RISK CONSULTANCY IN A COMPLEX WORLD IN UNCERTAIN TIMES
domingo, 19 de octubre de 2014
MILLONAIRES AROUND THE WORLD: HOW MANY, WHO AND HOW ARE THEY?
4 Things Millionaires Have in Common, Backed by Research
ERIC BARKER, TIME, OCTOBER 16, 2014
What do millionaires do differently?
Are they harder workers? Do they have brains that can bend spoons? Do they exhibit Bond Villain levels of cunning?
80% were self-made, accruing all their wealth in one generation. And they were doing a number of things you and I probably aren’t.For their books The Millionaire Next Door and The Millionaire Mind the authors surveyed over 700 millionaires to find out.
Here are a few patterns the researchers saw:
1) Most Millionaires Are Self-Employed
Got a great idea for a business? Make sure the profits are going in yourpocket, not your boss’s.
Twenty percent of the affluent households in America are headed by retirees. Of the remaining 80 percent, more than two-thirds are headed by self-employed owners of businesses. In America, fewer than one in five households, or about 18 percent, is headed by a self-employed business owner or professional. But these self-employed people are four times more likely to be millionaires than those who work for others.
Sound risky? It is. Less than a third of new companies survive 10 years.
…no matter how you measure new firms, and no matter which developed country you look at, it appears that only half of new firms started remain in business for five years, and less than one-third last ten years.
But millionaires have a different perspective. They think it’s risky to work for someone else. You could get laid off. Your boss could make a bad decision.
They want to be in control of their own destiny and yes — they’re quite confident. And research shows confidence boosts your income.
But not only is entrepreneurship risky, it’s also hard work.
In only two countries out of all the ones surveyed did the self-employed not work harder than salaried employees:
Why do something so risky and difficult? Research shows one of the main things that makes us love our work is autonomy.
And this is definitely true here. You’d need to earn 2.5 times as much money to be as happy as someone who is self-employed.
These studies have found that people are more satisfied with their jobs when they are working for themselves than when they are working for others. In fact, the studies show that to be as satisfied when he is working for others as he is when he is working for himself, the average person needs to earn two-and-a-half times as much money!
(For more on what the most successful people have in common, clickhere.)
So these aren’t salaried employees. But how do they decide what kind of companies to start?
2) Millionaires Choose Their Careers Strategically
They don’t start a business they’re necessarily passionate about. They don’t even do something they necessarily understand or have experience in.
They start a business that they think is going to make money. They look for areas of big demand and small supply.
Some of you are saying, “Duh. Of course that’s how you should pick a business.” Yeah, but that’s not what the vast majority of people do.
…between 1982 and 2002, start-ups in the software industry were 608 times more likely than start-ups in the restaurant industry to become one of the 500 fastest growing private companies in the United States—608 times more likely!
One of the authors of The Millionaire Mind is a business school professor. Every year he asks his students what the most profitable businesses are.
And every year the students can’t even name one correct answer. If smart, educated business students don’t know, why would the average person?
But millionaires pride themselves on thinking differently and looking for underserved markets and hidden opportunities.
And, frankly, the companies they start usually aren’t sexy. They fall into the category of “dull-normal.” But they make bank.
Many of the types of businesses we are in could be classified as dull-normal. We are welding contractors, auctioneers, rice farmers, owners of mobile-home parks, pest controllers, coin and stamp dealers, and paving contractors.
Despite thinking differently and doing things their own way, they’re not jerks. 94% of millionaires said “getting along with people” was key.
(For more on how not following your passion can be the smartest career strategy, click here.)
So they run their own shop and choose wisely what type of business to be in. But to make it a success don’t they have to be brilliant? Nope.
3) They’re Not Geniuses But They Have A Strong Work Ethic
We’ve all heard the old saying, “If you’re so smart, why aren’t you rich?” What was the average college GPA of an American millionaire?
2.9 out of 4.0.
(Not a lot of Phi Beta Kappa keys jangling around here, folks.)
Few were ever called intellectually gifted and many were explicitly told they didn’t have what it takes for medical school, law school or MBA school.
But what most people don’t know is that GPA is a very poor predictor of success.
…people who dealt drugs as teenagers are between 11 and 21 percent more likely than other people to start their own businesses in adulthood. And their higher rate of self-employment isn’t the result of wealth accumulated dealing drugs, greater likelihood of having a criminal record, or lower wages.
In entrepreneurship, you’re the boss. So it requires leadership. And some research shows being super-smart actually makes you worse at being a leader.
…approximately 70,000 Mercedes were sold in this country last year. This translates into about one-half of 1 percent of the more than fourteen million motor vehicles sold. At the same time, there were nearly 3.5 million millionaire households. What does this tell us? It suggests that the members of most wealthy households don’t drive luxury imports. The fact is that two out of three purchasers or leasers of foreign luxury motor vehicles in this country are not millionaires.
Most millionaires live a lot more like you and me than Jay Z, Elon Musk or Donald Trump.
They’re thrifty, not very materialistic, and they think a great deal about how much they spend.