Study says being rich is determined by chance rather than intelligence or talent

[Gens09]

In my own opinion, I do believe that we can determined it by the ability of the a person. Many people were became rich just because of their abilities. Yes I do believe in chance, Of  course if you have a chance you should grab it. Some people also used their intelligence to become rich.

Yes, and another thing you can't be rich by just ability and intelligence of a person you should have an opportunity to grab. There must be opportunity in your side for you to become rich and successful. What is the essence of being smart and talented, or even industrious if there is no chance right? And bitcoin is a chance to all bitcoin users. It is the bridge for us to be rich and successful.

[1715467485]

1715467485

[Hell-raiser]

I don't think that it is only determined by the chance because it is always about determination and how hard working you are. If you are really hard working then you can easily reach to become rich because being rich just need work and patience and if you have those two which is determination and also patience then you can become rich and you don't need to depend on chance.

Millions of people are working hard, and it is not likely that you will be working 10x as hard as an average workaholic. In these circumstances, it is luck that becomes a major factor, whether you like it or not. Working hard can help you live a decent life, maybe somewhat above average but nothing much beyond that. You do need a genuine luck to break out of your daily routine and a typical lifestyle that every Tom, Dick and Harry enjoy. Unless you are already born into riches, of course.

[jaysabi]

You obviously fail to see my point. You don't see the forest for the trees. Microsoft's products were not shitty, they were so-so at best (in fact they quite were). There were more than enough competing products likely much better than Microsoft's but their developers didn't have their mothers on friendly terms with CEO's of biggest corporations. This is where luck comes to matter a lot, actually enough to make all the difference.

Market utility isn't superficial because it's the actual root cause of wealth. You couldn't turn that example around because simply reversing the words wouldn't make it true. Money isn't actual wealth, it's a representation of wealth you've accumulated through the efforts of what you offer the market, either through the products you make or the services you offer. The more utility those goods and services have, the more money you ultimately will acquire. But you don't get the money without the utility, that's how you know it's the cause of it.

If so, why don't you address the point which I made? How are you going to create that market utility in the first place when you have to compete with or rather against corporations which have literally thousands of personnel in R&D departments? In most cases, your only chance is pure luck, end of story.

This has essentially devolved into a chicken and egg discussion. Because you couldn't win the point against the notion that market utility is what causes wealth (as opposed to some of your earlier assertions, like it's caused by luck or caused by money, which failed to recognize that money is just a representation of wealth and not the actual cause of wealth), you're now trying to undermine the market utility argument by claiming that the only way you can create market utility is through luck. It's a ridiculous argument to make. It completely ignores ingenuity as any kind of force in the market. You might as well be saying that there's no point in trying to do anything in the marketplace because it's completely random and winners and losers are determined by chance. When you take that argument to its logical conclusion, you realize what a ridiculous point it is.

No matter how many times you end a paragraph with "end of story," it doesn't make your points any stronger. It looks like an attempt to claim an authority your points are completely failing to establish.

[valentinen39]

If you’re so smart, why aren’t you rich? Turns out it’s just chance

The most successful people are not the most talented, just the luckiest, a new computer model of wealth creation confirms. Taking that into account can maximize return on many kinds of investment.

The distribution of wealth follows a well-known pattern sometimes called an 80:20 rule: 80 percent of the wealth is owned by 20 percent of the people. Indeed, a report last year concluded that just eight men had a total wealth equivalent to that of the world’s poorest 3.8 billion people.

This seems to occur in all societies at all scales. It is a well-studied pattern called a power law that crops up in a wide range of social phenomena. But the distribution of wealth is among the most controversial because of the issues it raises about fairness and merit. Why should so few people have so much wealth?

The conventional answer is that we live in a meritocracy in which people are rewarded for their talent, intelligence, effort, and so on. Over time, many people think, this translates into the wealth distribution that we observe, although a healthy dose of luck can play a role.

But there is a problem with this idea: while wealth distribution follows a power law, the distribution of human skills generally follows a normal distribution that is symmetric about an average value. For example, intelligence, as measured by IQ tests, follows this pattern. Average IQ is 100, but nobody has an IQ of 1,000 or 10,000.

The same is true of effort, as measured by hours worked. Some people work more hours than average and some work less, but nobody works a billion times more hours than anybody else.

And yet when it comes to the rewards for this work, some people do have billions of times more wealth than other people. What’s more, numerous studies have shown that the wealthiest people are generally not the most talented by other measures.

