Attributes of a Wealthy Individual or The Smartest Guy in the Room Isn’t the Richest

Twin brothers walk into the Wealthy Accountant’s office. One brother is as smart as a whip with an IQ of 147 and a wiz with numbers. The other twin, while looking identical to his brother, is a bit short in the mental category. The less bright brother is hard working, but knows he can’t outthink his twin brother.

Which twin do you think has the greatest financial advantage? Which one is likely to become a millionaire?

Would you believe me if I told you the super-smart twin is orders of magnitude less likely to amass a financial fortune? Yet time and time again I see it in my office: smart people underperforming and average people hitting it out of the park.

Here’s the funny thing. Both brothers are probably equal in intelligence. Life experiences caused one brother to think of himself as average. Perhaps the less intelligent brother preferred working outside with his hands while the high IQ brother pursued a profession.

Doctors and attorneys are awesome at playing financial offense. Many professionals share this quality. But high levels of intelligence don’t correlate well with high levels of financial wealth.

Big Hat, No Cattle

Thomas J Stanley argues in his 2001 book, The Millionaire Mind, that many professionals with a high income don’t have a corresponding level of net worth. Decamillionaires (people with a net worth north of ten million) have a term for people with high levels of income and little to show for it: big hat, no cattle.

These high earning professionals are also extremely intelligent. So intelligent, in fact, they start to believe they can outsmart the markets by timing them. They also have another weakness. Professionals need to maintain an outward appearance of affluence to convince other they are really good at what they do. Who would ever believe an accountant driving around in a bank reposed beater or attorney living in an 800 square foot home?

Average people in average income jobs are more suited to seven and eight figures of wealth! You read that right. The salvage yard owner is far more likely to have a serious level of net worth than a doctor, attorney or (gulp) accountant. Stock brokers and other financial advisors should have an inside track, but spending levels and a high level of understanding of how markets work causes many of these professionals to trade or time the market. The only traders with a snowball’s chance in hell of winning long-term are the market makers and financial newsletter publishers.

My Side of the Desk

Swing around, if you will, to my side of the desk. From my perspective you can see things clearer.

Every day people from all walks of life wander through my office. I have law firms, doctors and even accounting firms as clients. By and large this group enjoys a higher income than average. They also have a low level of net worth compared to what they earn. Worse, I’ve seen more than a few of these professionals pulling in upwards of a half million annually with only a low six figure net worth to show for it.

Before we continue, re-read the last sentence of the last paragraph. For some reason I find it vaguely important to our discussion.

There are plenty of excuses as to why these people are worth only slightly more than their last paycheck. None of them resonate with me.

High spending coupled with high income leaves you just as poor as if you never earned a dime in your life! It’s not the level of income; it’s the level of spending!

Don’t leave my side of the desk yet. I have a few more clients to introduce you to.

Oh, here comes Sam. He worked in the mill his entire life. Not the smartest guy in the world, but a helluva family man. He goes to church every Sunday. His wife died a few years back. Worked in the paper mill his entire life before retiring with $4.7 million. By looking at him (or his car or his home or his . . . ) you would never guess he is rich. (Sam is a real client with a different name.)

Here comes another wonderful client. Jack has a landscaping company. He clips and maintains lawns for businesses and rich people, you know, the doctors, attorneys, financial advisors and accountants. Don’t say anything, but the guy maxes out his retirement accounts before adding more to his non-qualified accounts. Oh, and he is a millionaire too. Didn’t expect that considering the rust bucket he’s driving, did you?

The same pattern holds for farmers (they’re not all poor!), truckers, salvage yard dealers and guys laying concrete.

Reality Check

Don’t bite your tongue so hard. They aren’t all rich. Yes, I know guys in the military (or retired from) who are pretty darn rich. Many are pretty darn poor, too.

Not every doctor and attorney is net worth poor compared to their income. Many people in average jobs struggle. What I’m getting at is the people you expect to be rich are putting on a show. They have a big hat, but no cattle. They spend all their money putting on a façade. There’s nothing left to fund real wealth!

People with average incomes in jobs where there is little to no expectation of wealth have an easier time hiding their financial accumulations. A worn pair of jeans is more than fine to wear to work at the salvage yard or auction house. It’s expected!

When I first started investing in micro-loans on the Prosper platform I was able to see a few details on the borrower. Prosper provided a credit score and income range along with the borrower’s occupation. For some reason accountant’s needed loans in May. This blew me away for two reasons. First, an accountant should be flush with cash after tax season.

