Why Dumb People Earn More Than Smart People

It might sound counterintuitive, but recent research suggests that people with lower intelligence can earn more than their smarter counterparts. This intriguing phenomenon has been supported by data and studies, including a comprehensive one from Sweden. Here’s a deep dive into why this happens and what it means for career planning.

The Study: Intelligence vs. Income 📊

A study from Sweden involving 59,000 men who took a compulsory military conscription aptitude test tracked their earnings over their careers. The results showed that while there is a positive correlation between intelligence and income up to a certain point, this relationship diminishes at higher income levels. In fact, the top earners (those in the top 1%) had lower intelligence scores than those in the income bracket directly below them.

The Intelligence-Income Plateau 📉

The study found that smarter people tended to earn more money, but only up to around 670,000 Swedish krona (about $64,000) per year. Beyond this threshold, intelligence didn't significantly impact earnings. Surprisingly, among the top 1% of income earners, those with lower intelligence actually outperformed their smarter peers.

Why Dumb People Earn More: Key Reasons 🧩

1. Career Choices and Job Prestige 🏢

   • High-Prestige, Low-Pay Jobs: Highly intelligent individuals often pursue prestigious careers such as academics, research scientists, and specialized professionals like doctors and lawyers. These jobs require significant intelligence and education but don’t always lead to top-tier earnings.
   • Business Ownership: Most top earners are business owners, a field that doesn’t require genius-level intellect. Business owners can achieve high earnings without the extensive education or qualifications needed for certain professional roles.

2. Risk Tolerance and Career Satisfaction ⚖️

   • Risk Aversion Among the Highly Intelligent: Intelligent individuals in well-paid careers might be less inclined to leave their stable, high-paying jobs to start a risky business. They often reach a level of income satisfaction that reduces their willingness to take entrepreneurial risks.
   • Moderate Intelligence and Ambition: People with moderate intelligence and a strong desire for high income might not have lucrative job opportunities and thus are more willing to take risks. They often venture into business, where success can lead to significant financial rewards.

The Role of Statistical Anomalies and Biases 📉

• Ceiling Effect: In statistical analysis, the ceiling effect can skew perceptions. For instance, achieving top scores in a test or high income levels can create the illusion that less intelligent people are more successful, as the data points cap out at the maximum values.
• Survivorship Bias: This bias occurs when only the successful outcomes (like thriving businesses) are visible, ignoring the many failures. Average-intelligence individuals who succeed in business inflate the perceived earnings potential for their intelligence level.

External Factors Influencing Earnings 🌍

• Geographical and Demographic Differences: The study was conducted on men in Sweden, which has a unique economic and social structure. Factors like welfare systems, average salaries, and entrepreneurial rates differ from those in other countries, affecting the study’s applicability elsewhere.
• Nepotism and Connections: Family connections and nepotism can play significant roles in income. Some individuals gain high-paying jobs through connections rather than merit, skewing the average intelligence of high earners.

Conclusion: Tailoring Career Paths to Personal Strengths 🛤️

While the data suggests that moderately intelligent people with ambition can achieve high earnings, it's essential to understand that intelligence alone doesn’t dictate financial success. Career satisfaction, risk tolerance, and external factors like connections and geography play crucial roles.

Key Takeaway: Assess your strengths and weaknesses honestly. Pursue careers that align with your capabilities and marketable skills, rather than chasing prestige or potential earnings alone. Recognize that success comes from a combination of intelligence, ambition, risk management, and sometimes, a bit of luck.