What factors, then, determine how individuals become wealthy? Could it be that chance plays a bigger role than anybody expected? And how can these factors, whatever they are, be exploited to make the world a better and fairer place?

Today we get an answer thanks to the work of Alessandro Pluchino at the University of Catania in Italy and a couple of colleagues. These guys have created a computer model of human talent and the way people use it to exploit opportunities in life. The model allows the team to study the role of chance in this process.

The results are something of an eye-opener. Their simulations accurately reproduce the wealth distribution in the real world. But the wealthiest individuals are not the most talented (although they must have a certain level of talent). They are the luckiest. And this has significant implications for the way societies can optimize the returns they get for investments in everything from business to science.

Pluchino and co’s model is straightforward. It consists of N people, each with a certain level of talent (skill, intelligence, ability, and so on). This talent is distributed normally around some average level, with some standard deviation. So some people are more talented than average and some are less so, but nobody is orders of magnitude more talented than anybody else.

This is the same kind of distribution seen for various human skills, or even characteristics like height or weight. Some people are taller or smaller than average, but nobody is the size of an ant or a skyscraper. Indeed, we are all quite similar.

The computer model charts each individual through a working life of 40 years. During this time, the individuals experience lucky events that they can exploit to increase their wealth if they are talented enough.

However, they also experience unlucky events that reduce their wealth. These events occur at random.

At the end of the 40 years, Pluchino and co rank the individuals by wealth and study the characteristics of the most successful. They also calculate the wealth distribution. They then repeat the simulation many times to check the robustness of the outcome.

When the team rank individuals by wealth, the distribution is exactly like that seen in real-world societies. “The ‘80-20’ rule is respected, since 80 percent of the population owns only 20 percent of the total capital, while the remaining 20 percent owns 80 percent of the same capital,” report Pluchino and co.

That may not be surprising or unfair if the wealthiest 20 percent turn out to be the most talented. But that isn’t what happens. The wealthiest individuals are typically not the most talented or anywhere near it. “The maximum success never coincides with the maximum talent, and vice-versa,” say the researchers.

So if not talent, what other factor causes this skewed wealth distribution? “Our simulation clearly shows that such a factor is just pure luck,” say Pluchino and co.

The team shows this by ranking individuals according to the number of lucky and unlucky events they experience throughout their 40-year careers. “It is evident that the most successful individuals are also the luckiest ones,” they say. “And the less successful individuals are also the unluckiest ones.”

That has significant implications for society. What is the most effective strategy for exploiting the role luck plays in success?

Pluchino and co study this from the point of view of science research funding, an issue clearly close to their hearts. Funding agencies the world over are interested in maximizing their return on investment in the scientific world. Indeed, the European Research Council recently invested $1.7 million in a program to study serendipity—the role of luck in scientific discovery—and how it can be exploited to improve funding outcomes.

It turns out that Pluchino and co are well set to answer this question. They use their model to explore different kinds of funding models to see which produce the best returns when luck is taken into account.

The team studied three models, in which research funding is distributed equally to all scientists; distributed randomly to a subset of scientists; or given preferentially to those who have been most successful in the past. Which of these is the best strategy?

The strategy that delivers the best returns, it turns out, is to divide the funding equally among all researchers. And the second- and third-best strategies involve distributing it at random to 10 or 20 percent of scientists.

In these cases, the researchers are best able to take advantage of the serendipitous discoveries they make from time to time. In hindsight, it is obvious that the fact a scientist has made an important chance discovery in the past does not mean he or she is more likely to make one in the future.

A similar approach could also be applied to investment in other kinds of enterprises, such as small or large businesses, tech startups, education that increases talent, or even the creation of random lucky events.

Clearly, more work is needed here. What are we waiting for?

Ref: arxiv.org/abs/1802.07068 : Talent vs. Luck: The Role of Randomness in Success and Failure

https://www.technologyreview.com/s/610395/if-youre-so-smart-why-arent-you-rich-turns-out-its-just-chance/

A very interesting spin on anything that has ever been said about money, success or wealth!

I don't know what to think about this. The scaling argument which says 1% of the human population shouldn't own 40% of the world's wealth due to them not having IQ's of 200,000 or talent proportional to the highly disproportionate stake of wealth they control is something that will take time for me to digest and think about. Its certainly a novel concept.

