Why Are You Smart but Poor? | Personal Development

AVAlexander Volchek

High IQ. I need some water. I have to record this. I just have to. I can't; it's like a block. Is it a block? It's my psychological trauma. My IQ is too high—or am I stupid? Sometimes I don't understand. Actually, I don't think my IQ is particularly high. ‘Logic and analysis help build strategies, but the same qualities can paralyze action. Endless data gathering, fear of mistakes and missed opportunities. As a result, high intelligence’—very serious people wrote this, by the way—‘becomes an invisible ceiling on income.’ I can't even say ‘high IQ’ without laughing. High IQ and lots of knowledge! How many people have actually taken an IQ test? Do they even know their IQ?

DMDmitry Mugenov

Interesting: people on YouTube, people watching YouTube with a high IQ... Oh, man!

AVAlexander Volchek

So, today. Again: a high IQ and lots of knowledge don't guarantee an income with six zeros. All you have to do is pick the currency. Six zeros in what? Dollars, Polish zlotys, or—

DMDmitry Mugenov

Dirhams.

AVAlexander Volchek

Dirhams? Which currency? If this is aimed at a mass audience—a big market—then that million probably amounts to about forty thousand dollars in comparable U.S. terms, of course. But when people write something like this, I always wonder: per day, week, month, year, ten years, or lifetime? Accumulated wealth? Savings? What are we talking about? Today we'll discuss ‘Smart but Poor: The Main Money Mindset Trap.’ That's the world of producers: smart but poor. Stupid but poor, though—that's great. You know, I'm such a systematic person. People start dividing up systematic thinking and creativity, and it's a disaster. ‘Why am I smart but not rich?’ has exactly the same force as ‘Why am I poor and stupid?’ They're equivalent. One person sits thinking, ‘Why am I stupid and poor?’ while another nearby thinks, ‘Why am I smart and rich?’ It's the same thing.

The person who's stupid and poor has just as much right to say that as the person who's smart and rich. That's a phenomenal thing to grasp—the paradox of life. The world has gone crazy over intelligence. I'd love people to come and ask, ‘Why am I stupid and poor? How can I earn...?’ With them, it's easiest to explain how to make money.

DMDmitry Mugenov

‘Smart but Poor: The Main Thinking Trap’ isn't just the title of your life, believe me. I'm working with scientists now, and this is on full display. Why does the mind like to postpone starting something until it's one hundred percent sure it will succeed? How do you recognize the trap?

AVAlexander Volchek

There are two sides to postponing action, and it's important to understand that. Sometimes you shouldn't launch something, start a business, change jobs, or take a particular action. Holding off is genuinely reasonable, and an inner sense tells you it's the right thing to do. Then there's irrational delay: fear, insecurity, wanting to calculate everything when that isn't possible, pride, or fear that you'll fail and everyone will judge you. The crucial task is to find a balance. Often a person postpones something not because they're thinking too much, but because there's a sound inner sense that they shouldn't do it. I'm not talking about rationalization: ‘I won't invest now because the market is bad.’ That's a form of rationalization. We're talking about inner feelings or holding off because of your own state.

Pay attention to that and learn to work with it. It's a major task for absolutely everyone. We'll examine various situations today, but you need to learn to understand: am I not starting this idea because it really will fail? Or am I not starting because I carry fear from childhood or some other source, when starting would guarantee success?

DMDmitry Mugenov

I'm reading the title, ‘Smart but Poor.’ Then you start talking, and I realize that even my example of scientists mixes things up. Many scientists aren't poor at all. They're genuinely intelligent, they're scientists, and they've built—

AVAlexander Volchek

But many scientists aren't intelligent.

DMDmitry Mugenov

And many sci—

AVAlexander Volchek

When we use the concept of intelligence, it's essential to ask what we're basing it on. What exactly? Are you elevating one particular kind of intelligence? Judging it by the number of books someone has read or by an IQ test? What are you using as your basis?

DMDmitry Mugenov

How do you distinguish holding off because it may be reasonable, as you said, or because intuition tells you to wait for a sign, a signal, or the right circumstances, from simply procrastinating? How do you tell sound waiting—like that Chinese emperor watching for victory, or a military commander—from ordinary procrastination?