Second, some accountant’s work outside the tax field so they could need additional funds. Prosper also listed the reason for the loan request. When an accountant requests a loan to pay bills in May I’m dubious. Online lending platforms are not the cheapest way to borrow money! Any accountant worth his salt would never make such a poor financial decision. I say “his” because no woman would ever do something so foolish. (Yes, that was a joke.)

Prosper confirmed what I suspected from serving my clients. High income professionals frequently are poor handlers of money.


There is a lesson for the wise in this tale. You do NOT need a high income to be wealthy or financially independent! Average people in average jobs with average income can excel financially. The statistics are clear.

Sure, a high income can get you to seven figure net worth status faster if you can avoid the siren call of excessive spending to play the role. Even a below average income can grow into a tidy nest egg if handled properly. Minimum wage is a hard racket, for sure. But once your income climbs to a level even below the national average you have plenty of resources to fund an early retirement!

Excuses will show up in the comments. It goes with the territory on blog posts with this topic. They are still only excuses. Income level plays a role in your net worth. By age thirty you should have at least two years income invested. Once you reach 40 your net worth should exceed at least 10 times your annual income. If you are pulling down a $50,000 annual salary you should have a half mil tucked away in an index fund by your 40th birthday. As each decade passes the net worth report card should grow larger.

This is where the rubber touches the pavement. Really smart people want to trade stocks and bonds. They want to time the market because they did all the research. Of course the market makes a fool of the well educated.

There are only two ways to accumulate money in the market. The first is to drop the money into an index fund, or, if you are so inclined to engage an actively managed fund, a growth and income fund. Forget about aggressive funds and other crazy ideas. Your goal is to be rich!

The other way to get rich investing is to research listed companies for undiscovered value. Buy these gems and hold them for somewhere in the neighborhood of forever. Then go out and find another undervalued business to invest in.

Remember, you don’t want to be the smartest guy in the room. The smartest guy is often broke!

I want to be smart.  Just not that smart.

It’s been a while since I showed you my working papers. Below are my unedited notes for this post. It should also be noted the working title of this post was Attributes of a Wealthy Individualor The Smartest Guy in the Room isn’t the Richest was added at the last minute as a tribute to the Rocky and Bullwinkle cartoon. Hope the insight into my writing style helps you with your writing.

What characteristics are most common in the wealthy? High intelligence doesn’t guarantee wealth, it actually hurts! Smart people think they can outsmart the market and time it. Professionals have an appearance to keep. Doctors and sales people need to look the part. The massive spending required to “look good” reduces savings and all the profits those savings generate.

Average people have a much better chance. The salvage yard owner has nothing to prove so she socks away a massive percentage of her income and puts it into index funds because she know she can’t do better,.

I see it in my office all the time. A recent client picked up his return. He is retired with a serious seven figure retirement account before looking at non-qualified monies or other assets. He is an average guy from an average family retired from a mill job. And he’s rich.

Don’t be so smart to talk yourself into poverty. Intelligence can only dig you out of so deep a hole.

Keith Taxguy, EA

Keith started his tax practice in 1982 and went full-time in 1989. An enrolled agent (licensed tax professional) since 1992, Keith has focuses on helping businesses and individuals pay the least amount of tax allowed by law.


  1. Gene on March 26, 2018 at 7:36 am

    I always find the stories like these let me know wealth is possible. I am just a common smuck. average IQ, etc.

    Always nice to see if from the professional side of the desk, not just “I heard of a guy”

  2. WCRN on March 26, 2018 at 7:44 am

    “By age thirty you should have at least two years income invested. Once you reach 40 your net worth should exceed at least 10 times your annual income. If you are pulling down a $50,000 annual salary you should have a half mil tucked away in an index fund by your 40th birthday.”

    Quite a challenge indeed! I thought I was doing well hitting the first benchmark, turns out it’s just par in this crowd. “Not a Bad” ™ place to be, I think?!

  3. Planedoc on March 26, 2018 at 7:57 am

    Yep. All too true. With docs there is a cycle of “I’m miserable at work so I deserve to spend..”,with a resultant need to work even more nights/weekends, with a cyclic misery/spend/work cyclone.

  4. Kenneth on March 26, 2018 at 8:49 am

    I’m Big Hat, No Cattle. Only $750,000 net worth, retired, living off social security and a small pension and IRA withdrawals.
    The thing is, I was in much worse position 10 years ago, maybe $50,000 net worth, lots of debt. I hit it hard, brown bagged my lunch, set a $100 dining budget per month, drove old cars, etc. and paid off my debt, including mortgage, before I retired.
    Now, although I’m not a millionaire, I am very comfortable. We have a wonderful paid for home. We are saving money based on our retirement income at a rate of about $3,500 per month. This has allowed us to travel Europe, take winter vacations in Florida and golf all we want.
    It’s about being happy with what you have!

