The plateauing of cognitive ability among top earners • Hacker News Board

Re: The plateauing of cognitive ability among top earners

#121

Post by seydor » Sat, Feb 04, 2023, 5:34 PM UTC

metacritic12 wrote: post #4

It's not a surprise that cognitive ability (the paper seems to define it as relatively close to classical IQ) is not highly correlated with earning ability or even value production for society. I would argue that a much better correlant of both production value and capture value is conscientiousness, or vaguely synonymously, hardworking, diligent, etc. A brilliant world observer who tweets their witty one-liners all…

Another take is that at the top earning brackets, it matters who you know more than what you know

Re: The plateauing of cognitive ability among top earners

#122

Post by VoodooJuJu » Sat, Feb 04, 2023, 5:39 PM UTC

solatic wrote: post #28

Implicit is the presumption that the smartest people optimize for wealth, or that the smartest people are good at optimizing for wealth. Outside of Wall Street, "smart" people - academics, doctors, lawyers, engineers, etc. - are just as likely to make bad personal finance decisions and/or to stay in labor (rather than management) positions for most of their careers (leave aside the dual-track IC/management ladder at…

>academics, doctors, lawyers, engineers

Another presumption, that people who hold these jobs are necessarily smart. I used to be fooled into believing it. I think many people are fooled.

Re: The plateauing of cognitive ability among top earners

#123

Post by thebigspacefuck » Sat, Feb 04, 2023, 5:41 PM UTC

psychphysic wrote: post #71

I feel much less sharp once I passed 30. Hangovers also started to last days. Learning new stuff that requires precision also seems harder - like syntax. Even though I feel like I'm much smarter when it comes to fuzzy processes like judging a good idea or programming language. Dementia runs in my family... But I think I'm too young for that and it's just what happens when you're not 25 anymore.

There’s nothing magic about the number 30, but a sedentary lifestyle, poor sleep, diet, and stress will all start to take their toll.

Re: The plateauing of cognitive ability among top earners

#124

Post by LouisSayers » Sat, Feb 04, 2023, 5:41 PM UTC

thebigspacefuck wrote: post #120

LouisSayers wrote: post #114

An old flatmate of mine was a Mckinsey consultant and in Aus was on something like $240k per year salary. I thought this sounded pretty good compared to my $140k as a software engineer but then I realised he was putting in a lot more hours. It makes me think, how many hours could you sustain developing software vs doing consultant work? I know for me personally the amount of actual hours coding per day isn't all that…

Doesn’t it seem like the more you’re paid in this industry the less time you spend actually coding?

Yes that seems true in general although in my experience you don't necessarily end up working more hours in a technical role even though your cognitive intensity required may be less (as your experience increases and you end up in more meetings etc).

Re: The plateauing of cognitive ability among top earners

#125

Post by beefield » Sat, Feb 04, 2023, 5:42 PM UTC

onos wrote: post #94

Qem wrote: post #83

Earlier quoted context omitted.

Nailed it. If you're Elon Musk, do some dumb mistake and lose 200 billion, your life barely changes. If you live on minimum wage, and loses half of it, starvation ensues for your family. The impact of losses is disproportional between rich and poor.

So you’re saying the poor have much more to gain through hard work and shouldn’t be discouraged?

So you’re saying the rich have much less to gain through hard work and shouldn’t be incentivized?

Re: The plateauing of cognitive ability among top earners

#126

Post by tpmx » Sat, Feb 04, 2023, 5:49 PM UTC

madaxe_again wrote: post #3

This study looks only at Swedish men who served in the military, which as the authors observe may well introduce a bias. They also note that a possibility is that higher cognitive ability individuals may more frequently opt for worse paying but prestigious roles, such as academia. I buy it, but I think there’s another factor today, which is that many higher cognitive ability individuals simply are not in the job mark…

> This study looks only at Swedish men who served in the military, which as the authors observe may well introduce a bias.

Paper: We subset on men who took a compulsory conscription test at age 18–19 during 1971–1977 or 1980–1999, years in which ≥90 per cent of each cohort enlisted (94 per cent on average).

