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

[portalufonet]

In general you do need a level of IQ to make it from nothing to become rich. But I think in life tough, eye opening experiences is really what evolves a person, and most people don't have such level of experiences. They could technically have a high IQ, but still be ignorant. So in that sense I do believe that luck does play a sort of a major role, because smart or dumb, 99% are ignorant of life. In particular if they were born rich.

I think everything is relative and everyone has their own way of success. So there will not be a common formula for success that can be applied to many people who will have their own way. I believe that if you really try, then success can come to anyone.

[Norihiro]

I don't think that all is about chance. But neither it is about talent, it is about certain abilities and education.

[Lorin]

To be rich you need to work hard for it. If the chance of being rich was given to you or comes to you, be thankful but you need to be wise and intelligent using your wealth somestimes you loose it because of your wroing doing. Chances come ones so grab it and  you are the one who will make it to grow.

[phpartisanmaster]

To be rich you need to work hard for it. If the chance of being rich was given to you or comes to you, be thankful but you need to be wise and intelligent using your wealth somestimes you loose it because of your wroing doing. Chances come ones so grab it and  you are the one who will make it to grow.

Yes you are right, you always need to study hard and work hard in order to become rich in the future and sometimes you also need to take risk in order to earn more profit.

[Diablesfunis]

I'd say if a person want to be a billionaire then luck plays biggest part in it as not everyone will get the same chance or grab the chance when it arrives, but if they want to change their live to be better then talent and intelligence will play bigger part, although they won't be billionaire but they will be quite well off. If you don't have the talent then you can work hard to make chance happen, but if you don't work hard you will be poor the rest of your life.

[anti76]

to become rich do not have to lie on the couch and do nothing. You need to develop, learn, get acquainted with different people. And then the probability of chance will be higher

[Bitlife81]

There are many people who became a rich person because they work and study hard to gain knowledge and ideas on how it will works. Having these things help them to overcome it to be successful in life.

[LuciferEveningStar]

There are many people who became a rich person because they work and study hard to gain knowledge and ideas on how it will works. Having these things help them to overcome it to be successful in life.

Maybe in the corporate world, studying will work but in this industry, it is more important to have patience because the market is unpredictable.

[princejohn19]

For me become a rich is not determined by chance,become a rich is about how you work hard for it.

[admosfir]

I think work hard is the main factor to achieve our goals such as become rich and all the goals we want. even though we have intelligence and skill, we will not be able to be rich if we cannot use it

[Sled]

I think work hard is the main factor to achieve our goals such as become rich and all the goals we want. even though we have intelligence and skill, we will not be able to be rich if we cannot use it

Hard work beats talent and skills and that is the main reason why even the intelligent people are losing opportunities and chances over the time because they are not working hard, they are not maximizing the things that can give them a lot of benefits in their future and that is the reason why even some people under the poverty can still make it and become rich, because they work hard.

[Madara_Uchiha]

I think to become rich, you have to work hard and engage in self-development. Very rarely there are situations, as a result of which a person who has not exerted any effort can get rich.

[UmitatsuKen]

Some beginners make the mistake of investing money only to realize a few years later that those funds are needed somewhere else. Consider the time frame of each and every investment you make. Few advisors will recommend touching money in the stock market before five years is up, but a money market account or certificates of deposit can turn around quicker than that.

[Nucunsimeo]

If you keep on waiting for chance to come, I don't think there's going to happen. Chances are good because it knocks on your door to offer something special, but sometimes I think it's better if you find your own door, offer your service where you excel and be progressive.

[bonammeo]

Successful people share the secret of success and experience. Especially they always mention the word seize the opportunity. No matter how good you are, but you have not met the right time, all your efforts are gone. Many people are not good at learning, but the way they grasp the problem makes them successful.

[hotBriX001]

If you keep on waiting for chance to come, I don't think there's going to happen. Chances are good because it knocks on your door to offer something special, but sometimes I think it's better if you find your own door, offer your service where you excel and be progressive.

For me to have high percentage to become rich these three aspects must be combined to become succeesful. For having intelligence and talents I think we can make any good chances to become rich because we are capable of doing things with positive outcome at the end. We may be able to come up with an extra ordinary ability on manipulating business with a high chances of earning great amount of profit in every investment made.

[flametoken]

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. 

I think the problem here is the presupposition that people are (or should be) rewarded based on their intelligence or their talent. Having this presupposition entitles you to think that no person should amass a huge wealth, because, as the study suggests, no one is order of magnitudes smarter or more talented than the average person.

But in fact people are rewarded based on the perceived value they bestow on others. Let's take Jeff Bezos for example. We can all agree that he is not orders of magnitude more intelligent or more talented than the average Joe. But what he has built, namely Amazon, brings value to a huge number of people that voluntarily give money in exchange for the products and services that he provides. So if what you do impacts a whole lot of people and they give you money for what you do, that means you bring more value into their life than the money they give you, so it's only normal for you to gather a huge wealth.

I don't think luck plays such an important role in the `abnormal` distribution of wealth. I mean yes, opportunities matter and a child born in a poor country will have to work more and harder than a child born in a developed country with institutions that allow the creation of wealth, but other than that initial difference, I think it's more important to make the right decisions presented to you. Like many people said before me, there are a lot of people who heard of bitcoin in 2010 and 2011 but they didn't choose to invest or mine then, not recognizing the importance that this new technology will have in the future. But those who did were not necessarily lucky, because the opportunity was there for everyone to take.

[gurang]

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.

even you are talented but you don't know how to invest or how do you reactivate yourself to getting out of poverty if you are not smart, so much better to be smart rather that being talented

[basyang]

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

It seems to me that,  determine in being rich is its accomplishment and a down to earth attitude. We can say that being rich is not about for being intelligence because even though how smart you are if you did not know how to be with other people it does not make sense. Talent can be a stepping stone to be rich if you have many skills then you a have a potential.

[Abolaji11]

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.

I totally agree with Mr. Gate... If you are born poor,  it not your fault because you met your self poor after beong born but if you die poor is really your fault because you can change a lot of things with your effort,  wisdom, intelligent and ofcourse a bit of luck.