Certainly reaching a "comfortable" income has value, but beyond that there is a limit. I am an AI researcher in University, so I guess under some measures I might come up as "highly intelligent" (whatever that actually means). I'm fairly sure (based on emails I keep getting) I could go into industry and earn much more money. However, the cost/benefit ratio to me isn't worth it.
For context, I’m not referring to SV software engineer salary just normal big city America.
I know a guy who probably now makes a little more than I do on his main job, is my age, but has been saving and investing much more consistently.
He’s always doing side gigs for $50 - $70/hour. Which is really nothing for a software engineer even in my city and much less than he would be making as a full time contractor.
When an opportunity like that comes up for me to “make extra money”. I always turn them down even at much higher rates. Anything we can’t get with my relatively average salary and my wife working we don’t need. I enjoy my time way too much. I don’t think I would work a contract that paid the equivalent of twice my salary as a side job.
When you’re young and able, life is merely a race to turn time into money fast enough to allow you to survive long after you can no longer turn time into money.
Every day I waste now may translate into a week of eating dog food after I can no longer work. Therefore, I generally want to maximize the dollar utility of my time, while I can. If I could guarantee that I’d drop dead as soon as I retired, maybe I’d stop and live a little now. But since I can’t (an don’t want to commit suicide when I run out of savings), well, an extra dollar is an extra dollar!
“Money isn’t everything” -says someone with a lot of it.
But if you're rich, you can just hire people to maintain that commitment for you.
And if you're rich enough, most of your money makes itself through stocks and investments anyway.
If you want to make a correct generalization, moderation is the key goes a long way.
Personally, my financial goal is to become self sufficient (decent but modest pension and such) and that’s about it. Amassing wealth and spending lots of money does not interest me in the least.
On the other hand, we have the creator of NPM Software Isaac Schlueter who stepped into corporate shoes and turned NPM into a profitable venture. On the other hand, the income of Ryan Dahl who invented Node.js is meager in comparison to Issac's. There was a lot of controversy surrounding this in the FOSS community too if I recall correctly.
The ability to create new knowledge would seem to require thinking beyond the status quo, not maximally optimizing one’s place within it.
A different consideration: maybe there exists a relationship between intelligence and "less tolerance for bulls..t". This explains why I know some really smart people who did not succeed in their academic careers even though they were highly intelligent. I consider it as highly plausible that you need an even higher tolerance for bulls..t if you want to become rich.
If the cause is "not wanting to work a lot/hard" that is a bit more interesting, because it speaks directly to the thesis of the article.
You basically have to be more focused on money. I am not suggesting any policy changes (at least not here), but you adjust to the environment as it is.
For instance, this person had insurance and it still cost $877K to deliver triplets.
The average cost of college for a state school over four years is $80K (https://www.valuepenguin.com/student-loans/average-cost-of-c...) and consider that the average household has 2 kids.
How much would you have to save to be able to afford to take a 3-6 months in paternal/maternal leave?
How much would you need to save if you were out of work for six months?
What if you were out of work because you were sick or had a sick child? Now you have a double whammy of no job and no insurance - with medical bills.
> How much would you have to save to be able to afford to take a 3-6 months in paternal/maternal leave?
Only have kids if you can afford it.
Guess what happens to the economy and especially the pay as you go social security/Medicare programs when the retired/worker ratio increases?
Are people not suppose to have children just in case their children get sick or they have a difficult pregnancy and they may have a $50K medical bill?
The median household income in the US is about $63K a year (https://dqydj.com/household-income-percentile-calculator/)
For example, if a rich person does activity X and a poor person does the same, equivalent activity X, it can happen (and it does happen) that they say that the poor person is an idiot while the rich person is a genius. For the same exact thing.
Rich people know this. They know they are buying everything around them, including people. None of the rich people I know are naive in the sense that they think are that funny, interesting, intelligent or attractive, especially to females. The things that I've seen rich people get away with, I guarantee, 99% of HN will not believe. Probably me too, if I didn't witness it. Not talking about crimes here (although that happens, too). Just social things.
It's all a game and everyone involved knows exactly how everything is setup, but for some reason, we look the other way and if we say anything like this in real life, we would be thought of as "bitter" or jealous or something.
