Becoming a financial unicorn will increase your IQ

Becoming a financial unicorn will increase your IQ

Becoming a financial unicorn will increase your IQ

One might think, what is so bad about monetary scarcity? What is so bad about having no savings? What is bad about living from paycheck to paycheck? After all, I want to live today and want to spend the money that I have before I die. What is the point of having tons of money in my bank account or stock portfolio, if after all I cannot use it. Does it really matter in any other way for my life apart from the fact that I cannot choose at some point in my life to retire? Maybe I like work, maybe I do not mind having no savings.

However, scarcity of money also has other negative outcomes. The negative effects are not restricted to having to figure out sometimes how to pay some of the bills that one has. One interesting outcome was brought up by Andrew Yang, one of the Democrat candidates for the US election in the year 2020.

He discusses a study that suggests that people lose IQ points when faced with scarcity. In his example it is farmers whose IQs drop significantly due to scarcity. He extends this point, quite accurately I think, to the general US population and the scarcities that people face. He estimates that a population in which 50% cannot pay a 500 US Dollar bill on the spot and most people live from paycheck to paycheck will be more irritable and more open to bad ideas.

Feel free to watch the original video here. It is definitely worth the 3:57 minutes that it takes to watch it!

Now let us take back this point, away from politics, to the world of personal finance. What does this mean for me if I do not have enough money in the bank account to pay my bills? Maybe that would make my IQ drop as well, at least temporarily. Now let us also not forget that most well-paid jobs today require higher IQs to get them and keep them. This means that having no money leads to badly paid jobs leading to less money and so on and so forth. It is a horrible vicious cycle.

Oh and before you ask, I of course did not just believe that the story that Andrew Yang told was based on facts. Thus, I went looking for the scientific article, and yes the article does exist, it is not cringe science. Following this link you can read a Princeton article about it yourself. The original scientific article is also mentioned if you want to proceed and study it further.

Altogether this shows that there is more to omitting living from paycheck to paycheck than simply reaching an imaginary goal. In fact, become a financial unicorn will potentially make you even more clever than you already are.

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