About this Video

• Video Title: Quant explains how you can get rich
• Channel: Lit Nomad
• Speakers: Quant
• Duration: 00:13:28

Introduction

This video presents a politically incorrect analysis of the relationship between IQ, career choices, and income. The speaker uses a scatter plot to illustrate how different professions correlate with different IQ levels and income potential, emphasizing that many individuals aren't maximizing their earning potential based on their intelligence. The video also explores the high-risk, high-reward nature of entrepreneurship and the importance of considering risk tolerance when making career decisions.

Key Takeaways

• Correlation between IQ and Income: There's a strong correlation between IQ and income, but societal factors often obscure this relationship.
• Optimizing Income Potential: Many individuals choose jobs that don't fully leverage their IQ, resulting in lower earnings than their potential.
• High-Risk, High-Reward Careers: Certain professions (e.g., entrepreneurship, professional athletes) offer high potential but also high risk of failure.
• Business Ownership as High Expected Value (EV): Starting a business, particularly a more established type of business, presents a higher expected value for maximizing net worth than many other career paths.
• Risk Tolerance: The speaker emphasizes the importance of aligning career choices with personal risk tolerance; high-risk options may lead to substantial wealth or bankruptcy.

1. The video categorizes jobs by IQ tier and income. Low IQ jobs include physical laborers and plumbers. Medium IQ jobs include accountants, sales, and insurance professionals. High IQ jobs include doctors, lawyers, bankers, and engineers. The speaker implies that individuals in lower IQ brackets may earn less than their potential if not in an income-optimizing job, while higher IQ individuals have a wider range of higher-paying options.

2. The speaker argues that when looking at high-earning individuals in high-risk fields (like drug dealers or lottery winners), there's a "survivorship bias." We only see the successful individuals, not the many who failed and ended up in prison or worse. This makes these high-risk paths seem more attractive than they actually are when considering the full picture of success and failure rates.

3. The speaker distinguishes between "zero-to-one founders" (those creating entirely new markets or industries) and other business owners. Zero-to-one founders, while potentially achieving immense wealth, face extremely high competition and low odds of success. Other business owners, who start businesses in existing markets (e.g., a doctor opening a practice), have a significantly higher chance of success and a more predictable income.

4. According to the speaker, becoming a business owner in a relatively established and less risky field offers the highest expected value (EV) for maximizing net worth. This is because it allows individuals to leverage their existing skills and experience to create a more predictable and successful business with higher chances of financial success compared to high-risk, high-reward ventures.