according to Dr. Travis Bradberry, author of  “Emotional Intelligence 2.0.”

According to Dr. Travis, emotionally intelligent people are curious about everyone around them. “Curiosity is the product of empathy, one of the most significant gateways to a high EQ.” Dr. Travis says the more a person cares about other people and what they're going through, the more curiosity they will have about them.

That’s interesting as it implies wealth is built by being more interested in other people than yourself.

Here are some other common traits shared by rich people:

  • They have strong time management skills
  • They take calculated risks
  • They use their money differently
  • They rely on a balanced diet
  • They read books and network with like-minded individuals
  • They are not afraid of failure

So, wealthier people are organised, curious and conscientious people. Great. Oh, and they’re taller.

Some studies suggested that taller people have better social skills and more self-confidence (“noncognitive” skills, as academics would say). People who were taller as children, the thinking goes, were treated better, so they developed more emotional stability, which has been shown to help on the job. Meanwhile, other studies have found that taller people are inherently smarter: As early as age three, they do better on aptitude tests.

Or maybe not.

The most successful people are not the most talented, just the luckiest ... and that’s been proven through computer modelling.

So, if you’re struggling to pay the monthly bills, don’t worry. It’s not that you’re stupid. It’s just that you’re unlucky.


Chris Skinner Author Avatar

Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog,, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...

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