How Being Smart is Not Necessarily Making You Wealthy

If you’ve gone through life thinking that your brains are always going to help you, don’t stop thinking that. Indeed, your cognitive abilities can help you get a decent job and to make sound life decisions -- and that’s not something to sniff at. But on the flip side, being smart is not necessarily going to afford you a high-dollar lifestyle. In fact, it might already be annoying you that your high IQ score hasn’t necessarily gotten you behind the wheel of that expensive car, or afforded you the penthouse suite you thought you deserved.

If you’re wondering why your intelligence is not yet equating to a high salary and excessive wealth, here are some things to keep in mind.

See Also: Top 10 Habits That Make You Rich

You invested in education

You may be really smart, but in most industries, that intelligence needs to be paired with a certain educational background in order for you to get the credibility you think you deserve. For many people, that means not just going to a four-year university, but also pursuing further education. Whether it’s a master’s degree, a Ph.D. or some other higher degree, the plain fact is that those degrees are not cheap.

If you’re really immersed in your studies, there’s a good chance you decided to forego working while studying, meaning you had to borrow money in order to pay your bills while you were in school. Even if you took that coveted teaching assistant job, there’s a chance it didn’t pay enough to cover much. So yes, you’ve invested in your human capital by pursuing a higher degree, but in the end, it’s left you with a mountain of debt to pay.

You live in a very expensive area

Here’s another reason that your super-smarts aren’t getting you the large bank account balance that you thought you should have by this time in your life. You’re living in an area where it’s super-expensive to live. If you’re in finance, chances are you’re living in a financial capital, such as New York or London. If you’re in software, there’s a good chance that you’re calling the Silicon Valley your home. Take a quick look at the costs of living in those places and you’ll find that they’re astronomical compared to other places. So if you’re about to take a job in one of those areas and you start to get stars in your eyes from the seemingly high salary that the job is offering, best think again.

Calculate the costs of rent, utilities, commuting and food before you accept that job, and renegotiate for a higher salary. Then, go out and find ways to invest the additional funds, so that you’re not spending all of your salary on entertainment or shopping -- things that also come in abundance in expensive areas.

You’re focused on your career -- at the expense of other things

If you’re really smart and you’ve invested a lot of time in your education, chances are you’re super-committed to that career. In fact, you might be so laser-focused on the tasks that come along with the job that you simply don’t pay attention to what else is out there. Finding the keys to curing a major disease may seem like the most important thing in the world to you -- and it certainly is important -- but if it’s taking up all of your waking hours, other things might suffer.

You might be the type to pay no attention to investing the remainder of your salary wisely, for example. You might not care to spend a few short minutes sorting out the cheapest phone service so that you’re not throwing away good money. In essence, you might not care that there are ways to save money and that all of them could add up to a lot of savings over time. With that in mind, if you are really interested in becoming wealthy, you have to take the time to think about how to do it.

Are you nurturing relationships?

It’s not true for all smart people, but for some, they’re so focused on the tasks, projects or details of their work that they forget that a big part of success is in building relationships. When you have good working relationships with your co-workers and employers, they’ll tend to look more favorably upon you when it comes time to promote someone within the company. When you get promoted, there’s usually a higher salary involved. What’s more, moving your way up in a company puts you in contact with other higher-ups in other companies, which could mean more opportunities in the future.

Wealthy people tend to be well-connected and understand how to find the right people for the right job. So if you’re not concerning yourself within and without your company, it might be time to make an effort. In other words, don’t let social ineptitude get in the way of your overall success. If you need help in that department, join a group such as Toastmasters or a networking group that teaches you how to get to know people. Use your existing network as well.

The numbers don’t lie

Sure, you can earn a higher salary when you have a higher degree, but that doesn’t necessarily mean you’re going to be doing something smart with the money that you’re making. According to a study conducted at The Ohio State University in 2007, smarter people do tend to make more money than those with average intelligence -- but perhaps not enough to say that the smarter people are "wealthy."

According to the study, a person with average intelligence (an IQ of about 100) makes between $6,000 and $18,500 less than the people who are within the top 2 percent of intelligence (with IQs of about 130). That’s a bit more, but according to the researchers, people with below-average and average intelligence fared about the same as super-intelligent people when it came to total wealth, as well a person’s likelihood of financial difficulty. In other words, smart people paid bills late and failed to save money at about the same rate as those with less intelligence.

So far, researchers haven’t discovered the exact habits that are leading to those results. But they suspect it’s a mix of some of the causes mentioned earlier, including high educational debt and living in expensive areas, among other factors.

You assumed you deserved it

Are you the type of person who’s always been smart, and didn’t really have to work in order to get good grades in school? Do things like learning new tasks or handling issues seem to be easier for you than they seem to be for other people? Then you may be suffering from a case of ego.

You assume that since things have always been easy for you, that beginning to accrue wealth and see success in your life would also be super easy. In other words, you assumed you just deserved to be rich, even if you weren’t willing to take steps to get there. Don’t make that mistake. Unless you’ve been handed a sum of cash from a loving relative, no one is going to hand you anything -- even if you are super-smart and are doing something good for humanity.

If you’re starting to realize that being endowed with lots of book smarts doesn’t necessarily equate to a life of riches, then at least you’re rooted in reality. You, like everyone else, have choices in your life. You might not get anything automatically handed to you, but you can certainly start to turn things around.

As you go about trying to change your trajectory and to start gaining wealth, keep these things in mind:

Start nurturing the relationships that lead to being well-connected and well-respected. Pay attention to the little details that can help you save some money. Set daily goals for your work as well as your financial habits. And when faced with deciding between living in a major metro area or doing good work in a quiet, less-expensive suburb, at least consider living in that suburb where your costs of living will be lower.

Life -- and your overall success -- is a combination of many factors, and your level of intelligence is just one of those factors.

Did you fall victim to this trap and get frustrated? What did you do?

The New York Times: Smart Doesn't Equal Rich