    • JD@WealthNotRetirement on March 26, 2018 at 9:06 am

      Kenneth, you maybe could have done more saving, but you are NOT what this article is referring to. The fact that you have a paid for house pretty much removes you from the BHNC tag. The BHNC folks are people without a paid for house, up to their eyeballs in debt owning super fancy cars, boats, buying their kids fancy cars at 16, and maybe trying to save 10% of their income if anything is left over. You’re in pretty good shape compared to the rest of the country.

  5. JD@WealthNotRetirement on March 26, 2018 at 9:00 am

    Keith, this subject is my absolute favorite. I’ve read all of Thomas Stanley’s books. I am the MND in my neighborhood. It’s a hoot.

    I’m curious, have you EVER tried to counsel any of your customers about money when it was so painfully obvious everything they were doing wrong?

    • Keith Taxguy on March 26, 2018 at 9:06 am

      I consult with readers and clients all the time for the fee listed on the Working with the Wealthy Accountant page. When the client has skin in the game they listen closer. Unfortunately it usually takes a crisis to change habits.

  6. Jenny on March 26, 2018 at 9:39 am

    I’ll be sharing this post with friends and family. This was a great reminder and great encouragement that I’m on the right path. I have a client who continually tells me “you’ll never make it by index investing! The only path to wealth is to trade individual stocks”. All while simultaneously urging me to buy the latest gadgets and that I need a $200 tumbler instead of my $5 Ozark Trail. No thank you! I’m good.

    Great post!

  7. Dr. MB on March 26, 2018 at 9:48 am

    We built wealth by living simply and also earning a large income. We are a 2 physician family but lived as if we earned 50K per year. It was not particularly intentional- I just abhor clutter and the hassle of dealing with too many things.

    Our accountant does not even know how much we have. He already tells us we have enough to retire by looking at our corporate accounts alone. But like you, my husband really really loves what he does.

  8. FullTimeFinance on March 26, 2018 at 10:54 am

    Easy come easy go…. very easy trap to fall into. ‘A high income is easy for me so I can save later’. Unfortunately often tommorrow never comes for these people.

  9. Andy on March 26, 2018 at 1:59 pm

    Never tell your friends or family your networth. There is no upside to it at all! Stealth wealth is the way to go. We never want to live in the torment of being slave to the lender and showing off material status. We’ll take health, family, friends, contentment and financial independence.

  10. Matt on March 27, 2018 at 10:28 am

    Good article. With today’s access to information, everyone has the chance to become a millionaire.

  11. Michelle Kry on March 27, 2018 at 12:26 pm

    Since my first job at 15, most of my family would make fun of my frugal ways. My dad was my example, he lead a simple life, knew how to stick to a budget, and was happy (!). He was able to retire at 50 mostly due to his company stocks going through the roof (not by saving). In my late 30s, I read The Millionaire Next Door and Your Money Or Your Life (plus others not as relevant to this topic) which happened to fill in the missing part of my father’s example. I retired at 46. Who is making fun of who, now?! I just wish other members of our family would follow our example or (gulp) ask us for advice. They are so stressed out. I try to drop hints like sharing articles like this on FB, but I don’t think it is sinking in. I stumbled upon a volunteer opportunity to do financial education. Although I have no formal training in this area, I keep thinking about how I think I would enjoy it. They would be a receptive audience, I figure.

    If IQ isn’t indicative of financial success, how about how frugality? By frugal, I mean not spending lots of money and not feeling depraved. Like the two physician above (who I assume are very smart) who are not trying to keep up an image. Where does frugality come from? Can you train someone to be frugal?

    • Keith Taxguy on March 27, 2018 at 3:03 pm

      The FIRE community has been teaching people frugality from day one. Michelle.

  12. Mike Dempsey on March 30, 2018 at 12:08 am

    I enjoyed reading your article. It is similar to the first 50 or so pages of The Millionaire Next Door, the book that I am currently reading. I am 50 and I am a Building Equipment Mechanic for a General Mail Facility. The past few years I started to get a financial education because I realized how poorly I was doing saving for retirement and drowning in consumer debt. I am happy to say that I am no longer in debt, and maxing out my retirement accounts. I am constantly asked by co-workers about the changes in my weight, and appearance, and my promotion. I only wish I had realized earlier in my life to pay closer attention to these important matters. I am trying daily to teach my children how to become wealthy by indexing, and staying out of debt, and the fire way of doing things. Looking forward to reading more of your articles. Nice work sir.

