Chapter 1: Why do less intelligent people often earn more money?
Have you ever wondered why dumb people make more money than you? Like how are people with no degrees building multi-million dollar empires while straight A students are working nine to fives? Because it turns out the richest people aren't actually that smart. In fact, the average millionaire only has a 2.9 GPA. And I know this from personal experience.
I did horrible in school, I didn't go to university, and today I live my dream life traveling the world, all while running multiple businesses. I'm gonna show you the three reasons why your intelligence might be keeping you broke, the psychology behind it, and I'm also gonna give you three dumb strategies that will make you richer than you ever thought possible, regardless of your IQ.
Welcome to the Martell Method. I went from rehab at 17 to building a $100 million empire and being a Wall Street Journal bestselling author. In this podcast, I'll show you exactly how to build a life and business you don't grow to hate. And make sure you don't miss anything by subscribing to my newsletter at martellmethod.com. starting with uninformed optimism.
The first reason dumb people make more money is they don't know what they don't know and they don't care. They have an unreasonable amount of confidence because they literally don't second guess themselves. Smart people have this tendency to overanalyze. They doubt themselves. Dumb people just act. So there's this thing called the emotional cycle of change.
It's the rollercoaster of feelings that people experience when they choose to make a major change in their life. Not first stage, the uninformed optimism is the best one. Research shows that 93% of Americans think they're above average drivers, which is statistically impossible. It's also called the Dunning-Kruger effect, which means that most people think they're smarter than they are.
The problem is, is that when it comes to making money, people that are intelligent make up a ton of reasons of why the thing won't work. You miss 100% of the shots you don't take. The smartest people overthink their shots and never even take them. So confidence is one thing, but there's a second reason dumb people win.
And it's the one thing that keeps smart people playing small their entire lives.
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Chapter 2: What psychological factors keep intelligent people from succeeding?
Reason number two, they're scared to look stupid. Most people don't try, not because they're scared to fail, they're scared to be seen failing. So why does a smart person do this? It's because they want to protect their smart kid identity.
In the book, Mindset by Carol Dweck, she talks about this, that there's a study where children that have been praised for being smart will eventually get to a point where they will avoid challenging situations because they're afraid of losing that smart kid label. Dumb people aren't scared of looking anything. They're like, I don't care if you think I don't know. I don't know.
I need to know the answer. You have the answer. So I'm going to ask the question, even if I look dumb, because then I'll have the answer to be able to make a good decision. I remember one time I was coaching this woman, Jessica, and I noticed she never asked questions. And I called her out on Instagram. I literally messed her on Instagram. I said, hey, you haven't asked a question in a while.
And then she admitted, she's like, well, I just don't want anybody to think that I don't know what I'm doing in my business. I said, here's the deal. You don't, that's why we're working together. And if you ask questions, you'll learn more. Next call, she asked a really simple question.
Everybody might've thought it was basic, but I told her how her competitors are using an automation tool to solve her problem, which cut her costs in half. And not only that, she doubled her business in 90 days. Because she was willing to look dumb. The smartest people in the rooms are the ones that are willing to look stupid. So here's what we're going to do.
Grab a piece of paper or anything to write in. I want you to write down your honest answers to two questions. One, what's one thing that you avoid doing because you're scared you might look stupid or incompetent while you're doing it? Second question is, who are you trying to impress by not doing it? Write those things down because we're gonna come back to them.
So we've established that the fear of looking dumb keeps people stuck. But here's a third reason smart people stay broke and it's all about how you see risk.
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Chapter 3: How can embracing uninformed optimism lead to success?
Number three, bad risk radar. I once read a study that showed that people with lower cognitive scores were willing to take risks in a controlled test. But when it came to real money being involved, they became less conservative than the average person. Smart people overestimate the risk and play it safe.
And the truth is it's not about making the right decision, it's about making a decision than making it right. So here are two examples of smart versus dumb risk. Smart. Yahoo passes on Google twice. Literally, in 1998, Google offered to sell Yahoo for $1 million. $1 million. Yahoo said, nah. Four years later, Yahoo comes back once they see the traction and offers them $3 billion.
Google says, OK, but they came back at $5 billion. Yahoo passed again. Today, Google's worth way more than a trillion. Two chances missed by overthinking. Dumb? The FedEx gamble. 1973, the founder of FedEx, Fred Smith. He's got no money. He can't even pay a 5K fuel bill. He takes 5,000, all they have left in the bank account, goes to Vegas, gambles, blackjack. Now, most people think that's dumb.
