"If you're so smart, why aren't you rich?"

Listen to the segment "If you're so smart, why aren't you rich?" from the March 3, 2018 episode

"If you're so smart, why aren't you rich?": In a computer simulation that closely resembles the distribution of wealth in the real world, "[T]he wealthiest individuals are not the most talented (although they must have a certain level of talent). They are the luckiest." 

If this is an accurate representation of how talent is rewarded in the real world, then it has really substantial implications for how we choose to remunerate talent (and otherwise compensate it without money, but with things like social esteem). It echoes a comment from Bill Gates: "I am always fascinated by the question of whether the most talented people end up in critical positions -- in politics, business, academia, or the military. It's amazing the way some people develop during their lives." 

Most likely, there is a great deal of the ultimate outcomes in wealth that is shaped by choices that people make early in their lives -- when pure talent and intelligence don't necessarily determine the quality of decision-making, since they're not informed by wisdom and experience. Getting set in the right direction early on -- often by luck of finding something like an industry on the rise -- might explain much of the outcome. 

And in that case, it certainly speaks volumes to the impact of family members and other trusted elders who may guide their younger counterparts to the right places at the right times, before they can make informed decisions for themselves.

 
Brian Gongol

Brian Gongol

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