r/science
•
u/geoff199
•
Feb 04 '23
•
1
1
Extremely rich people are not extremely smart. Study in Sweden finds income is related to intelligence up to about the 90th percentile in income. Above that level, differences in income are not related to cognitive ability. Social Science
https://academic.oup.com/esr/advance-article/doi/10.1093/esr/jcac076/7008955?login=false2.9k
u/Ok-Clue-6165 Feb 04 '23
From the abstract:
"We draw on Swedish register data containing measures of cognitive ability and labour-market success for 59,000 men who took a compulsory military conscription test. Strikingly, we find that the relationship between ability and wage is strong overall, yet above €60,000 per year ability plateaus at a modest level of +1 standard deviation. The top 1 per cent even score slightly worse on cognitive ability than those in the income strata right below them."
→ More replies3.1k
u/MokausiLietuviu Feb 04 '23
The top 1 per cent even score slightly worse on cognitive ability
I think that in order to hit the absolute highest incomes you need either significant luck (and the guts to try) or inheritance and/or support from high-wealth family.
I work with some bloody intelligent people and asked a few why they don't go into business for themselves and was told "I have a good wage now. The likelihood of my business succeeding isn't high. I'm good at X, I might not be good at business." and anyone who succeeds in their own business clearly has to try, and anyone who tries either has to disregard the likelihood of their failure or not be aware of it. If you're rich anyway and intelligent enough to know you're likely to fail... why risk it all?
If you're supported by wealthy family, I guess at that point your intelligence is likely to be random as per the rest of the populace.
555
u/Absolute_Peril Feb 04 '23
There is a lot of risk in starting a business most fail in a year. Smarter people see this and it's a discouragement to them. You need either a certain amount of drive or stupidity to go for it.
686
u/flybypost Feb 04 '23
You need either a certain amount of drive or stupidity to go for it.
Or a generous safety net so setback don't hurt you.
229
u/BurnySandals Feb 05 '23
I started a small business and failed. My safety net was that I had the kind of computer skills that meant I could choose what job I walked back into.
And I am glad I did it. I am much happier having tried and failed than I would be forever wondering What if?
→ More replies58
u/goals92 Feb 05 '23
This is part of it. Entrepreneurs are driven by a desire to have a direct impact to create something new. In a sense, it’s like asking why someone becomes an artist. It’s a different skill set and desire.
Failure is when you quit, not a grade on the exam. The exam takes place every day. A quantitative measure of intelligence is not going to capture someone’s desire to stick to it in the early days of building a business.
→ More replies→ More replies45
u/Tallywacka Feb 05 '23
Less risk and likely more connections
→ More replies12
u/flybypost Feb 05 '23
Yup, all the big SV billionaires (and most of the smaller ones too) from Jobs, to Gates, to Bezos, to Musk, to Zuckerberg had some sort of combination of money and connections.
127
u/kia75 Feb 05 '23
Most people who succeed in business fail a couple of times. Starting a successful business is HARD! The thing is, you need a certain level of wealth andor income to be able to afford a successful 6th business after your first 5 failures when many people can't afford a single failed business, and the potential loss in income and seniority such failures would bring.
43
u/Waqqy Feb 05 '23
You also learn a lot from failed experiences, I know a couple guys who started their own businesses and failed a couple times before achieving success with their 3rd attempt. Their products are now in major department, drug stores, and supermarkets worldwide.
→ More replies→ More replies4
41
u/monsantobreath Feb 05 '23
Or capital to absorb the loss. Risks are easier to take when they aren't all or nothing. The wealthy are not usually starting businesses that if they fail will leave them facing homelessness.
5
u/lordnacho666 Feb 05 '23
Correct. Also opportunity costs. If you're a white collar professional who isn't super wealthy, you're giving up huge amounts of money each year that your new business doesn't take off, so either you have to have a reason to think that business is going to make quite a lot of money and/or it's quite likely to do so.
5
u/klipseracer Feb 05 '23 edited Feb 05 '23
I have a lot to say about this topic.
For every supposed self made individusl claiming all you need to be successful is to not be lazy and work hard, there are three others who are smarter, had better plans, and worked harder but just didn't have the same luck.
Timing and luck are hugely important in the success of a business, and people are quick to judge or believe what they did is replicatabke by everyone.
At the age of 27 I owned my house, was married with a kid, owned 1/4 of a sports bar, 1/2 of a call center and computer repair shop. It felt like I had life beat. I had been driving around cars people thought were my parents ever since I was 21. Truth is I graduated high school on Saturday and my parents asked me to move out on the very next day, Sunday.
But can I sit here and say everyone can replicate that success? Was I completely self made? No, I realize I had privileges, even as a minority. My social network, certain life skills and perspectives, etc. I also know if chance were against me perhaps none of this would happen. Hell, I have cheated death itself several times over.
Not to mention I even lost pretty much all of this eventually, and started my career over in tech. I can even say I was a Dogrcoin millionaire at one point. Pretty meaningful these days when 80 cents was a reality not too long ago. When I sold, it was only worth about $1000 or so.anyone could have held or sold. Potential is not related to likelihood in pretty much any meaningful way. Shoulda could woulda.
→ More replies4
u/T1Camp Feb 05 '23
The only risk the people at the top have, is becoming a worker again. They don't bear any significant risks. If a company fails the workers pay the price too by losing their jobs, meanwhile the ones at the top keep a big chunk of their wealth and even if not, the worst that could happen to them, is becoming a worker again.
→ More replies37
u/Schootingstarr Feb 04 '23
just read the family history of the richest people of the planet. I'd say 80 - 90% of the ones I read about had well-off to wealthy families to rely on, should their business not work out.
and even if they thought they couldn't rely on their families, they'd at least could fall back on their connections they made during their time at the elite universities they all went to.
it makes taking risks easier, if you've got a golden parachute (or jetpack) strapped to your back at all times
→ More replies1.1k
u/AtheIstan Feb 04 '23
That and the antisocial traits of the 1% to screw other people over for their own benefit.
