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

[SkyFlakes]

Yes that could be true to some that destiny makes them rich. But that destiny isn't just the way to be rich. I believe that hardwork and perseverance is very important for an individual to be rich. Being practical is in need as there are really a lot of problems that we would be facing as we continue our journey. What I think makes a person rich is the mindset of ourselves. If we set our mindset to reach a goal, then I believe we would definitely achieve it. Thus, being rich can be determined by chance and through mindset.

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[onaiwusun]

I think the concept of 'chance' as used in the description could suggest a odd or likelihood of something happening, if there is one thing about the rich, they increase the Odd or chance of their getting rich by developing certain habits or traits,skills , dispositions etc. IQ is not required for these. Most genuises are actually bad with some 'wealth habits' and often make bad investors

[diger]

You can be dead sure that luck played its role in their promotion to the highest ranks. There is just too much competition in the world these days that you could solely rely on your talent, intelligence, and effort. There will always someone, or rather quite a few of them, who is more talented, intelligent, and industrious than yourself.

[kniheant]

I believe that being rich you have to do things in a certain way.There is a science of being rich.Anyone who follow the scientific principles of being rich either consciously or unconsciously will inevitably be rich.

[hastang]

Percentage wise to be rich is not by chance but by the plan a.person set to be his goal. It is not good to rely our future by the chances of life. We should always set our goals and target to pursue in our daily lives. Living by chance is just a crazy idea of some idiot mind.

[dlhezter]

Being rich is according to fate and predestination

You have point but you need to work for it for you to be able to become successful base on my understanding if there is an opportunity then grab it, even if you are smart and you didn't use it in a wise way it will result into nothing, in life we need to became wiser to be able to be success in life and we should put hardwork for it, if we didn't grab the opportunity now then when it will be? If you want to became rich then work for it.

Yes that could be true to some that destiny makes them rich. But that destiny isn't just the way to be rich. I believe that hardwork and perseverance is very important for an individual to be rich. Being practical is in need as there are really a lot of problems that we would be facing as we continue our journey. What I think makes a person rich is the mindset of ourselves. If we set our mindset to reach a goal, then I believe we would definitely achieve it. Thus, being rich can be determined by chance and through mindset.

Agree with this destiny isn't just the way to be rich because we ourselves we are the one who will make our destiny just dedication and effort and setting a goal is the way to have a successful future so put in your mind that you will be successful in what you are doing and believe in yourself that you can do it don't mind the people that was successful now focus on your career and goals.

[nigelsblockchainbytes]

Yes that could be true to some that destiny makes them rich. But that destiny isn't just the way to be rich. I believe that hardwork and perseverance is very important for an individual to be rich. Being practical is in need as there are really a lot of problems that we would be facing as we continue our journey. What I think makes a person rich is the mindset of ourselves. If we set our mindset to reach a goal, then I believe we would definitely achieve it. Thus, being rich can be determined by chance and through mindset.

IDK man, I live in Singapore, and a if you take a 1hr plane ride south you can easily meet people who will never be able to afford a plane ride. Can't be that many people who are lazier than me. Hardwork is important, but alot of things beyond a persons control have to go right for riches to happen

[guschin]

To create that chance, you need to be smart and hardworking. A lucky person might succeed but  a hard worker will definitely succeed.

[romanovst]

How credible is this research  ? I do not think that with luck alone one can become rich.

[chromosomes]

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.

This research have explained the science of being rich and made it simple. Even though you are very intellegent, if you are not good at strategies and decision making, the chance of being wealthy may get so far from you. It is by chance that we become rich and those chances should not be wasted instead it should be signified as a very important part of our lives.

[redsun114]

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 is the truth. Where I was working before, I was just a Guest Concept (a Receptionist in case…) and I was being paid there was less than what they pay the other staffs who do the main work and are above me in the office.

I’m not a graduate, but I’m very smart and instead sticking to that particular job I decided to go for other things and create more ways for income, which I did and I can assure you that I was earning more than ten times of whatever everyone in that office was being paid and I got more rich than them and was living a bigger life. I layer decided to quit from their cause that wasn’t my level anymore.

[Matic]

This can be true only in the case when your knowledge and experience is not helping you because the market is resisting it hardly by falling in prices and whatever else.

[btcrut2017]

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

For me intelligence is still the key to success. Being rich can be through luck or talent and even hardwork and with strong determination. It depends on the person. If he really wants to get rich there is a lot of things to do especially your attitude. Sometimes you are also at the right time.

[Hell-raiser]

Metamorphically speaking, life is really unfair. And if I would base with the information given. Some were practically born rich, some were sadly born poor. But the thing here is, how to live our life? Some rich people, they have all the thing they want in just a snap of their fingers but at the end of the day, they feel incomplete. While some poor people, having companions to get the days go by is simply a happiness for them. I think it's not merely the money itself that makes us rich, but the amount of appreciation we have in our lives. We all differs with talents and intelligence. But we all have opportunities that knocks a lot of times --- it's just a matter of choosing what door you will open; we all have a perfect timing for everything --- it's just a matter of realizing what is what. We are all rich by all means. Let's just don't forget to add spices like hardwork and efforts.

It is not just metaphorically speaking. Life is unfair even in the strictest and most practical terms. With that said, we should still accept the truth that in many cases, if not to say in the majority of cases, our future mostly depends on us. If you were born poor, and by poor I mean devastatingly poor (say, somewhere in Africa), it is unlikely that you will become a Bill Gates or Warren Buffett but you can still do a lot and achieve much. Much more than your peers and fellows.

As the saying goes, if there is a will, there is a way, so it is our thinking that is our worst enemy at the end of the day. Most people think in terms of how good they are at something. But this approach tends to backfire massively if something doesn't go right or just goes wrong. It is better to think in terms of getting better, then mistakes you make won't be as painful and you can get the most out of them, actually learn from them.

[nguyenthanhvien]

I think the concept of 'chance' as used in the description could suggest a odd or likelihood of something happening, if there is one thing about the rich, they increase the Odd or chance of their getting rich by developing certain habits or traits,skills , dispositions etc. IQ is not required for these. Most genuises are actually bad with some 'wealth habits' and often make bad investors

You say very right. Opportunities come to you but if you have no skills, no good knowledge then you will not catch it. So I think the opportunity is only 40% of your success.

[Zemomtum]

In my opinion, I think it's base on the people who'll make him rich or wealthy, because even though people have a chance, but doesn't know how to make handle that chance, then nothing will happen. And I also agree that being rich is not base on being intelligent, because I know some few people who're intelligent, but not rich. I think if you're good at making strategy, and decision making, then your chance of being rich is high.

[merchantofzeny]

Think of how many kids are in varsities and how many of those go pro. Or how many people go through acting camps that end up as big actors. Some just get lucky, while some never manage coz of setbacks.

Success is really more than about traits you have. Luck plays a lot. For example less than half of all new businesses would make it past their first year.

You can try to skew this in your favor by expanding your network - they can pass down opportunities to you that they themselves can't take advantage of but then again chance also play a part there. That break would have to align with your talents/expertise. And considering other people in that one contact's network, what are the chances you'd be the first one they'll think of?

[Harrisonimo]

There is this quote that says time and chance happen to both the rich and poor; an indication that it is not always of one's doing that one becomes classified as being rich or poor and also being rich is a matter of timing and chance too which I agree with; I didn't get to choose the family or country I was born into!

[diger]

 If you do not have the intelligence, you will not be able to take the chance if it is there, and even if you have intelligence but do not have the skills or talents required to maintain being there, you will eventually end up going down than up.

[Baokali92]

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