Quick question: Do you think a high IQ is a significant predictor of financial success? Are high-IQ people more likely to be successful?
If you’re like most people, you probably said yes.
Now, what if I told you that only about 2% of success is explained by IQ?
That’s according to a study by Nobel laureate James Heckman. In a study of thousands of people worldwide, he found that possessing a high IQ wasn’t a critical component of financial success in most cases.
Hurrah! You don’t gotta be smart to get rich, eh?
Sorta, yeah.
It’s more than just intelligence
When I went through school, I was put in what my school district affectionately referred to as the “Learning Disabilities” program. The program was designed to give “disabled” kids like me extra time to do our homework because we didn’t pick things up as quickly as other students.
My GPA out of high school was a solid 2.7. Hardly the model of “intelligence”.
Yet, my first job out of college was a $55,000/year position in software (this was back in 2005 when earning $55K right out of school was good).
Fast forward 14 years and I had achieved financial independence.
You could easily say that my IQ, which was probably lower than most of my classmates and coworkers, didn’t keep me from achieving financial success.
Okay, time for the second question: If IQ isn’t a meaningful predictor of success, what is? Well, that Nobel laureate guy came up with that answer, too.
It’s personality. Namely, two personality traits: conscientiousness and curiosity.
The research tells us that our IQ basically doesn’t matter with the right personality.
Thinking back on my career, it’s true.
I worked with lots of high-IQ people. They were highly qualified and did their jobs well. The problem? They weren’t promoted as quickly as others because they didn’t have the right personality for the next step (typically, leadership).
And sometimes, these smart people were just flat difficult to work with.
Conversely, those who possessed conscientiousness and curiosity were most likely to achieve financial success throughout their careers.
Conscientious people are natural wealth-builders. People willing to go the extra mile to do their jobs well are conscientious. Through self-discipline and self-control, they work hard to achieve their goals even in difficult situations. They rarely give up. Conscientious people are highly organized and willing to delay gratification to achieve their goals and dreams.
Curious people don’t stand still for long. They are quick to try new things, learn new subjects, and take the initiative to figure things out.
So, don’t be discouraged if it takes you longer to learn new things.
With the right personality, those things don’t matter. Your GPA doesn’t matter. IQ? Nope. According to research, your personality can make up for it.
Chat next week,
– Steve
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