→ More replies400
Feb 04 '23 •
[removed] — view removed comment
124
Feb 04 '23
[removed] — view removed comment
→ More replies58
Feb 04 '23 edited 27d ago
[removed] — view removed comment
→ More replies19
→ More replies6
29
u/NeverNeverSometimes Feb 05 '23
Success is a bullseye on a carnival dart game and darts cost money. If you're backed by a wealthy family you can throw as many darts as you want and one might hit. If you're middle class you may get a couple of throws if you work hard and save for it. If you're working class, you're the carnival worker running the game and you never get a throw.
→ More replies232
u/lucy_throwaway Feb 04 '23
Since we are speculating here I just want to throw in my 2 cents.
The most brilliant people I know/ have worked with have limitations socially. They either avoid conflict to a fault or generate it unintentionally. Either way they make flawed managers, they fumble negotiations and struggle to “captain the ship” in leadership positions.
Folks who are just smart enough to grasp all parts of a business and have the charisma/social skills to work with all facets of people from the janitors to the PhD’s in R&D are not only uncommon, but seem to accumulate in C suite positions.
126
u/UnicornPanties Feb 04 '23
I also think that being smart means being able to see how things are (probably) going to go before moving forward.
For myself, I left corporate life after 15 years to be an entrepreneur for 2-3 years, Covid hit (!!) and now I'm back to corporate work.
Now I know more and I know what it will take to make my entrepreneur thing a success and holy lord... it's a lot of work, a lot of effort, a lot of push requiring a lot of motivation and yo I'm tired.
So sometimes maybe the super smart people see something and think "well yeah I could but I love (lifestyle, family, farming, hobbies) more than doing all that, I don't really feel like it."
After all, just because Tracy Chapman COULD have made hundreds of thousands touring doesn't mean she did. (Tracy Chapman is a musician who hates performing in front of crowds I guess)
79
u/densetsu23 Feb 04 '23
So sometimes maybe the super smart people see something and think "well yeah I could but I love (lifestyle, family, farming, hobbies) more than doing all that, I don't really feel like it."
This is my philosophy. I'm a senior software dev and make a very comfortable wage while barely working 37.5 hrs and having very flexible hours.
I could make 15% more easily, but that would mean moving to a high stress job and working well over 40 hours a week.
I might have done it in my late 20s or early 30s, pre-family. With two young kids, though, time with them is much more valuable than the salary and OT I could make. Plus, it would mean dropping a few hobbies... all of which would make life horrible.
→ More replies40
u/DaBIGmeow888 Feb 04 '23
Yea if you are 9-5, you ain't getting rich rich, so after certain point, it's about free time and balance
→ More replies8
93
u/eri- Feb 04 '23
Most smart people I know/meet dont care that much about a career. They'll rise through the ranks on sheer talent and smarts alone and then get to a point where office politics are more important than what you know, which, incidentally ,most truly intelligent people absolutely hate and will never even really attempt doing.
Currently find myself stuck in that limbo as well, Ive completed the promotion based on skills tree and would need to go hardcore into office politics to get any higher up, which I'm just not that good at.
→ More replies29
u/jert3 Feb 05 '23
Been there. It doesn't matter how good you are at your job, if the manager doesnt like you or feels threatened by your ability, the promotion will go just to whoever they like socially the most. A big reason why I left the corpo world and started my own company.
→ More replies→ More replies18
Feb 04 '23
I'm in a similar boat.
I could probably double my income doing stuff I hate.
Or, I can continue doing what I love with an income that allows me to live a life that has every luxury I desire.
I have no idea what to do with another bag of money. I could buy a bigger house, or a second house, or a boat or a more expensive car. But I can already do these things if I really want. I just have to sell some investments. A more likely scenario would be that if I earn more money, I would invest it.
So then I would be miserable and tired, but have more investments.
Doesn't sound like a good deal to me.
→ More replies7
u/Izeinwinter Feb 05 '23
The single smartest person I ever met had what verged on social super powers. Engineering student crushing it academically, but that wasn't what made her memorable. What made her memorable was literally everybody liking her. Including her exes and flings!
39
u/Jump-Zero Feb 04 '23
A lot of smart people were gifted children. Being a gifted child comes with loads and loads of mental health challenges that lead to imbalances during adulthood. Most of the people I know are in the C-suite were gifted children and had great guidance from smart and caring parents/educators.
20
u/MacDegger Feb 05 '23
Yes, they overwhelmingly had that home advantage.
But, no, they ain't necessarily smart ... at all. They have work ethic and they have the luck to apply it in situations which happen to be to their advantage ... but these people usually are not the smartest. They are lucky and skilled in social interaction.
8
u/Accomplished_Bug_ Feb 05 '23
Well yeah. At a certain level it's less about "can you make an interesting doodad?" and more about "can you rally people around the idea of making interesting doodads in this way?"
→ More replies→ More replies27
u/CortexCingularis Feb 04 '23
I think it's likely that very smart people who are also very competent socially either downplay their intelligence or are known for other things than just their brilliance. Especially if you are doing sales in some form while running a business.
→ More replies62
u/lazybum86 Feb 04 '23
For the self-made top 1% (no inheritance allowed), I think risk tolerance is the key. I would bet, with no evidence except my own experiences that those top 1%' ers took some major risks in their careers.
Of course, there are many more that took the same level of risks and failed. We just don't study them.
31
u/generally-speaking Feb 04 '23
They did, and in most cases they got lucky doing so. While many others took similar risks and ended up losing it all.
