How much is a child's future success determined by innate intelligence? Economist James Heckman says it's not what people think. He likes to ask educated non-scientists -- especially politicians and policy makers -- how much of the difference between people's incomes can be tied to IQ. Most guess around 25 percent, even 50 percent, he says. But the data suggest a much smaller influence: about 1 or 2 percent.
So if IQ is only a minor factor in success, what is it that separates the low earners from the high ones? Or, as the saying goes: If you're so smart, why aren't you rich?
Science doesn't have a definitive answer, although luck certainly plays a role. But another key factor is personality, according to a paper Heckman co-authored in the Proceedings of the National Academy of Sciences last month. He found financial success was correlated with conscientiousness, a personality trait marked by diligence, perseverance and self-discipline.
Why aren't you rich? You obviously slept with the wrong people!
(Score: 5, Insightful) by Thexalon on Thursday December 29 2016, @01:14AM
My working definition of what it takes to be "upper class" or "rich": Possession of enough wealth that investment income alone is sufficient to cover living expenses plus something extra. This is an important milestone, because it makes working the 9-5 entirely optional in a way that nobody lower on the economic ladder experiences. The simple fact that you could walk away from your job at any time and be totally fine gives you an incredible amount of freedom. That said, most people who are near that point don't feel really rich, because they're busy comparing themselves to those higher on the economic ladder than themselves. For example, one of my college roommates described himself as a typical middle-class guy, but both his parents were executives and had 6-figure incomes. Now, compared to the Donald Trumps of the world, that's pocket change, but it's also about 6 times what the average American household has to work with and a completely unimaginable fortune for the vast majority of people in the world.
The other major class designations, with this blueprint:
The only thing that stops a bad guy with a compiler is a good guy with a compiler.
(Score: 2) by microtodd on Thursday December 29 2016, @01:31AM
Possession of enough wealth that investment income alone is sufficient to cover living expenses plus something extra
Excellent definition, and with sound reasoning. Thank you!
(Score: 0) by Anonymous Coward on Thursday December 29 2016, @02:39AM
I agree, being able to live off investment income is a milestone or dividing line. But there is at least one more level of being rich -- which I heard from a friend who started a small company and grew it to ~40 people. In the course of his work he met some professional athletes and when they could afford a private jet, that was the next level.
My friend was never going to get into that income territory, and he was philosophical about it-- "Why should I keep busting my ass to make a little more each year, when it doesn't get me any more than I have...and will never be enough to have the freedom of travel that comes with a jet."
Personally, I got lucky once. We had been chartering a light-twin prop plane to take 3-4 people to a jobsite that only had very expensive commercial air -- the charter plane saved the customer money. One time the prop plane was double booked and the charter company gave us enough of a break that we could rent their Lear Jet for a one day business trip. It would be easy to get used to private jet travel, we came home at 500 mph ground speed (small tail wind). Note: Air charters of all kinds do not go through normal terminal security, we basically showed up at the charter company and in 10 minutes were on the little plane and taxiing out to the runway.
(Score: 0) by Anonymous Coward on Thursday December 29 2016, @03:25AM
I know which one I would pick. :-)
(Score: 0) by Anonymous Coward on Thursday December 29 2016, @03:14AM
I had talent in an in-demand field, went to a public school paid for by my parents and got a degree. That placed me in your definition of middle class. I saved and invested a lot to provide for a safety fund. Unlike my parents' generation not only were there no prospects for advancement, the ambitions of job leaders and coworkers ended up being pretty low too.
Then I got lucky and suddenly became rich. I already had a decent amount of FU money saved, now I could live off investment income for life, so there was no reason to stay in a shitty B-team job with no respect. I made a lucky job switch, can optimize income for tax efficiency and do enjoyable things. The capital base is reasonably safe from short term market fluctuations.
So I am rich, but any above average smartness I may have is orthogonal to it. I am rich because I was lucky. I can do whatever I want for the rest of my life. As long as I don't get dumb, or hooked on drugs, and blow through the money.
(Score: 2) by Phoenix666 on Thursday December 29 2016, @02:12PM
That's a good definition from a traditional perspective. I think true wealth is not taxable. Being healthy and surrounded by people you love and able to pursue meaningful and rewarding life goals make you richer in all the ways that matter than having a pile of money that others covet and a wife and kids that hate you.
Washington DC delenda est.
(Score: 2) by Thexalon on Thursday December 29 2016, @09:51PM
I don't entirely disagree, but when you're talking about economic situations, the ability to tell your boss that you walk is a big help in being able to pursue meaningful and rewarding life goals.
Sheer cash can also be a big help for pursuing meaningful work. Far too many plans for meaningful efforts start with "First, let's collect a whole lot of other people's money", which of course almost never works. Far more successful is "I'm going to take a bunch of my money, and put it into something important". One work buddy of mine did that, and his organization [africansky.org] has now built a bunch of schools in Mali, among other things.
The only thing that stops a bad guy with a compiler is a good guy with a compiler.