  13. Rachel on March 30, 2018 at 12:09 pm

    “Excuses will show up in the comments. It goes with the territory on blog posts with this topic. They are still only excuses. Income level plays a role in your net worth. By age thirty you should have at least two years income invested.”

    At age 30 I had just graduated with a doctorate. I had more than two years of income invested at that point since my income was effectively $0 🙂 I’m on my way to 40 now and definitely behind on the next marker. I wish my parents had done more to educate me on finances, but at age 20 I started investing on my own because I knew I had to do something. Again, grad school wiped out some of that (cashed out some of my brokerage account to live on during my second year of post-doc). Given that I had no guidance in the area, I did okay, but yeah, I guess this counts as an excuse for not doing better, right? Maybe I’ll make it to where I should be by 40, I’m certainly trying.

    • Keith Taxguy on March 30, 2018 at 12:46 pm

      Sounds to me like your facts and circumstances are different from mine, Rachel. There are instances where the markers I listen will not happen. This doesn’t mean you failed! It takes time to get a doctorate. What I meant in the post was some people will make excuses why they haven’t saved anything. It’s an excuse if you are 20 years out of college pulling six figures and are still drowning in debt, telling me it can’t be done. Regular readers rarely make excuses; trolls often times do.

  14. Elizabeth on March 31, 2018 at 12:55 pm

    This is so true. I’m a private banker and have seen the financial statements and tax returns of hundreds of affluent individuals over the last 14 years. It’s endlessly fascinating to see how much people REALLY make and how much of it they manage to convert to assets.

    -The folks in the flashiest cars and with the most expensive clothes/accessories almost always have a net worth below what their income would lead you to expect.

    -Some professionals – the docs, lawyers, etc. – make a lot less than you’d expect. Many physicians barely break into the 6 figures in some specialties for example. Some attorneys never earn 6 figures.

    -By contrast, some people make an astounding amount of money with made up sounding jobs (often self-employed consultants of some kind), bloggers or freelancers, and blue color employees (not even business owners). You really cannot tell by what a person does whether they earn a lot of money.

    -Most people have credit card debt and car loans. I swear I have a client who is worth over a hundred million dollars who has a freaking $75k car loan on the books with me (a Tesla, in case you’re wondering – the loan was in the low six figures to begin with). I asked my boss why on earth we have it and he couldn’t remember doing it. The guy has 7 figures in checking. It totally blows my mind. And this isn’t some easy car loan from the dealer – we have to underwrite this stuff manually and issue loan docs and courier them back and forth and the whole shebang. Ugh. I once ran a credit check on an attorney who was applying for a small loan to pay his property taxes. He had $250,000 in credit card debt. They lived in a $2 million home and were members at an expensive club. His income had dropped over several years, but the lifestyle didn’t. His wife had no idea; she’d come in from the club to sign docs without looking at them, happy as a clam in designer duds. When they couldn’t make the house payment anymore we had to threaten to foreclose and they sold the house and divorced. That story still sticks with me.

    • JD@WealthNotRetirement on March 31, 2018 at 1:47 pm

      THESE kinds of stories are why I love this MND subject so much. I could read crazy financial stories like this all day. I’m super fascinated by it.

  15. Jim Wang on April 10, 2018 at 7:26 am

    I think the difference isn’t actual intelligence but perceived – the person who feels like they are the smartest one in the room probably behaves the most this way and is least likely to be the wealthiest. As you say with the twin brothers, they probably are around the same level of intelligence but one doesn’t feel that way and one does. With so many inputs, the perception of intelligence may just be a precursor to a more important factor/trait (observation, perseverance, etc).

  16. Joe on April 10, 2018 at 1:30 pm

    I think highly paid professionals are getting better now too. There are sites like White Coat Investor and Physician on FIRE. They are waking up to the fact that you need to keep more of what you earn. The FIRE movement is great for everyone.
    My dad is like the smart brother. He never had any problem making money, but he can’t really keep it. He takes too much risk. I think smart people think they can outsmart the system/other people and take more chances. Ordinary people like me take it slow and keep at it.

  17. TJ on June 4, 2018 at 11:46 am

    Thank you for this article. As you said earlier “The FIRE community has been teaching people frugality from day one.” I found the community a couple years ago and it has changed my life. Have gone from barely making it sizable savings and investment accounts, with a long way to go.

    I am very grateful for the entire community and all the wisdom it shares.

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