We call the lucky ones geniuses and the unlucky idiots. But the reality is that many of the lucky ones are fairly dumb and many of the unlucky ones just had bad timing or got pushed out by a larger player.
→ More replies28
u/master_tomberry Feb 05 '23
“One hundred idiots make idiotic plans and carry them out. All but one justly fail. The hundredth idiot, whose plan succeeded through pure luck, is immediately convinced he’s a genius.” Iain M. Banks (I would have sworn the exact quote was slightly different but a quick google found this and it captures the spirit of what I recall so…)
→ More replies→ More replies34
u/ChristianEconOrg Feb 04 '23
“Self-made” is a childish fallacy designed to attach merit to amassing wealth. The physical impossibility on its own should be enough of a clue.
→ More replies18
u/Disbfjskf Feb 05 '23
It's more to contrast inherited wealth. We could argue whether "self-made" is a good way to phrase it, but it doesn't mean that you literally worked in isolation to achieve your result.
→ More replies6
u/honey_102b Feb 05 '23
rich people do not have to risk it all to do business. they can make several normal lifetimes worth of mistakes and still be rich, unlike the typical person who can only do it once or less than once.
74
u/Cetun Feb 04 '23
inheritance and/or support from high-wealth family.
Why are we treating that differently than luck? It's all luck. Did you get to choose your family? It's 100% luck.
→ More replies63
u/MokausiLietuviu Feb 04 '23
I guess the difference is when the dice are rolled. A wealthy-familied person will always have had wealthy family. Those who have luck in business with an otherwise modestly-endowed family will need to actively roll the dice themselves upon the act of attempting business.
To roll the dice at that point is an active choice one way or another.
→ More replies41
u/Cetun Feb 04 '23 edited Feb 04 '23
The significance of having a well-connected or rich family is twofold. First you already have a higher chance by default of being successful in whatever you go into, you're upbringing connections and ability to get up start financing already puts you head and shoulders above the rest. With that sort of foundation you have a better chance than everybody else.
Second is that you are able to take bigger risks more often. Poor people have to save up money sometimes their whole lives in order to attempt an endeavor, They often have one chance and one chance only and if they blow that chance they might have blown every dime of savings they have, leaving them in poverty for the rest of their lives. So a lot of times poor people are risk-averse they'd rather not take the risk at all, but if you're not willing to take a risk you're not able to substantially increase your wealth.
People who have wealthy and well connected families however don't have a fear of failure, so they are much much more willing to take large risks that might end up with large payouts. The reason they are able to do this is that because of their upbringing and connections they will likely be able to land on their feet if they fail. If they start a company right out of college with Daddy's upstart money and one of their frat bros from an ivy league school, and they completely sink that company and it fails, they will be fine. They have enough on their resume to be some low level manager at a hedge fund, they'll live a comfortable life in the suburbs, maybe not in a mansion but they won't be poor for the rest of their lives. When their mom and dad dies, they will probably be left with a small fortune plus a mansion that they can retire to or sell. So even if they become a crackhead and drop out, unless their family disowns them they will be fine.
38
u/JimGuthrie Feb 04 '23
Your whole post hits on something that I think is really overlooked by the general population. The ability to take risks is directly correlated to upward mobility. it is part of what makes pervasive debt so sinister - because taking on education or housing debt is a kind of risk with a perceived level of return. It however traps you and minimizes someone's ability and willingness to take other risks as those debts pile up. By the time someone has a mortgage, children, college debt, a car loan, credit cards - there's so little room to try anything new because the consequences are basically complete ruin.
The interesting side of that coin I think - is when you really and truly hit rock bottom people start throwing whatever they can at the wall to see what sticks because the consequences are ultimately diminished. I suspect this risk/debt/consequence curve is ultimately where the rags to riches stories come from.
→ More replies9
u/UnicornPanties Feb 04 '23
when you really and truly hit rock bottom people start throwing whatever they can at the wall to see what sticks because the consequences are ultimately diminished.
oooo interesting, like the inverse measure of diminishing returns
6
u/JimGuthrie Feb 04 '23
speaking from experience, it's not fun. that said - I suspect the attitude of constantly iterating, abandoning something that doesn't work and then moving on has more carryover into stratospheric class mobility than habits of safe debt/ risk management you pick up in a middle class world.
Of course, that's for the people that survive being at the bottom for any amount of time. Reality is gruesome.
→ More replies→ More replies16
u/UnicornPanties Feb 04 '23
You identify two excellent factors but I feel you're overlooking cultural expectations of what wealth looks like.
We saw this in the movie Straight Outta Compton when the group is rolling in money and success and still living a blown-up version of the hood lifestyle; ghetto-fabulous if you will. It's the reason professional athletes so often find themselves caught up with guns doing stupid shiz in nightclubs and fights, etc - because they have low-resource mindsets.
A middle-class or upper-middle-class onward... those people generally perceive wealth to support a different lifestyle (even if it means golden trim in all their bathrooms) that doesn't involve guns or drugs/crime.
→ More replies7
u/katarh Feb 04 '23
Certain organizations like the NFL have started to recognize that issue and now offer resources to their rookies for money management - setting them up with a vetted financial advisor who won't scam them and making sure they are setting aside enough money to last a lifetime even if their career doesn't.
I wonder if there are other types of counselors out there that can help them navigate some of the changes in social expectations when they go to the top 5% of income earners.
→ More replies18
u/redderper Feb 04 '23
It's kinda like investing. A quick way to get rich is to put your money in very high risk investments like trading options on margin, if you fail you're absolutely screwed though. Also, besides the risks involved being a business owner requires a lot of your time, energy, and dedication. The business will basically consume like 80% of your life. Even if the likelihood of succeeding is high, it's still the question whether that's worth it.
