I define natural intelligence as the brain and body’s intrinsic ability to process information and produce outputs, understood at what psychologists typically call g-factor. This is the property that IQ tests measure, which is somewhat heritable and likely has mostly to do with neurological structure and health. There is some evidence that natural intelligence can be increased, especially in the short term, but long-term gains here are possibly harder to come by.
Effective intelligence, on the other hand, is the general capacity to contend with constraints or limitations. This is, in my view, what “real” intelligence is, because its measure is performance based. What’s relevant for navigating real life is less your natural intelligence and more how you use your natural intelligence. Effective intelligence can be increased through developing what I call heuristic skills.
G-factor, as measured by IQ, is similar to horsepower in a car. If life were a drag race, all that would matter (or what would matter by far the most) would be how much horsepower you have. In a straight line race on the tarmac, the car with the best engine is usually going to win.
But life isn’t like a drag race. It’s more like an off-road obstacle course. To succeed in such a race, many other factors come into play: tire tread and traction, suspension, driving style, etc.. Likewise, when it comes to acting intelligently in the world, what actually matters is less natural intelligence and more effective intelligence, or how you utilize your natural intelligence (horsepower) in conjunction with additional factors, e.g. using mental math tricks to increase numerical processing, mnemonic techniques to enhance memory, intelligent reading strategies to synthesize knowledge, and so on.