Earners,

If you work in a corporate setting, I am almost 100% sure that you've interacted with someone quite senior within the company and you've thought to yourself, "how in the world did they get there - they don't seem that sharp, lol." Or, maybe you've come across someone you know who runs a successful business and you think, "man, business seems so hard - but they don't seem like they are brilliant or anything…so how did they figure it out?"

Reaching a next-level status of wealth or earnings in your career doesn't require a 180 IQ. Or even a 140. You just need to be smart enough, and many of you are - here's why:

Why People Overrate Intelligence

Let's first define success as financial success. More clearly, how much someone can or will earn throughout their lifetime, as well as their ability to retain and grow their wealth over time.

Next, let's define intelligence. A way you can conceptualize intelligence is through two different constructs: fluid and crystallized intelligence. This was pioneered by psychologist Raymond Cattell in 1963.

Fluid Intelligence is understood as the ability to reason and solve novel problems, independent of any knowledge from the past. It involves the capacity to identify patterns, solve puzzles, and use abstract reasoning.

Crystallized Intelligence is understood as the ability to use knowledge, facts, and experience that one has gathered over time. It includes vocabulary, general world experiences, and the application of learned information. Most of us would assume that this would be more so "knowledge" (a more nurtured trait as opposed to fluid intelligence), but Cattell argues that this is just as valid as a form of intelligence.

When we think about how "smart" people are, we are likely referring to their fluid intelligence. We think that all high earners have a God-given ability to think through problems more effectively and efficiently than us mere mortals and that's why they earn more. We also assume that rationally, more money = good, so the more intelligent actors among us will leverage their fluid intellect to earn more money.

It Matters…Kinda…

While it makes sense to think fluid intelligence is directly correlated with wealth levels, it completely ignores a massive part of the equation. In a vacuum, without the crystallized knowledge of financial literacy, wealth-building strategies, career experience, etc., the fluidly intelligent don't have the opportunity to apply that ability against anything. To have an immense amount of success, you need to have an insatiable hunger for novel information.

Development of your crystallized intelligence will allow you to earn and grow your wealth more effectively. Good news as well: this is well within your control as everything you need to know knowledge-wise is out there for you to learn (similar to this newsletter). The more fluidly intelligent of us may have the ability to take that to an insanely high level, but that's not to say all of them choose to. How many of us know someone who is naturally "smart", and yet isn't fully applying themselves as much as they could? This could be for a variety of reasons such as their ambition for more wealth or lack thereof, their upbringing, and their emotional temperament.

However, if someone possesses a high level of fluid intelligence AND has that "dog in them", this is where the outliers live. Your Sergei Brin (co-founder of Google) or your Sam Altman (CEO of OpenAI). They are just different human beings. If your fluidity is razor-sharp, then you will process new information (that you are taking in droves) rather quickly. You will internalize new info with the old at a faster clip. This will accelerate the learning of any discipline and contribute to your financial success.

Think of a high level of fluid intelligence as a power-up in a game. It makes the game easier and can allow you to reach the highest levels of the game. However, it doesn't necessarily mean you will beat the game and it also doesn't mean the game just solves itself for you. You have to apply it with a slew of other attributes. With average intelligence, you can still play the game and be successful. Extremely successful. You just may have to over-index with crystallized intellect as well as the application of said intellect to get to the higher tiers should you choose to.

That's Why There Are "Dumb" Rich People / High Earners

Well, they aren't actually dumb. They are probably of average fluid intelligence, but assuming they are self-made, it's rather unlikely that it's purely luck that got them to where they are. They've probably worked pretty hard, or exploited opportunities that have come their way. Made the most of luck, one could say.

The point of all of this is to say that many of us are "smart enough" to become, by anyone's standards, very financially successful. With average intelligence (even below-average intelligence to some degree honestly) and consistent effort over time, I've seen firsthand how far people have taken it - and feel like you could take it pretty far too.

Earn more,

Nate