Why the ultra rich get rich, explained in two charts | Brian Klaas

Why most billionaires aren’t geniuses and most geniuses aren’t billionaires, explained by political scientist Brian Klaas.

Not all rich people are geniuses – most of them are just lucky.

Professor and author Brian Klass joins us to debunk a common misconception about wealth – that all those who have it are smarter than average. Klass uses probability to explain that though this is an easy assumption to make, it’s technically not correct.

He points to Elon Musk as a case study, noting that while Musk's skills have contributed to his achievements, his success also depends on his pre-existing resources and collaboration with others. In situations where Musk has worked individually (such as during his acquisition of Twitter), he has seen less success, and, ultimately, less profit.

The key takeaway here is that wealth is not directly correlated with wealth is not directly correlated with brain power. Thinking smarter and working harder does not always make you rich; most of the time, it’s just about being positioned at the luckiest spot on the bell curve.

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About Brian Klaas:

[KevinBauman]

A study found that players in Monopoly, who were given way more money to start, thought they won because they were smarter, not because they had been given an unfair advantage. That's why sayings like, "Some people are born on third base and go through life thinking they hit a triple"

[michaelschiemer]

Successful investing is hard work because it means disciplining your mind to do the opposite of human nature. Buying during a panic, selling during euphoria, and holding on when you are bored and just craving a little action. Investing is 5% intellect and 95% temperament.

[kleckerklotz]

What I find most interesting is how incredibly far away a billion actually is. To visualise what this actually means, it helps to compare it with time. One million seconds is 11.57 days. And one billion seconds is 31.71 years.

[posthocprior]

Big Think: if an academic paper is referenced in a video, as it is in this video, it's polite to link to it in the description. (Btw, almost every YouTube channel does, from my experience.)

[JessicaKeith-ujjq]

The Asian bling or display of wealth seems to be the most elaborate of all races. It's mind-blowing sometimes the extent they get to.

[austinbar]

I have a 3 fund portfolio consisting of 33% S&P, 33% Total stock, and 33% international. I feel a need to focus on complete growth so I went 100% stocks, but does the SP500 and TSM overlap too much to make sense holding both? However I’ve been in the red for a month now. I work hard for my money, so investing is making me a nervous sad wreck. I don’t know if I should sell everything, sit and just wait but watching my portfolio dwindle away is such an eye -sore.

[SarahTaylor_]

As an lnvesting enthusiast, I often wonder how top level investors are able to become millionaires off investing. . I’ve been sitting on over $545K equity from a home sale and I’m not sure where to go from here, is it a good time to buy into stocks or do I wait for another opportunity?

[LouellaValencia]

Hey guys I'm looking to invest. But I don't know anything about the market, any help? As well who can I reach out to?

[ChristopherRoss.]

Vonnegut said:
“America is the wealthiest nation on Earth, but its people are mainly poor, and poor Americans are urged to hate themselves. To quote the American humorist Kin Hubbard, 'It ain’t no disgrace to be poor, but it might as well be.' It is in fact a crime for an American to be poor, even though America is a nation of poor. Every other nation has folk traditions of men who were poor but extremely wise and virtuous, and therefore more estimable than anyone with power and gold. No such tales are told by the American poor. They mock themselves and glorify their betters. The meanest eating or drinking establishment, owned by a man who is himself poor, is very likely to have a sign on its wall asking this cruel question: 'if you’re so smart, why ain’t you rich?' There will also be an American flag no larger than a child’s hand – glued to a lollipop stick and flying from the cash register.

Americans, like human beings everywhere, believe many things that are obviously untrue. Their most destructive untruth is that it is very easy for any American to make money. They will not acknowledge how in fact hard money is to come by, and, therefore, those who have no money blame and blame and blame themselves. This inward blame has been a treasure for the rich and powerful, who have had to do less for their poor, publicly and privately, than any other ruling class since, say Napoleonic times. Many novelties have come from America. The most startling of these, a thing without precedent, is a mass of undignified poor. They do not love one another because they do not love themselves.”

Steinbeck said:
"The poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires.”

[SeanTalkoff]

As an investment enthusiast, I often wonder how top level investors are able to become millionaires off investing. I do have a significant amount of capital that is required to start up but I have no idea what strategies and direction I need to approach to help me make over $400k like some people are this season.

[Riggsnic_co]

These are very valuable rules for anybody who wants to get rich. Unfortunately, most people who will watch this video will not really be able to apply the principles. We may not want to admit, but as Warren Buffett once said, investing is like any other profession-- it requires a certain level of expertise. No surprise that some people are losing a lot of money in the bear market, while others are making hundreds of thousands in profit. I just don't know how they do it. I have about $89k now to put in the market.

[Brennanoliver]

If life gives you lemon, you make lemonades, so at this point instead of waiting for stocks to crash or recovery, focus on how to profit off the current market, Bloomberg, WSJ, BBC business(just to mention a few) have been recording cases of folks averaging 350k in 12weeks, so there's money being moved around if you know where you're looking.

[SophiaAlbury]

*Appreciate your videos! I’m 54 and younger generations should know there’s no shortcut to acquiring wealth, but there are ways to go about it. Fellow millionaires don’t tell the poor/middle class they need the knowledge of finance coaches to help build their wealth. If anyone here needs a good coach, here’s it..*

[dryzalizer]

So glad he included the GREED part, that's just as important as being lucky.

[TheVinitGosalia]

Its not about luck playing a small or a significant part. The fact that luck exists and nothing can escape it, is what he's trying to say. If you try something and with complete accuracy, still there's a minute amount of risk of things going wrong, if things do go right, then that risk is called as luck. So to put it plainly, everything depends on chance, the more chances you take, the more your odds of getting lucky increases. Taking calculated risks again and again is what increases your chances of success. Lastly, you only have to get lucky once, so make sure you take mighty risks but in a way that you can still be in the game if luck isn't in your favour.

[X]

Remember that the most intelligent people tend to congregate into the academic space. They become professors and researchers. The CEO's who run companies are not usually the most intelligent people in that field.

[thomasscottwilliams]

Generational wealth is integral to the British class system still.

[glenndewulf]

I'm pretty sure being a genius doesn't mean that you believe your talent will pull you through.
I think it's the opposite.

Being a genius means you'll doubt yourself endlessly. Question even the way you formulate your questions.

And be furthermore endlessly surprised at the sheer audaciousness of other people's self confidence.
I think it takes a long while before even a genius realises: these people are confident because bravery and stupidity are closely related.

Just my two eurocents.

[bu]

The misconception that equates billionaire status with genius. This topic not only intersects with societal perceptions of wealth and intelligence but also touches on broader implications for global issues such as conflict resolution and peace.

[bobcornwell]

Old joke:
"If you're so smart, how come you aren't rich?"
New joke:
"I you're so rich, how come you aren't smart?"