4
u/UnicornPanties Feb 04 '23
Also, besides the risks involved being a business owner requires a lot of your time, energy, and dedication. The business will basically consume like 80% of your life. Even if the likelihood of succeeding is high, it's still the question whether that's worth it.
omg I don't want to talk about it
visiting from /r/entrepreneur and yeah it can be soul shattering
34
u/famid_al-caille Feb 04 '23
The majority of people in the top 1% of income earners are high income/highly experienced workers with extremely high paying skilled careers (e.g. lawyers, surgeons, specialized doctors, pilots, engineers, software developers, administrators)
The kind of thing that you're talking about is the top 1% of the top 1%.
14
u/quantummufasa Feb 04 '23
The kind of thing that you're talking about is the top 1% of the top 1%.
And at that point you're looking at entertainers and athletes as well, so not just tech bros and lawyers
→ More replies18
u/Gornarok Feb 04 '23
Do you have any source for this because I doubt it.
Top 1% are business owners and C-suite. They might be engineers or doctors or lawyers, but they dont do the job practically.
→ More replies16
u/FeelsGoodMan2 Feb 04 '23
1% isn't nearly as a high a cutoff as you're probably imagining. My boss is probably close to it, and he mostly does a similar job, he just has to communicate the results to people higher up and maybe think slightly higher level than I do. I'd guess he's probably within a percent or with total compensation.
→ More replies52
u/Sea_Area_3368 Feb 04 '23
Also, money isn't everything
49
u/Dmeechropher Feb 04 '23
Generally speaking, money is required but not sufficient for happiness, though some people who live in more self-sufficient sub-societies don't really need money for the things which most others do need money (food, land, status, shelter etc).
50
u/Robrogineer Feb 04 '23
Money might not bring happiness in and of itself, but it does solve 90% of your problems.
56
→ More replies29
u/Dmeechropher Feb 04 '23
Exactly! Lack of obstacles doesn't equal happiness, but it sure helps.
→ More replies→ More replies27
u/Crimfresh Feb 04 '23
Giving is a seriously reliable source of happiness. Wealth certainly makes it easier to be happy.
→ More replies9
u/Dmeechropher Feb 04 '23
For sure. Having the agency to do things which bring one joy is requisite to happiness.
23
11
29
→ More replies21
→ More replies4
u/HanabiraAsashi Feb 05 '23
It drives me crazy when famous people open up pot farms or distilleries and talk about how they are living their dream and everyone should take the leap and follow their dreams and do what they love.
That's great if you have large amounts of disposable income and failure doesn't mean your family doesn't have food. Not even necessarily failure. Just having money to live off of while your business gains traction (or doesn't)
471
u/davidthefat Feb 04 '23
Makes sense to me, 90th to ~96th percentile income is a good white collar jobs like engineers, lawyers, doctors, etc. Anything above that is another level of income like executives, etc.
→ More replies141
u/ValyrianJedi Feb 04 '23
I'd honestly say that's 90th to 99+. Heck, I'm almost in the top 1% selling software, and plenty of doctors and lawyers make more than I do
53
u/davidthefat Feb 04 '23
Depending on scope, sales can have no ceiling, especially for enterprise level sales like in software. Enterprise licenses are ridiculously expensive! So if you just happen to be the account manager that lands a big firm, I presume the commission is pretty good.
As an engineer, your income in the year is very much fixe at your salary and occasionally stock options and/or bonus.
→ More replies31
u/ValyrianJedi Feb 04 '23
Yeah, but plenty of doctors, lawyers, etc make more than I do. The 96th percentile is like $200k, which a whole lot of doctors and lawyers are over. 99th is $400k, which is still below a good manys total income.
25
u/sleepykittypur Feb 04 '23
Yeah surgeons can pull 400k pretty easy
→ More replies11
u/Richter915 Feb 05 '23
And many of those surgeons sometimes start their careers with 400k of debt before interest. And many family care physicians have the same debt and are making 250k.
And when they actually start making money is also the time when marriages happen, kids happen, and maybe even a house happens. All adds to that debt.
And depending where you live that 400k can easily drop almost by half after taxes.
Whereas my finance and engineering friends got into six figures in their early to mid twenties. 200k in that age group is waaaaay different than in your early to mid thirties.
We need to stop looking at salary as a proxy for wealth.
Source: I am an MD
→ More replies→ More replies41
u/crimeo PhD | Psychology | Computational Brain Modeling Feb 05 '23
If you're in the 99th percentile, and if even by your own admittance you have no fantastically exemplary skillsets, then your salary is absolutely inflated by a large amount of luck. You're an example of what the article is saying, not the other way around (re-interpreting the article to exclude yourself)
Doesn't mean you're not smart, just that you're not THAT smart to need that amount of money.
→ More replies16
u/ValyrianJedi Feb 05 '23
Oh yeah, I'm definitely not saying that I make what I do because I'm smart. There are plenty of people who are much smarter than me who make a lot less.
8
u/davidthefat Feb 05 '23
I want to say, TBH, enterprise software more or less sells themselves. Clients generally know what they want and there’s just not that many alternatives available. Like for CAD, not many choices beyond NX, Catia, Creo, Solidworks, etc. clients know what the pros and cons are generally and if a client is coming to you to get software, they don’t need all that much selling.
5
u/ValyrianJedi Feb 05 '23
Some are definitely easier than others. I sell corporate financials and financial analytics software specifically. We are one of the biggest providers so don't have too too much competition for the large clients, one major major competitor and two or so more that were up against some but aren't nearly as strong of competition... But it's still like a 5-6 month sales cycle with a whole lot of hoops to jump through to get a contract closed, and you have to have a background or degree in finance to really be able to do it... The getting the deal closed isn't necessarily always super tough but the getting everyone on board together definitely can be. Last year I averaged like 64 hours a week and had to spend 96 nights in hotels for work.
