If You’re So Smart, Why Aren’t You Rich?(technologyreview.com)
technologyreview.com
If You’re So Smart, Why Aren’t You Rich?
https://www.technologyreview.com/2018/03/01/144958/if-youre-so-smart-why-arent-you-rich-turns-out-its-just-chance/
102 comments
No that's not how it works. 15 IQ pts is 1 standard deviation. So a 115 is 83rd percentile, 130 is 97.5 percentile, and 145 is 99.85 percentile. 1000 would be 60 standard deviations, so there aren't even enough humans on earth to establish what that is.
Oh, I see. Thanks!
They work following a standard deviation so 99% of the population have an IQ lower than 135, 99.6% lower than 140, etc. So maybe, among the billions of people who ever lived on the planet or will live in the future, someone will have an IQ of 200.
Anyway, IQ is just a tiny aspect of intelligence, which is a loosely defined term.
Anyway, IQ is just a tiny aspect of intelligence, which is a loosely defined term.
No they do not. I think the author was making a point that peoples' IQ can not differ by 2 or 3 levels of magnitude but their wealth can and often does differ by 3-9 levels of magnitude.
> Cause (in case I’m smart enough at all) I have no courage to risk and implement a working thing by myself
The risk of the same action (e.g. spending a year on getting a startup to work out) differs based on your background, too.
Let's say you make minimum wage. That reduces the amount of money you can invest in your startup, lowering the chances of success while also shortening the runway. The risk here is might even be homelessness.
If you are backed by a reasonably wealthy family, you can invest more and your runway is longer, making it more likely to succeed (or at least fail not that hard). The risk here is having "wasted" one year of your life.
This doesn't even take into account other factors like family/friend connections.
Of course there are always counter examples to this, I'm just talking about probabilities.
The risk of the same action (e.g. spending a year on getting a startup to work out) differs based on your background, too.
Let's say you make minimum wage. That reduces the amount of money you can invest in your startup, lowering the chances of success while also shortening the runway. The risk here is might even be homelessness.
If you are backed by a reasonably wealthy family, you can invest more and your runway is longer, making it more likely to succeed (or at least fail not that hard). The risk here is having "wasted" one year of your life.
This doesn't even take into account other factors like family/friend connections.
Of course there are always counter examples to this, I'm just talking about probabilities.
Good point. I’ve come up with a similar strategy: no wealth, but have a handful of life-years in savings before starting something. If it doesn’t work out in a year, there is still a good safety net and time to re-evaluate. Heh, it must be much easier to reason about when you have backup just by default.
My anecdotal observations are closer to; successful people aren't critical thinkers enough to argue themselves out of ideas and they just do stuff naively and customers can only buy products that exist, not hypothetical better products.
If society is a lottery, then the smart move will leave you sliggtly better off than the gamvlers, but not as rich as the guy who takes the gamblers losses.
Whether this fits, depends on how many businessmen ruined themselves with a stupid idea for every success.
Of course, if you win the lottery and then they let you pay to change the rules, its more of an aristocracy.
Whether this fits, depends on how many businessmen ruined themselves with a stupid idea for every success.
Of course, if you win the lottery and then they let you pay to change the rules, its more of an aristocracy.
This works both ways.
When the next billionaire tells us what we as a society should be doing remember that.
When the next billionaire tells us what we as a society should be doing remember that.
I’ve never understood why people find the force of chance so difficult to accept.
I am lucky I am a white man born in the UK in 1969. So much of what I am is due just to that fact, irrespective of whether I am smart or not, hard working or not.
I am lucky I am a white man born in the UK in 1969. So much of what I am is due just to that fact, irrespective of whether I am smart or not, hard working or not.
Skew the odds then
Fascinating, but I'm not sure about the assumptions. This model mainly doesn't account for risk in the calculation.
The company owner might only work twice as much as the 9-5 salaryman. But he increases the value of his equity, while the salaryman just draws a monthly salary.
Eventually that equity is valued at millions by investors, and that is how the company owner becomes rich. Or it could be valued at zero.
Meanwhile, the salaryman is not even exposed to any of these extremes because he never took the risk.
The company owner might only work twice as much as the 9-5 salaryman. But he increases the value of his equity, while the salaryman just draws a monthly salary.
Eventually that equity is valued at millions by investors, and that is how the company owner becomes rich. Or it could be valued at zero.
Meanwhile, the salaryman is not even exposed to any of these extremes because he never took the risk.
Two reasons:
1. Haven’t gotten lucky yet.
2. I dislike other people and don’t connect well with them.
Other than that, I got some pretty good ideas.
1. Haven’t gotten lucky yet.
2. I dislike other people and don’t connect well with them.
Other than that, I got some pretty good ideas.
This reminds me a bit of Larry Niven's idea of breeding for psychic luck in his Known Space stories, in which Birthright lotteries are held which gave the winners the chance to have children.
So, if wealth is indeed due to luck, one could make the whimsical case for luck being heritable.
And indeed, it seems that the world's wealthiest tend to have more children, on average, according to this article:
https://finance.yahoo.com/news/fascinating-things-top-billio...
https://finance.yahoo.com/news/fascinating-things-top-billio...
(2018). Extremely simplistic model that doesn't tell us much about the real world.
Could smart and ambitious young people selling shares in themselves à la Mike Merrill in 2008 be made to work?
https://www.wired.com/2013/03/ipo-man/
https://www.mike-merrill.com/
Could smart and ambitious young people selling shares in themselves à la Mike Merrill in 2008 be made to work?
https://www.wired.com/2013/03/ipo-man/
https://www.mike-merrill.com/
It's possible that success isn't determined by something that's normally distributed like intelligence or hours worked. Say the key factor is what they call "grit" or determination. If this occurs according to a power law instead of a normal distribution, you could have a situation where the average person has a score of 0.1 and an all time determined person has a score of 1, or 10 or 100.
We can see easily that no human has an IQ of 10x the average. But determination to accomplish a goal is difficult to measure, empirically or subjectively. I can't really say that super rich person X didn't just want it 10x or 100x more than everyone else.
It's interesting that the authors were able to come up with a simulation that roughly matched real world wealth distribution. But there are a large number of potential factors that they did not and could not account for in a model. I fully agree with the idea that all great wealth comes from luck and chance in some form or another. This article is definitely stating what I believe to be true. But I don't know if they really proved anything.
We can see easily that no human has an IQ of 10x the average. But determination to accomplish a goal is difficult to measure, empirically or subjectively. I can't really say that super rich person X didn't just want it 10x or 100x more than everyone else.
