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

[DiabolicAnt]

I'd disagree with that and say that everything is determined by person's very abilities and nothing more.

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[simonzenke55]

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.

[magz]

I do not agree with this article. For me, it depends on how you become rich. When you got rich by chance like making bets in gambling, then we can say you are a very lucky one. But if you get rich because you pursue and become successful with your career, I don't think that it is just by chance. It involves time, effort, intelligence, and talent, that's why you achieve your dreams.

[pallang]

Being rich is sometimes a fate because some rich people had inherited their wealth they are the people who were born with silver spoon that is what we call fate but some people become wealthy through their goals in life and their perseverance to become rich.

[Digital_Lord]

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.

Yes that’s true. Like seriously, it’s soo damn true cause I see it everyday, I see a lot of intelligent people, people who are so smart but they have nothing, not even a job. I see lots of graduates that end up with no job, lots of them with first grades but not achieving anything, but you will see those who were getting poor grades in school and when they graduate from school due to their family is rich they easily get job. Even in the music industry, I see lots of young great talents that are not succeeding, while there are lots of dumb–a$$ making money from it.

[DonateBB]

Opportunity attached to talent is a great thing. Perhaps you are right, if we are lucky we will become rich. Smart, talented are not always successful, but they reduce the risk of losing money, and the opportunity to come up with intelligent people is always high.

[BrewMaster]

it was definitely an interesting read but i don't like the way it is putting it all together.

for sure, nobody can deny that luck plays an important role in everybody's lives, rich and poor alike. some have good luck and become more successful and some others have bad luck and fail. but to say being rich is determined by chance is wrong. i do believe in hard work. you may get lucky tomorrow and win the lottery but without hard work, talent and a functioning brain! that money is going to vanish in thin air so you will never become rich.

for example when i look back at my life for the past ~5 years, i have been working hard and i had a terrible luck with finding a job, making money, and anything else you may think. and although i am nowhere near being rich but i have improved my life significantly. and i will continue doing so until i get there.

[geegaw]

it was definitely an interesting read but i don't like the way it is putting it all together.

for sure, nobody can deny that luck plays an important role in everybody's lives, rich and poor alike. some have good luck and become more successful and some others have bad luck and fail. but to say being rich is determined by chance is wrong. i do believe in hard work. you may get lucky tomorrow and win the lottery but without hard work, talent and a functioning brain! that money is going to vanish in thin air so you will never become rich.

for example when i look back at my life for the past ~5 years, i have been working hard and i had a terrible luck with finding a job, making money, and anything else you may think. and although i am nowhere near being rich but i have improved my life significantly. and i will continue doing so until i get there.

From what you say, I highly agree that luck or opportunity is just something temporary, it can not determine the rich, more precisely, our lives will become better in the short term when we are lucky but whether this lasted or not, it depends a lot on our talent and intelligence. Talent will help us maintain a rich life, instead of opportunities because the opportunity is not forever, it will soon disappear while talent is a permanent tool, it can help us make money regardless of whether we have the opportunity or not, talent automatically gives us the opportunity

[Odelkaleng]

I agree People who are lucky can beat smart people, talented, and rich people though.

[Wong Kalong]

Yes, I agree with this. For someone to be rich does not just rely on intelligence and talent because all we need is luck. If the person is stupid and not gifted but has a very lucky fate, I am sure that person will succeed. And usually, people who are smart and talented, they will feel the most intelligent and arrogant with the knowledge they have.

[Hell-raiser]

I know about your point, chances are not always come in our life, and the chances are  now born which the key to everybody become rich, it is the cryptocurrencies business, which is the sharp tools use to all people become rich. We know already that there is a lot of people becomes a rich because of bitcoin business by starting in a small capital invested. But it is not quick and easy to become rich by way crypto business, we must also adopt the total nature and the flow of crypto businesses.

I know chance does not come to all people but when there is chance, do your best to grab it. In order to become rich, it is better if you have that talent and intelligence.Not all who are intelligent gets rich because they do not have the opportunity. Some people I know that got rich through bounty campaigns are because of luck, they do not study that much in crypto, but they work hard for it.

I strongly disagree with this stance. While we are not given the same amount of luck during our lifetime (since otherwise the idea of luck would be meaningless), no one can say that he has been completely unlucky. He could have been unlucky for not grabbing an opportunity when it had been presented to him, but it was his choice and ultimately his fault. To put it differently, you can't blame luck for yourself ignoring it when it comes about. Most people who consider themselves as totally unlucky are just that. They get stuck in a sort of self-fulfilling prophecy, basically, they are unlucky because they think of themselves so.

And also, we need to believe in luck, for how else can we explain the success of those we don't like?

[Rizky Aditya]

I trust in this, as long as the character is determined to exchange their life as lengthy as they see a small risk that can exchange them for the better they will took it. But to turn out to be a billionaire you will now not rely solely on danger but also on your brain or Genius a true instance was once some of the billionaires in the world, some of them did not graduate some dropped out in faculty because they took the threat to invent some thing new, modern so they focus in it and they grow to be rich and famous with it.

Well, it may be this way but I have a different faith in this matter. There is no doubt that luck plays an important role in the success of a person but grabbing the chance at right time depends on individual. For example, there are many people around here who knew about bitcoin when it was at early stages but only few grabbed the opportunity. A man can change his life with hard work.

[sharm2121]

Yes its true, because some of the rich people like the artist are giving a chance to show their talents, and when they succed they become rich. So i believe that the chance that give to other people is the key to become rich, so if you have a chance to have a better life, grab it and work hard for it so that you will become succesful.

