Stupid people make MILLIONS while you make middle wage

IN THIS ISSUE 

15 min read

• 💸 Limiting beliefs about money → keeps you poor

• 🧠 The largest factor of success

I always thought that you had to be smart to make big money.

The truth is, the richest people in the world aren't necessarily any smarter than you or me.

In fact, a study out of Sweden called "The Plateauing of Cognitive Ability Among Top Earners" confirms this.

They found that there's actually a drop in cognitive abilities corresponding to the top 5% of earners.

Some of these dumb people make millions each year.

I couldn’t believe it.

So why is this true?

Let’s consider some 4 limiting beliefs that are keeping you, as brilliant as you are, from getting rich.

MONEY IS NOT IMPORTANT

The first limiting belief is this: "I don't care about money."

Listen, our society has a very problematic relationship with money.

On the one hand, it's often used to signal status because we, as a culture, mistakenly equate status with value.

You might not really care about getting that new fancy car, but if the neighbors have one, then that means they have more status and therefore must be more valuable to society, right?

Well, no. Of course not.

The truth is, it doesn't actually matter. These things signal status but don't actually make you more valuable.

And I think deep down, we all understand this, so a lot of people just do what I did and decide the game is broken and stupid and they stop playing it altogether.

Because after all, the only people who care about making money are shallow, greedy, and materialistic, right?

Well, no, it's actually wrong.

But believing this gives you permission to not even try, and the result of this mindset is:

• not being able to provide for yourself

  • or your family

  • or your community

Here’s a fundamental truth: you can't actually opt out of the money game.

Like it or not, you need money to survive. So the real question isn't whether or not you're going to play the money game, but how are you going to play the money game?

And truly answering that question in a way that transformed my pursuit of money into something greater than my desire for status or material things was the key to unlocking my earning potential.

So I encourage you to ask yourself, if you weren't limited by money, what impact could you have on the world?

Now, the only way to not be limited by money is to win the money game for yourself.

I DON’T WANT TO LOOK STUPID

Now, regardless of how you decide you're going to play the money game, one thing is universal: to win, you're going to have to put yourself out there.

You're going to have to get in the field, and you're going to have to actually try.

And that might sound painfully obvious, but most people won't do it because of the second limiting belief that keeps smart people from making money, which is this: "I'm afraid of looking stupid."

One of the reasons dumb people have an advantage when it comes to making money is because everybody underestimates them.

They think, "That guy's dumber than a box of rocks. He's never going to do anything. He'd be lucky to get a job at a convenience store."

Now, two interesting things happen when people underestimate you.

First, it creates a goal to prove everybody wrong, and that can be a powerful motivator.

Second, it allows you to try anything because who really cares if you fail? People have already written you off. I mean, what do you have to lose?

It's great to be the underdog. Nobody expects you to win. You've got nothing but potential upside.

Smart people, on the other hand, well, they have the opposite problem.

They have nothing but downside because everybody expects them to be wildly successful in everything they do, which is obviously impossible.

But smart people are now in a no-win situation because if they try something crazy and it fails, then their very identity as a smart person is at risk.

So the only smart move that protects this identity is to follow the same path that everybody else is following: you go to school, you get your job, you work your ass off for 40 years, and then you retire.

And don't get me wrong, this can provide a great lifestyle, which can be absolutely right for most people, but if you want to get rich, you can't follow common wisdom and expect to get uncommon results.

You have to do something different. Now, the problem with doing something different is that most people perceive it to be risky.

The truth is, we all are crazy risk-takers. There's no way of navigating this thing called life without taking risk. But something I've come to notice is that dumb people tend to underestimate risk, whereas smart people tend to overestimate it.

I DON’T WANT TO RISK IT

And this leads to the third limiting belief that holds smart people back from making millions. It's this: "It's too risky."

The ability to run simulations in our mind to predict what may or may not happen in the future and then plan accordingly, is the leading power we all possess.

But there's a problem with this superpower: it tends to skew towards pessimism, which makes sense if you think about it from an evolutionary perspective.

Our ancestors were the ones who survived long enough to pass on their genes, and one of the great survival mechanisms when you're in the wilderness is just to assume pretty much everything is trying to kill you.

If you hear anything in the bushes, it’s better to assume that it’s dangerous, otherwise you might be harmed.

So all that's to say, we've evolved to always assume the worst-case scenario.

Now, historically, intelligence was a great attribute in surviving out in the wilderness because the smartest people amongst us were the most capable of calculating all the things that could potentially go wrong.

Therefore, they were more likely to survive because they were better at avoiding taking risks that could get them killed.

All told, this strategy kept our species alive for millennia, so I'm not going to knock it.

But it's important to recognize that the game has changed over the past century as we've modernized as a society.

And truly, the number of existential threats that you face on a daily basis is practically zero compared to your ancestors.

These days, the punishment for taking risks and guessing wrong is far less severe as well.

Maybe you lose some money, maybe you lose some status, maybe you are forced to live in your car for a while, and you start over.

But ultimately, taking risk to make money, assuming you're not doing anything illegal, is unlikely to end in any type of catastrophic ruin that you can't recover from.

Which is why dumb people have an advantage when it comes to making money these days because often, they're just ignorant of all the things that could go wrong, whereas smart people, they can see it all so clearly in their mind, and it stops them from ever even getting in the game.

I want you to ask yourself: are you good at imagining all the things that can go wrong?

Studies show that humans are really, really terrible at calculating the probability of those events actually occurring.

How much time have you ever spent thinking about worst-case scenarios that never even happened?

So we spend all this time worrying about things that are unlikely to happen, but even worse, we allow our fear of those downsides to stop us from taking the actions which would lead to an amazing positive outcome.

Now, I used to really struggle with this, but here's just a simple quote that's helped me with this issue:

the risk of mediocrity is greater than the risk of failure. 

I’M TO STUPID TO START

The fourth limiting belief keeping smart people from riches is this: "I don't know what I don't know."

Now, one of the greatest ironies in the world is something called the Dunning-Kruger effect.

This cognitive bias has two interesting aspects.

First, people with low competence in a particular domain tend to overestimate their abilities, whereas people with high competence in a domain tend to underestimate their abilities.

But the mistake a lot of us make, which gives life to the Dunning-Kruger effect, is that when we're in the lower stages of learning, we don't even know what we don't know.

And so we're more likely to overestimate where we are on the spectrum because we don't realize just how far there is still to go.

Whereas once you're in the middle of your learning journey, you tend to underestimate your abilities only because now you can see the top of the mountain and you realize how far away it actually is.

So a large reason why smart people struggle to make money is because they get hung up on the fact that they know they don't know everything.

For instance, if you've been working as an accountant in a Fortune 500 company for the last decade, you have a breadth of domain experience that could easily be translated into starting your own profitable accounting firm.

But you're likely to get hung up on the massive discrepancy between your domain experience and your general knowledge of what it takes to run a business, and therefore you decide not to take action.

The dumb person, by comparison, might not have your accounting skills or experience, but there might not be as big of a gap between that and their general business knowledge.

This might lead them to conclude that starting their own accounting practice will be easier than it actually will be in reality.

As a result, dumb people tend to take action and get in the game, and because things rarely play out as badly as we think they will, more often than not, they stumble onto success.

And if you walk away from this newsletter having learned only one thing, let it be this.

You can't win if you don't start, and you can't lose if you don't quit.

Lots of people are smart, but only a certain few are just too stupid to quit.

And whether you're smart or dumb, that simple concept is everything you need to know about finding success in life.

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