It's interesting that the authors were able to come up with a simulation that roughly matched real world wealth distribution. But there are a large number of potential factors that they did not and could not account for in a model. I fully agree with the idea that all great wealth comes from luck and chance in some form or another. This article is definitely stating what I believe to be true. But I don't know if they really proved anything.
Personality traits like that are also normally distributed and the concept of 'grit' specifically is controversial:
https://www.gse.harvard.edu/news/15/04/problem-grit
https://en.wikipedia.org/wiki/Grit_(personality_trait)#Scien...
> We can see easily that no human has an IQ of 10x the average.
IQ is by definition normally distributed. If you define wealth the same way as you define IQ (basically as position in normal distribution), not even Jeff Bezos will have 10x "wealth IQ". He is richer than ~99.9999999857% of people, but he will score in such test test around ~6.3 standard deviations, as you can verify through https://keisan.casio.com/exec/system/1180573188 That would correspond to score 250 IQ (Cattel scale).
And about cognitive abilities in general - yeah, some people exhibit 10x times bigger working memory (roughly corresponding to RAM) than average.
IQ is by definition normally distributed. If you define wealth the same way as you define IQ (basically as position in normal distribution), not even Jeff Bezos will have 10x "wealth IQ". He is richer than ~99.9999999857% of people, but he will score in such test test around ~6.3 standard deviations, as you can verify through https://keisan.casio.com/exec/system/1180573188 That would correspond to score 250 IQ (Cattel scale).
And about cognitive abilities in general - yeah, some people exhibit 10x times bigger working memory (roughly corresponding to RAM) than average.
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Not every kind of "smartness" is rewarded on the job market or on the market in general. As a hired employee, I am 5x wealthier than a couple of my peers who enjoy solving a Rubik cube in 20 moves, or excel in IQ tests. It takes a bit of social aptitude and common sense to approach the right social circles, to present yourself in a likable manner, to reason in abstract terms.
> Not every kind of "smartness" is rewarded on the job market or on the market in general.
Also financial smartness is a thing.
Also financial smartness is a thing.
You don't even need to go as esoteric as "good rubik cube solver". My first job was at a physics laboratory as a research assistance. At least some of the people holding physics PhDs from elite institutions (the one I worked in is internationally renowned and a source of many nobel prize winners) are definitely "smarter" (for some definitions thereof) than a lot of people working at FAANG companies earning multiples of their salaries.
According to the model, those qualities only prevent you from being eliminated from the race. Winning it still requires a repeated stream of good luck events.
Or their version 2.0: If you are so smart why you never win in the lottery?
"Oh, this is an easy one. When people say a child is talented they mean he or she is a good learner. But a talented adult is a good do-er. High potential people who fail to make an impact are stuck in child-mode, because that is what they were always praised for." -- goatinaboat @ HN
https://news.ycombinator.com/item?id=20722716
https://news.ycombinator.com/item?id=20722716
This is so stupid it makes me think the author is rich.
Because most rich people are born into wealth and all its advantages. "Luck" indeed. I think something like significantly more than half of 1%ers were born into 1%er families.
Another is height. There's a very strong correlation between height and lifetime earnings; tall people are seen as better leaders, trusted more, and frankly, more physically intimidating. Tall men are much more desirable to partners.
Getting back to wealth...let's run down just some of the advantages.
Having parents with the free time to do things like read to you as a baby. Babies start figuring out language pretty much the second they're out of the womb. Their little brains are working out the rhythm of the language in order to figure out where the word separation is, so they can learn words.
Childcare (and childcare that likely isn't religiously affiliated.)
Going into Pre-K. Again, likely not religiously affiliated. You're learning useful stuff, versus being brainwashed.
Better chance of living in a good school system, or even if you don't - your parents recognizing you're in a shitty school system and getting you outside tutoring, being involved in your education (helping with homework, going to parent-teacher conferences, etc.)
Having regular doctor's visits, dental care, vision, etc.
Having enough to eat, and probably good quality food as well. A shocking number of kids in the US go to school hungry. And we charge kids to eat in school - somewhere they are required to be. It's bananas.
Better access to exam prep/tutoring/ability to participate in enriching afterschool activities
Likely less stress in the home. Sure, rich families have their own dysfunctions. But likely nobody's worried about paying the grocery bill that week, you're clothed, etc.
Able to work internships that are of academic value as opposed to a job that makes money because you / your family need the money. Parents are likely well connected and able to leverage their network to help you get an internship of value.
Better access to nicer colleges both financially and due to access to things like exam preparation/tutoring, and the aforementioned good-looking internships.
Let's also not forget that college applications cost a considerable amount of money, which is a scam and a half. You can literally buy your way into a nicer school by applying to more schools than the kid whose parents can only afford to apply to one or two.
You're more likely to get help with purchasing a home, so you don't flush a ton of money down the drain renting - which means you can be pumping money into investments, both retirement and otherwise. Or pursuing an advanced degree, and the income bump that comes with it. Maybe even both. Early investing in retirement pays huge dividends later. This also means late in life you're not scrambling to stuff every dollar you can into retirement savings so you're not eating rice and beans when you're too old to have any sort of luck finding a job in tech...which means mid life is a lot more pleasant.
Another is height. There's a very strong correlation between height and lifetime earnings; tall people are seen as better leaders, trusted more, and frankly, more physically intimidating. Tall men are much more desirable to partners.
Getting back to wealth...let's run down just some of the advantages.
Having parents with the free time to do things like read to you as a baby. Babies start figuring out language pretty much the second they're out of the womb. Their little brains are working out the rhythm of the language in order to figure out where the word separation is, so they can learn words.
Childcare (and childcare that likely isn't religiously affiliated.)
Going into Pre-K. Again, likely not religiously affiliated. You're learning useful stuff, versus being brainwashed.
Better chance of living in a good school system, or even if you don't - your parents recognizing you're in a shitty school system and getting you outside tutoring, being involved in your education (helping with homework, going to parent-teacher conferences, etc.)
Having regular doctor's visits, dental care, vision, etc.
Having enough to eat, and probably good quality food as well. A shocking number of kids in the US go to school hungry. And we charge kids to eat in school - somewhere they are required to be. It's bananas.
Better access to exam prep/tutoring/ability to participate in enriching afterschool activities
Likely less stress in the home. Sure, rich families have their own dysfunctions. But likely nobody's worried about paying the grocery bill that week, you're clothed, etc.
Able to work internships that are of academic value as opposed to a job that makes money because you / your family need the money. Parents are likely well connected and able to leverage their network to help you get an internship of value.
