You don't have to be smart to be rich, study finds

April 24, 2007

COLUMBUS , Ohio -- 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."
-end-
[Embargoed for release until 8:00 PM ET, Thursday, April 24, 2007.]

Written by Jeff Grabmeier, (614) 292-8457; Grabmeier.1@osu.edu

Ohio State University

Related Intelligence Articles from Brightsurf:

Human intelligence just got less mysterious says Leicester neuroscientist
NEUROSCIENCE EXPERTS from the University of Leicester have released research that breaks with the past fifty years of neuroscientific opinion, arguing that the way we store memories is key to making human intelligence superior to that of animals.

Artificial intelligence (AI)-aided disease prediction
Artificial Intelligence (AI)-aided Disease Prediction https://doi.org/10.15212/bioi-2020-0017 Announcing a new article publication for BIO Integration journal.

New roles for clinicians in the age of artificial intelligence
New Roles for Clinicians in the Age of Artificial Intelligence https://doi.org/10.15212/bioi-2020-0014 Announcing a new article publication for BIO Integration journal.

Classifying galaxies with artificial intelligence
Astronomers have applied artificial intelligence (AI) to ultra-wide field-of-view images of the distant Universe captured by the Subaru Telescope, and have achieved a very high accuracy for finding and classifying spiral galaxies in those images.

Using artificial intelligence to smell the roses
A pair of researchers at the University of California, Riverside, has used machine learning to understand what a chemical smells like -- a research breakthrough with potential applications in the food flavor and fragrance industries.

Artificial intelligence can help some businesses but may not work for others
The temptation for businesses to use artificial intelligence and other technology to improve performance, drive down labor costs, and better the bottom line is understandable.

Artificial intelligence for very young brains
Montreal's CHU Sainte-Justine children's hospital and the √ČTS engineering school pool their expertise to develop an innovative new technology for the segmentation of neonatal brain images.

Putting artificial intelligence to work in the lab
An Australian-German collaboration has demonstrated fully-autonomous SPM operation, applying artificial intelligence and deep learning to remove the need for constant human supervision.

Composing new proteins with artificial intelligence
Scientists have long studied how to improve proteins or design new ones.

Artificial intelligence and family medicine: Better together
Researcher at the University of Houston are encouraging family medicine physicians to actively engage in the development and evolution of artificial intelligence to open new horizons that make AI more effective, equitable and pervasive.

Read More: Intelligence News and Intelligence Current Events
Brightsurf.com is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com.