Money is indisputably important, but the best marker of intelligence that I have consistently seen is the right attitude and appreciation of money.
And I am saying this as someone well off, who will most probably never have any financial issues in life. So this is not "bitterness" or envy of the rich or something.
Felix Dennis, an actual billionaire, called it the "point at the sky" theory of wealth creation. It's really a form of cargo culting.
On the other aspect, there are a number of what Thomas J. Stanley call "gold collar" workers: young, singles who often live at home but make relatively good money and so tend to buy things they cannot afford like used Lexuses, BMWs, Mercedes, etc. He even wrote a book about it "Stop Acting Rich."
Could you give some examples please?
It's not surprising that a lot of people here buy into the mythology that having a high IQ ranks them among an elite class in a technical meritocracy, and that they're just one app and a bit of hustle away from a million dollar buyout.
Note: This seems far more prevalent in the B2C non-software non-vc-backed space. But then I expect there are a lot more individual millionaires being minted from those types of businesses than from silicon valley SaaS startups.
It's broad-brushing, of course, but I think there's more than a little truth to this.
For people with higher intelligence, their income is generally higher. The correlation is strong, the effect size is large, and the research has replicated very well. Conscientiousness also correlates strongly positively with income in a similar way.
This article seems to start with a baseline assumption of what "rich" means, but doesn't state what that assumption is. I imagine it is a pretty high bar and the article is essentially saying "successful moonshots come from all walks of life/ all IQ levels."
Taleb has written on this topic and when he did it prompted a lot of discussion. He notes that above a certain IQ threshold, the correlation becomes lower, and uses this observation to dismiss the whole correlation. However, if you look at the scatterplots he uses in his own article, you start to realize how strong the relationship really is. I can't find his article yet, might be able to find it soon...
>How important is intelligence to financial success? Using the NLSY79, which tracks a large group of young U.S. baby boomers, this research shows that each point increase in IQ test scores raises income by between $234 and $616 per year after holding a variety of factors constant. Regression results suggest no statistically distinguishable relationship between IQ scores and wealth. Financial distress, such as problems paying bills, going bankrupt or reaching credit card limits, is related to IQ scores not linearly but instead in a quadratic relationship. This means higher IQ scores sometimes increase the probability of being in financial difficulty.
2. Even if one is more intelligent, he/she is not that much more intelligent. Of course intelligence matters, especially in certain fields, but overall intelligence will not allow people to gain an edge, or at least not an edge that will make a big enough difference.
3. Wealth and status stems rather from certain moral values, rather than abilities. Of course modern society tends to value new ideas and innovation, but human societies, in general, still favor a certain set of traditional values that make it harder for intelligent people to get favors. And in general, innovation breeds change, and change always brings its share of problems. You can look for anti-intellectualism.
Not to mention that intelligent people don't really seek wealth at all, they know it's much preferable to seek recognition from their peers.
What set of values is that? Is this across western developed economies, or as you seem to imply, across all societies?
If anything, money buys more than simple recognition.
Also about 3): which moral values are you referring to, regarding to wealth?
I don't think so. I think it's orthogonal to "success" (I'm assuming that by "success" here, you mean wealth).
There are tons of people who are wealthy but not terribly bright, and there are tons of people who are bright but not wealthy. From my personal observation, it looks like the intelligence distribution is about the same in the set of "wealthy people" as in the set of "not wealthy people".
In my family I was always the only one that placed any importance on pursuing wealth. I would say that my upbringing wasn't that vastly different from my sisters.
Also from what I gathered at lunch with my colleagues, most of them don't really care about a few k more per year and would prefer benefits like "flying business".
"Nothing in this world can take the place of persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent. The slogan Press On! has solved and always will solve the problems of the human race."
That was the moment I understood capitalism. Intelligence is not what makes you rich; neither is hard work. What makes you rich is skimming a large percentage of the value of the labor of a large group of people. That’s how you end up with billions of dollars. Not by being smart (although I’m sure it doesn’t hurt) and certainly not by being scrupulous. By having leverage. By owning the means of production.