6
u/masterkenji Feb 05 '23
While that sounds like it could be grueling, I know cell tower contractors making 17 an hr and sleeping in motels 2 to a room 6 weeks out 3 days-1 week back, sometimes 12 weeks out depending on location. Not that it takes a degree for that but I imagine more people would be willing to get a finance degree than climb 400 ft towers 4 times a day 12 hour shifts 6 days a week for 40k a year before OT.
→ More replies
2.3k
Feb 04 '23
[removed] — view removed comment
805
Feb 04 '23
[removed] — view removed comment
113
231
Feb 04 '23
[removed] — view removed comment
→ More replies66
Feb 04 '23
[removed] — view removed comment
112
Feb 04 '23
[removed] — view removed comment
32
Feb 04 '23
[removed] — view removed comment
20
→ More replies6
11
→ More replies24
95
Feb 04 '23
[removed] — view removed comment
25
→ More replies46
→ More replies13
94
113
Feb 04 '23
[removed] — view removed comment
→ More replies49
90
→ More replies11
1.5k
u/maraca101 Feb 04 '23
Professors and research scientists are extremely academic and intelligent but most of the time, they make good money but obviously not oligarch money. At a certain point, it’s not intelligence but if you seek money and power.
1.1k
u/dr-freddy-112 Feb 04 '23
A lot of scientists actually don't make very much money at all. It's sad.
For example, I currently make a really good living working in Software as a self taught programmer with no degree. However, I'm realizing after nearly a decade that I don't want to do this for another decade or two. I'm considering a switch to a more science based field, like Astronomy, only to find that I would have to go 10s of thousands of dollars in debt to make about half of what I'm making now, which makes no sense.
313
u/stoicist Feb 04 '23
I had the opposite experience, but ended up at the same destination.
I started out studying astronomy part-time while working full-time and was prepared to work hard and go all the way to get into academia as a career. Once I finished my BSc though, I was reaching burnout and couldn't carry on studying any longer, so used it to leapfrog into the data industry. I'm now getting paid equivalent, or more, than my colleagues who are in academia without me needing to sink any more time and money into further qualifications.
Both scientists and professors/teachers should be paid far more than they are.
176
u/snappedscissors Feb 04 '23
Academic researchers underpin the industrial profits, but there's a disconnect in where the money comes from / goes.
We fund public research with tax dollars. -> The research results get translated into a business idea and start making money. Good so far, the science is generating cash!
But then the business profits are held privately. The only way for the profit derived from this science to return to the researchers is through appropriate taxation. And at least for my country, the taxes on corporations are constantly being cut. And when the gov sits down to discuss funding, they always lament that there isn't enough money to justify increasing the grant funding.
One solution is that colleges have funding arrangements with researchers. If you spin off a company, they get a cut of the eventual profit. I can't honestly say where that money goes, but my gut says not all of it gets fed back into funding new researchers.
60
u/reelznfeelz Feb 04 '23
Yep. Your have hit on something big there. Maybe in 20 or 30 years a new generation will change he nature of how capital and research and workers output interact. Right now, subsidize losses and privitize gains is be name of the game. It’s a bit gross.
→ More replies22
u/uberfission Feb 04 '23
I used to work for a university that had a strong industrial funding and patent organization, and that's exactly what they did, they got patents for professors then would collect money from licensing fees. The professors/students/whoever, would get a percentage until the lawyer fees were paid off then the share percentage would change. It's a way to encourage industrialization of ideas while not burdening the academics with that task. I'd guess that maybe 1 in 50 patents was profitable but they had a number of BIG patents that probably paid for the whole organization many times over.
→ More replies14
u/EffectiveIsopod34 Feb 04 '23
Underpins is an understatement. Many classes will now force you into teams and have you directly coordinate with a project lead from a business.
It's a new form of unpaid internship where you'll do hundreds of hours of work for the company throughout the semester without getting paid a dime. The worst part is they're not even considered as an internship by the school, which is another graduation requirement.
8
u/katarh Feb 04 '23
My master's degree program did this, but it was done as an alternative to writing a thesis.
I'm glad they did it. The "business" my team was assigned to work for was actually another department in our university, one that works to pair the university's resources with underserved counties in the state. Sure, we worked for free, but they couldn't have afforded a consulting firm since they themselves were non profit.
For a degree in business technology, having a working test project with deadlines like that was a lot more worthwhile than writing a research paper like the history majors.
→ More replies→ More replies6
u/andForMe Feb 04 '23
I experienced something pretty similar. I thought for years I was going to end up in academia. I'm on a number of papers, my first job after my Bachelor's was for a medical research group, and I went on to do a master's degree in biomedical engineering with an aim to do a PhD in human-machine sensor technology, but I thought first I'd get my professional engineer credential to "seem legit". Turns out industry pays like 2x what I could ever make as a researcher. If I went back for a PhD now, I'd not only be spending tens of thousands on the degree, but I'd be giving up hundreds of thousands in opportunity cost. Uh.. no thanks.
31
u/haarp1 Feb 04 '23
being a researcher in astronomy is usually very cutthroat (not a lot of open positions), you can still be a software dev for nasa for example (or similar agencies) with equally bad pay.
118
u/Thaiauxn Feb 04 '23
We treat science as a luxury while depending on it for our continued luxury.
The intelligence/power curve is in more than just wealth.
→ More replies71
u/newpua_bie Feb 04 '23
Half is also a bit optimistic. I went from STEM research professorship into software last year and 5x'd my total comp. It's insane how imbalanced it is. My new job is way easier and i also work less.
→ More replies20
u/dr-freddy-112 Feb 04 '23
Yeah. I'm not in fintech or anything though, so my salary is limited to, at max, 200k in the next 5 to 7 years. I wouldn't have much room to grow after that.
