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Tuesday, August 20, 2019 Leer en Español

Why Many Brilliant People Aren’t Rich

IQ has some bearing on income, but it's much smaller than people think. Some qualities matter much more.

Photo by Riccardo Vicidomini on Unsplash

If what my web analytics tell me is true, many of you reading this article have above-average IQs, but only a small percentage of you would crack the upper class in terms of income.

Why is that? As the edge-laden question goes, “If you’re so smart, why aren’t you rich?”

The Correlation Between IQ and Income

Well, IQ does have some bearing on income. As Richard J. Herrnstein and Charles Murray’s research has shown, IQ has become more important in America’s knowledge-based economy, and our most prestigious universities—which, as we know, are ladders for joining the ranks of the socioeconomic elite—have become almost entirely populated by the “cognitive elite.”

But according to Nobel-Prize-winning economist James Heckman, personality plays a much bigger role in separating those with high and low incomes. A Bloomberg article summarizing his recent scholarly paper on the subject reads: “[Heckman] found financial success was correlated with conscientiousness, a personality trait marked by diligence, perseverance and self-discipline.”

In examining the IQ scores, standardized test scores, and grades of thousands of people in the U.K., U.S., and Netherlands, Heckman and his colleagues found that test scores and grades were much better predictors of financial success than IQ:

Grades reflect not just intelligence but also what Heckman calls “non-cognitive skills,” such as perseverance, good study habits and the ability to collaborate—in other words, conscientiousness. To a lesser extent, the same is true of test scores. Personality counts.

Many of you are probably unsurprised by these findings. In today’s education system, those with a relatively modest intelligence have the ability to achieve straight-As simply through persistence. And though being “smart” certainly helps on standardized tests, students can close the gap between a low score and a high score through careful preparation and employing proven test-taking strategies.

The drive to get good grades and test scores translates well to the people-pleasing environment of the modern workplace, and to making money in that environment.

Drive and Desire Matters

But then there’s the question of the desire behind that drive, which neither Heckman nor the Bloomberg article mentions.

About ten years ago, I found myself sitting next to an attractive, middle-aged woman on a plane, and we ended up talking about our respective occupations. As it turns out, she had started up a few different cleaning businesses and had ended up selling them for millions of dollars. She never once gave me the impression that she had a particular passion about helping people get their homes clean. She simply saw a need in the community in which she lived, and was willing to spend her time and creative energies fulfilling that need in order to make a good living.

With some exceptions, to become rich, you actually have to care about becoming rich. And not all smart people care about becoming rich.

What struck me is that many of the intelligent people I knew at the time were not necessarily devoid of what we call “good business ideas.” But what they did lack was the willingness to act on them and see them through to completion.

And in general, the reason why they lacked this willingness wasn’t necessarily because they lacked those qualities that Heckman links to high incomes, namely, “diligence, perseverance and self-discipline.” It’s just that they weren’t willing to direct those qualities toward the object of making gobs of money, and toward the steps required to obtain that object.

It sounds stupidly obvious, but in these times the obvious often bears repeating: With some exceptions, to become rich, you actually have to care about becoming rich. And not all smart people care about becoming rich.

This article is republished from Intellectual Takeout.

  • Dan is a former Senior Fellow at Intellectual Takeout. He received his B.A. in Philosophy and Catholic Studies from the University of St. Thomas (MN), and his M.A. and Ph.D. in Systematic Theology from Duquesne University in Pittsburgh, Pennsylvania. You can find his academic work at