Its also very interesting that they attempted to model along lines of standard deviation and wound up with a historical 20/80 wealth distribution. I think this is something which could use more exposure and media coverage. Its not often relatively original or new perspectives like this come along and the paradigm shift which can accompany them can often take decades to be fully appreciated within a pop culture vein.

It was actually depending on the person how he will take advantage of his skills and its just the same like, you have skills but you have no confidence to demonstrate how good you are on your own craft then your skills is just useless.

[FlightyPouch]

In my own opinion, I do believe that we can determined it by the ability of the a person. Many people were became rich just because of their abilities. Yes I do believe in chance, Of  course if you have a chance you should grab it. Some people also used their intelligence to become rich.

That is true, some people are becoming rich because of their abilities not by intelligence. But it is just a plus factor that you are a skilled and a intelligent person. but chances? yes I do believe in it, If you have it then grab it. 

For me, what you are saying is wrong. You see, a kid is being found to have a talent or a skill into something and parents will finding a way to improve their childs and that is why I am saying that you are wrong.

Before it becomes an ability or a skill, you must have a knowledge about that thing because sometimes we knew something that we thought we are better at it and we immediately immersed ourselves into that without really taking our time acquiring knowledge about it. For example, friends say that we are good in playing games so we join competitions because they said that you are good but you do not know that there is a lot of other players that are using their skill and knowledge the reason they are better than you. Those two is important because without the other one, you will not be able to improve yourself.

[slyfox]

this study is true most of the rich people come from rich families. But there is still a chance for us to try and innovate to create new things that can make us a new rich person. Bitcoin has created many new rich people hopefully in the future bitcoin still exist and make the poor rich.

This is not true, those that are rich most of the time are rich because of their own effort, the families that are rich for a very long time are very rare because at some point the person that made all the effort to become rich dies and gives his money to his children which most of the time do not really know what was needed to do in order to get that money so they squander it.

[Qastessa]

In my own opinion, I do believe that we can determined it by the ability of the a person. Many people were became rich just because of their abilities. Yes I do believe in chance, Of  course if you have a chance you should grab it. Some people also used their intelligence to become rich.

That is true, some people are becoming rich because of their abilities not by intelligence. But it is just a plus factor that you are a skilled and a intelligent person. but chances? yes I do believe in it, If you have it then grab it. 

I totally disagree with this statement and judgment how ignorance it is? You should not ignore the intelligence and hard work of an investor and definitely it is a thing of business so hard work is needed. Chance also is very important but in this case I assume that Bitcoin is a chance and is for everyone not for certain people and intelligent and hard work is required in this Business.

[ene1980]

this study is true most of the rich people come from rich families. But there is still a chance for us to try and innovate to create new things that can make us a new rich person. Bitcoin has created many new rich people hopefully in the future bitcoin still exist and make the poor rich.

I am not sure how you came to this conclusion, if being rich is not determined by hard work and intelligence then half of the worlds population would be rich by now, there are people who are making money by taking chances but you need to have a combination of everything to be successful in life, knowledge is more important to be successful and the drive to make money will determine where you end up.

[Hell-raiser]

You obviously fail to see my point. You don't see the forest for the trees. Microsoft's products were not shitty, they were so-so at best (in fact they quite were). There were more than enough competing products likely much better than Microsoft's but their developers didn't have their mothers on friendly terms with CEO's of biggest corporations. This is where luck comes to matter a lot, actually enough to make all the difference.

Market utility isn't superficial because it's the actual root cause of wealth. You couldn't turn that example around because simply reversing the words wouldn't make it true. Money isn't actual wealth, it's a representation of wealth you've accumulated through the efforts of what you offer the market, either through the products you make or the services you offer. The more utility those goods and services have, the more money you ultimately will acquire. But you don't get the money without the utility, that's how you know it's the cause of it.

If so, why don't you address the point which I made? How are you going to create that market utility in the first place when you have to compete with or rather against corporations which have literally thousands of personnel in R&D departments? In most cases, your only chance is pure luck, end of story.

This has essentially devolved into a chicken and egg discussion. Because you couldn't win the point against the notion that market utility is what causes wealth (as opposed to some of your earlier assertions, like it's caused by luck or caused by money, which failed to recognize that money is just a representation of wealth and not the actual cause of wealth), you're now trying to undermine the market utility argument by claiming that the only way you can create market utility is through luck. It's a ridiculous argument to make. It completely ignores ingenuity as any kind of force in the market. You might as well be saying that there's no point in trying to do anything in the marketplace because it's completely random and winners and losers are determined by chance. When you take that argument to its logical conclusion, you realize what a ridiculous point it is.