Better access to nicer colleges both financially and due to access to things like exam preparation/tutoring, and the aforementioned good-looking internships.
Let's also not forget that college applications cost a considerable amount of money, which is a scam and a half. You can literally buy your way into a nicer school by applying to more schools than the kid whose parents can only afford to apply to one or two.
You're more likely to get help with purchasing a home, so you don't flush a ton of money down the drain renting - which means you can be pumping money into investments, both retirement and otherwise. Or pursuing an advanced degree, and the income bump that comes with it. Maybe even both. Early investing in retirement pays huge dividends later. This also means late in life you're not scrambling to stuff every dollar you can into retirement savings so you're not eating rice and beans when you're too old to have any sort of luck finding a job in tech...which means mid life is a lot more pleasant.
Those things you say the rich have, the many in the middle class do as well.
>Another is height. There's a very strong correlation between height and lifetime earnings; tall people are seen as better leaders, trusted more, and frankly, more physically intimidating.
Napoleon Bonaparte, Benito Mussolini, Alexander The Great, Joseph Stalin, Hirohito, Silvio Berlusconi, Nicolas Sarkozy, Vladimir Lenin, Francisco Franco, Amenhotep I, James Madison, Mahatma Gandhi, Nikita Khrushchev, Kim Jong-il, Yasser Arafat, Mahmoud Ahmadinejad, David Ben-Gurion, Deng Xiaoping, Benito Juárez would all like to have a word with you. :)
Napoleon Bonaparte, Benito Mussolini, Alexander The Great, Joseph Stalin, Hirohito, Silvio Berlusconi, Nicolas Sarkozy, Vladimir Lenin, Francisco Franco, Amenhotep I, James Madison, Mahatma Gandhi, Nikita Khrushchev, Kim Jong-il, Yasser Arafat, Mahmoud Ahmadinejad, David Ben-Gurion, Deng Xiaoping, Benito Juárez would all like to have a word with you. :)
Are most smart people even trying to optimise for net worth?
I worked with a lot of very intelligent people at my last job, and it just wasn't a priority for so many of the people there (company owners included).
I worked with a lot of very intelligent people at my last job, and it just wasn't a priority for so many of the people there (company owners included).
That is of course the correct answer. Smart people are like most people, they don't care about being rich.
Agree! A lot of smart people aren't trying to get rich. I bet many nobel prize winners aren't rich, while many of them are smart.
Lol actually they are rich.
"The winners of the 2021 Nobel Prizes will receive a gold medal and 10 million Swedish kronor ($1.14 million). The prize money comes from an endowment left behind by the prize’s creator, Swedish inventor Alfred Nobel, who died in 1895."
Source https://www.forbes.com/sites/siladityaray/2021/10/08/2021-no...
"The winners of the 2021 Nobel Prizes will receive a gold medal and 10 million Swedish kronor ($1.14 million). The prize money comes from an endowment left behind by the prize’s creator, Swedish inventor Alfred Nobel, who died in 1895."
Source https://www.forbes.com/sites/siladityaray/2021/10/08/2021-no...
Earning $1.14 million for a whole life's work is peanuts when you compare it to bay area salaries where someone working for FANG can earn that much in half a year or less just by writing microservices.
So, no, Nobel prize winners are not necessarily rich when you compare them with lawyers, doctors, and software engineers of California.
So, no, Nobel prize winners are not necessarily rich when you compare them with lawyers, doctors, and software engineers of California.
Compared to most people in academia they are stinking-rich !
"whole life's work"
Yea sorry they don't always "win" it at the END of their careers !
"compare it to bay area salaries where someone working for FANG can earn that much in half a year or less just by writing microservices."
Guess you can say that about many careers just depends which you industry you compare it to ! Gardening,R&B Popstar,Maid,Teacher,Hollywood Actor,Tutor.
"whole life's work"
Yea sorry they don't always "win" it at the END of their careers !
"compare it to bay area salaries where someone working for FANG can earn that much in half a year or less just by writing microservices."
Guess you can say that about many careers just depends which you industry you compare it to ! Gardening,R&B Popstar,Maid,Teacher,Hollywood Actor,Tutor.
This isn't much money in the USA. The rule of thumb is to save 10 times your income if you want to retire by age 67. Given that an academic is at perhaps $100K salary a year, that would mean it would not even be enough to cover retirement since after taxes it would probably be less than $700K. In many parts to the USA, e.g., parts of California, that's not even enough to buy a modest home. It depends on where you live to assume that's enough to be considered even close to rich. About 10% of Americans have a net worth of over $1M.
https://spendmenot.com/blog/what-percentage-of-americans-are...
https://spendmenot.com/blog/what-percentage-of-americans-are...
10% @ 1mil sounds extremely high being that the median income is 31,133 USD(2019). Not sure I buy it, especially since the article claims this excludes home equity.
A quick Google suggests that the top 10% of (individual) earners in 2019 took home at least 116k (almost 4x the median!).
Seems totally believable to me.
Seems totally believable to me.
Came here to say exactly this!
Most smart people do not care about becoming rich. Some of them do. But most of them do not. Most smart people I have met care about honing their skills and becoming better at what they do which is exactly what led them to being smart in the first place. Moreover not all kinds of smartness translate to more $$. The market rewards only certain kinds of smartness (computer skills, law skills, medical skills, etc.)
Most smart people do not care about becoming rich. Some of them do. But most of them do not. Most smart people I have met care about honing their skills and becoming better at what they do which is exactly what led them to being smart in the first place. Moreover not all kinds of smartness translate to more $$. The market rewards only certain kinds of smartness (computer skills, law skills, medical skills, etc.)
It does seem likely that most smart people aren't optimising for wealth. I know a lot of smart people who spend their entire income, and it is just difficult for someone to be wealthy and spend all their income at the same time. Wealth requires surplus.
But even for smart people trying to optimise their wealth - it isn't at all clear that smartness is something to be rewarded. A reasonably competent, hardworking small business owner can be quite wealthy. I would expect them to be of above average intelligence. But I've basically never paid someone because they are intelligent, so it isn't obvious why the market would save the best reward for them.
If I was hiring a tutor I wouldn't necessarily hire the most intelligent person I know. There are a lot of factors to consider.
But even for smart people trying to optimise their wealth - it isn't at all clear that smartness is something to be rewarded. A reasonably competent, hardworking small business owner can be quite wealthy. I would expect them to be of above average intelligence. But I've basically never paid someone because they are intelligent, so it isn't obvious why the market would save the best reward for them.
If I was hiring a tutor I wouldn't necessarily hire the most intelligent person I know. There are a lot of factors to consider.
