Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

You don't have to be smart to be rich

25.04.2007
It doesn't take a rocket scientist to make a lot of money, according to new research.
A nationwide study found that people of below average intelligence were, overall, just about as wealthy as those in similar circumstances but with higher scores on an IQ test.

Furthermore, a number of extremely intelligent people stated they had gotten themselves into financial difficulty.

“People don't become rich just because they are smart,” said Jay Zagorsky, author of the study and a research scientist at Ohio State University 's Center for Human Resource Research.

“Your IQ has really no relationship to your wealth. And being very smart does not protect you from getting into financial difficulty,” Zagorsky said.

The one financial indicator in which the study found it paid to be smart was income. Those with higher IQ scores tended to get paid more than others.

While other research has also found the IQ-income link, this is one of the first studies to go beyond income to look at the relationship between intelligence and wealth and financial difficulty, he said.

“Financial success for most people means more than just income,” Zagorsky said. “You need to build up wealth to help buffer life's storms and to prepare for retirement. You also shouldn't have to worry about being close to or beyond your financial limits.”

Zagorsky's study appears online in the journal Intelligence.

The study is based on data from 7,403 Americans who participated in the National Longitudinal Survey of Youth, which is funded primarily by the U.S. Bureau of Labor Statistics. The NLSY is a nationally representative survey of people, who are now in their mid-40s, conducted by Ohio State's Center for Human Resource Research.

The same people have been interviewed repeatedly over time since 1979. This study is based on responses from the 2004 survey.

Participants completed the Armed Forces Qualification Test (AFQT), a general aptitude test used by the Department of Defense. Researchers have long used AFQT scores as a measure of intelligence.

All participants were also surveyed about their income, total wealth, and three measures of financial difficulty: if they currently have any maxed-out credit cards, if over the past five years they had any instances where they missed paying bills, and whether they ever declared bankruptcy.

The results confirmed research by other scholars that show people with higher IQ scores tend to earn higher incomes. In this study, each point increase in IQ scores was associated with $202 to $616 more income per year.

This means the average income difference between a person with an IQ score in the normal range (100) and someone in the top 2 percent of society (130) is currently between $6,000 and $18,500 a year.

But when it came to total wealth and the likelihood of financial difficulties, people of below average and average intelligence did just fine when compared with the super-intelligent.

The study could find no strong relationship between total wealth and intelligence. How could high-IQ people, on average, earn higher incomes but still not have more wealth than others? Zagorsky said this data can't provide an answer, but it suggests that high-IQ people are not saving as much as others. He is currently finishing a study that is exploring that question.

The findings revealed mixed results when it came to the link between intelligence and measures of financial distress. For example, the percentage of people who have maxed out their credit cards rises from 7.7 percent in those with an IQ of 75 and below to a peak of 12.1 percent among those with an IQ of 90. Then the percentage falls in an irregular pattern to 5.4 percent among those with an IQ of 115 before rising again.

This irregular pattern is also seen among the bankrupt and people who missed bill payments.

“In these measures of financial difficulties, it seems that those of slightly better than average intelligence are best off,” Zagorsky said.

“Just because you're smart doesn't mean you don't get into trouble. Among the smartest people, those with IQ scores above 125, even 6 percent of them have maxed out their credit cards and 11 percent occasionally miss payments.”

Zagorsky said you only have to look in the parking lots of the nation's universities to see that intelligence and wealth are not necessarily linked.

“Professors tend to be very smart people,” he said. “But if you look at university parking lots, you don't see a lot of Rolls Royces, Porsches or other very expensive cars. Instead you see a lot of old, low-value vehicles.”

The lesson is simple, he said.

“Intelligence is not a factor for explaining wealth. Those with low intelligence should not believe they are handicapped, and those with high intelligence should not believe they have an advantage.”

Jay Zagorsky | EurekAlert!
Further information:
http://www.osu.edu

More articles from Studies and Analyses:

nachricht Smart Data Transformation – Surfing the Big Wave
02.12.2016 | Fraunhofer-Institut für Angewandte Informationstechnik FIT

nachricht Climate change could outpace EPA Lake Champlain protections
18.11.2016 | University of Vermont

All articles from Studies and Analyses >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: Novel silicon etching technique crafts 3-D gradient refractive index micro-optics

A multi-institutional research collaboration has created a novel approach for fabricating three-dimensional micro-optics through the shape-defined formation of porous silicon (PSi), with broad impacts in integrated optoelectronics, imaging, and photovoltaics.

Working with colleagues at Stanford and The Dow Chemical Company, researchers at the University of Illinois at Urbana-Champaign fabricated 3-D birefringent...

Im Focus: Quantum Particles Form Droplets

In experiments with magnetic atoms conducted at extremely low temperatures, scientists have demonstrated a unique phase of matter: The atoms form a new type of quantum liquid or quantum droplet state. These so called quantum droplets may preserve their form in absence of external confinement because of quantum effects. The joint team of experimental physicists from Innsbruck and theoretical physicists from Hannover report on their findings in the journal Physical Review X.

“Our Quantum droplets are in the gas phase but they still drop like a rock,” explains experimental physicist Francesca Ferlaino when talking about the...

Im Focus: MADMAX: Max Planck Institute for Physics takes up axion research

The Max Planck Institute for Physics (MPP) is opening up a new research field. A workshop from November 21 - 22, 2016 will mark the start of activities for an innovative axion experiment. Axions are still only purely hypothetical particles. Their detection could solve two fundamental problems in particle physics: What dark matter consists of and why it has not yet been possible to directly observe a CP violation for the strong interaction.

The “MADMAX” project is the MPP’s commitment to axion research. Axions are so far only a theoretical prediction and are difficult to detect: on the one hand,...

Im Focus: Molecules change shape when wet

Broadband rotational spectroscopy unravels structural reshaping of isolated molecules in the gas phase to accommodate water

In two recent publications in the Journal of Chemical Physics and in the Journal of Physical Chemistry Letters, researchers around Melanie Schnell from the Max...

Im Focus: Fraunhofer ISE Develops Highly Compact, High Frequency DC/DC Converter for Aviation

The efficiency of power electronic systems is not solely dependent on electrical efficiency but also on weight, for example, in mobile systems. When the weight of relevant components and devices in airplanes, for instance, is reduced, fuel savings can be achieved and correspondingly greenhouse gas emissions decreased. New materials and components based on gallium nitride (GaN) can help to reduce weight and increase the efficiency. With these new materials, power electronic switches can be operated at higher switching frequency, resulting in higher power density and lower material costs.

Researchers at the Fraunhofer Institute for Solar Energy Systems ISE together with partners have investigated how these materials can be used to make power...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

ICTM Conference 2017: Production technology for turbomachine manufacturing of the future

16.11.2016 | Event News

Innovation Day Laser Technology – Laser Additive Manufacturing

01.11.2016 | Event News

#IC2S2: When Social Science meets Computer Science - GESIS will host the IC2S2 conference 2017

14.10.2016 | Event News

 
Latest News

UTSA study describes new minimally invasive device to treat cancer and other illnesses

02.12.2016 | Medical Engineering

Plasma-zapping process could yield trans fat-free soybean oil product

02.12.2016 | Agricultural and Forestry Science

What do Netflix, Google and planetary systems have in common?

02.12.2016 | Physics and Astronomy

VideoLinks
B2B-VideoLinks
More VideoLinks >>>