Does intelligence equal wealth? If the question isn't rhetorical, then the answer is "no." Then again, it all depends on a number of factors. If you define intelligence as the ability to apply knowledge and skills, then intelligence certainly can equal wealth. Study hard, apply yourself and read. After all, having an education is the only guaranteed way to get ahead, right? Go tell that to the myriads of overeducated college graduates working at menial jobs with no advancement in sight.

Educated, but Underemployed
Educated people working in disappointing jobs isn't the result of dire recessionary times. Rather, it's because financial rewards are tied to what a producer has to offer. Every one of us has to accept the challenge of proving one's worth in the marketplace. Intelligence is only a limited part of that. The marketplace is nothing more than the exchange of people's accumulated wants and desires. Much of what consumers collectively place great value on in the marketplace has astonishingly little to do with intelligence as we understand it.

No one expects Magic Johnson to offer proof of the Riemann hypothesis anytime soon, yet his wealth is estimated to be half a billion dollars. In Johnson's case, he developed non-academic skills that he could use to obtain a high salary. By saving that salary and investing, Johnson earned far more money through passive income than by active means.

Contrast that with Chris Langan. His story is a classic example of how little correlation there can be between intelligence and financial reward. Raised in poverty by a single mother, Langan dropped out of two colleges and has worked a series of manual labor jobs ever since. This is despite being billed as "the smartest man in America," and having an IQ measured at 195. In between his shifts as a bouncer, Langan single-handedly devised a theory that unifies science and theology. That theory might have vast promise for human understanding, but it doesn't pay Langan's bills as efficiently as his current job as a horse rancher.

Applying Your Knowledge
That being said, it's clear that the most overwhelming force in the marketplace is that of applicable intelligence. Google creators Sergey Brin and Larry Page are adept programmers with plenty of credentials in mathematics and computer science. Upon graduation from Stanford, either could have had his pick of entry-level jobs at Microsoft or IBM. However, Brin and Page also had a mission. Their goal was to organize the world's information and make it available to everyone. Without intelligence, Google would have remained just a niche business instead of growing into the quarter-trillion-dollar market cap leviathan it is today.

Every market has an opportunity waiting to be exploited, and that exploitation doesn't necessarily require vast intelligence. Harvey House founder Fred Harvey never attempted to formulate a scientific theory, but he did notice that people disembarking at train stations often wanted something to eat and a place to spend the night. Armed with that knowledge, he became one of the hospitality industry's most successful entrepreneurs.

The Bottom Line
Exploiting opportunities is a form of intelligence that's often far removed from what's learned in a classroom. It's like the old joke about the two college mathematics majors. The "A" student brags about how he went to grad school, quickly got a lecturing job and became a fully tenured professor with a $100,000 salary. The "C" student casually mentions that he became a billionaire. "I found a product that I buy for $2 and sell for $5. It's amazing how much money you can make with that kind of markup," he said.

Related Articles
  1. Personal Finance

    10 Reasons It Is Time to Look for a New Job

    Learn 10 good reasons for switching jobs, such as major life changes, ethical concerns, job description creep and upwards mobility.
  2. Credit & Loans

    College Loans: Private vs. Federal

    Not all student loans are the same. Know what you're getting into before signing on the dotted line.
  3. Credit & Loans

    Student Loan Debt: Is Consolidation The Answer?

    Consolidating student loans entails taking out a new loan to pay off existing loans. It sounds simple, but there are a few things to keep in mind.
  4. Taxes

    Payroll Taxes: Picking Apart Your Paycheck

    Here's what gets deducted from your pay, what your employer pays and where your payroll taxes actually end up.
  5. Investing

    5 CEOs Who Returned to Save the Day

    Instead of toying with trial and error, many struggling companies have adopted a tried and true "founder knows best" strategy, bringing back former CEOs.
  6. Professionals

    5 Things to Request If You Can't Get a Raise

    The job market is improving, but many companies are still running on tight budgets which means no raises. But there are other forms of compensation.
  7. Personal Finance

    5 U.S. Cities With High Paychecks and a Low Cost of Living

    Consider these U.S. hubs where workers get paid competitive salaries while enjoying a high quality of life due to a low cost of living.
  8. Professionals

    Top 5 Post-Grad Degrees That Lead To High Pay

    Although completing a post-grad degree is tough, the payoff is usually worth it. These five jobs typically pay well over $100,000 a year.
  9. Professionals

    Increase Your Odds of Getting a Job After College

    Economists still say college is the best path to a high-paying job. Nowadays, it just requires a little more thought before heading off to the university.
  10. Professionals

    What To Expect On The CFA Level III Exam

    The Chartered Financial Analyst Level III exam, which is only offered in June, is the last in the series of three tests that CFA candidates must pass.
  1. What’s the difference between the two federal student loan programs (FFEL and Direct)?

    The short answer is that one loan program still exists (Federal Direct Loans) and one was ended by the Health Care and Education ... Read Full Answer >>
  2. Does working capital include salaries?

    A company accrues unpaid salaries on its balance sheet as part of accounts payable, which is a current liability account, ... Read Full Answer >>
  3. Do financial advisors need to meet quotas?

    Most financial advisors are required to meet quotas, particularly if they work for firms that pay base salaries or draws ... Read Full Answer >>
  4. Student loans, federal and private: what's the difference?

    The cost of a college education now rivals many home prices, making student loans a huge debt that many young people face ... Read Full Answer >>
  5. Can I use my IRA to pay for my college loans?

    If you are older than 59.5 and have been contributing to your IRA for more than five years, you may withdraw funds to pay ... Read Full Answer >>
  6. Can I use my 401(k) to pay for my college loans?

    If you are over 59.5, or separate from your plan-sponsoring employer after age 55, you are free to use your 401(k) to pay ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Take A Bath

    A slang term referring to the situation of an investor who has experienced a large loss from an investment or speculative ...
  2. Black Friday

    1. A day of stock market catastrophe. Originally, September 24, 1869, was deemed Black Friday. The crash was sparked by gold ...
  3. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  4. Barefoot Pilgrim

    A slang term for an unsophisticated investor who loses all of his or her wealth by trading equities in the stock market. ...
  5. Quick Ratio

    The quick ratio is an indicator of a company’s short-term liquidity. The quick ratio measures a company’s ability to meet ...
  6. Black Tuesday

    October 29, 1929, when the DJIA fell 12% - one of the largest one-day drops in stock market history. More than 16 million ...
Trading Center