I agree with this, but as I get older I realise what a mistake it was to be this way. Wealth is an enabler that helps us meet our goals, however high minded, and give us the freedom to do things the way we want. It gives us the ability to make our own mistakes instead of implementing others’.
Those who know this and are able to optimise for it will have a sustainable advantage over everyone else, creating a virtuous cycle.
Those who know this and are able to optimise for it will have a sustainable advantage over everyone else, creating a virtuous cycle.
Funny you say that.
I'm in my mid-to-late 20's and quit my job in early 2020 (just before COVID!) to start my own business.
I've landed on my feet completely - making about as much per quarter selling used video games[1] as I was per year as a software engineer, with a feasible and straightforward plan to double that before the end of 2022.
However, seeing the the numbers going the way they are, I've started to wonder if I'm perhaps optimising too much in this direction at the cost of other aspects of my life.
I'm not arguing that the pursuit of wealth is a waste of time or anything like that, but for someone who doesn't quite have Elon Musk-tier ambitions the cost-benefit analysis starts to weigh less favourably towards money the easier it gets to acquire.
[1] For what it's worth, if you are smart, have strong technical skills and want to make money, I personally advise against starting a business that is "high tech" or "cool". Gaining domain expertise in a low-tech but scaleable area, then optimising it into the stratosphere is relatively low-risk and potentially ridiculously high-reward.
I'm in my mid-to-late 20's and quit my job in early 2020 (just before COVID!) to start my own business.
I've landed on my feet completely - making about as much per quarter selling used video games[1] as I was per year as a software engineer, with a feasible and straightforward plan to double that before the end of 2022.
However, seeing the the numbers going the way they are, I've started to wonder if I'm perhaps optimising too much in this direction at the cost of other aspects of my life.
I'm not arguing that the pursuit of wealth is a waste of time or anything like that, but for someone who doesn't quite have Elon Musk-tier ambitions the cost-benefit analysis starts to weigh less favourably towards money the easier it gets to acquire.
[1] For what it's worth, if you are smart, have strong technical skills and want to make money, I personally advise against starting a business that is "high tech" or "cool". Gaining domain expertise in a low-tech but scaleable area, then optimising it into the stratosphere is relatively low-risk and potentially ridiculously high-reward.
Everyone around me in academic neuroscience seems pretty smart and is most certainly not optimizing for net worth. I'm guessing many in tech don't interact with that type of individual often, though many exceptions undoubtedly exist.
> In hindsight, it is obvious that the fact a scientist has made an important chance discovery in the past does not mean he or she is more likely to make one in the future.
I believe luck is a bigger part of life than we'd like to admit to ourselves. However, saying talent doesn't play a role in success (especially in science) seems plain wrong.
I believe luck is a bigger part of life than we'd like to admit to ourselves. However, saying talent doesn't play a role in success (especially in science) seems plain wrong.
Wealth follows a power law because there is a positive feedback loop. Having some wealth makes it easier to get more wealth. So, if you're smart/lucky enough to get a bit of wealth, you can continue to use whatever smarts you have to get more.
The article seems to imply that since other human traits follow normal distributions, then wealth distribution should also be normal if it's determined by human traits. But that doesn't follow because it ignores feedback. Being a little tall doesn't help you get more tall. Most human traits don't reinforce themselves the way wealth does. A smart person with a million dollars can make money a lot more easily than a smart person with zero dollars. A smart person with a billion dollars can do even more.
The article seems to imply that since other human traits follow normal distributions, then wealth distribution should also be normal if it's determined by human traits. But that doesn't follow because it ignores feedback. Being a little tall doesn't help you get more tall. Most human traits don't reinforce themselves the way wealth does. A smart person with a million dollars can make money a lot more easily than a smart person with zero dollars. A smart person with a billion dollars can do even more.
> Wealth follows a power law because there is a positive feedback loop.
You even get a power law if you have a game where everybody gives 1 dollar to a random person (if possible). If you play that game for enough steps, then the wealth distribution becomes exponential.
You even get a power law if you have a game where everybody gives 1 dollar to a random person (if possible). If you play that game for enough steps, then the wealth distribution becomes exponential.
you just nailed it with the power law example. But how would you explain the _rags-to-riches_ scenario?
It's easier to make money if you have money, but it's not impossible to make money if you don't. A flash of genius and/or stroke of luck can still take you from no money to some money, and if you continue applying skill and have reasonable luck (and take steps to mitigate bad luck) then it will only get easier to make more money. Then you'll also be able to set up your kids to start in a luckier position.
Rags to riches is rare.
It's a compelling origin story though. Past financial hardship can be spun as rags quite easily, so we hear the story a lot more than it "really" happens.
It's a compelling origin story though. Past financial hardship can be spun as rags quite easily, so we hear the story a lot more than it "really" happens.
But if you look at the distribution where some people have 1,000x the median wealth it’s usually not because they slowly built it up over time but rather had 1 or maybe 2 massive exits.
I would say wealth follows a normal distribution if you’re looking at number of people at each level. Very few people have <$0 over their lifetime and a same small number have >$25M over their lifetime.
But the outliers are so extreme at the top end you end up with the power distribution of wealth.
I would say wealth follows a normal distribution if you’re looking at number of people at each level. Very few people have <$0 over their lifetime and a same small number have >$25M over their lifetime.
But the outliers are so extreme at the top end you end up with the power distribution of wealth.
Most wealth in the world is inherited and grows over generations.
Pretty sure there was a US study that said most billionaire are first generation.
Let me guess, they inherited small 40m fortunes, and the thirtyfold total return of the stock+property market since the eighties made them billionaires?
Nope. These people started successful businesses.
I think there is a difference between starting a small business with a “small loan of a million dollars” and starting from truly nothing.
Even people like Warren Buffett had a congressman for a father - which has quite a bit of privilege with it that can get you places.
Even people like Warren Buffett had a congressman for a father - which has quite a bit of privilege with it that can get you places.
> Most wealth in the world is inherited and grows over generations.
According to "Inheritances and the Distribution of Wealth Or Whatever Happened to the Great Inheritance Boom?":
> Of the total wealth of the population, Kessler and Masson estimated that 35 percent originated from inheritances or gifts. Among those who had reported receiving an intergenerational transfer (who were about two and a half times richer than the average household), the corresponding proportion was 40 percent.
This proportion will probably drop if we exclude land.
According to "Inheritances and the Distribution of Wealth Or Whatever Happened to the Great Inheritance Boom?":
> Of the total wealth of the population, Kessler and Masson estimated that 35 percent originated from inheritances or gifts. Among those who had reported receiving an intergenerational transfer (who were about two and a half times richer than the average household), the corresponding proportion was 40 percent.
