Friday, March 9, 2018

How Dumb People Get Rich and Smart People Get Poor

Some of the dumbest people in the world get rich.  Sometimes it is just luck, sometimes hard work, sometimes it is just not being too smart for your own good.   Often it is all three.

Peter Thiel has given up on his idiotic idea of "seastead" - building a floating libertarian city where billionaires could avoid taxes, and presumably do libertarian things like screw underage girls and take drugs.   It is an idiotic idea, as anyone who has lived through a hurricane will tell you.   Floating cities - what's not to like?  Practical, inexpensive, environmentally friendly!

He got this idiotic idea from some idiot who had a vision at "burning man" - which itself is idiotic.  Burning man, in case you don't know, is an Ecstasy party they have in the desert every year, where people claim to be all eco-friendly and then leave tons of trash behind in the desert for "volunteers" to clean up.   Last year, they left 5,000 bicycles.  It's stupid.   If you want to hang out with a million people in RVs, go to Oshkosh.  At least they have running water there - and working bathrooms, as well as something interesting to look at besides a big pile of burning trash.

But I digress.   

The point is, this whole "seastead" thing that Thiel threw a couple of million at, proves that he is a blithering idiot.  Well, that and he's a Trump supporter (not a Republican - those are two different things!).   In other words, he fell bass-ackwards into a pile of money by being the Right Place at the Right Time when PayPal was founded.   And back then, PayPal was pretty much a typical silicon valley asshole company with a "fuck you" attitude toward everyone, including their customers.   And you wonder where Uber gets it from.

But this got me to thinking - a lot of "dumb" people get rich in this country.  And by "dumb" I don't mean they are mentally challenged (although being a Trump supporter does seem indicative) but rather they are not intellectual and sophisticated.   They didn't go to liberal arts college and read all the great authors!  And that might be exactly the point right there.

The problem is, in our country, we assume that capitalism rewards those who work hard or those who have a special genius or vision - those who saw what was coming and put themselves in the Right Place at the Right Time, rather than just being hit by truckload of money.   Bill Gates is the classic example - not a computer genius who "invented" DOS or "designed" windows, but rather someone who just happened to have the most lucrative contract of the 20th Century land in his lap.

This is not to say he is a moron.  No, no, that title goes to Gary Kildall, who turned down that same contract after Gates referred IBM to him.  No, that's not fair, either.  Kildall was by all accounts, a brilliant computer guy, but a lousy businessman whose lawyer-wife decided that tweaking the non-disclosure agreement for a week or so was more important than being the richest person in the world.   Perhaps Kildall is a prime example of a smart person who ended up not being successful.

The end result is, we hang on every word Bill Gates says (or the Zuckerstein kid, or whoever) as though they have some inside knowledge or genius.    And this is flawed thinking, as people who get lucky often have no special insight, other than to stroke their lucky rabbit's foot.

The good news is, these examples (and there are many others) illustrate how you can get ahead in the world without being a bloody genius.   You just have to not be too smart or too stupid.   If you can add up a column of numbers on the back of an envelope, odds are, you can run a business.   If you think emotionally, odds are, you will go broke.

A group of female investors gave up on salvaging the Weinstein Company the other day - convinced that they would "show Hollywood how it's done" by hiring women and empowering (the word du jour) them.   They would set up a $90 Million "victim fund" and run the company ethically and morally.   They likely would have gone bankrupt, so it was a good thing for them it didn't pan out.  Good intentions are often the worst business instincts.

And yet the world is full of people with good intentions - and the road to hell is paved with good intentions, as they say.   Smart people - people who are too smart - cripple themselves through emotional thinking.   Sometimes being a little dumber is an advantage, as it allows you to concentrate on what is important.

I mentioned this before in my PhD Impaired posting - a friend who couldn't hack it at the Patent Office, not because he was too dumb, but because he was too smart.  He could see all these possibilities and probabilities and "big picture" things - to the point he couldn't make a decision whether anything was patentable.

Others get caught up in social issues - the injustices of the world.   To them, making money is evil, even though they are smart enough to make it.   Some claim to choose poverty as a means of being noble.   But I think the real issue is mental health.   Some very, very smart people are also a little crazy, and this prevents them from functioning well in society.

In the book The Millionaire Next Door, the author provides a profile of a typical "Millionaire" in America.  He is not some super-genius computer guy or Wall Street guru (although they exist).   Rather, he is the guy driving the dented pickup truck who runs a chain of coin-op car washes, who balances his books on the back of a napkin, and knows how to make money, even if he isn't college educated (or college impaired).   He isn't too smart for his own good that he sees "all the possibilities" and yet can act on none of them.

Think about it.   You can be as smart as a "Rocket Scientist" but never make a lot of money.   Elon Musk makes a ton of money, but he's no rocket scientist, but an entrepreneur.   He hires a lot of rocket scientists and pays them good salaries to be sure - but that's the most they will ever make in life - a few million at best, if they save their money in a 401(k).   But Billionaire?  No one becomes one working for someone else on a salary.

This is not to say you should quit your job and become an entrepreneur.   No, the world has quite a few of those - more than YouTube stars.    Only that if you are an average schmuck, you might end up doing quite well in life - better than some folks "smarter" than you.   Put money aside, invest, and stop buying crap based on your emotional needs for status.

And don't be surprised when the people who are "successful" often seem to have less smarts but more ambition - that's how the system works, I'm afraid.   Don't be jealous of their success, but don't elevate them to the status of Gods or Demi-Gods.   Because there is only one true God.

But suppose you are not an average schmuck?   Suppose you got all straight-A's in high school, were accepted to a top university, graduated top of your class, and have an IQ of 180?   What does this mean for you?   Well, it is not a guarantee of utter failure, but you, more than any others should be cautious about your career and prospects.   We often see "smart" people run off the rails, particularly in their early 20's, as they transition from college to work life.   Suddenly, filling in all the right boxes on test forms means nothing and the skill sets that worked well in school are often meaningless in "the real world".

Others become so used to success that when they fail, they simply don't know how to deal with it.  Myself, being an utter failure in life, got used to it early on and learned not to fear failure.

And maybe that is why dumber people are oftentimes more successful in life - they are not afraid because they can't envision "all the possibilities" like my PhD friend could.   Maybe that's it.  I don't really know.   All I know is, some of the dumbest people in the world end up successful.

Some even end up as President!