False Statement: Higher IQ Equals Greater Wealth, Better Business Ideas, and Superior Ego
Ok, the last statement about superior ego is true. I can’t tell you the number of times that I’ve run into those type of people. Especially at my former job.
In an interesting study, intelligence was linked to an ability to earn higher levels of income, but not the ability to retain that income. It turns out that smart people are not really smarter than the people that aren’t so smart. They just seem smarter. Brain twister alert.
When it comes to generating business ideas, Zagorsky’s study did not conclusively discuss them (I can’t find anything where he did). Or at least, the press didn’t cover Zagorsky and the better business idea. I have to think that the higher your IQ, the more esoteric your business, and the smaller the chance of success. The rocket scientist may come up with a better rocket, but he’ll do it under the employ of NASA. No equity involved there.
There are a few reasons why the average IQ person has a much higher chance for success:
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1. Can’t assess the real risk, so he is emboldened by his own stupidity.
2. Will use emotional and social intelligence as the force of success, because he lacks any other means of doing so.
3. Will write a blog to advertise his stupidity, and continue to assume that people find it an interesting read. Snore!
4. Searches Entrepreneur, Inc., and Business 2.0 for ideas. He actually believes that he can execute those ideas better than the multi-million dollar venture-backed company and/or anyone else that dares tread in his path.
Now, I still pity the person that went to Harvard. He thinks he’s better than everyone else and he’s likely right, but for the wrong reasons: He thinks he’s smarter.
No.
If the educational market was efficient, all the smartest people would automatically go to the smartest colleges. Of course, we know that the market is inefficient and smart people want to stay close to home, etc… In other words, the unqualified get into Harvard.
So the person that went to Harvard may be better. After all, he learned at a greater institution, not at a smarter one…
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May 21st, 2007 22:47
The article didn’t say that average IQ people were BETTER at accumulating wealth, just that there was no correlation between IQ and financial difficulties.
“An irregular pattern of total wealth as well as financial distress levels — such as maxed out credit cards, bankruptcy and missing bill payments — emerged among the various degrees of intelligence”
One way to explain this would be that the causes of these financial setbacks are more or less random (ie intelligence is not a protection against them). For example, if your spouse is diagnosed with a terminal disease with very high treatment costs, the fact that you are a genius will not save you any money on the medical bills.
Most of the things that can really kill your financial situation (theft, car accidents, illness, criminal charges, divorce, mental illness, drug addiction, natural disasters, etc.) are usually unrelated to intelligence. There is a tendancy to think that very smart people with very high incomes are immune to the kinds of struggles that plague “normal people”, but in reality most people face the same basic problems regardless of income level or intelligence.
May 22nd, 2007 14:39
That’s a good point and very true.
I wasn’t saying that the average IQ person has a better chance at wealth creation (where the study doesn’t necessarily indicate that they have a better shot). I was merely saying that there are reasons why the average IQ person has a better shot at business success.