We like to think people are smart. And hey, some are. Even you. You’re welcome.

Approximately half the population has an IQ score between 90 and 110, which is considered normal. Another 20% of the population falls between the ranges of 85-90 and 110-115. So if you’re reading this, chances are you have an IQ between 85 and 115, ranging from a little dull to a little smart.

Most of the rest of people fall between the 70-85 and the 115-130 range. You’re a bit of an oddity if your IQ is above 120 or below 80. Anything below 60 or above 140 puts you in very special territory.

There’s a point behind these IQ statistics, I promise. In Canada, the average person has an IQ of 99. The average score in the United States is slightly lower, at 98. FINALLY ACTUAL EVIDENCE AMERICANS ARE STOOPID.

This means, on average, people aren’t really that smart. Hidden among the geniuses and vigorous young go-getters are a whole bunch of dim-witted kettleheads. And remember, otherwise smart people do dumb things.

So what?

Yeah, Nelson, I know. People are stupid. I’ve seen Jackass, so I’m well aware of this. Why do I care?

It’s not so much that we need to be aware that there are stupid people in this world. It’s that we need to be reminded that we can’t assume people act smart all the time. In aggregate, people are actually much dumber than we think.

There are countless examples out there, especially involving math. I’m convinced the key to riches is to get into a business that exploits people’s inability to do math. And not just complex math like equations and crap. I’m talking about basic fucking counting.

I was reminded of this in a big way last month when I spent some time browsing eBay’s gift card section.

Some of you might have already seen these tweets. Well, too bad. See them again, cause they’re funny.

(That one is my favorite. He made a penny off that deal. SOON I’LL BE RICH, BABY!)

And so on. I found those in about five minutes worth of searching on eBay. Sure, the majority of gift cards were bought be smart people for under the face value of the card, but these types of transactions exist and they’re everywhere.

The easy answer for why these opportunities exist is because of exchange rates. American buyers go on eBay, see a $25 gift card selling for $21 in their own currency, and buy it. Even though some of these listings pretty clearly say Canadian funds right in the headline.

But it doesn’t explain them all. Esso service stations don’t even exist in the United States; neither do Cineplex Theatres.

I’d love to get in touch with each of these buyers to see what exactly they were thinking when they hit the buy button. But I’m willing to bet in just about every situation there’s a somewhat reasonable thought process for doing what they did.

If you live a 20 minute drive away from a grocery store, maybe paying $5 extra for an Apple gift card makes sense. Or maybe someone wanted to give a surprise Esso gift card to a friend for driving them around. Maybe somebody thought that guy’s face was handsome enough to be worth paying an extra dollar for an Amazon gift card.

I’ve also heard people buy gift cards as an easy way to earn credit card points or inflate their eBay feedback score.

So there are legit reasons for wanting to pay more than the face value of a gift card. Maybe it’s not so much that people are stupid, but because they have motivations that aren’t just dollars and cents related.

How I’m exploiting this

As I’ve mentioned before, I’m in the private mortgage business. It’s an investment class I think gets a bad rap for being risky.

I’ve done loans for people who could easily qualify at a bank. Considering how I charge between two and three times more than a comparable bank loan, how am I getting business from these people?

It’s because I offer certain perks a bank can’t.

Many loans get done without looking at a credit score. I can make decisions quicker than a bank which gets the person their money faster. Most loans have a clause that lets borrowers pay it off early with no extra penalties. And I can take a common sense approach to lending while a bank needs to follow rules. Hell, I even have a loan outstanding to a guy with no job.

(All of you who are scared of Canada’s housing market crashing just threw up in your mouth a little, didn’t you?)

These perks are worth it to certain people. They’ll gladly pay more for them.

So am I really exploiting people’s inability to do math? Maybe. But I like to look at it a different way. It’s not that people are stupid. It’s that they’re not motivated by the same things that you or I might be. The key when dealing with people is to figure out where those motivations lie.

Companies do this all the time. Apple charges much more for phones that do the same thing cheaper Android-powered models do. The sugar water sold by Coca-Cola is virtually identical to the generic stuff sold by Cott. Solar panels are still more expensive (at least in Canada) than getting your electricity from the grid.

None of these options are the cheapest. The people who buy them aren’t motivated by money. They’re motivated by other things.

As PF nerds, we often forget this. We live in a world where every penny matters and where anything less than a 20% savings rate is mocked. Regular people don’t live in this world. Regular people constantly make decisions that aren’t motivated by money. Remember that when dealing with them and you’re already halfway towards profiting from them.

Tell everyone, yo!