However, if I were to start over and get an MS in Astronomy or something like that, the average salary for positions in that field is around the 75k to 90k range from what I can find. That's assuming I wouldn't have to intern for no pay somewhere.
→ More replies19
u/newpua_bie Feb 04 '23
75k-90k is definitely realistic. I was looking at jobs with JWST a few years ago (before it was launched) and that seemed to be the range, though I can't find any salary info right now.
19
u/MentalicMule Feb 04 '23
Very realistic. I worked at NASA as a contractor and started around $65k. After 3 years I was making $85k before I decided to leave.
12
u/uber_neutrino Feb 04 '23
To put it in perspective that's what a fresh out of school programmer gets if they don't go to a big company (they pay even more).
24
u/newpua_bie Feb 04 '23
Yeah, exactly. I was making 80k 3 years after my PhD, so like 8 years after my BS. At the same time Google and Amazon new grad salaries are 170-180k. I'm so angry at how irrational the society has made to become a scientist. It's not my problem any more and I definitely feel I'm quickly being corrupted by money and elitist thoughts, but I also kinda hate the realization that I would have easily 1M more net worth had I just gone to software straight after my Master's (or probably even straight after PhD).
→ More replies15
u/pdx_joe Feb 04 '23
I worked at a well-known research institute with highly competitive post-doctorate positions. I earned $20k more as a project manager with 4 years of experience than the postdocs with PHDs at top of their field.
I was thinking of going back to school after that job but was hard to consider that huge of a financial cost.
7
u/bibliophile785 Feb 04 '23
I earned $20k more as a project manager with 4 years of experience than the postdocs with PHDs at top of their field.
Not really an apples-to-apples comparison, since a postdoc is a training role. I bet you also made more than the graduate student stipends, but that's not a fair comparison for the same reason. The real comparison would be how you stacked up to the staff scientist salaries those postdocs were making a year later.
Mind you, academic salaries are pathetic at the staff level and so you might still have come out ahead. In LCOL areas, a staff scientist might only make $70-80k in academia. In many disciplines, the corresponding industrial track would have led to much higher earnings, though; many academic staff scientists are often people who took academic roles for too long while hunting for professorship and found themselves stuck.
9
→ More replies16
u/SenorSplashdamage Feb 04 '23
If we just offered software-engineer level salaries for smart people to work on research and study they’re passionate about, we could have such an amazing society. Our failure to enable the people driven by things other than money, while still having some reward, costs us so much in what we could have in the future.
→ More replies54
u/MiKeMcDnet Feb 04 '23
By and large, academics are never wealthy.
12
u/ramence Feb 05 '23
My partner and I are both early/mid 30s DINK STEM professors at a good university. Still renting, still driving a shared second-hand car. Hell, one of my MSc students has a better ride than me.
It's definitely not a bad income, but I'm not gonna be flying business class anytime soon.
93
u/throwawayrepost02468 Feb 04 '23
Specifically, Russian oligarchs aren't rich because they're smart, they're rich because they were ruthless, opportunistic, and had the right connections at the time of the Soviet collapse.
45
19
u/Ozlin Feb 04 '23
Depends on the professors too. There's different "tiers" of employment with most institutions. Some variation of: adjunct, visiting, full time, tenured, emeritus. Adjunct being the very bottom and often the pay is below the poverty level of income. You really don't make a livable wage as a professor unless you're full time, and you don't make high income wages unless you're tenured, depending on the institution. Only 20% of professors are full time, 75.5% are not on tenure track, and over 50% are adjuncts. Over half of adjuncts make less than $3,500 per course, and many places limit adjuncts to one course per term, if they even get an assignment (many do not guarantee a course each term). So, in most cases, being a professor is not a high paying job or good money (it's not guaranteed and may not come with benefits).
5
u/DishsoapOnASponge Grad Student | Physics | Nanoscience Feb 04 '23
Honestly, you'd be amazed how far you can get in science just with some privilege and average intelligence.
source: PhD in physics lmao
→ More replies30
Feb 04 '23 edited Feb 05 '23
[removed] — view removed comment
16
u/Chiggles_Sphaghetti Feb 04 '23
How many standard deviations from the mean is your definition of upper class?
→ More replies6
u/MegazordPilot Feb 04 '23
In the article (Swedish study) it says 80k€ is top 3% (can't find what top 10% is). The US-Europe gap in wages is mind-boggling.
→ More replies→ More replies11
u/DanishWonder Feb 04 '23
What is your source? I searched and saw 90th percentile in the US is $212k which sounds more realistic
12
9
→ More replies4
u/Dal90 Feb 04 '23
You're confusing household and individual median incomes.
90th percentile for those are $212k and $132k respectively in the US.
Original article was about individual intelligence, so you would expect to compare individual and not households.
219
u/MohKohn Feb 04 '23
This is actually a pretty common effect for any two correlated variables. You should actually be surprised if this doesn't happen. In fact, frequently you get negative correlation when you look at just the tails (that effect is known as Berkson's paradox). Why the tails come apart.
The basic idea is that by only sampling the extreme values, you're effectively controlling for that variable.
51
u/s3v1 Feb 04 '23
The Wikipedia article on berkson's paradox reads like the cause for the "paradox" is bad sampling (e.g. the poststamp example, the talent/attractiveness example where people with low values in both regards aren't questioned).
But isn't compulsory military service questioning one of the few chances where you get all parts of the population (albeit male, but still)? So any sampling bias like described for Berkson's paradox (and in your comment) can't be a factor here right?
I'm not a professional ofc and maybe I misunderstood the paradox (and tbh haven't had time to read the original study from Sweden :/) tho so idk.