That said, I think Sweden is a bit special because of it's extreme taxation levels even for medium high income. See: https://news.ycombinator.com/item?id=34656070

Re: The plateauing of cognitive ability among top earners

#127

Post by Swizec » Sat, Feb 04, 2023, 5:58 PM UTC

mejutoco wrote: post #87

Swizec wrote: post #85

Earlier quoted context omitted.

Fun fact: The average American perceives “wealthy” as having just over $2.2million in net worth. https://www.kiplinger.com/personal-finance/605075/are-you-ri... This is very achievable to most HN types. Maybe not in our 30’s, but easily by retirement. Just maxing out your 401k for an entire tech career will get you there.

Maybe by then (one's retirement) the average American will perceive "wealthy" as having $4million in net worth. If I understand right, this is the perception right now, not in the future. Probably then it will be higher.

That sounds likely. Inflation and all that.

Would also be interesting to know if people in general even count 401k as “wealth”. I feel like it occupies a different bracket in many people’s minds.

Re: The plateauing of cognitive ability among top earners

#128

Post by ramphastidae » Sat, Feb 04, 2023, 5:59 PM UTC

jandrewrogers wrote: post #106

sidlls wrote: post #90

Earlier quoted context omitted.

Because few people are objective enough to put aside their deep emotional attachment to the notion that their particular bit of hard work and skill meant nothing without that luck. I’m wealthy now: very wealthy by any standard (mid 7-figure net worth). I came from humble beginnings (nearly homeless frequently as a youth with a single mom), but I am quite intelligent (PhD in physics) and I worked hard. I would have re…

Many people with your net worth grind it out without any windfalls, the product of consistent hard work and reasonable choices over decades. It was always a possibility. Most people don't require an IPO to achieve that. Luck can accelerate that outcome but it is not necessary in any meaningful sense. It requires significantly greater extremes of wealth before luck plays a more frequent role. I know people well into 8…

> I know people well into 8-figures who were never anything more than blue-collar grinders.

Can you elaborate? I don’t see how that’s possible unless they started work in their early 20s, have been maxing their retirement, never had an accident or have been unemployed, made incredible investment decisions, and are now 60+? Even then I dont see how it’s possible for blue collar folks. Well into 8 figures is like … at least 30 million.

Re: The plateauing of cognitive ability among top earners

#129

Post by Qem » Sat, Feb 04, 2023, 6:01 PM UTC

VoodooJuJu wrote: post #122

solatic wrote: post #28

Implicit is the presumption that the smartest people optimize for wealth, or that the smartest people are good at optimizing for wealth. Outside of Wall Street, "smart" people - academics, doctors, lawyers, engineers, etc. - are just as likely to make bad personal finance decisions and/or to stay in labor (rather than management) positions for most of their careers (leave aside the dual-track IC/management ladder at…

>academics, doctors, lawyers, engineers Another presumption, that people who hold these jobs are necessarily smart. I used to be fooled into believing it. I think many people are fooled.

In the pandemic I became astonished seeing how a lot of doctors were quick prescribing the likes of chloroquine, and other ineffective treatments, even after they were proven bogus. Really shaked my trust in the profession. Today I'm afraid of taking medical advice before I have the opinion of at least two and they agree.

Re: The plateauing of cognitive ability among top earners

#130

Post by whatshisface » Sat, Feb 04, 2023, 6:02 PM UTC

boppo1 wrote: post #12

metacritic12 wrote: post #4

It's not a surprise that cognitive ability (the paper seems to define it as relatively close to classical IQ) is not highly correlated with earning ability or even value production for society. I would argue that a much better correlant of both production value and capture value is conscientiousness, or vaguely synonymously, hardworking, diligent, etc. A brilliant world observer who tweets their witty one-liners all…

Just going off the abstract, they did find that cognitive ability correlated strongly with earning ability. The hook is just that it's not a monotonic relationship.

It is a monotonic relationship, monotonic just means that it doesn't change directions. The word for this is "convex."