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

[Menawi12]

I strongly disagree with what you say, being rich is a business and a process. not people get rich because it is determined by chance. intelligence, talent, honesty and hard work are the keys to success. although destiny and fate play little role in the end of a business

Absolutely! There can only be a small percent of luck and we should not rely on it alone, because if we get to miss it then it's a big loss on our part. It's still better to be knowledgeable, to exert an effort, time, to be determined, to have passion, be committed, be patient, and be positive. The faith that we have also has a big contribution for us to succeed in life, and most importantly our attitude that makes us unique. It helps us to manage life's challenges to decide reasonably and manage them strategically and wisely.

Intelligence, talent, determination, and luck is related each others to create success. Knowledge is more powerfull because with good knowledge, we can see an opportunity that can bring us to success.

[icecream sandwich]

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.

We know starting at now that there is numerous people transforms into a wealthy in perspective of bitcoin business by starting in a little capital contributed. In any case, it isn't smart and easy to end up rich by way crypto business, we ought to similarly grasp the total nature and the surge of crypto associations.

[Lauff]

be a successful person or rich not only from the intelligence or knowledge you have, because I think to be a success other than two things tesebut luck factor is also very instrumental in addition to the experience is also a good teacher to be successful

[Boris_sahnevich]

I think they just do not miss a single moment that can bring them success or wealth. But sometimes it happens that wealth is achieved through hard work.

[ponomare]

One effective exercise is to write, "I can't (and also won't) be prosperous because ___ (fill in your negative thought)." You have all the answers inside of you. Then change all the negative thoughts to positive ones. Throw away the sheet with the fear based thoughts and focus on your positive ones. You have the power to have what you desire, and you deserve it all. Go for it! Harder you work luckier you get.

[odri777]

The study is most likely wrong.  Because luck does not always play any role, and sometimes it's the intellect that helps!

[pandanaran]

Indeed that luck sometimes defeats intelligence and talent, but just relying on luck is a thing that i think is not good, it impressed awkward. Although it is undeniable that you say it is very true, although I am not so surprised to hear this, but it would be better if we also have to have intelligence and talent.

[vessing]

Wealth is not the accumulation of material values. This ability to spend less than you earn, the ability to save and the Rich are people who have money. And the wealthy - those who have money and time.

[tatuare]

You want to be wealthy and have unlimited income. You also have a dozen different books from famous authors sitting on your bookshelf collecting dust and you are still not rich. You actually need to be little smart and change your position with the author.

[Salala1]

Richness is all about the opportunity one will get. There are brilliant people out there who are very poor financially but rich in cognitive thinking. A friend of mine use to top our class every semester but now, he is at the station washing cars for money. Upon all the intelligence, he has ended washing cars and this is all due to lack of chance.

[BitRentXx]

what kind of study did you follow?
I personally have other opinions about this, I think wealth is determined by the fortune that God gives us.

[pinot95]

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. Chance combined it with intelligence it will be better a chance to be rich.

Yes, I believe it is really true that luck plays the key role to most successful individuals because not all intelligent people become successful in life. It is not a measurement of success it is more on chances and luck. A person that is not so intelligent but has strategic plans and hardwork are more likely to succeed because they already know what they are not capable of. So they don't rely on their brain capacity that's why they need to work harder to reach their goal.

[andika2018]

someone gets rich by chance I think it just happens by some people who experience it. Luck is on the side of people so destiny makes it successful and rich. But in general, a person gets rich because of a process in which the person will try, be diligent, persistent, work hard with his abilities and talents.

I am agree with your opinion. Most peoples getting rich because their diligent and hard working. We can not rely on luck if we want to be rich because being rich depending on luck is not for long. Our luck can running out. What we should depend is on our hard working and knowledge because it can maintain our wealth

[gudrun]

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

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[/b]?

In my opinion, Opportunities only make up a small part of the opportunity to become rich.

The first thing needed to be rich is intelligence, if you are not smart you will not recognize your opportunity.

Second, I think it's courage, opportunity comes to you but you fear and do not grasp it, you will still be poor

[gerald246kru]

Yes, but this study says that smart people do not, as a rule, become rich. That everything depends on luck and luck. That is, this study refutes the assertion of the previous topic that stupidity is close to poverty. On the issue of wealth, we, probably, are following the fate that has been given to us. It is difficult to know the ways that are intended for us.

Yes, but not in all time this is correct, there are also times that our intelligence makes us rich too. It will all depend how lucky we are and what strategies we will be using.

Yes, luck is probably the most important factor to become rich. If you're lucky, you will not need to be smart to make money or look for opportunities. Luckily, money and opportunities come naturally to you

[cryptokia]

I'm not an expert in that area but I feel like it is the equal things, but to be rich upon the chance is so much easier than to try hard and work hard having your intelligence and education, lol. I'm looking for my chance.

[valentine401]

I'm not an expert in that area but I feel like it is the equal things, but to be rich upon the chance is so much easier than to try hard and work hard having your intelligence and education, lol. I'm looking for my chance.

In my own opinion, most of the people are getting rich because of their hard work and that is the reason why you should always make your self knowledgeable about cryptocurrency since it was one of the easiest way to get wealthy.

[geraldbe]

To get rich quickly, you must sell. What you sell is ideas and feelings. People seldom buy based on product use alone.

[safonoruu]

Some people earn money by the hour, which is great until you run out of hours and still want to make more money. Getting paid passively is the way to go.

[josephpogi]

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.

for me talent is more good than studying because theres a lot of people or student now have a good school and they are graduate and have a good grades but they didnt have any good  job so for me talent is more good .