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

[JoMarrah Iarim Dan]

If a person is intelligent he/she must also contain a personality of being gumptious and industrious. The world of being a student is very different from the world of being a professional. Starting from the time of finding a job which is very difficult coz there are times that even though how tired we are applying, there comes a point that we are still not getting hired.

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[Dayan1]

This the most exact statement , I could not even believe that there is someone in this world who shares the same thoughts about this as me. Well  just to clarify it is indeed needed for a person to have a talent or intelligence to be successful person , but for me successful person is not a product of his or her own excellence, he is a product of chances, why? there are numerous people who can sing ,dace or even have a knowledge on almost everything but there will only be few people who can successful on this , because not all people gets the right opportunity for themselves.

[LuciferEveningStar]

Statestically, it has a bigger percentage that becoming rich is more on chance, but it is more effective when associated with intelligence and hardwork. When the 3 factors are combined together the chance of becoming rich is very reachable and doable. But sometimes “fate” will always bring you to where you deserve.

Yes you can be very rich depending on your family but everyone can be rich if they have the determination to work very hard each day just like the traders in the market that are always monitoring the prices in order to have profit daily.

[Mariksa]

I completely agree with this statement. To be successful people need to have talent and at least some intelligence but it doesn't guaranty that they will become rich or famous. I believe that every person has several chances in his life that can change it if he or she uses it wisely.

[$anounimus$]

yes you are right I really agree with you, a lot of rich people but do not have the degree of cleverness or talent, which can make him become rich is a very hard effort and never give up is the key to success that I can get from people who are successful without talent or intelligence.

[BulbaLord]

Most of the rich people , are came from the rich family . But their are people getting rich by their determination and goals in life on how they manage it .

[udanemas]

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, I think some say that chance only comes to those who will try. Luck will side with their efforts. It should be combined with intelligence, in order to become richer. That's in my opinion.

[queenlaurel]

It is true that chances comes to people once in a while, but you alsi need to be smart enough to see it and make use of it. If you are chanced and not smart enough to to make use of the chance you have got, you might loose it or still get the chance and not use it wisely will end in losing.

[SearchingforS]

I won't ever agree with that...of course we can see examples of extreme lucky millionaires but that's more like rare thing instead of usual.

[dragoz11]

for me it is not by chance but how much risk you take and when you take those risks. Being an entrepreneur and not being afraid from taking risks wisely is one of the main factors of being rich.

[squallw]

I always thought that people with more QI/intelligence would have more success at job, money, etc than normal people.
But, nowadays, i think that is just lucky, sometimes a genius could be lost in society living a simple life and a dumb @sshole could turn very rich suddenly and ramdonly.
Sometimes we have chance and we need to try, but sometimes we need lucky to be successful.

[Baronggot]

I think it make sense at some point because i really have a friend who became a millionaire because of crypto being just a bounty hunter and he just even didn't expect that to happen. It is just too timely that he participated in a very promising ICO that its ICO price went off the charts unexpectedly giving him millions worth of money converted in our country's currency.

[Dmitry.Vastov]

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.

Chance and luck pays a vital role in being rich but this statement not always holds true. As we all know that our parents keep on saying study hard otherwise you will not get good job or you will not get highly paid jobs just because we all know that money always comes from intelligence and talent though luck factor also plays some role in becoming rich but not always its always a matter of luck and chance but talent and intelligence is permanent.

[tazman]

Being rich its not determined by chance, its needed to do hardwork because your knowledge and intelligence will be useless if you don't do work of it. School and studies to learn does not mean you easily become a rich person its not like that you need to use it in working because this will help you to achieve and success in life.

[SectorZero]

Interesting theory. I believe that wealth = success. Millions of stupid people are very rich. Yes later someone becomes smart, helping him to develop wealth, but nevertheless he earned his don't mind. The authorities are not profitable that all were rich and sometimes talented people take everything. I want to believe that the cryptocurrency will end this once and for all and no one will take away people's wealth.

[love_you_much]

I do not think so . If there is a chance without grasping then it will fail. I think the way to rich is the positive and diligent, dare to think will do one day you will achieve what you want.

[kauban2018]

I truely amazed about the research and how it was determined because I believe that studying help us to enhance and develop our knowledge and may help us to enhance our talent by learning different techniques in practicing and trying. Intelligence is all about studying something that may help you develop each talents.

[coynedterm]

I truely amazed about the research and how it was determined because I believe that studying help us to enhance and develop our knowledge and may help us to enhance our talent by learning different techniques in practicing and trying. Intelligence is all about studying something that may help you develop each talents.

Right , and I agree with the factor with which you are giving your favour but here you should see at another another factor that why OP is including .
Since I have lots of knowledge in this field but still to make better earnings in the trading in cryptourrency market need better skill of prediction as well as a better luck , so that we can make better earnings , even all the prediction are based upon the technical analysis about the coins but in Actual pump and dump are the main factors about the market of that coin .
Many times I made prediction but there is didn't found that intelligence ideas works more ebtter that what I made from by chance in this field .
So here we need to consider the both factor and also we should take decision with the technical analysis and also will remain dependent to the luck ( to take risk ) .

[Tiger Junk]

Interesting theory. I believe that wealth = success. Millions of stupid people are very rich. Yes later someone becomes smart, helping him to develop wealth, but nevertheless he earned his don't mind. The authorities are not profitable that all were rich and sometimes talented people take everything. I want to believe that the cryptocurrency will end this once and for all and no one will take away people's wealth.

Being rich could depend on many factors. And yes it could either be by chance  or all of the factors that were mentioned above. But I believed that being in the crypto currency  world could really help you a lot becone successful when it comes to your financial aspects.

[nabinkhadka]

To be successful there should be three things Either you have to be very lucky , either you have to cheat or either you have to work very hard. Well i don't think being rich is determined by chance rather than intelligence or talent if you are not talent you cannot convert the chances.