This proportion will probably drop if we exclude land.
Sounds about right. Add compounding stock gains on the inherited wealth, rent and growing land prices, and you'll have more than half.
> This proportion will probably drop if we exclude land.
Sure and if we exclude stocks it will drop further, but there's no reason to exclude land, the single most important form of property, from the calculation.
> This proportion will probably drop if we exclude land.
Sure and if we exclude stocks it will drop further, but there's no reason to exclude land, the single most important form of property, from the calculation.
Why would one exclude land from the calculation though?
It can skew results, because poor (by income) people can own some wealth in land, because they don't want to sell it for legal or sentimental reasons. My own grandmother keeps some wasteland, because she believes that someday her children (medical professionals) will farm it.
If you are so smart why don’t you have more free time to live your life? Is mostly the challenge I see to people in my circle of peers family and friends, regardless of money status
This is where our whole society fails. Somehow the general plan is always more money and never less time.
Once when everyone was getting their raise, my proposal was less hours for the same money. I got it, and subjectively I was just as productive as before but now had won a whole extra day for ME.
For me it worked out to working less and less and eventually started to earn more and more because I had time to focus on things I am actually passionate about.
That said I am lucky Switzerland even has the concept of working ex. 80%. In Austria it is usually either 'fulltime' or 'halftime' (which barely anyone can afford)
My main point is that if you work less hours does not directly mean you produce less code. More concrete sometimes when I sit around and do nothing I find a way to reduce 8 hours coding to 1. And yes I realize that only works in some jobs
Once when everyone was getting their raise, my proposal was less hours for the same money. I got it, and subjectively I was just as productive as before but now had won a whole extra day for ME.
For me it worked out to working less and less and eventually started to earn more and more because I had time to focus on things I am actually passionate about.
That said I am lucky Switzerland even has the concept of working ex. 80%. In Austria it is usually either 'fulltime' or 'halftime' (which barely anyone can afford)
My main point is that if you work less hours does not directly mean you produce less code. More concrete sometimes when I sit around and do nothing I find a way to reduce 8 hours coding to 1. And yes I realize that only works in some jobs
Good choice!
Working 80% means 50% more free time and 20% less pay. (If - as in your case - this comes with a raise, even better.)
I'm pretty sure most people (at least around here on HN) could do with 20% less income and still get out more quality of life.
Of course we always need to compare ourselves (and our positions and possessions) to other people in our peer group and money earned is just such a nice way to compare yourself to others. How else are you going to acquire all these nice status symbols that show how important you are?
But we forget the price we pay for money.
Working 80% means 50% more free time and 20% less pay. (If - as in your case - this comes with a raise, even better.)
I'm pretty sure most people (at least around here on HN) could do with 20% less income and still get out more quality of life.
Of course we always need to compare ourselves (and our positions and possessions) to other people in our peer group and money earned is just such a nice way to compare yourself to others. How else are you going to acquire all these nice status symbols that show how important you are?
But we forget the price we pay for money.
Everything's about luck. Are you smart? Luck. Are you good looking? Luck. Are you rich? Again, some combination of things that are all essentially about luck.
That's not what the model says. It says that being smart and good looking do not have a large effect in the long term; having repeated streaks of luck do.
(Being rich counts as having already had several lucky breaks, you or your family.)
(Being rich counts as having already had several lucky breaks, you or your family.)
If being rich counts a already having had several lucky breaks, aren't they just presenting a circular conclusion?
In the real world, opportunities can also be manufactured, increasing the odds to be lucky. I don't think the model from the article has that many interesting things to tell us.
In the real world, opportunities can also be manufactured, increasing the odds to be lucky. I don't think the model from the article has that many interesting things to tell us.
"Being rich" doesn't appear as an input factor on the model, that's my interpretation.
The paper describes how, assuming a meritocratic setup where everyone starts out the same, wealth accumulates as a function of repeated lucky events, largely unaffected by the particular talents of the individual.
We all know that money makes money and the wealthy have a lot more ways of seizing opportunities than those without resources, using wealth as a leverage way more powerful than personal talent. Nevertheless, the model works as a thought experiment showing what would happen if everyone began from the same starting point; even in that case, talent would have little weight in how wealth accumulation would evolve.
The paper describes how, assuming a meritocratic setup where everyone starts out the same, wealth accumulates as a function of repeated lucky events, largely unaffected by the particular talents of the individual.
We all know that money makes money and the wealthy have a lot more ways of seizing opportunities than those without resources, using wealth as a leverage way more powerful than personal talent. Nevertheless, the model works as a thought experiment showing what would happen if everyone began from the same starting point; even in that case, talent would have little weight in how wealth accumulation would evolve.
There was another experiment a while ago about songs becoming hits. Iirc they started with presenting random songs to users, but their "likes" could affect further suggestions. Then it also was random which songs ended up becoming hits.
That seems like a much more interesting experiment, and in the real world, too.
Also the "Matthew Effect" is well known. I find it very dangerous to latch onto such an experiment because it "feels right", though.
That seems like a much more interesting experiment, and in the real world, too.
Also the "Matthew Effect" is well known. I find it very dangerous to latch onto such an experiment because it "feels right", though.
Yeah, this.
People don't realize and don't want to realize how much of their success in life is based on pure, sheer luck.
I'm not going to say that hard work is irrelevant, but it's very much overrated. Because you can work hard yourself to death and not get any penny to your name. Whereas if you luck out, you luck out - no hard work required.
I guess that we - as narrative creatures - aim to have a satisfactory story to our lives. We that are successful want this success to be our own achievements, not the random fluctuation of chance.
But human brains are very bad with randomness and so we see patterns; the people close to us are good and honest and hard working, no wonder they are rich and successful. They earned it! we think, not taking into consideration confirmation and selection bias.
It's just a shame that we are also lead to believe the reverse is true. That poor person over there? He must be slacking off and is not putting in enough elbow grease - he deserves to be poor and miserable.
Sometimes we're very bad at thinking.
People don't realize and don't want to realize how much of their success in life is based on pure, sheer luck.
I'm not going to say that hard work is irrelevant, but it's very much overrated. Because you can work hard yourself to death and not get any penny to your name. Whereas if you luck out, you luck out - no hard work required.
I guess that we - as narrative creatures - aim to have a satisfactory story to our lives. We that are successful want this success to be our own achievements, not the random fluctuation of chance.
But human brains are very bad with randomness and so we see patterns; the people close to us are good and honest and hard working, no wonder they are rich and successful. They earned it! we think, not taking into consideration confirmation and selection bias.