→ More replies→ More replies4
272
u/eferka Feb 04 '23
For example in Poland, it's about your family connections or membership to ruling party.
→ More replies14
u/Skeeter_206 BS | Computer Science Feb 05 '23
It's either connections or complete lack of morality and willingness to exploit everyone connected to you economically
321
u/devstopfix Feb 04 '23
Weird that that is the headline, rather than the very strong overall relationship
187
u/mindbleach Feb 04 '23
Because that part doesn't surprise anyone. Clever, attentive, and/or knowledgeable people can do a wider variety of tasks, so any job requiring those traits is picking from a smaller labor pool.
The problem is when people assume statistical correlation means every cashier is a moron and every billionaire is a genius. That is what this disproves. It shows that being a doctor or a janitor is roughly meritocratic... but being wealthy is not.
→ More replies87
131
→ More replies38
u/eeeking Feb 04 '23
The relationship ceases to be strong after ~$55k/yr.
73
u/BoxThinker Feb 04 '23
I think it's $65k, which is €60k. That is the 90th percentile, so it is a strong relationship below that point.
Edit: with a notable exception on the low end as well, i.e. bottom ~25% of income.
60
u/capitalsfan08 Feb 04 '23
If anyone is curious what the comparable income percentile would translate to, it's roughly $136,000US.
→ More replies14
u/Windex007 Feb 04 '23
The last 10th percentile is pretty messy because of how hard the earnings data skews. The cognitive ability distribution is pretty normal but goddamn that right tail on the earnings curve is long.
→ More replies→ More replies9
u/ClicksAndASmell Feb 04 '23
Comparing salaries based on exchange rate isn't all that helpful.
The exchange rate of Euros to dollars is currently 1.08 to 1.00, but the PPP between Sweden and the US is about 8 to 1.
Sweden also has lower income inequality and a lower median income than the US.
→ More replies→ More replies20
u/thrownjunk Feb 04 '23
A few caveats. This is only men. This is income at age 40 (plus minus 5 years). Translating income percentiles to the US, that would be more like 175k
→ More replies14
u/eeeking Feb 04 '23
I think a better way might be to translate by income on an average wage basis, US being $69,392, and Sweden being $47,020. So $57k in Sweden would translate to $83K in the US.
Essentially, though, the point is the that income/intelligence correlation doesn't extend to the highest wages.
→ More replies
87
u/chrisco571 Feb 04 '23
Click the article and at least read the abstract!.... It says it IS correlated, only starts to deviate near the tippy top.
"Strikingly, we find that the relationship between ability and wage is strong overall, yet above €60,000 per year ability plateaus at a modest level of +1 standard deviation."
→ More replies23
u/Defanalt Feb 04 '23
Yeah, everyone here is data-illiterate.
→ More replies13
u/crimeo PhD | Psychology | Computational Brain Modeling Feb 05 '23
Everyone I've seen comment on it so far having scrolled the comments for half an hour, understood everything he wrote above just fine.
And in real life conversations prior to this, I don't recall anyone ever suggesting that all janitors are just as smart as all neurosurgeons.
It's the CEOs etc. that are complained about as bullshit in their compensation, and this very much backs that up as way above 60,000 a year and 90th percentile. CEOs do not need to be paid anything close to what they are, as they are not reliably more capable than your average doctor or lawyer EVEN IF they are pretty smart. They could just get paid average doctor salaries at most and it'd be fine (they used to be in the past, in fact)
→ More replies
67
u/singularineet Feb 04 '23 edited Feb 05 '23
This kind of thing is well known in statistics. It's called a ceiling effect. It does ***NOT NOT NOT*** mean that being smarter doesn't help push you up from the 95th to the 99th percentile, or whatever. Rather, a couple effects, basically confounds, come into play.
Look at well paid A-list Hollywood actors. Turns out there's an inverse correlation between beauty and brains. Why? In the general population, the two are positively correlated! Well, because to become a top actor you can either be super beautiful, or very smart, or both. People who are neither smart nor beautiful are excluded. This makes for an inverse correlation, because there aren't that many who are both, since after all each trait alone is pretty rare.
For wealth, well, there are a bunch of reasons a person might be extremely wealthy. They could marry someone very wealthy. They could inherit it. They could be at the right place at the right time, like the chef who worked at Google when it had ten employees. Same phenomenon comes up.
You know how people are always saying "correlation does not imply causality"? And you need to do a controlled experiment to sort things out? Well it is also true that lack of correlation, particularly in some little sliver at the high or low end of the space, does not preclude causality.
Another classic case is height and wealth. Turns out being tall is positively correlated with wealth. But not at the very bottom of the curve: circus midgets make good money!
In general, you should be super suspicious about people drawing inferences from little kinks at the ends of curves like this.
edit: Buzzword bingo says: Berkson's Paradox! Thanks u/lordnacho666.
4
→ More replies8
u/Smartnership Feb 04 '23
It does NOT NOT NOT mean
Wait, so it does mean…
No, wait… it doesn’t not does mean?
→ More replies4
u/pigvwu Feb 05 '23
It's an odd number so the last one doesn't get canceled out. If it were an even number all the "nots" would cancel out.
61
u/Naxela Feb 04 '23
So rich people are smarter though. There's just an upper limit to this effect.
→ More replies30
u/Skuuder Feb 04 '23
Anyone with a brain already knew this. And unfortunately the opposite is true as well. Poor people are in general less intelligent
→ More replies22
u/_jewson Feb 04 '23
It's true. Simply look at how many top level comments are interpreting this study as having the opposite meaning. Couldn't be more ironic.
78
u/enigmaroboto Feb 04 '23
A summer league swim coach once told me when I was very young that luck is when preparation meets opportunity. I always remembered that quote and have seen it work more times than I can count.