[Hell-raiser]

it was definitely an interesting read but i don't like the way it is putting it all together.

for sure, nobody can deny that luck plays an important role in everybody's lives, rich and poor alike. some have good luck and become more successful and some others have bad luck and fail. but to say being rich is determined by chance is wrong. i do believe in hard work. you may get lucky tomorrow and win the lottery but without hard work, talent and a functioning brain! that money is going to vanish in thin air so you will never become rich.

for example when i look back at my life for the past ~5 years, i have been working hard and i had a terrible luck with finding a job, making money, and anything else you may think. and although i am nowhere near being rich but i have improved my life significantly. and i will continue doing so until i get there.

I see and understand your pains with finding a job (I've been there), but the whole point of luck is such it comes about completely unexpected. And while this is certainly true in the majority of cases, you can actually work your way toward more luck. If you haven't yet, you may want to read the first two posts of this thread where I give an example how you can actually increase your chances of meeting, or rather encountering luck, though in a specific environment.

The irony is that people who don't believe in luck are less likely to find it, and this has pretty solid, kind of scientific explanation. Really, if you don't buy lottery tickets, your chances to win a lottery are null and void, whatever way you look at it. Certainly, it is a overly simplified example, but in real life it is not very far from that.

People who don't believe in luck act accordingly as if there were no luck possible at all, and when they are given a chance, they don't take it seriously and rather choose to discard it. This is a big mistake which you may regret for the rest of your life. But then it may be too late to cry. I know that, I've been there too.

[Valzzz005]

I am not entirely surprised by this at all actually, anecdotally I have always felt people who achieved success where mainly in the right place right time. Whether that be born to a certain family or class, or to a certain country, or area of a country, these things all effect where we will end up. Good to know us average folk can still make it in this rigged world

That is so very true because there are a lot of intelligent people who end up nothing compared to their other people. Because they do not meet their chance they do not even see the opportunity. Not all people are given the chance to have an opportunity in their life so once that you have it do not even let it go because that is once in a life time. Just like those people who buy bitcoins 10 years from now look at them they are now a millionaire because of that. They have the opportunity and they grab it.

[sp01_cardo]

Almost all for me. There is also a situation that if your family is rich then you are also, because you inherit all the wealth of you mother and father. There is also some person get rich because of their intelligence and talent, just because the want their life to change so they pursue to work hard to earn big money.

[Prettyme]

Being rich is according to fate and predestination

Hmmmm..

They say that chance only knock ones you have to grab it but also you have to do something you have to work on it wisely.

Exactly and on point.

I have always felt people who achieved success where mainly in the right place right time

and with right decision.

Yes, we have our own time and wait for it but while waiting we need to work hard because as they said we make our destiny. And yes, it's not our fault to born poor but it's our fault if we die poor. So living in this world is not a matter of chance but it's a result of every decision you made and the hard work we render. So strive hard.

[GoodLuck2]

Not all smart people are rich we can see beggars on the internet going viral because some of them are fluent in English while others are good in solving math problems. I think for some people it is their fate but for some they choose on what status of life they want to be. I know some people that are happy despite of being poor while some people who are rich are quite lonely.

Being a smart person is the most important thing and that it plays a key role in helping you in making more money and that you need to use your brain to make the wise decisions and to expect for something better in your life.

There is no way that you can rely on any kind of chance or on your luck completely for the sake of making money. You need to put in your best efforts as well to get the desired results.

If we study the life style of all the people who somehow managed to get richer and the ones who made a lot of earning in their lives, then we’ll get to know that not even one out of them have earned money just because of his luck or because of getting some chance or any other thing like that. It is all and all your hard work and personal efforts which pays you off at the end and which can help you in getting richer.

[Hell-raiser]

Not all smart people are rich we can see beggars on the internet going viral because some of them are fluent in English while others are good in solving math problems. I think for some people it is their fate but for some they choose on what status of life they want to be. I know some people that are happy despite of being poor while some people who are rich are quite lonely.

Being a smart person is the most important thing and that it plays a key role in helping you in making more money and that you need to use your brain to make the wise decisions and to expect for something better in your life.

There is no way that you can rely on any kind of chance or on your luck completely for the sake of making money. You need to put in your best efforts as well to get the desired results.

If we study the life style of all the people who somehow managed to get richer and the ones who made a lot of earning in their lives, then we’ll get to know that not even one out of them have earned money just because of his luck or because of getting some chance or any other thing like that. It is all and all your hard work and personal efforts which pays you off at the end and which can help you in getting richer.

Don't believe anything of what you hear and half of what you see. Though in these days of relentless Photoshop, you should believe even less what you see than what you hear. Actually, how are going to study the lifestyles of all the people who somehow managed to get to the top? Let me guess, by their authorized biographies and interviews in the major news sources like Bloomberg or Reuters, right? You are being fed fanciful success stories ("from rags to riches") about talent and industry without fail, but no one is actually going to reveal you the real truth behind their success unless it gets leaked one way or another. Because you may get disappointed, your dreams may get shattered and illusions dispelled.

[mimienamphine]

Being rich is by chance? well,I do not agree with this school of thought.If so, then I will say that the diviner or whatever behind the creation of that chance is not fair to all mankind.To be rich,one has to work hard,smart and strategic.Off course the object of worship is part of the journey.In my case I will say God guide my steps to riches everyday but I definitely have a role to play so that the will of God which is riches will be materialized.Intelligence or talent has more to offer for a person to be rich.