It Doesn’t Pay To Be Smart


According to a new study, it doesn't pay to be smart. Or, to put it more clearly, it doesn't pay anything extra.

The answer is no. "Being more intelligent does not confer any advantage along two of the three key dimensions of financial success (income, net worth and financial distress)," Zagorsky finds, looking at the data with statistical tests. Income does weakly correspond to intelligence test scores, he finds, where "a one point increase in IQ test scores is related to an income increase of $346 per year. But at most, that same one-point increase in IQ leads to "a net worth increase of at most $83, but probably zero."

A couple of observations…

First of all, education still matters. If you think of intelligence as more brain horsepower, well, you still need to learn how to use it. If you don't know how to drive then it does you no good to own a Lamborghini instead of a Camry.

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Second, if you are intelligent, it puts you at risk of discovering something that is true, but counterintuitive and unpopular, and it does you almost no good to know such a thing. Nine out of ten times you would probably be better off believing the conventional wisdom. Swimming upstream makes it that much harder to get anywhere. People hate party-poopers who are always explaining why they shouldn't believe their horoscope, etc.

Third, most of what people will know about you will be what you tell them, so a healthy dose of narcissism is a great way to get ahead, regardless of your level of intellect.

  • Smart isn’t worth much if you are lazy. We probably all know people who are smart, but waste it on high scores on the trivia game at the local bar. Intelligence is certainly a component of success, but so is hardwork and being in the right place at the right time.