The Psychology of Intelligence vs Money (Why Being Smart Doesn’t Make You Rich)

Myron Scholes and Robert Merton helped invent the formulas Wall Street still uses to price risk. They won the Nobel Prize. Their hedge fund, Long-Term Capital Management, nearly took down the global financial system in 1998. If intelligence doesn’t protect you from catastrophic financial failure, what actually does? This video breaks down what the research really says about IQ and wealth, the specific psychological traits that matter far more, and exactly what happened inside that trading room in its final weeks. Research referenced in this video: Jay Zagorsky (2007), “Do You Have to Be Smart to Be Rich? The Impact of IQ on Wealth, Income and Financial Distress” — Ohio State University summary · full study PDF Brad Barber & Terrance Odean, “Trading Is Hazardous to Your Wealth” — overview of the research Daniel Kahneman & Amos Tversky (1979), “Prospect Theory: An Analysis of Decision Under Risk” — paper via Princeton Justin Kruger & David Dunning (1999), “Unskilled and Unaware of It” — overview of the research Thomas J. Stanley & William D. Danko, The Millionaire Next Door: The Surprising Secrets of America’s Wealthy — book overview If this changed how you think about the relationship between being smart and being financially secure, hit like and share it with someone who’s convinced they’d handle money better if they were just a little sharper. Subscribe to MindToAct and turn on notifications so we can keep decoding the hidden mechanics of the mind together. #psychology #money #finance #behavioraleconomics #wealth #intelligence #MindToAct