"Not only are the median earnings of the self-employed comparatively low, they have similar traits to those of salaried workers. ... they have similar education, score similarly on learning aptitude tests and self-esteem evaluations as teenagers, and have parents with similar education and income. If the self-employed are a good proxy for 'growth-creating innovators,' it is puzzling both that their cognitive abilities and non-cognitive traits are similar to those of their salaried counterparts and that they earn less."But when you do some splicing and dicing, as Levine and Rubinstein do, in turns out entrepreneurs really do earn more than their salaried counterparts. In fact, as much as 50% more. The trick is in separating unincorporated business owners from incorporated business owners. "Many previous studies broadly define entrepreneurship, including people who are self-employed such as an accountant or a plumber. In this study, an entrepreneur is defined as a person who undertakes a novel, risk-taking activity," says Levine, who uses as examples New York City Mayor Michael Bloomberg, who built a business data and news empire, and Microsoft founder Bill Gates. Business legends such as Bloomberg and Gates were more likely to possess traits, even as teenagers, that separated them from the pack, he says. "These traits turn out to be accurate predictors of entrepreneurial success," the study says. "Some of the not-so-surprising traits include having a high IQ, coming from a stable family, having parents who earn a higher than average income and having exceptionally high self-esteem and confidence. However, some other common traits are often associated with juvenile delinquency." That rule-breaking mentality may actually be what makes entrepreneurs so successful, Levine says. "Our data revealed that many successful entrepreneurs exhibited aggressive behavior and got in trouble as teenagers," he adds. "This is the person who wasn't afraid to break the rules, take things by force or even be involved in minor drugs." Nobody is saying Bloomberg or Gates were delinquents. At least, we don't think so. But channeling that rebellious nature seems to have triggered something deep inside the minds and hearts of successful business owners. Troublemakers, it turns out, make really good entrepreneurs.
From Juvenile Delinquent to Start-Up Genius
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts