If You're So Smart, Why Aren't You Wealthy?

have you ever wondered why am I not wealthy yet maybe you're thinking I mean I'm smart educated intelligent and hardworking so why am I not rich seriously why you're not alone you're not the only one asking these questions this question has baffled many people and there's extensive academic research into this topic it is intense there's a load of academics smart people focusing their efforts on trying to answer the question why the hell am I not rich and it is a great question and today we're going to answer that question and I'm also going to show you what you can do about it I will start by looking at the single biggest determinant of financial success it is a characteristic we rarely focus on but we really should so this line here represents the world Spectrum at this end of the line are the richest people on the planet at this under end are the poorest people now take note of the number of richest to poorest people now this group of people down here which represents usually more than 50% of the global population share amongst themselves as much wealth as about the few richest people at this other end meaning this 3% of the population or whatever number have as much money combined as do the 70% of the global population this is eye opening but the question is how come are they smarter did they work harder well maybe yes but surely past a certain point the influence of those factors like hard work or smartness certainly diminishes I mean come on how much smarter can you be people in a way are sort of the same agreed we all have different backgrounds different mindsets but we're all you know within a realm of normality the same 95% of the human population has an IQ between 70 and 130 Albert Einstein never took an IQ score test however based on his historical records academics have estimated his score to be around 160 William James cidus could read the New York Times by 18 months old he taught himself eight languages by the age of eight and attended Harvard at 11 he is one of the smartest people that ever lived his IQ was believed to be between 250 and 300 if being smarter makes you richer he should have been crazy loaded but he wasn't he died pretty young and was a recluse at the end of his life I mean his was a pretty sad story but my point is there are limits to human potential to human Talent no one is a thousand times smarter than anyone else and no matter what hustle culture wants us to believe no one can work a million hours more than anyone else but wealth at these levels ignores those limits for example is Jeff beos right here a billion times smarter than whoever's down here no he's not whether we like to admit it or not humans are all pretty similar and the range of our talents is not broad not this level anyway so what's dictating success at this level what is really going on here is there something else going on could Lo be playing a part in being rich and wealthy Alexander Pino is a world expert in mathematical modeling he wanted to understand how big of an impact skills have on success intelligence knowledge hard work how do they impact wealth because like it or not we tend to use wealth as a measuring stick for Success so they created this simulation with different people of different levels of skill and personality traits all within a normal human range but you know some people were smarter than others some were hard workers and some had better social skills all the skills that you would often associate with being successful then they ran the simulation they ran R it over and over again and every time the results were the same wealth accumulated at the top 80% of it went to the top 20% of the people just like in real life but there was no correlation between the traits sometimes it was the hard workers that came out on top sometimes it was the charismatic people there wasn't a personality trait that they could say this is the dominant thing this is the thing that makes people successful but that's not exactly true actually there was one thing as part of the study they mimicked everyday life they threw random events at the simulations some unlucky events that hurt their wealth and some lucky ones that helped them build more wealth overwhelmingly the subjects that won the simulation over and over again were the lucky ones an averagely talented individual with good luck would beat a gifted person with bad luck any day in Western Society we often think that success and failure are due to skill the Americans will call this rugged individualism we say things like it's on you the winner deserves their success and the loser it's their fault that they lost this idea that successful people have skills or habits that others don't this leads us to do weird things like study the morning routines of billionair or research how millionair start and end their day because we think they must be doing something that I'm not doing but I hate to break it to you the key to success is not five minutes of affirmation as soon as you wake up from sleep I know I know you've seen those posts affirmations are great but affirmations alone will not make you wealthy and skill is important in how successful you are if your smart and a hard worker you will on average go further but there's a limit to this you can only go so far with skill a Swedish study showed that the correlation between intelligence and earnings flatlines above 6,000 a year what does that tell you it tells you that those who earn above €60,000 a year have something else Beyond intelligence and that thing is luck Maybe they were born lucky the Pew Research Center found that children of wealthy parents will go on to end three times as much as kids from a low earning background or maybe they were born in the right place at the right time the National Bureau of economic research in 2017 concluded that 90% of children born in 1940 earn more than their parents whereas today children born in the 1980s only 50% of them earn more than their parents parents did for some people they have this sliding door moments where their whole life changes just one event changes their life forever take the story of Maria for example Maria was a recent college graduate struggling to find job in marketing every day she sent out countless resumes and received either polite rejections or no responses at all discouraged or determined she kept her routine of applying in the morning and then heading to a nearby coffee shop to clear Her Mind One rainy afternoon the shop was packed and the only available seat was at a shared table Maria hesitated but decided to sit across from an older man engrossed in his laptop as she sied her coffee the man glanced at her and asked long day Maria tired and frustrated laughed and she shared her struggles about job hunting the man listened intently and then he said marketing H I own a small PR agency and we are looking for fresh talents why don't you send me your resume Maria was stunned she quickly Dred down his email and sent her resume that evening two weeks later she was hired as an assistant at his agency fast forward three years and Maria has risen through the ranks to become a senior account manager working with top clients and loving every moment moment of her career whenever she looked back Maria marveled at how a simple decision to sit at that table and to strike up a conversation changed her entire trajectory she often reminds others that opportunities are everywhere or you just have to be willing to show up and speak up but you know think about it what if she hadn't gone to the cafe that day or if she sat somewhere else she may have been successful in another way later down the line I'm sure she would have been but she got that job due to a series of fortunate events that kind of compounded on top of each other over time Maria's Story shows us how luck Faith right place right time whatever you want to call it is a factor in success especially when we're talking about massive amounts of it I'm going to say again I don't want to play Down the influence of intelligence and hard work and smartness and I also Al don't want to make it out like the people at the top don't deserve their position that they didn't earn it in some way but I also want to point out that there are plenty of people out there who are probably just as talented just as hardworking who ultimately won't get those outcomes smart only gets you so far we need a little bit of luck so let's shift our Focus now and ask how can I make myself luier in the context of building w because it is actually possible to improve our chances here do you know the answer to these questions they've been put forward as a test of financial literacy that's now been adopted by more than 20 countries I'm going to reveal the answers in three 2 one if you got all of them right congratulations if you didn't don't worry about it you're in the right place rational Choice Theory suggests that people approach decisions like little economists weighing the pros and cons of each action to maximize their benefit it assumes that humans are logical beings who always act in their best interest but then you hear stats like seven in 10 drivers use social media chat video while driving that's not rational or sensible behavior is it so when it comes to education the idea that we teach people to think and learn and then they will go out and make good decisions they will drive their life sensibly if you will but okay then how is it that 53% of Canadians don't know how much money they would need to retire this was a survey done by CPP Investments how is it rational the answer is it is not because the truth is a traditional education is not enough to guarantee good financial decisions or Good Financial outcomes because you can be book smart and money stupid all at the same time a basic grasp of financial Concepts has been shown to improve your wealth health and your overall wellbeing now one answer to the question of if I am so smart why am I not wealthy yet is time time the average age of a Canadian millionaire is 54 years old compounding wealth takes time the slow route if you will anyone with a little bit of understanding about how money Works would understand that yet through a lack of basic Financial education most adults fall victim to Lifestyle CP they are too cautious with their savings and they are not engaged with their retirement at all they are intelligent people who would never get rich because they were never shown the basics of Finance look I know you get it I mean you have watched this video of to this point but there's another part to this the fast way of getting wealthy if you will and having a solid understanding of personal finance just simply knowing where you should pack your money to produce a long-term return will allow you to build up the reserves so that if and when opportunity comes when luck strikes you are ready ear I mentioned this Swedish paper that pointed out the impact of Intelligence on earning this idea that it plateaus at around €60,000 the paper that put this idea forward also claims something else that the top 1% of earners are less intelligent than the people below them on the earning scale that finding grabbed headlines all over the world this idea that being too smart is bad for your wallet but there's an important detail here that we need to look at and I think really this is a conversation around risk the highest paid jobs in any economy tend to be specialized professionals that require high levels of Education surgeons CEOs lawyers Finance professionals Engineers if you're coming out of school and you're deemed to be one of the most intelligent people in your class you're naturally going to be funneled towards one of these career choices as they offer the best prospect on paper for high earnings you then go on to do years of study you pass all the qualifications that you need and then you get that great job that gives you a great income but that income won't put you in the top earners will it well that's debatable and there's lots of debate on it but there's a school of thought that says that to be in that top 1% of earners you need to be a business owner there's a paradox of s here the brightest people get the best jobs and as such to end less than they might have done because they are less incentivized to take a risk on being self-employed most businesses fa even those started by really smart people if you're making hundreds of thousands of dollars a year taking a leap starting your own business or making that big change feels like a huge risk but if you're earning minimum wage that same leap might not feel like a risk after all it could feel more like a necessity something you have to do to break out of your current situation there's also this point though that there are a lot more averagely intelligent people than there are hyper intelligent people so just by share numbers alone you're going to get more businesses run by people with average IQ than the really intelligent people but let's go back to that original point it's not the fact that people who are intelligent take less risk in fact it's quite the opposite a 2015 experiment revealed something counterintuitive when participants were put through a driving simulation researchers discovered that the more intelligent individuals were actually more likely to take risk brain scans showed that these quick decision makers had significantly more white matter the neural Highway that enables rapid decision processing those who took the risk did not hesitate it but the researchers also noticed something else the ones who identified as being skill drivers took that Gamble and if we come back to the placino study from before the way the lucky events found out was if a simulation encountered a lucky event they needed a specific skill set to be able to act on them you have to have the required skills and these have to be learned but sadly May failed during this learning process with tragic consequences it takes brains to take risk how could this issue around education and risk taking be stopping smart people from getting wealthy it reminds me of this quote it goes like this an expert was a fellow who was afraid to learn anything new because then he wouldn't be an expert anymore we all get really comfortable in our circle of competence we often find ourselves settling into the familiarity and security of what we already know and we are good at no one wants to push themselves no one wants to step outside of their comfort zone and feel like a beginner again but if you're looking to do something to level yourself up I would encourage you to learn about a topic outside but adjacent to your circle of competence skills stack upon of each other and compound to produce huge results for me the link between what I studied in school versus me learning to use a camera and do video editing might not have been all that clear initially but now we sit here with this YouTube channel don't we what can learning about AI do for a finance professional what can improving public speaking do for an accountant skills that are closely related to or adjacent to the ones you already know can enhance and influence your existing abilities is I've learned in life that basically all you need to be is 1% better than your Pairs and you get all of the rewards the promotions the recognition the pay Rises whatever The Winner Takes it all the difference between being in poor position and simply maintaining your current position is often just a small margin sometimes only a fraction of a second yet all the glory goes to the winner take a chance a risk at Learning something outside of your sphere of knowledge become a beginner again it's really fun but it's pretty humbling I know that for a fact bring that into your expert world and watch how skills stacking in that way is a 2+ 2 equals to 10 the learning never stops Below in the description I've put together a list of what I see as some of the most high value skills that you can learn in 2025 and Beyond Charles Bukowski said the problem with the world is that intelligent people are full of doubts while the stupid ones are full of confidence let me talk about people who do YouTube videos like me did you know that the people on YouTube who are successful in any giving Niche pick any Niche you like are almost never the best at what they do they are just simply the ones who had the confidence to pick up a camera and just made the decision to post despite their fear for example I don't even know if anyone will watch this video but I made it anyway tell me have you heard of The Da Krueger effect it's the idea that when you start learning a new skill you experience rapid Improvement early on going from knowing nothing to grasping the basics this quick progression often leads to overconfidence because you're unaware of how much more there is to learn eventually you hit a point where it Dawns on you just how complex the skill truly is your confidence takes a dive not because you're less capable but because you now understand the vastness of what you don't know even though you've learned more than when you felt so confident I have a growing YouTube channel but in as much as I'm still getting better I know that my current videos are better than my earlier videos but people watch them they watch them then and people still watch them today but my standards have risen to the point where I often end up holding myself back because I am more conscious I have made many videos that I ended up not even posting wasting precious time that I would have used to do something else I just didn't feel confident to post them maybe you can relate it's called perfectionism imposter syndrome that feeling that your work isn't good enough like you're trapped chasing Perfection or maybe even an addiction to comparing yourself to bad baselines all of these are traits that register higher the further up the expertise skill we go a season chef with Decades of experience might hesitate to declare the perfect recipe for a dish while someone who just learned from a simple YouTube video confidently claims that they've mastered G cooking the blind confidence of that person could lead him to make the dish for a cooking competition get lucky win and become an instant celebrity everyone then studies the strategies of this lucky person and the season Chef goes hold on there's a few flaws to his recipe here and the feedback will be well if you're so smart why aren't you the celebrity there are so many layers to this question so many angles we could explore this whole connection between intelligence and wealth I could honest talk about it for hours and by the time I'm done with this video I probably would have talked for about 30 minutes or so I guess we'll see but even then I don't think that I'll have done the topic Justice talking is one thing but it's better to just focus on the Practical steps luck is a huge factor in success but it's those with the skills to grab a lucky event when it happens that benefits financial literacy is the skill it improves life outcomes and it allows you to pounce on opportunity when it presents itself I've created a playlist I'll link it below it's just a collection of some of my videos that talk about the basics of Finance then beyond that you need to continually improve and update your skill set the best thing is a little bit of a new skill can really help your expert skill and in particular a little bit of an understanding of AI can really benefit your accountancy expertise or whatever profession you're in I need you to understand that self-doubt imp poster syndrome and perfectionism are incredibly common among people who consider themselves experts when you catch yourself falling into those negative thought patterns try to remember that a lack of confidence can actually signal higher competence after all the more we learn the more we realize how much we still do don't know you need to be brave enough to make the jump to leave behind the security of being an expert in a comfort zone to take a risk because those risk when they pay off the multiplier effect on your life is incredible now I've put together also in the description a list of skills you can start learning to stack on each other for yourself there's one more factor to consider it's a simple but crucial one if you want to try your hands on a different skill I would suggest an online business creating digital products you might think you don't need it but since you clicked on this video I'm guessing you do care so watch this video next where I'll show you how I went from my 9 to5 to this online business and how I'm absolutely crushing it and how you can too