Many people think that people who are smarter than average, i.e. have a higher IQ, are the ones who are successful. It makes sense, as higher IQ contributes to logical decision-making; intelligence helps you learn new strategies quickly and manage your finances correctly.
But is there any scientific evidence for this hypothesis, or is it just a popular belief? How do you manage your finances? Can you connect your financial talent with your IQ?
In this blog post, I will shed light on the link between IQ and financial success to help you understand how a higher IQ level can help you make informed financial decisions.
Let’s start!
What is IQ and How is it Measured?
IQ, or intelligence quotient, measures the effectiveness of human thinking and you can check it with a free iq test online. IQ tests were created to test a person’s ability to solve problems, learn quickly and adapt to a situation, or recognize relationships. Intelligence consists of several different domains:
- Logical thinking – Recognising connections and drawing conclusions.
- Problem-solving skills – Finding solutions quickly and efficiently.
- Spatial intelligence – Interpreting visual information.
- Language skills – Vocabulary and ability to formulate complex ideas.
So people with a high IQ are not just talented in one area, but tend to have several outstanding skills. But is there really a direct link between IQ level and financial success, or is there something else at work?
The Relationship Between IQ and Financial Success
Several studies have shown, and researchers agree, that people with higher intelligence tend to do better in school, get better jobs and then have higher salaries. However, there are many examples that deny this theory, the part about school. Why? There are several celebrities who did not do well in school, or only studied one subject, yet graduated from school with successful business acumen and became successful in their own spheres.
However, it should also be pointed out that a high IQ can help in many areas such as finance:
- Faster and more efficient decision-making.
- Better planning and analytical skills.
- More accurate assessment of risks.
- Innovative thinking that can drive business success.
So why is it that not all people with high IQs become rich and successful? The explanation is simple: high IQ is very rarely enough to make a person successful. If you want to succeed in finance, you need financial literacy. If you want to be a researcher, you also need the right communication skills to be able to communicate your research results. If you want to be a psychologist, you need not only IQ but also emotional intelligence.
What can you do to become more financially literate?
How Can You Improve Your Financial Intelligence?
Financial literacy is something you will definitely need if you want to be successful in finance. There are a number of ways you can develop this intelligence, because remember one thing: all skills can be developed.
- Learn about finance. Read books, listen to podcasts, watch videos. Find the resource that you can work with best and start learning. No matter how smart you are, knowledge has never taken off on its own. Learn, learn, learn!
- Prepare a budget. It is not for nothing that they say that everyone learns by doing. If you want to be successful in finance, learn to manage your own finances first, even if you don’t have a strong financial background. Start by budgeting your current money, then analyse the results after a month.
- Learn about the financial market. If you want to build a good strategy, it’s a good idea to learn about basic investment strategies. You can find plenty of resources on the internet about these too, and there are several techniques. Even if the first technique doesn’t work for you, don’t worry – it can take time to find one that works for you.
- Learn from your mistakes. We can’t repeat enough times that to increase intelligence, you have to learn. If you made a mistake, you made a mistake, no problem. Learn from it, draw conclusions and move on. Believe me, the only one who doesn’t make mistakes is the one who does nothing.
- Test your IQ. If you want to find out what skills you should be developing in yourself, test your IQ and you’ll see what other areas to focus on besides financial awareness. For example, you might have good problem-solving skills but find it difficult to adapt to new things in the long term. Whatever you develop in yourself will only ever benefit you.
Final Words
A high IQ can be an advantage for financial success, but it does not in itself guarantee financial literacy. Emotional intelligence, financial literacy and informed decision-making are as important as logical thinking. Intelligent people are often better at managing money, but success also requires practical experience and financial knowledge.
