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Smarter People Make More Money, Save Less
Posted By Jim On 05/21/2007 @ 4:08 pm In Frugal Living | 5 Comments
According to Ohio State professor Jay Zagorsky, in order to become wealthy it doesn’t matter if you’re smart. “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.” What ultimately matters is whether or not you save – mind boggling!
But that’s not what piqued my interest because pretty much everyone can tell you that, it’s just a matter of whether or not someone is willing to do it. What did interest me was the results of a study (Yahoo has since pulled the article) of 7,500 middle-aged Americans, which basically were that the smarter you are, the more money you’ll make. Specifically, for each IQ point you have above someone else, you’ll probably make anywhere from $200 to $600 more each year. So, if you’re smarter by 50 points, that’ll translate to anywhere from $10,000 to $30,000 more earnings each year according to this study. It’s interesting that a point in IQ was quantified in terms of dollar value, something I’d never seen before… but you’ll have to get over the disputed validity of IQ tests.
So, if smarter people earn more, why aren’t they more likely to be rich? (Rather, why isn’t there a correlation between IQ and wealth?) Zagorsky guesses it’s probably because smarter people think they can earn more later on so they spend more now.
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