> Subject: Re: From the "If You're So Smart How Come You Ain't Rich? Department" On Tue, 06 Oct 2009 16:10:10 -0500, Jim Clark wrote: > Hi > > The Zagorsky article appears to go out of its way to make the case for > a lack of relationship between IQ and wealth. Just a couple of > observations.
I'm not sure whether Jim or anyone has provided the reference to the study that I think Jim is describing but I believe that it is the following: Zagorsky, J. L. (2007). Do you have to be smart to be rich? the impact of IQ on wealth, income and financial distress. Intelligence, 35(5), 489-501. doi:10.1016/j.intell.2007.02.003 I have skimmed this article and need to read it more carefully but my initial impression is that it inadequately represents people with great wealth in this country. We know who these people are and I provided a dataset providing net worth and educational level achieved a week or two ago for 2008 (a new 2009 list is available but I haven't had a chance to do anything with it). In this sample there is a slight negative correlation between education level and networth (remember that the richest man in the world is a college drop out) as well as a couple of people whose seem to have only a grade school education or are high school dropouts. There were, I believe, 4 Ph.D.s among the top 400 wealthiest people which Jim Clark claims is higher than the expected number (i.e, 2 Ph.D.s) but which misses the larger picture that high levels of educational achievement (and presumably associated high levels of intelligence) is not necessary for being a billionaire in the U.S. If the Motley Fool condemns the "Big Brain" types of arrogance as the cause for their inability to become wealthy, then perhaps they should focus on those qualities that might help becoming truly wealthy, such as being a ruthless opportunist in business matters and being related to wealth either through marriage or family relations. [snip] > My main take from this study is if you want to be wealthy ... don't get > divorced, don't be born Black or Hispanic or in the USA, be > self-employed (good luck) rather than a professional, don't marry > someone who works (presumably wealthy people can keep their spouse at > home), don't smoke heavily (good advice at the best of time), and don't > be the primary earner (anyone looking for a partner to keep at home to > make themselves wealthy, give me a call ... but don't tell my wife and > ignore the fact that you would be the primary earner!). Again, this might be true for the merely wealthy and not the super-wealthy. > Personally I think this is a good candidate for the correlation (i.e., > non-experimental) does not imply causation book, despite the seeming > sophistication of the analyses. One final note ... anyone wanting to > give away IQ points can also give me a call. I find that one can never > have enough! I'd sell you mine but they're in pretty beat up shape. :-) -Mike Palij New York University [email protected] >>>> "Mike Palij" <[email protected]> 06-Oct-09 8:04:33 AM >>> > The Motley Fool website (a website that provides stock and > investing advice) has a little article titled "Are You Too Smart > to Be Rich?" in which the author goes over the reasons for > why "smart people" (aka Big Brain/High IQ types -- I think > that's a Jungian category :-) do badly at getting wealthy. > Although skimpy on details (e.g., Michael Lewis wrote about > the collapse of Long-Term Captial Management, an investment > house with a couple of Nobel prize winning economists and > heavy duty quantitative modelers and the collapse was not as > simple as presented here; Lewis' article appeared in the NY > Times and I provided a link to in a previous post to TiPS, so > one should be able to search the archives for it). > > For more, see: > http://www.fool.com/investing/value/2009/09/28/are-you-too-smart-to-be-rich.aspx > > > To provide a sense of the presentation consider the following > quote: > > |Economist Jay Zagorsky ran a study to determine whether > |brains translate into riches. His conclusion? "Intelligence is not > |a factor for explaining wealth. Those with low intelligence should > |not believe they are handicapped, and those with high intelligence > |should not believe they have an advantage." > | > |In his book Outliers, Malcolm Gladwell explored example > |after example of how the successful became so. He concluded > |that "once someone has reached an IQ of somewhere around 120, > |having additional IQ points doesn't seem to translate into any > |measurable real-world advantage." > > I'm not a fan of Gladwell so I haven't read "Outliers" but I presume > some Tipsters are fans and wonder if they can confirm that Gladwell > actually says that one doesn't get a benefit for having an IQ over > 120. Some people seem to believe in this as shown in the following > quote: > > |Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B) billionaire > |Warren Buffett seems to agree: "If you are in the investment business > > |and have an IQ of 150, sell 30 points to someone else." > > Anybody know where one can sell some excess IQ points? ;-) > > -Mike Palij > New York University > [email protected] --- To make changes to your subscription contact: Bill Southerly ([email protected])
