Smart people make more money but don’t end up any wealthier, according to a new longitudinal study in the journal Intelligence.
“Your IQ has really no relationship to your wealth,” says Jay Zagorsky of Ohio State University, the author of the paper. It’s based on surveys of more than 7,000 Americans now in their 40s who have been interviewed repeatedly since 1979.
Previous researchers have found that IQ correlates with income — each extra point of IQ is worth between $200 and $600 in annual income — but this study finds no strong relationship between IQ and total wealth. Mr. Zagorsky isn’t sure why, although he suggests that smart people aren’t saving as much.
You’d think they’d have the brains to put aside more money for their retirement, but it occurs to me there might be a confounding factor. Could it be that they’re more likely to head for jobs in the “knowledge industries” based in expensive places like New York and Silicon Valley? The salaries in these metro areas are higher than the national average, yet so are housing costs and other expenses.
I also wonder if smart people are likelier than average to sacrifice income for intellectually stimulating jobs. It’s easy to point to anecdotal evidence — like the career of Dr. William Hurwitz, whose finances I discuss in the previous post. His former wife, Nilse Quercia, told me that his family used to joke about the statewide award he’d won during high school for his mathematical ability. “We’d say, ‘Billy, all your math skills sure didn’t help when it came to making money.’ ”
But anecdotes, of course, do not constitute reliable data. I welcome contributions from anyone with hard figures to answer a hard question: If you’re so smart, why aren’t you rich?