It's just a shame that we are also lead to believe the reverse is true. That poor person over there? He must be slacking off and is not putting in enough elbow grease - he deserves to be poor and miserable.
Sometimes we're very bad at thinking.
Right, but everyone’s life is a roll of the dice. The only thing we can control is our own actions.
Yes luck plays a big role, but it also plays a big role in getting cancer (genetics), but you can move the needle through your own actions.
Yes luck plays a big role, but it also plays a big role in getting cancer (genetics), but you can move the needle through your own actions.
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So who deserves what?
If you need brain surgery, you want a very good brain surgeon. Does it really matter to you if he was just lucky to become so good? Personally I would still be willing to pay more money to get the better surgeon, no matter HOW they became so good.
Same for all other things. I want the best leader for my country. Does it matter if they are a good leader because they were lucky (born with intelligence, good education and so on)? No, all I care is that they are good, not why they are good.
(Assuming all act morally - if the brain surgeon only got so good because he abducted people and experimented on their brains, I would not be OK with it).
If you need brain surgery, you want a very good brain surgeon. Does it really matter to you if he was just lucky to become so good? Personally I would still be willing to pay more money to get the better surgeon, no matter HOW they became so good.
Same for all other things. I want the best leader for my country. Does it matter if they are a good leader because they were lucky (born with intelligence, good education and so on)? No, all I care is that they are good, not why they are good.
(Assuming all act morally - if the brain surgeon only got so good because he abducted people and experimented on their brains, I would not be OK with it).
this sounds like "survivor bias"
https://en.wikipedia.org/wiki/Survivorship_bias
https://en.wikipedia.org/wiki/Survivorship_bias
because i am smart ;)
Some people value wealth, some value relationships, some value their free time. Wealth is not simply that
Their proof that their model is correct seems to be that it ends up creating a 80:20 distribution. But many processes do that, that's why it is such a famous rule. So I don't think they can simply conclude their model is the correct one.
I don't think anybody disputes that luck is also a factor.
I don't think anybody disputes that luck is also a factor.
Some value wealth, some value relationships, some value their free time. You cannot have all without sacrificing the other, it's up to everyone who wants to do what.
To me, the most interesting part of the original paper is how the best leverage from a population's talent is not achieved by funding the most successful so far, but by distributing a small amount of funds equally to all participants. Past performance is no guarantee of future results.
The people on this website should be best placed to understand why such strategy works.
The people on this website should be best placed to understand why such strategy works.
To me as well, that was the most interesting part of the article. Almost sounds like communism :) but really it's more like the advice to not judge a book by it's cover. Giving everybody a chance is much more effective than funneling funds into a small "elite". As far as individuals and people are concerned at least.
Having said that, the model used in the research is way too simplified to draw conclusions from. "Talent" in it is just a change in the likelihood of a randomly good event or bad event. There is no activity, no searching for opportunities and no competition. They could substitute "talent" for electrical conductivity and events for being struck by lightning and the results would be exactly the same.
Having said that, the model used in the research is way too simplified to draw conclusions from. "Talent" in it is just a change in the likelihood of a randomly good event or bad event. There is no activity, no searching for opportunities and no competition. They could substitute "talent" for electrical conductivity and events for being struck by lightning and the results would be exactly the same.
Taleb points to this by reversing the question to :"If you are so RICH, why aren't you SMART"
He get's to some of the points in: https://medium.com/incerto/inequality-and-skin-in-the-game-d...
And specifically IQ vs wealth:
https://medium.com/incerto/iq-is-largely-a-pseudoscientific-...
He get's to some of the points in: https://medium.com/incerto/inequality-and-skin-in-the-game-d...
And specifically IQ vs wealth:
https://medium.com/incerto/iq-is-largely-a-pseudoscientific-...
Unless there's more to the model than described in the article, it doesn't make any sense. It sounds like none of the individuals in this model have any agency, and just have random events happen to them? If you make RNG the biggest factor affecting outcome in your model, I'm not sure why the results are surprising.
So just read the paper and it's pretty much as described in the article. In the model random events happen to individuals, a doubling of capital for a good event and a halving for a bad event. The probability of a good or bad event is a constant defined by the "talent" score.
This seems pretty nonsensical since you can tune the model parameters to reach any conclusion you like.
This seems pretty nonsensical since you can tune the model parameters to reach any conclusion you like.
Yes the model / simulation is incredibly simplified. The individuals instead should be proactive and competing each other for limited(or maybe constantly growing but still limited) resources, with varying success depending on their talent and luck.
Still the idea that they are trying to represent has it's own merits. People are not that different from each other - because we are the same species. That's how living things are - they are similar to each other because they are just copying from their parents. In that sense somebody having 10^5 times more wealth than somebody else cannot be because of some inherent difference in qualities. We all behave mostly the same, mostly reach the same conclusions and mostly the same speed and accuracy, and we all have the same amount of time. Contrary to popular belief everyone are mostly trying their best to live their lives to the fullest as well.
I want to see someone make a more sophisticated model that simulates the real world more. There are some complex factors like being "talented"/knowledgable in multiple fields that are better than being extremely gifted in one field if the goal is to maximize your wealth. A complex factor like that might happen to provide a huge boost to your chances of getting rich - but the factor has to be insane, orders of magnitudes large.
Still the idea that they are trying to represent has it's own merits. People are not that different from each other - because we are the same species. That's how living things are - they are similar to each other because they are just copying from their parents. In that sense somebody having 10^5 times more wealth than somebody else cannot be because of some inherent difference in qualities. We all behave mostly the same, mostly reach the same conclusions and mostly the same speed and accuracy, and we all have the same amount of time. Contrary to popular belief everyone are mostly trying their best to live their lives to the fullest as well.
I want to see someone make a more sophisticated model that simulates the real world more. There are some complex factors like being "talented"/knowledgable in multiple fields that are better than being extremely gifted in one field if the goal is to maximize your wealth. A complex factor like that might happen to provide a huge boost to your chances of getting rich - but the factor has to be insane, orders of magnitudes large.
I assume by "rich" they are talking top 10% or whatever of society? I live in the UK and it's well-known that you can't just get there through hard work. You have to be born into it. But let's assume it just means rich within your class. If so, I think I qualify as rich. Life is pretty easy and I just always seem to have enough money to do whatever I want to do.
But it wasn't always like this for me. I've always been into computers and programming and my degree is computer science, but I started off my career in academia doing biological research. There were loads of really smart people doing what I was doing and I know some were earning a bit less than me. But financially I was floundering. Starting off in the negative thanks to student loan, it took me 4 years to hit 0 (although, I should say the student loan is a "soft" liability, not like a real bank loan or something). This must have been the same or similar to my peers, I assume.
Then the work kind of dried up in academia and it forced me out. I got a job in a finance company and my net worth began to skyrocket. The following four years saw my net worth increase more than 10x what it did in the previous four (I left the finance job after only a year btw, just a software engineer now). But I'm not smarter than I was before. I could have easily ended up staying in academia and there's simply no way I would ever have been able to earn this much. So, yeah, luck definitely seems to have played a big part in making me "rich" and if I had skipped academia entirely then I would have been even more lucky, I guess.
But it wasn't always like this for me. I've always been into computers and programming and my degree is computer science, but I started off my career in academia doing biological research. There were loads of really smart people doing what I was doing and I know some were earning a bit less than me. But financially I was floundering. Starting off in the negative thanks to student loan, it took me 4 years to hit 0 (although, I should say the student loan is a "soft" liability, not like a real bank loan or something). This must have been the same or similar to my peers, I assume.
Then the work kind of dried up in academia and it forced me out. I got a job in a finance company and my net worth began to skyrocket. The following four years saw my net worth increase more than 10x what it did in the previous four (I left the finance job after only a year btw, just a software engineer now). But I'm not smarter than I was before. I could have easily ended up staying in academia and there's simply no way I would ever have been able to earn this much. So, yeah, luck definitely seems to have played a big part in making me "rich" and if I had skipped academia entirely then I would have been even more lucky, I guess.
> I assume by "rich" they are talking top 10% or whatever of society? I live in the UK and it's well-known that you can't just get there through hard work.
In UK, you need to have wealth of £176,221, excluding personal possessions, to qualify to top 10% percent of wealth, and ~£35,345 per year (2008 data [1], so it's probably ~45k in 2021) to qualify to top 10% of income.
I don't think it's impossible to achieve by hard work.
> I could have easily ended up staying in academia and there's simply no way I would ever have been able to earn this much.
If you stayed in academia, you would probably qualify as top ~12% of income.
[1] https://en.wikipedia.org/wiki/Income_in_the_United_Kingdom#H...
In UK, you need to have wealth of £176,221, excluding personal possessions, to qualify to top 10% percent of wealth, and ~£35,345 per year (2008 data [1], so it's probably ~45k in 2021) to qualify to top 10% of income.
I don't think it's impossible to achieve by hard work.
> I could have easily ended up staying in academia and there's simply no way I would ever have been able to earn this much.
If you stayed in academia, you would probably qualify as top ~12% of income.
[1] https://en.wikipedia.org/wiki/Income_in_the_United_Kingdom#H...
> In UK, you need to have wealth of £176,221, excluding personal possessions, to qualify to top 10% percent of wealth
Where on earth are you getting this from? You need well over a £1m to be in top 10% of wealth. And wealth is what really matters, not income.
Where on earth are you getting this from? You need well over a £1m to be in top 10% of wealth. And wealth is what really matters, not income.
The question is posed so naively, it hurts me to see it. Being rich is not a function of how smart you are. In general people aren't wealthy because they're capable, but because they have access to resources, like land, manpower, natural resources, or money obtained other ways, e.g. inheritance.
Markets aren’t designed to reward raw intelligence or raw talent in specific individuals. Nor should they be. Giving all the money to the best sculptor or best mathematician does nothing for the rest of us.
Markets are designed to reward people who take risk to create useful things for other people.
Are there inefficiencies where markets don’t properly reward useful activity? Of course. But markets trend towards efficiency, so those cases are slowly shrinking.
And obviously since markets reward risk, luck plays a role, but the findings of the author’s model completely contradict real world data.
Their model claims grant money, VC dollars, etc. should just be distributed at random.
Yet, in real world data, the same handful of VC firms generate all the returns in venture capital every single year. And it’s not due to a lack of capital at the other firms.
It seems their simplified computer model doesn’t account for the network effects and momentum bias of real world activities that involve humans.
When humans are all interlinked nodes that influence each other via contagious imitation, clearly you'll never have a normal distribution.
Hence why everything from wealth to coronavirus is better calculated on a log (exponential) scale.
You don’t catch coronavirus at random, and you don’t decide to start buying products at random either.
Markets are designed to reward people who take risk to create useful things for other people.
Are there inefficiencies where markets don’t properly reward useful activity? Of course. But markets trend towards efficiency, so those cases are slowly shrinking.
And obviously since markets reward risk, luck plays a role, but the findings of the author’s model completely contradict real world data.
Their model claims grant money, VC dollars, etc. should just be distributed at random.
Yet, in real world data, the same handful of VC firms generate all the returns in venture capital every single year. And it’s not due to a lack of capital at the other firms.
It seems their simplified computer model doesn’t account for the network effects and momentum bias of real world activities that involve humans.
When humans are all interlinked nodes that influence each other via contagious imitation, clearly you'll never have a normal distribution.
Hence why everything from wealth to coronavirus is better calculated on a log (exponential) scale.
You don’t catch coronavirus at random, and you don’t decide to start buying products at random either.
> Markets are designed to reward people who take risk to create useful things for other people.
This is just simply not true. Take Elon Musk, started with millions in hand-me-down money so the risks for him were very very low. It's obvious that already wealthy families have a higher chance to have wealthy and successful offspring because of the safety net they can provide.
> But markets trend towards efficiency,
Markets trend towards money efficiency, or biggest gain if you want, otherwise we wouldn't have goods made in China sent to South America to be packaged for sale in Europe. Or tell me how BTC tends towards efficiency that is not profit efficiency.
This is just simply not true. Take Elon Musk, started with millions in hand-me-down money so the risks for him were very very low. It's obvious that already wealthy families have a higher chance to have wealthy and successful offspring because of the safety net they can provide.
> But markets trend towards efficiency,
Markets trend towards money efficiency, or biggest gain if you want, otherwise we wouldn't have goods made in China sent to South America to be packaged for sale in Europe. Or tell me how BTC tends towards efficiency that is not profit efficiency.
> Markets are designed to reward people who take risk to create useful things for other people.
This is an illusion. Recency bias due to technological advancements in the recent past.
But through the history of our specie it was social phenomenons which made people rich, not giving people what they want.
And it's still the case. Take the 20 years long war on terrorism. It costed 2 trillion of real cash (not phony marketcap, again real cash) which ended up in the pockets of few people and institutions.
