The secret money equation.

Updated: Aug 4, 2020

Hey guys, welcome back. Today I want to talk about something that we all should be taught in school, but sadly we are not.

In Indian schools, when we are in the 9th and 10th standard we are taught the quadratic equations, trigonometry equations etc. but we are not told about the most important equation for a person in his or her life, the money equation.

For most of the Indian kids, getting the job is the utmost priority, and that's not wrong but I just want to talk some numbers about this, so lets begin.

In India, IIT's are considered one of the most prestigious collages, an average IITian gets a in hand salary of about 1 lakh/month after taxation. Assuming that he/she has 8 days off as weekends and 2 days in are month are public holidays. He/she works 20 days in a month.

In a day, if we work in a good IT firm, we give 10 hours of our day at least (including the time of travel etc).

Now lets calculate, if we give 10 hours a day, we work for 200 hours in a months, considering the above statements. By working for 200 hours he/she earns 1 lakh rupees, that's about 500 rupees in an hour. A good tuition teacher for JEE/NEET (entrance exams for engineering and Medical) charges 1200 rupees per hour. It's a fact.

So by paying 1200 rupees per hour we get a job paying 500 rupees per hour. Isn't it strange?

Now look at the other aspect, The same engineer earns 12 lakh rupees every year and that's very good. So assuming he/she works for 40 years in his/her, they earn about 4.8 Cr in their whole life. By some magic he/she saves every penny out of it. Now you may say that their salaries will increase with time, but friends there expenses will also increase right? but still lets assume that the earn/save 6 Cr after working for 40 years, 10 hours a day and by some magic, saving every penny out of it. Still they are not a millionaire. So after working for 40 years, in one of the best company in the world you still are not a millionaire and mind you, you cannot save every penny you make right?

Now the same number may not look that good to you.

I have told you one side of the coin, Working so hard in your life you still don't became a millionaire.

So, it's pretty clear if you want to earn a lot of money in your life, I am talking about million and billions, Job is not the option. You need to do something that is Scalable.

Now a question may arise what is scalable, let's discuss this by an example

If you open a gym, at most you can accommodate 50-100 people, I know that not possible but still lets assume it. You will cover about 5 km of radius of your area, not more than that. At some point you will not get more customers and you will stop to grow.

On the other hand, if you work on your branding, and became the best gym company in your country, state or even city. You can give franchises of you gym. I mean that you go to a normal gym and talk to the owner of that gym, you tell them that, he/she can use you gym name that means it's there gym, all the expenses are taken care by them, you charge them only for using your name. This is called as franchise model, this is what McDonald's and Subway did to become the best fast-food chances in the world.

So to conclude everything, Job is not the best option to become a millionaire or billionaire, you need to do something that is scalable.

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We meet again next week, until then Good Bye.

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