We often hear people attribute their economic level to their “rich mindset”. This ambiguous concept is often identified with personality variables, such as persistence, willpower or self-reliance, and intellectual capacity.
However, and although there are psychological studies that confirm that personality and intelligence have some weight in professional success, the truth is the philosophy of the “rich mentality” is fallacious because the level of income depends to a greater extent on external factors which are beyond the control of the individual.
How is intelligence measured?
The most common way to measure cognitive abilities is to use an intelligence test, which they appreciate the performance of the person that meets the test of comprehensive skills such as verbal or abstract reasoning.
Intelligence tests frequently measure “IQ”. The CI is calculated by comparing a person’s scores with those previously obtained by others of their age; if the score is 100, the subject will have an average CI, while the further away from this number, the greater his distance from the average.
The well-known tests of choosing which figure out of four options is best suited to complete a series are good examples of IC tests.
Aptitude tests are another way to measure intelligence, although they include more aspects. These tests measure different skills like reasoning, arithmetic, verbal or mechanical skills. Unlike CI tests, aptitude tests do not only measure intellectual skills and are mainly used in career guidance and staff selection.
How does intelligence influence the economic level?
A weak CI is associated with weaker capacities, Especially verbally and in relation to abstract reasoning. This can make it difficult for people with intellectual functional diversity to access certain activities and professions.
IQ has little direct influence on professional status, and therefore on income; however, intelligence affects educational level and professional level, so there is a relevant indirect influence.
Scientific literature suggests that while very low intelligence makes it difficult to achieve high economic status, having a high CI only explains income level by 1 or 2%. Aptitude tests predict wealth better than CI tests because they relate to more specific skills relevant to certain professional roles.
Moreover, although intelligence explains the economic success of people, IC is largely inherited from parents and mothers. In other words, it has little to do with willpower, and from puberty onwards the results of intelligence tests applied to a person become very predictable.
In any case, if we talk about the influence of psychology on the economic level, personality seems to play a more relevant role than intelligence.
The 5 major personality factors
The most popular personality model today is what we call the “Big Five Model” or “OCEAN Model”, for the acronyms in English of the personality variables that make it up.
According to the model, these five major personality factors manifest in each person at some point in a continuum with two poles: Extraversion-Introversion, Neuroticism-Emotional Stability, Responsibility-Negligence, Kindness-Antagonism, and Openness to Experience-Conventionalism.
Each of these factors it includes a number of personality sub-factors. For example, the factor of responsibility includes the need for achievement and self-discipline, and shyness and impulsiveness are encompassed in neuroticism.
Personality and wealth
The economic influence of personality was analyzed using the five main factors model. A study by Borghans and colleagues indicates that the Responsibility factor is the most important reason for financial success.
The concept of “responsibility” includes persistence, self-discipline, and hard work, among other characteristics. The Borghans team states that, like with IC, these variables increase academic performance and subsequently job performance. Other personality factors are also important. Openness to experience increases performanceWhile too much introversion or neuroticism can make matters worse.
Unlike IC, these personality attributes are more modifiableThus, people who encourage the development of a “rich mindset” (as in some web pages and companies) tend to give them more weight. We are also less likely to get rich if our social skills are low.
On the other hand, scientific research also places more importance on personality than intelligence. However, overall other non-modifiable variables play a much more relevant role than the psychological ones.
Income level is inherited
The two factors that most influence anyone’s economic level this is their country of birth and the income level of their parents. According to studies, these variables represent about 80% of the economic situation, while more than 5% could hardly be attributed to psychological variables.
The economic level of parents influences that of children in many ways. Perhaps the clearest effect is to improve access to university training opportunities, especially in countries where there is no egalitarian public education.
These differences are particularly visible in societies where socio-economic mobility is severely reduced, Such as those organized through a caste system.
The concentration of money explains the inequalities
According to economist Thomas Piketty, known for his historical analyzes of the evolution of the economy in various countries, in societies where inheritance is unimportant, work carries a much greater weight in enrichment.
On the other hand, the more the assets are concentrated on a small number of people it is more difficult to enrich yourself by your own efforts. The current stagnation of population in most countries of the world further increases this accumulation of wealth.
Also, having savings and assets is usually much more profitable than making money from work, especially if you are starting from scratch, as is the case with workers.
In this way, the current economic trend in the world favors that wealth depends more on the economic level of parents than on efforto. Of course, personality variables and intelligence also contribute to socio-economic mobility, but they have a much lower weight, closer to that of luck.
Explanations that attribute wealth solely to effort and ability reject more important unmodifiable variables such as our family. While effort or luck is essential to getting rich, it should be remembered that the best way to make money is to be born with it.
- Borghans, L., Golsteyn, BHH, Heckman, JJ and Humphries JE (2016). What do the grades and achievement tests measure? Proceedings of the National Academy of Sciences of the United States of America, 113 (47), 13354-59.
- Piketty, T. (2014). Capital in the 21st century. Barcelona: RBA Books.