Now as developers or techies we own a little bit of the means of production in the form of skills we have in our heads. But believe me when I say that they’re coming for that too in the form of intellectual property, software patents, and noncompetes. All of those things depress wages because they take the means of production out of our control. It’s really important to be able to see this. Money is a form of power and power is about leverage. Not intelligence or hard work.
Leveraging that debt to create something of value to others — that is what can make you rich.
Otherwise you just go broke in a big way.
You can take luck out of the equation if you have time. Unfortunately most people are too old before they realize this (if ever)...
> Innate intelligence plays, at best, a 1 to 2 percent role in a child's future success. Instead, financial success is correlated with conscientiousness: Self-discipline, perseverance, and diligence.
Which is interesting research, but the article doesn't mention the huge role that being born to a rich family and having good opportunities plays. By framing this as "hard work pays" rather than "talent and intelligence pays", they are missing the elephant in the room.
More than half of the top 1% was not born in the top 1%.
Only 1.2% of children born into the top 1% out earn their parents .
The elephant in the room is luck. Being born rich is an element of luck, but it's not everything.
If your partner is on meth or likes to commit felonies, you probably won't become rich soon.
A similar thing happens for felonies. IIRC, simply being poor makes it more likely that you commit felonies and more likely that you get caught for others. The richer person can do their cocaine in relative privacy, even if they are outdoors in their own yard. The poor apartment dweller doesn't have such luxuries.
Divorce is also an issue: I've met multiple folks that stayed married to their partner simply because they couldn't afford the fees to get divorced, let alone think about a lawyer if they felt they needed one.
Both have stress, but they have vastly different tools available to help them out with the situation.
I fortunately have never been arrested, but from my peers who have the troubling trend is that if you can afford a good lawyer, the DA will almost immediately plead your felony down to a misdemeanor with no jail time attached. Rich people are far less likely to suffer consequences, even if they're caught because the justice system isn't built to deal with defendants who can fight their case.
The only divide in the US that matters right now is the wealth gap.
(I'll go with the top comment, though. I suspect a lot of smart people simply don't care that much about being rich.)
Is hard work the primary determinant of success? Maybe. But this article offers no real support for that position.
For example, we have a separate category for emotional intelligence because that's not traditionally been considered intelligence. What's measured and pushed for in intelligence isn't really the full range of intelligence.
Lost in there are things, like emotional intelligence, that enable people to more easily move toward their goals. Someone can be wicked smart with general knowledge, spacial relations, and other more common things measured with intelligence but lack in the people skills needed to make their ideas a reality.
Intelligence is complicated. What we measure isn't all their is to intelligence. What we prize in IQ isn't everything that's useful for intelligence.
I divide intelligent from smart as the difference between a capacity for abstraction and the ability to get what one wants. Lots of smart people are of medium intelligence, and lots of highly intelligent people are not very smart at all. What I wish I could teach is that, smart is an outcome, intelligence is an attitude, and genius is an effect.
I don't understand what you mean by this.
The luck vs skill ratio of life is often skewed toward the "luck" side more than many of us want to admit.
Why aren’t more highly intelligent people more accomplished?
The emphasis on money is fine but I think a more productive conversation is why do we find super smart/intelligent people not doing notable things? I think as a society we owe it to each other to push the boundaries of what we are gifted at/in as a way of contributing and building some concept of legacy. Again money is a single metric which many people either don’t care about or hit a local maximum on but what about the other possible metrics?
There's a personality trait that measures "working hard" called conscientiousness.
It's stable and hard to impossible to change among adults.
But it's possible that's it's learned in childhood.
So a smarter child will need to exert less/little work in getting good enough grades. So he may develop less of that personality trait, and become less hardworking.
And that shows.
BTW, choosing a more interesting job instead of a higher paying one - like many mentioned here - is directly related to that trait: it's about choosing play over work, basically.
What's needed (as the article dances around) is a strong desire to become wealthy. It has to be your overt goal. Most people (of any intelligence level) don't have that desire or goal.
Are you asking about something else?
No one asks why there aren't more highly intelligent people with massive "successful" families.
Let's look at the article
>Like how much the difference between my income and yours, for example, is based on our relative IQs.
