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

[Ronyx]

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.

I do not believe in coincidence, but I am more confident in talent and how we can take advantage of the best possible situation. Bitcoin can indeed make rich people, because they buy at a low time and sell it when prices soar. I guess it's not just a coincidence but they already have a positive view on bitcoin, and believe that bitcoin will increase in value.

[Bagaji]

Well to some extent i will agree with the that being rich is determine by chance as compared to intelligence. This is because if one should compared the numbers of those who are rich via chance and those who got rich through the level of their intelligence you will see that is insignificant of the later as compared to the previous one.

[whirlcoin]

Born as a rich is by chance but being is rich is based on the skills and luck because many rich born kids lose their all assets due to no knowledge about hiw to save and invest money.To be honest many poor people are now the richest people they did this by skills and intelligence of course the luck too.So all the three factor is important for being rich person.

[goldade]

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.

Although, there are some people who are due to chance, they are probably born rich or were helped to become rich,  I still believe that being rich is determined by intelligence or talent rather than chance.
Hardworking and talent have produced more rich people than chance. Even one is rich by chance, there is a high probability one may lose it all to carelessness,  mismanagement and some other factors.

[Findingnemo]

Yes I agree to that because sometimes luck is one reason why people become rich.  Luck in terms of many ways. Being rich by intellegence or talent is also one reason why people become rich because they use their knowledge and talet but I mostly agreed of being rich by chance.

Yes I also agree with this statement most of the times luck and chances are very helpful to grow up only in sometimes our studies and intelligence will helpful you to grow up in your life but both are very important in our life so my opinion is a man need all of these things to live a good life .

[Bustart]

Well to some extent i will agree with the that being rich is determine by chance as compared to intelligence. This is because if one should compared the numbers of those who are rich via chance and those who got rich through the level of their intelligence you will see that is insignificant of the later as compared to the previous one.

Richness is not achieve by chance or destiny. Practically speaking, it is achieved and cultivated by perseverance and persistency. Road to richness doesn't happen overnight. Its road may be bumpy, rough, or uncertain but its result is worth rewarding. Let's all aim for the better and stay positive!

[servogeek2]

There are several methods to obtain wealth.

Luck is a factor, but there are millions of people who had a lucky opportunity, but turned it down, or could not seize it because they were unprepared.

Here Are several traits that can make you a fortune:


- Burning Desire (To keep you chugging along at the goal even in dark times)

- Willingness to Experiment & FAIL (Fall flat on your face 1000 times and still keep trying)

- Being Open to Ideas and people (Becoming an eternal student of life - everyone has something they can teach you - to follow or not to follow)

- Think Differently - Society pressures people towards conformity, but it often rewards ideas that are better than or different from their competitors.

- Build Your Ideas of What's Possible (Reading/listening to Autobiographies and topics on the subject you want to go into - the mind is a black box, give it some good material to work with; it will produce better ideas.)

- Working on Yourself (Business is mostly about managing your own psychology - Your personal vices and life problems will show up in your business if you do not work on them and let other people help you)



Finally, while LUCK may come at random, VALUE, RISK & TIME are CONSTANTS.


You can always make more money, but we can never make more time.

All the wealthy people have the same 24 Hours as you do, but time is their employee.



Method 1: The Investors Way:
You sell your time for money (salary/hourly).
They invest their money using time itself to earn more. (whether that's in stocks, bonds, crypto or business ventures)

This requires the willingness to fail, and to learn from others and your own mistakes over time.
Investing in good ventures is a skill that can be learned, and if you pursue it like that, the money follows.

More Info on this: The Richest Man in Babylon (Book/Audiobook)



Method 2: The Savers Way:
If you want no risk, you'll have to be young and put it into smart retirement accounts that compound over time. The cost from you is not being smart, but being consistent in your payments over time.

Also follow the GOOD Policy: Get Out Of Debt, and Stay Out Of Debt.

More Info on this: Dave Ramsey (Books/Talk Show)



Method 3: Value & Risk (The Entrepreneurs Way)

Usually ventures with the most risk tend to have the most value. (Crypto's volatile market versus stock trading's 1% highs and lows)

While people cannot create more time, they can create more value to the marketplace.

Rather than teachers giving a lesson to a group of 30 people, that same teacher can give the lesson on Youtube or UDACITY and teach thousands.
If they decide to charge money, they will probably end up with way more money than they could ever get from teaching the class one time to 30 people, because of the value they provided.

More Info on This: The Millionaire Fastlane / Think and Grow Rich / Who Moved My Cheese (Book/Audiobook)


Final Thoughts:

Thoughts alone will not make you wealthy. School should have taught you that.
Its the application of what you've learned over time, that will bring the wealth that you desire.

- Scientists spend years trying to prove their theories.
- Academics and Smart people have to get out of their heads and work with other kinds of people to have their ideas realized.
- Actors still have to learn their lines and look the part. (Peak performance fitness, clothing, marketing their brands)
- Early Employees at the leading brands had to believe in a mission more than their paycheck (Early Amazon, eBay, Facebook, Apple)
- Tech people who seemed to have wealth overnight, spent years of their lives giving up the time to learn to code, tinker with scripts and solve problems through critical thinking.
- People born into wealth have to be taught to preserve wealth, trust carefully, find real friends (who do not want something from you), not become a target of social games, and not get into destructive habits.


Sometimes people have to prep thousands of hours and several years for that one moment of opportunity that you guys call "Luck".
When these prepared people see it, they recognize the chance and latch onto it with all the strength in their bodies (they bet their lives on it).

The unprepared with the same exact opportunities watch them ascend to fame and fortune and merely scratch their heads and wonder when will luck finally smile favorably on them.....