The Subprime/housing bubble is another example. It's a viral idea , meaning a social phenomenon that prompted people to think real estate was always gonna appreciate
The Japanese bubble of the 90s, the dot-com bubble of the late 90s, the Russian debt crisis of 96, the European debt crisis of 2011..
Markets reward those who can buy low and sell high. Period.
It's not about creating a good or a service as much as it is about riding the waves of ideas and shifts in public opinion, as well as being able to closely follow viral social trends which prompt people to flow in/out of a determined asset.
This is an illusion. Recency bias due to technological advancements in the recent past.
But through the history of our specie it was social phenomenons which made people rich, not giving people what they want.
And it's still the case. Take the 20 years long war on terrorism. It costed 2 trillion of real cash (not phony marketcap, again real cash) which ended up in the pockets of few people and institutions.
The Subprime/housing bubble is another example. It's a viral idea , meaning a social phenomenon that prompted people to think real estate was always gonna appreciate
The Japanese bubble of the 90s, the dot-com bubble of the late 90s, the Russian debt crisis of 96, the European debt crisis of 2011..
Markets reward those who can buy low and sell high. Period.
It's not about creating a good or a service as much as it is about riding the waves of ideas and shifts in public opinion, as well as being able to closely follow viral social trends which prompt people to flow in/out of a determined asset.
> Markets are designed to reward people who take risk
Markets can be (and often have been) designed to reward whoever or whatever the designers wish. Free markets aren't designed to reward anyone in particular, and that's their beauty. Free markets facilitate exchange. Who and what they reward should be a result of participants' actions, not the design of the market itself.
Markets can be (and often have been) designed to reward whoever or whatever the designers wish. Free markets aren't designed to reward anyone in particular, and that's their beauty. Free markets facilitate exchange. Who and what they reward should be a result of participants' actions, not the design of the market itself.
Because the current definition of "smart" is very static and theoretical and is in no way correlated to the ability to deliver somethin meaningful in the real world.
Haven't seen any mention of an "incentive to work/train" or "motivation" trait, which is kind of a huge oversight.
Talent is good and all, but if a genius never gets motivated to work on anything, this would clearly affect success.
The results are still interesting, sure, but they clearly should'nt be taken as an accurate representation of reality.
The results are still interesting, sure, but they clearly should'nt be taken as an accurate representation of reality.
If we look at life as a game of Poker, luck does matter, but what matter most is knowing what to do with luck. You have to have good strategies to minimize your losings when you are unlucky and maximize your winnings when you are lucky. You have also to know when to bluff. You have to also be good as calculating risk vs rewards but also to know some psychology.
Nobody is infinitely unlucky and nobody is infinitely lucky. So, to become rich, you have to know how to use the opportunity the second it arrives. And you have to recognize that opportunity.
Nobody is infinitely unlucky and nobody is infinitely lucky. So, to become rich, you have to know how to use the opportunity the second it arrives. And you have to recognize that opportunity.
20% of the people own 80% of the wealth. But I think that if we level the field, confiscate all the wealth, in 20 years we will still have 20% of the people owning 80% of the wealth, and from those 20%, 90% will be the same people.
Luck can be a factor in becoming rich. Being smart also is needed. But apart from this, you need to have determination and some sort of talent and knowledge to use the opportunities as they appear.
Luck can be a factor in becoming rich. Being smart also is needed. But apart from this, you need to have determination and some sort of talent and knowledge to use the opportunities as they appear.
Because I have morals.
I, along with my classmates, had a good two dozen business ideas at the peak of the internet bubble. Pretty much all of them would've required us to take advantage of people's stupidity or lack of knowledge.
None of us were THAT much into money.
Half of those ideas popped up later by other people, who didn't have any scruples taking money from the elderly or those who didn't know better.
I, along with my classmates, had a good two dozen business ideas at the peak of the internet bubble. Pretty much all of them would've required us to take advantage of people's stupidity or lack of knowledge.
None of us were THAT much into money.
Half of those ideas popped up later by other people, who didn't have any scruples taking money from the elderly or those who didn't know better.
Answer: wisdom is its own wealth.
In the big numbers being in a rich family, in the right social group/culture and in the right country could influence a lot if you become (or continue to be) rich. And that is not an evenly distributed chance, nor requires very high IQ.
Having/seeing the right opportunity in the right moment in the right place, while having the right contacts, may give you a hand up, and again, that is not chance, nor specially being far above average in intelligence.
Another non random factor is your "cultural" intelligence (as opposed of genetic one). How you learn, what you learn and at which age (and more factors, like food, family and friends) affects your intelligence or at least some flavor of smartness. And this could be partially attributed to inherited wealth too.
And not every activity you get into will give you equal opportunities of becoming rich, starting with a somewhat common baseline. If you apply your big intelligence to theoretical mathematics or quantum physics you may have less chances to become rich than if you apply your average one in the field of finance. And you must again be in the right country/social class to even try that.
If you use chance to decide why some people in the right country/social class/education/etc got uber rich and the others just rich, you may have a point. but it is not even for all the world.
Having/seeing the right opportunity in the right moment in the right place, while having the right contacts, may give you a hand up, and again, that is not chance, nor specially being far above average in intelligence.
Another non random factor is your "cultural" intelligence (as opposed of genetic one). How you learn, what you learn and at which age (and more factors, like food, family and friends) affects your intelligence or at least some flavor of smartness. And this could be partially attributed to inherited wealth too.
And not every activity you get into will give you equal opportunities of becoming rich, starting with a somewhat common baseline. If you apply your big intelligence to theoretical mathematics or quantum physics you may have less chances to become rich than if you apply your average one in the field of finance. And you must again be in the right country/social class to even try that.
If you use chance to decide why some people in the right country/social class/education/etc got uber rich and the others just rich, you may have a point. but it is not even for all the world.
I heard this question first when it was posed to us in class by a Professor at the Univ of California, Berkeley... Ever since, it has evoked mixed reactions in me... my natural proclivity leans towards "becoming rich is not a priority"... but during the course of life, I have come to realize that those who have the riches tend to write the "rules" at every level of society... and so in retrospect, I keep asking myself, what is smart about handicapping myself in the golf of life by not prioritizing riches?!
If everything is luck...maybe we should tax 100% of wealth above 1 billion, then redistribute it just randomly via 'luck' .... 100k/day lottery or something... that would kinda maybe even out the luck disparity, no?
Average IQ is 100, but nobody has an IQ of 1,000 or 10,000
Do iq tests even work this way? I think there is not enough points to add up to 1000 or at least 200.
Edit: And even then, this iq thing is irrelevant to your whole life, because our minds are mostly sleeping, being carried around by waves of automatic thoughts, whose iq is minimal.