AVAlexander Volchek

Let's return to what intelligence means. A woman hasn't been able to have a child for twenty years. She's read every book and gone beyond everything. Is she smart about having children? Incredibly smart. She's talked to people, taken courses and programs, met coaches and therapists, attended eighteen thousand therapy sessions, visited sixteen ashrams, and done endless meditations. She's read all the Swiss, French, German, American, Russian, Belarusian, Hungarian, and Polish authors. She's seen every doctor, in conventional and alternative medicine. She knows every detail. She has four degrees and has pursued higher education on how to give birth. Yet she has no children. Is she intelligent about having children? Calling someone ‘smart’ is a vague, invented, materialistic, egotistical concept. For some reason, the whole world thinks only scientists are intelligent. I think there are plenty of stupid scientists, just as there are stupid businesspeople, salespeople, and others—and plenty of intelligent people among ordinary people of every kind.

Again, what do we mean by intelligence? Someone who has read eight hundred thousand books? Someone who has built relationships with ten thousand people? Someone who has raised two children with true, authentic values? Or someone who talks about raising children but has never done it? What do we really mean? Returning to the person who wants a child, I want to show something important about being unable or unwilling to begin. Childbirth is a clear, simple example. They want a child, but no child comes. It's very similar to wanting to start a business but not starting; wanting to leave a job but staying; wanting a divorce but not divorcing; wanting a vacation but not going. These are all life projects, things to do, and enormous life tasks. Meanwhile, a girl meets a boy at eighteen, and suddenly they have a child. They haven't read a single book; perhaps they can't read at all.

Then another child, a boy, arrives; then a girl; then a fourth child, another boy. They look at it and say, ‘Between eighteen and twenty-three, we've had four children about a year apart.’ They didn't do or study or read anything, yet they have children. It's remarkable. Meanwhile, intelligent people read endless books and did all sorts of things, but no child came. And then—

—after all they'd done without having a child, some chance circumstance they knew nothing about led to one. The same happens in business and professional life. Someone calls themselves incredibly smart, has read and studied a great deal, passed many tests, and earned four degrees, yet life's circumstances haven't led them to start the business. Look at the facts: billions of people have things they dreamed of doing all their lives and never began. I bring this up under ‘Smart but Poor’ because people often consider themselves intelligent in an area where they don't actually understand cause and effect. If you're really intelligent about an area in which you aren't acting, you should understand those relationships. Then you'd have no trouble knowing when to start a business and when not to. If someone is supposedly brilliant but isn't developing in business, then they're simply stupid at business. That's all.

I know many people like that. ‘He's so smart; he understands...’ Well, he's simply stupid at business, knows nothing about it. Or he doesn't understand marketing, sales, building partnerships, trading, financial markets, or economic circumstances. What is his intelligence connected to? If you believe intelligence produces results—and we'll move on to money as a result—then calling yourself intelligent should mean you have results. If you don't, it's time for two big doubts. First: are you actually intelligent in the field you're examining? Second: do you understand the causes and effects that make something happen or not happen? Why didn't you do it at one point, yet do it at another?

Over the last year and a half, I've recorded more than a hundred different videos, seventy on this subject. Before that, I recorded videos on other subjects, not this one. Honestly, I wonder why I didn't do this seven or five years ago. There are clear, understandable causes and effects. I don't tell myself, ‘But I was such an intelligent person. Why didn't I do it?’ That brings us to how money works.

DMDmitry Mugenov

How does perfectionism differ from healthy caution?

AVAlexander Volchek

When discussing perfectionism, intelligence, caution, and spontaneous ideas, first recognize that the final result often has no connection to caution, perfectionism, or spontaneity. I know many cases of people making a great deal of money while acting completely unreasonably in terms of caution—essentially placing a casino bet. People do win in casinos. That's unreasonable. For example, someone bets on a number, not red or black. Those are the colors, right?

DMDmitry Mugenov

Red and black, yes.

AVAlexander Volchek

Not red or black, but a specific number. Some people win. That's obviously an unreasonable way to earn money. People have built businesses in completely absurd circumstances, taking enormous risks and going against the entire market, and many made huge sums. Others acted carefully and precisely, buying thoroughly vetted financial assets, yet something went wrong and they lost everything. Or they died before the money was lost, and afterward it turned out the paperwork was wrong and no one received it. It was left in limbo, or went to a bank or other people. Nothing came of it. The crucial connection between perfectionism and caution is to understand how well you grasp their relationship to the outcome. That understanding can move you forward a great deal.

DMDmitry Mugenov

How do you avoid reckless risk if you remove preliminary analysis and rush into action? How do you balance starting and acting with analyzing the situation—risk versus analysis?

AVAlexander Volchek

What balance between taking a risk and analyzing?

DMDmitry Mugenov

How do you avoid constantly charging ahead without thinking?