Now you are trying to deliberately distort and twist my point. I don't say that luck is the only way you can create market utility, yet it pretty quickly comes down to that in any saturated market which is divided by corporations with their huge budgets. To keep things real, can you name, for example, a startup which came up with a new processor recently? There is none. The only one that I can think of is Transmeta. But it still failed in the end by offering a subpar "market utility". Your realistic chances (besides some really impossible turn of luck) lie in new fields which haven't yet been taken over by the same big guns.

No matter how many times you end a paragraph with "end of story," it doesn't make your points any stronger. It looks like an attempt to claim an authority your points are completely failing to establish.

Now that you don't want to talk about Microsoft success and Bill Gates being a genius any more, I safely conclude that we can finally call it a genuine end of story.

[Sithara007]

It is a combination of many factors. You can't say that 100% of the rich people are intelligent and hardworking, while 100% of the poor people are retarded and lazy. But it is true that the vast majority of the rich people are intelligent and hardworking, and most of the poor are lazy and uneducated.

[Altcoins enthusiast]

This article is a well educative one and of a truth I really see some point that actually change my perception about been rich.  I think riches is a combination of both be intelligence and favour or luck. Many are born being rich and and some being poor but I just believe is just about the universals' laws of kama or couse and infect.

[intingko]

yes, i agree because poverty is not the hindrance to succes,  But sometimes we accept  failure in our goals in life , I  wonder  why my peers seem to be prospering my way more than my talent, it might not be because they're better at their jobs it's probably just down to random chance, according to a new computer model of wealth simulation and high technology. Charting a working lifespan more than 40 years.

[koralan]

this study is true most of the rich people come from rich families. But there is still a chance for us to try and innovate to create new things that can make us a new rich person. Bitcoin has created many new rich people hopefully in the future bitcoin still exist and make the poor rich.

This is not true, those that are rich most of the time are rich because of their own effort, the families that are rich for a very long time are very rare because at some point the person that made all the effort to become rich dies and gives his money to his children which most of the time do not really know what was needed to do in order to get that money so they squander it.

Yes, wealth comes only to those who really try, you have to try to work when the opportunity comes to you to grasp and become richer. Even so the opportunity sometimes comes very quickly and the rich will know how to grasp it. If it goes through it will be very difficult to come back. I believe that luck and opportunity only come to those who truly try.

[alon_alon]

Yes, I agree with this argument. I think if actually getting rich is just the luck factor of each person. Sometimes people who have more intelligence and talent can not even take advantage of what is inside of him. But people who do not have more knowledge can become rich because of their hard work.

[Opekin]

This article is a well educative one and of a truth I really see some point that actually change my perception about been rich.  I think riches is a combination of both be intelligence and favour or luck. Many are born being rich and and some being poor but I just believe is just about the universals' laws of kama or couse and infect.

What do you mean on universal laws? Can you give some example in detail. I think its luck also but not at all times its more on luck because your interest and intelligence will lead your path to those kind of work or activity that you will give effort, time and sometimes money to win in and earned.

[Clyvizcarra]

Being rich is when you have intelligent, hard work, and determination. But by chance is only given once in a lifetime, but make sure if you have that chance to become rich, you must work for it and do all you can to maintain it.

[thecoder2017]

Yes some are born rich having rich ancestors and some become rich due to luck and fate in investing in crypto currency but there are instances that people will become rich also due to their hardworking and smartness in the way they manage their lives.

[usekevin]

I agree with you. All the rich now are not a intelligence or talent guy.The people who had choose a chance are became a richest man .In Bitcoin trading also, we have to use the chances to inverse your money .When the price of bitcoin reaches red road,you have to choose a chance to inverse in bitcoin.

[Muwatti]

Being intelligent person or talented are not the measurement for your chances to success it can be measure on how determine you are to reach your goals... Even you are a genius if you didnt use it for your own goods still you will not consider as an intelligent person... But we dont need to let all of our works will depends only in chances we need to work for it because its our passion and will...

[mOgliE]

Hi,

Chance is not everything.

Your intelligence may have a role, but what is determining I think, is your environment.

If you grew up in a wealthy family, chances are high that you had access to culture when you where young, or had financial means to make studies..

And therefore in the end you can more easily have high paying jobs or a better living environment!