If you're so smart, why aren't you rich?
You don't hear it much any more, but for a long time, "If you're so smart, why aren't you rich" was a pretty effective line for the average Joe when dealing with somebody who was smarter than him. The expression has kind of fallen out of fashion lately. Nowadays, there are too many rich smart people.
The line worked because, for most of history, being smart wasn't really a big advantage in becoming rich. Aside from things like inheriting/marrying wealth, or winning the lottery, there are basically two paths to wealth:
Option #1 is the "millionaire next door" way to wealth: live below your means, save and invest, and let compound interest and the natural growth in the markets work its magic. If you do this--and you live long enough--you'll eventually be wealthy.
Option #2 is to be an entrepreneur: find some need, and then create a product or service that can satisfy it at a profit. Unlike living frugally and saving, this is not a sure way to wealth. Many new businesses go broke. Many of the rest muddle along making less money than the owner could have made working a regular job. But lots of entrepreneurs make good profits and a few become wealthy.
The downside to option #1 has always been that it took too long. Unless you lived very frugally indeed, it could take 30 or 40 years to turn an ordinary salary into real wealth. (Even then, success depends on living long enough--and if bad luck or bad choices pushed your income down, your expenses up, or weighed on your investment returns, "long enough" could turn out to be longer than you've got.)
So, for most of history, option #2 has always been the way to go if you wanted to be wealthy. But being an entrepreneur took a certain set of personality traits--a set that notably doesn't include being smart, but includes things like a tolerance for risk, a burning desire for wealth, a thick skin, and a willingness to put running the business ahead of other interests (like hobbies, friends, and family).
Over the past generation, the "knowledge economy" has made intelligence a bigger advantage than it used to be. Besides the dotcom boom (which made it possible for people with only a modest entrepreneurial bent to get rich following option #2), it's been possible over the past couple of decades to accelerate option #1 as well: an ordinary smart person, working at an ordinary good-paying job, has been able to support a family at an ordinary middle-class standard of living, and have enough of a surplus for saving and investing to become modestly wealthy in a decade or two. (Of course, lots of smart people failed to do so, but that's just because smart people are as prone as dumb people to suffer from the natural human inclination to let the cost of living rise to whatever one's income will support.)
Smart people of the world: This is your shining hour. There's no telling how long just being smart will translate into the kind of income advantage smart people have enjoyed these past couple of decades. This is very much a "get while the getting is good" kind of situation. Don't miss it.
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