AVAlexander Volchek

Charging ahead with what?

DMDmitry Mugenov

Starting things and making decisions without analysis.

AVAlexander Volchek

I don't see a problem with that. Acting without analysis is one extreme; endlessly thinking and analyzing is another. It's a question of extremes, not of one particular form of reasonableness. That's what balance means. Some tasks should be done without planning or excessive assessment; others absolutely require planning. You need to recognize which is which. Even a midsize business with more than a hundred employees has tasks that require rigorous planning and precise calculation: tax legislation, setting up legal entities properly, capital structure, and filing accounting and tax reports with federal authorities. Those tasks need strict, clear oversight. Other tasks require acting chaotically, without fully understanding the eventual result. Some sales systems require calling lots of people, rather than finding five specific people to approach. Other businesses require approaching exactly five people instead of calling five thousand. Call five thousand, and you won't get anywhere.

You need to find those five people; finding five thousand isn't enough. It depends very much on the specific situation. Remember that different systems exist. Again, when someone fails to act when they need to, it's because they lack the strength to act.

UPUnidentified participant

Mm-hmm.

AVAlexander Volchek

Someone tells themselves, ‘I have the strength. I'm intelligent; I'm just not acting. Can you tell me how?’ You don't have the strength to act. If you did, you'd simply act. Someone once gave me a very good example. There was a period in my life when I didn't save any money, yet I lived quite well. My life didn't change for the worse and I didn't lose anything financially. I told this person, ‘I felt very good. I simply didn't need to save. I spent the money while living my life, lived well, and everything turned out fine.’ He said there were different reasons: one was why I lived well, and it was wonderful that a certain grace in my life allowed things to flow peacefully.

The other reason was that I didn't have the strength to put money aside. Those two things aren't connected. That's important: not having the strength to save is separate. He said, ‘Sasha, please don't confuse them.’ Otherwise you build a mental explanation: ‘I didn't need to save because everything was great.’ No, I simply lacked the strength then. Knowing that, I don't invent an illusion about why I didn't do it. So if you're deciding whether to do something, the first question is why you want to do it at all. That's number one. Usually a task isn't done, or is done incorrectly, because you've connected it to the wrong reason. Why do I make videos? To earn money? To have as many people as possible know who I am? To prove to the people close to me that I can do it?

To prove to other people that I'm impressive? To make new acquaintances, form new relationships or partnerships, to—

—form new partnerships, or show these videos to my grandchildren in the future? Why am I making them? That's crucial. People say, ‘I would have started a YouTube channel long ago, but I haven't because of various things.’ What exactly do you want that channel for? That's the first question. Working through it usually brings everything into balance and resolves the questions about starting or not starting. It's understanding the one true, central goal: why am I recording this? I haven't changed my goal in a year and a half, and it's an enormous source of stability. My teams, acquaintances, and outside partners endlessly try to attach another goal to me or invent one. A member of my team is taking an expensive YouTube course where they say, ‘Every YouTube channel has to sell. There must be a sales goal; you can't have a channel without one.’ I find that strange. Why does every channel need to sell? As far as I remember, Ronaldo has the biggest social media following, doesn't he?

How many does he have—a billion? I think a billion people follow Ronaldo. I haven't particularly noticed him selling directly on Instagram, though of course they can do all sorts of things there. Huge social media accounts exist without sales. I don't want to deceive myself or base things on a false foundation. Yes, in certain situations you can sell. But my To The Moon channel doesn't sell anything; it covers technology news and insights from Silicon Valley. This clarity gives you a great deal of stability in acting, making decisions, and taking your next step. The second point is understanding why you aren't acting, if that happens, or why you are. Often we begin because someone helped us, the right time came, or we moved to the right country. I started my YouTube channel after moving to the US. I didn't run one in Russia, even though anyone who knows my professional work knows I was in an environment with endless opportunities to record, speak publicly, and do all sorts of things.

But I didn't. Here in the US, it's harder to conduct an interview, meet people, give an interview, organize filming, or get editing done. All of that is much harder than it was for me in Moscow, yet I do it here. Why did I begin here? That's a remarkable second source of understanding that helps resolve the question. I also want to make this point: money has no connection to intelligence. It is connected to work, to the ability to work every day and do repetitive work, and to luck, but not to intelligence. There's no correlation or dependence. If we took a large sample of people, we'd see that the connection is very relative. I don't want a debate here about comparing ten thousand people with higher education and ten thousand who can't read, and saying the educated group will be richer.

That's not the kind of intelligence or comparison I'm talking about.