The disconnect between the perceived vs. actual rarity of high-net-worth individuals vs high-IQ individuals

Last week I made a post speculating on Elon’s IQ, who despite being the richest person in the world it may come as news to some he is not the smartest too. I think there is a systemic bias in society in which people equate wealth with intelligence, or overestimate the IQs of rich people. Rich people are not that uncommon, especially in the US, which is the wealthiest country in the world on an absolute basis and one of the richest in the world on a per-capita basis. There are 22 million millionaires in the US, or about 1/10 of the adult population. But this is five times more common than being smart enough to meet the cut off for Mensa, which is one-in-50 rarity in terms of IQ, or at least 132. Yet being a millionaire is still seen as less obtainable or more exclusive. Or in the context of social media, someone who flashes a ‘Lambo’ is more likely being honest than someone who claims to have an IQ of 145 (1 in 400 rarity), yet many default to the assumption that the car is rented.

I think this disconnect is because people with high IQs tend to be more prominent and visible in society, such as pundits, professors, annons online who have large followings, and occupying various high-status, important roles in society, whereas most millionaires by contrast are more obscure (the so-called ‘millionaire next door‘). Also, people with IQs only in the 110-125 range (‘midwits’) can do a reasonably good job impersonating someone who is genuinely smart (>132). It’s not like it’s obvious the difference between an IQ of 120-125 vs. 135-140, yet the former is two to four times as common as indicated by the ‘bell curve’. Because smartness confers status and is generally socially desirable, it means people are inclined to appropriate or imitate the mannerisms and attributes of smart people. The result is a sort of inflation of the supply of smart people, similar to an inflation of the money supply in economics.

Also, wealthy people tend to downplay their wealth, compared to obvious displays or signifiers of wealth, such as top hats, in the past. Wealth today is more about autonomy and the exclusivity of one’s social circle, than attire or ostentatiousness. Wealth is not about being seen as wealthy in the context of broader society, but about escaping from society whether it’s private resorts or always taking Uber instead of the bus. Or convenience, like using Uber Eats, which can be surprisingly expensive if one makes a habit out of it.

Additionally, the media is constantly putting out headlines about how a large percentage of the US population is broke, poor, indebted, living paycheck-to-paycheck etc., but not that half of the population has an IQ below 100, which is also true. There are far fewer headlines by the media about the growing number of millionaires in the US.