Guess what? He turned that into the 27 grand you need. He got to survive and he became a global shipping giant. The biggest risk is taking no risk. I'm not promoting gambling, but I want to emphasize the concept of taking risks. So here's how we fix your broken risk radar. I call it the ratios of risk. There's three questions you gotta ask yourself.
First off, you ask yourself, what's one investment that scares you right now? Some people it's like hiring somebody, hiring a coach, full-time employee, going pro. There's something about some way you wanna spend your money. Write that dollar amount down. Like, what do you think that costs? The second is, is what's the percent of your annual income in that?
Are you putting like your whole life savings or is it a small percentage? Third is if you knew you couldn't fail, would you make that bet? And what I want to inform you is that you have to recalibrate. When I started in business, spending $18 for a book felt like a serious investment.
And then I got to a place where I noticed that every time I made an investment, my life got better, but the size of the investment had to go up in a relation to the level of risk. Dumb people realize that it's not an absolute dollar amount. It's a percentage. They'll put a lot more money behind the things that smart people won't even pay for. Smart people are like, I got a $20 gym membership.
I feel good about myself. A dumb person goes, well, if I don't pay you $250 to go, I know I don't trust myself. I won't go. But if I pay you $250, I want to get my money's worth. So I'm going to do that instead. Do you see the difference? Because when people don't pay, they don't pay attention.
If you're not willing to put money at risk to get a reward proportionate to the reward you want, then you won't get it. The truth is the biggest risk you could ever take is not having the time in your calendar to do the thing that's gonna make you the most money. Most people need an assistant. Most people need a virtual assistant, executive assistant, even somebody in your home to help you clean.
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Chapter 4: What are the three reasons smart people struggle with risk-taking?
And my favorite story of this is the story of Sriracha. David Tran, the founder, came to America with nothing. And his dumb plan was pretty straightforward. Sell one type of hot sauce. While big companies were trying to give him advice and everybody coming in, you need to do this, you need to do that. He said, no, I'm going to do one thing and I'm going to do it really well.
I'm going to make sure everybody knows about it. And it's become such a cultural phenomenon. The green cap bottle for 40 years, Sriracha. He didn't overthink it or try to be a genius. He did one simple thing perfectly. Now he's a billionaire. The dumbest solution is usually the right one because it's the least complex.
Here's why complexity always sneaks in is because adding stuff makes you feel productive. It costs nothing to add. It makes you feel like you're doing something, but subtracting makes the system actually work. Right now, you've got your zone of genius. You know what you gotta do. Now I gotta teach you the scaling credo so you don't overcomplicate it. It requires these five ones.
Here's how it works. The first thing we have to do is pick one target market, okay? Who can I serve the best? Who I wanna serve? Just pick one. The second thing is one product. What's the one thing that you know will give them value? What would I sell if I knew I only got paid if they got the result? Third is one conversion tool. The one way you get them to buy.
If it's through partners, if it's through paid, if it's through creating content, what's the one way you get their attention and sell them something? Number four is one channel. One place to go find them. Where are they hiding? Are they going to events? Are they on Facebook? Are they on TikTok? One traffic source. You wanna go all in on one. And the last one is one year.
If you commit to these four things for 12 months without distractions, you put blinders on, you will blow your mind on what you can accomplish. Dumb people kick smart people's asses because they don't get distracted. They don't add a bunch of stuff and they're able to do a dumb thing, which is to sell hot sauce with a green cap for 40 years to become a billionaire.
Do you care how you become a billionaire, you smarty pants? You see what I'm saying? I love you, but stop overcomplicating it. If your goal is to be rich, the strategy I just shared with you is the highest probability of you getting rich. So write those down. That's your entire focus for the next year.
Before we get back to this episode, if you prefer to watch your content, then go find me on YouTube. I have this episode on YouTube. I'm Dan Martell on YouTube. Just subscribe to the channel, turn on the notification bell, because then you'll get notified in real time. It'll tell YouTube to tell you. I've got a new episode, so you'll never miss anything. Now let's get back to the episode.
You now have everything you need, okay? You know why dumb people are richer than smart people. You know what you need to do so that you can incorporate their dumb strategies so that you can get rich. Don't overcomplicate it. Don't overthink it. Just go. And I know some people are gonna watch this and they're still gonna wanna overcomplicate it. And here's why.
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