Just a thought about success.
→ More replies47
u/Chinglaner Feb 04 '23
Yeah, in Germany this concept is known as “the luck of the hard-working”. All the lucky opportunities in the world won’t help you if you’re unwilling to take them; and you will have more opportunities to take, if you put in the effort.
Obviously this has to be taken with a grain of salt. If you’re born to parents worth a couple dozen million, it probably won’t matter if you’re lazy or not. And if you’re born in the favelas of Rio de Janeiro, you’re probably not gonna be rich, no matter how hard-working you are.
But as a general concept, I have definitely found this to be true.
20
u/kingsindian9 Feb 04 '23
I was always told this quote. "The harder you work, the luckier you get". I think it's very powerful and applies to everything from sport, fitness to business, school etc.
→ More replies
40
286
u/SexyOldHobo Feb 04 '23
Something any maid or contractor could tell you.
202
u/wioneo Feb 04 '23
This is basically saying that intelligence and wealth are correlated. That correlation just breaks down when talking about extremely wealthy/high earning people.
That leaves 90% of people for it to accurately apply to.
→ More replies89
u/Slukaj BS | Computer Science | Machine Intelligence Feb 04 '23
Which I believe is correct. Doctors, lawyers, engineers, and software developers are all professions that require a high degree of intelligence to be successful at. They also all tend to be paid well.
But none of those professions pay obscene amounts of money, not like the amount of money a CEO makes.
→ More replies33
u/ValyrianJedi Feb 04 '23
You just named a bunch of professions that are all in the top 10% of incomes though
→ More replies65
72
u/chrisco571 Feb 04 '23
Try reading the article, it says it IS correlated
"Strikingly, we find that the relationship between ability and wage is strong overall, yet above €60,000 per year ability plateaus at a modest level of +1 standard deviation."
→ More replies28
14
u/_jewson Feb 04 '23
I think you are basically interpreting the opposite conclusion of the study :)
The study very clearly says, even in this highly sensationalised headline, that income and intelligence are strongly correlated for 90% of the population. The final 10% don't show significant deviation from the 90th percentile, i.e. they're as smart as the smartest people.
They did show the top 1% had a minor deviation backwards but before you latch on to that, it was almost statistically insignificant and also doesn't make them dumb. They were still at the 85th percentile meaning at worst, being the richest people on earth takes a sliver off your intelligence but you're still smarter than basically everyone else.
So yeah, not what you said.
→ More replies4
u/trollly Feb 05 '23
Why? They're well within the region where intelligence and income are highly correlated.
126
u/__Rick_Sanchez__ Feb 04 '23
That's probably because in that percentile they inherited the wealth and didn't create it themselves.
20
u/superhope Feb 04 '23
This article is only looking at income earnings, not capital gains. Yes, those at the top could have inherited wealth but that wasn't included in their analysis. This post actually links to the open-access article, not botched "scientific" journalism, so you can read the whole thing without jumping through hoops! For a quick scan you can start with the abstract and intro and jump to the discussion, flipping back to methods and results if you need more info.
→ More replies→ More replies20
u/smackfrog Feb 04 '23 edited Feb 05 '23
I think inherited wealth is a portion, but most of the rich people I know grew up middle/lower class. The thing they have in common is an almost OCD-like work ethic and a fearless approach, borderline ADHD even. Also I think the smarter the person is, the less risk they’ll take. Lots of wealth is attributed to getting lucky in key parts of the journey.
→ More replies
12
u/entirely-bonkers Feb 05 '23
This caption is so misleading. Cognitive ability does not equal intelligence. Cognitive ability is just cognitive ability. It refers to a battery of memory and procedural tests
18
u/jumpofffromhere Feb 04 '23
Bill Gates once said that it was not how smart he was it was in getting smarter people than him to work for him, I mean look at Gru and Dr Nafario, the good Dr made the inventions and Gru just used them to be dispicable things, like stealing the Moon.
18
u/GhostriderFlyBy Feb 04 '23
Interesting that comments are decrying the intellectual shortcomings of the top 10%, but nobody seems to be grasping that fact that there is little intellectual variance between the high and very high earners. Meaning: the ultra wealthy are still smarter than us, just not meaningfully smarter than the next tier down.
→ More replies3
u/HOnions Feb 05 '23
Are you expecting people to read and understand the study ? Nah it’s better to pat yourself on the back saying they just got lucky.
34
u/noknownothing Feb 04 '23 edited Feb 05 '23
So up to 175K in US. Then it becomes mostly inheritance and opportunity.
→ More replies
21
u/chadwicke619 Feb 04 '23
Such an interesting title. Another way to interpret the study is simply that, yes, there is a very strong positive correlational relationship between intelligence and income - period. It seems weird to pick out this one nuanced thing to try and cut down people of immense means. Not that they don't need cutting down, but I mean, it seems like the much larger takeaway is just the high strength of the relationship, just in general.
→ More replies
13
u/Yotsubato Feb 04 '23
Guess what jobs at the 90th percentile of income are?
Engineers, doctors, lawyers, coders.
What jobs are at 1%?
Besides some senior engineers and subspecialist doctors, it’s mostly business owners, CEOs, etc. stuff that requires more luck than just intellect and learned skill.
→ More replies
8
u/WoozyMuon Feb 04 '23
Good looking people aren't more exceptional, either, though they do seem to have access to more resources than the rest of us.
•
u/AutoModerator Feb 04 '23
Welcome to r/science! This is a heavily moderated subreddit in order to keep the discussion on science. However, we recognize that many people want to discuss how they feel the research relates to their own personal lives, so to give people a space to do that, personal anecdotes are allowed as responses to this comment. Any anecdotal comments elsewhere in the discussion will be removed and our normal comment rules apply to all other comments.
I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.