>But Heckman's research reveals something else entirely. Innate intelligence plays, at best, a 1 to 2 percent role in a child's future success.
Intelligent people might have a different understanding of success than the author.
Further down in the article:
>But what you can control is how conscientuous you are. How diligent you are. How persistent you are.
>How hard you work.
And there's one of our Elephants. For me it seems obvious that working hard can only make you happy if you love your work. I wouldn't be surprised to hear that smarter people tend to optimize for their own happiness, health, well being etc. Or of that of their family and friends instead of "working hard".
Or to put it like @CJefferson
> Maybe highly intelligent people don't care about being rich?
Another Elephant was pointed out very well by @hyper_reality
>but the article doesn't mention the huge role that being born to a rich family and having good opportunities plays
We live in a time of income inequality like no other generation ever before us. Having the right parents is responsible for most of your success.
Overall the article seems to have only one message. "Work harder or you don't deserve success."
That's terrible and terrifying because it implies that if you are not successful. Then it's your fault for not working hard enough.
At this point we should go back to the start. Smart people are more likely to understand how incredible rigged this whole thing is. So smart people avoid playing this rigged game. They don't compete with you over financial success, they are playing a different and more fulfilling game.
I don't know if you guys had this, but when i was in school there were always these stupid "games" in the break, where the bullies would call anyone who didn't participate as a looser in terms of the game. It never made any sense to go to other people do something and say "I got your", "You lost", when they didn't even play the game.
This didn't change when we grew up and it makes sense to handle authors of articles like this one like we did back in school. Ignore them, play our own games, don't invite them for it.
Income inequality always been there, I don't think we are in some special situation compared to let's say ancient Egypt or something.
>Having the right parents is responsible for most of your success
Was it not like this pretty much all the time?
[can explain my reasoning if needed]
The article is basically begging the question of what capitalist markets prefer in terms of "properties" its actors should "hold". I don't know of any evidence that contemporary capitalism rewards "intelligence" apart from pop cultural and ideological claims. In that sense, the conclusions presented are in no way "new" or "informative".
It's just a restatement of a deeply seated wish that we could somehow explain away the largely immoral differences in the standard of living with some property suposedly outside of moral consideration (intelligence, gender, race - it doesn't really matter).
And I know this will get downvoted, mostly by the people I'm talking about : If you're still working a day job where you swap your time for money, you are not highly intelligent, maybe intelligent, but not highly. Jobs are for suckers, automate your wealth generation.
When I spend my time at work, I don't actually feel like I'm selling my time; I feel like I'm actualised as who I am, what I am, and doing things that matter, and the company shows its appreciation via my bank account.
Some of my coworkers are wealthy from previous employment in finance industry, but they still work here because they enjoy it, it keeps them connected with everything.
One guy in particular implemented hedging and arbitrage strategies over various cryptocurrency exchanges - he automated his wealth generation - but he's still with us working on machine learning when he's not out sailing.
Assuming we reward people in fashion correlated to their material contribution it is clear that intelligence isn't the critical measure. We do and should reward based on a best-effort guess to estimate how much someone materially improved the lives of others. An intelligent person might be able to do a better job but it isn't obviously better than any other personality attribute.
When people think they want to be rich, what they actually want is to have more freedom and certainty in their lives. In such an environment, there is much less pressure to take risks. Especially, for highly intelligent people who feel safe about their jobs and happy about their work-life balance.
In my area of the world, all the software companies are terrible. The quality of the staff and the quality of the software are both terrible. This really doesn't just apply to software, it applies to everything. Cars before Tesla were so bad at everything. It is clear all these companies don't have particularly good staff in high positions.
I don't know about car companies, but in terms of the software companies here, the process goes like this:
1. A manager in a particular industry commissions the building of software to solve a problem in that industry
2. The manager has a lot of industry knowledge due to their position and the time they have spent in the industry
3. The software is made, a company is then spun out of that software
4. The founder doesn't really even know much about software. As they were a manager, they were more about social connections and people
5. They hire more social people
There is nothing in this process that relates to intelligence. The intelligent person could theoretically create much better software, but they have no industry knowledge, and can't even get hired because they are not social.