Originally Posted by JonLaw
The correlation of the top 0.1% in IQ is well above 0.4-0.5 in terms of people who make the top 0.1% in terms of income.

It's almost to the point where having an IQ in the top 0.1% effectively guarantees that you will never drop below $1,000,000 in annual salary.

My understanding is that the "top 0.1%" is more of a measure of wealth than of income. This is an important distinction to make when CEOs can draw a $1 annual salary (taxed at something like 35%) plus whatever stock options they chose to sell (taxed at about 15%). Assuming the CEO holds more stocks than he sells in a given year, his reportable income does not equal his total annual compensation. Wealth becomes a more relevant measure.

Now, if we want to talk about wealth versus IQ: http://usatoday30.usatoday.com/tech/science/columnist/vergano/2007-08-12-smart-not-rich_N.htm

Quote
"Being more intelligent does not confer any advantage along two of the three key dimensions of financial success (income, net worth and financial distress)," Zagorsky finds, looking at the data with statistical tests. Income does weakly correspond to intelligence test scores, he finds, where "a one point increase in IQ test scores is related to an income increase of $346 per year. But at most, that same one-point increase in IQ leads to "a net worth increase of at most $83, but probably zero."