If you feel that the door to wealth is closed to you, KICK IT DOWN.
Make your luck, be the hero of your own story (not a side character).

[btc.xbt.btc]

Of course there is no direct relation between the two, and crypto even proves that!

[reliable]

Yes I agree to that because sometimes luck is one reason why people become rich.  Luck in terms of many ways. Being rich by intellegence or talent is also one reason why people become rich because they use their knowledge and talet but I mostly agreed of being rich by chance.

Luck do play role but not always and when it comes to hard work and intelligence luck favors those who continuously work towards their goal and helps themselves in getting things done. It is not a game where luck will play role to greater extent but only a smaller part to be precise.

[spyerf]

Being rich is according to fate and predestination

It is a yes when according to fate but in predestination i dont think so. What you mean to say about predestination is people cant change their future. When they are born poor and in the future they are also poor is that what you want tyo point out. People has freedom, and they can change life they want to be in the future.

It is true . Not always people get rich because of hereditary or inheritance. Wealth is the amount of possessions we have. and possessions that can be sought by those who desire it. So anyone who has the will to become rich can certainly, even the poor ones.

[pecson134]

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.

This is right to the point. For a person to be born poor I agree that they don't have a choice for that since it the their parent or the predecessor does it. But as we were born on this world and as we grew older and learn about what life is, it would be the start to shape up our own future. It will be up to you if still want to become poor by doing nothing and just contented with that kind of life or will you strive harder so you can avoid this kind of life. I actually don't believe in fate but it is up to one owns decisions.

[Victorycoin]

I think luck and good timing also has something to do with it. We have seen intelligent and hardworking people trying to make it but most of them dont.

Being ruthless and cunning are also traits that one should have to get rich. Step on all those who are in front and who are better than you. If you need to, kill them.

I have heard that life is a game of chance and I have seen it firsthand that the swiftest most often do not win the race, because opportunity has a way of smiling on the prepared! If we sum up all the above, it becomes evident that neither luck, talent nor intelligence on their own is enough to make for success, but their combination greatly increases the success rate.

[inillo]

Intelligence and money only go hand in hand in societies with high social mobility. Most countries in the world have an society that makes it impossible to advance as individual no matter how smart you are.

[European Central Bank]

i don't buy any of this myself.

and intelligence has zero to do with wealth. the most intelligent people i know are all broke and will never amount to squat.

the people with money are the ones with drive, an eye for opportunity and people skills. luck had nothing to do with it either. they made their own luck using those skills. that's what you need.

[FrueGreads]

I completely agree with what had been said on that article. Being rich has nothing to do with being smart. Of course it helps, but it's all about chance and being able to gather good opportunities and making good choices. As for those good choices, you don't really make them because you are super smart. Maybe you ego will tell you that, but truth be told, you were "just" lucky. A good example is crypto. For those that entered the market soon, and holded their coins, it doesn't mean they made an amazing choice because they knew bitcoin would reach these prices. No one knew it would happen, as no one knows if it will succeed in the future, and increase to $500k or more.

Some people were already rich, because they were born in rich families, others got rich because they were lucky. Once they got to that state, it's easier to continue rich. The smartest people on the planet, like Einstein or amazing scientists like him, aren't known for being super rich. Are known for their contribution in terms of science development. Usually rich people are known for just being rich, nothing else, because they only contribute by moving their money and buying things.

I wont even go into illicit activities, or inside trading, or how rich people get completely favored by the system, that ends up making the rich, richer. Not because they are smart, but just because they are already rich.

[heraldlazaro25]

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.

I think I agree with you. Sometimes, intelligent and talented people become successful and rich in their lives but most of the time, those lucky people become the more successful ones. Luck plays a great part in our lives especially if we are gambling or taking risks with our money in order for it to grow.

[alyssaxx]

In the Philippines most people who are rich are Chinese people, they owned biggest companies.
And the other rich people are mostly those politician who are corrupt. They use their talent to get money in every projects that should be use for the betterment of our country. I didn't say all but mostly, hoepfully our new President will do process eliminate those corrupt politicians..

[Vladv26]

I agree with the idea that being rich is determined in athe very big percentage by the chance, by the place you lived, the famil you had and by the events that happend in your life. But obviously I dont agree with the idea that you cant get rich if you were not born in a rich family because I think it is stupid. I think everyone can get rich if he truly wants that and works for it. Of course it doesnt matter only how intelligent you are, if you dont want to be rich. It is not enough to be intelligent so as it is not enough to have money for a business but you dont have knowledge. Again, the studies show that most rich people are born to be rich but that doesnt mean anyone cant get rich just because they were not born in a rich family.

[audaciousbeing]

This is really a subject of discussion without any reservation because there are several people that are smart but not rich. While I admit that chance is a determining factor, but it has to be supported by being smart. I have not seen anybody who is rich that is not smart even if chance is going to be on his smart.

The issue is that there is no measurement of smartness and its not even on the basis of formal education. I have seen people who didn't even acquire university education employing people who do to keep their accounting records while those who didn't do well in formal education went out to become entrepreneurs to hire the bookies. It then mean that they might not be smart in formal education but smart in areas of business and the taking of risk.

In conclusion, I would agree that its a combination of the two and not just focusing on one to be the determining factor.

[criz2fer]

Being smart is not enough to be rich and successful. Most of the time people's success depends on the people surrounding us. Talent's are exceptional specially if you have a great attitude towards others which will contribute to connections to be rich. Knowledge to earn, invest and making money will be the key to be rich rather than being so bright in the classroom and focusing your self to only one goal, try to explore everything.