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How much lifestyle are you earning?

I am about to depress you.  So grab a cup of coffee, or your favorite beverage, and put your feet up.  And put your arithmetic head on.  I am about to turn numbers upside down and talking some shocking truths about how hard you have worked for that cup of coffee and how much you have to be paid to earn a lifestyle of luxury.

Or to be mischeivious, how much we have been paying some very well paid people for having lunch and going to sleep.

Thought Experiment 1: You are worth $1 or GBP1 or Euro1 per second. Count 1 potato, 2 potato, 3 potato. Click, click, click.  Count it out like a metronome. Click, click, click.

Each click is a dollar coming in.  Not a lot, is it?   Barely pays for the coffee you are drinking, the sofa you are sitting on, your broadband connection.

Actually, it is is $30 million a year.

I put it on a graph for you. You might want to check my arithmetic again. I’ve done the calculation several times but I am getting old and I’ve begun to make mistakes with numbers.

Compare with $1 per sec

Thought Experiment 2: Over the shock? Well, lets count 30 seconds. 30 potatoes – wow, that takes a long time.

Wait – patiently. $1 arrives.

Count another 30 seconds, another $1 arrives.   $2 dollars per minute.

Coffee is beginning to seem really expensive.

How much is that? $15 million, of course.

No, $1 million a year.

You have to divide by 30 not 2. You are now earning 1/30 of the person earning $1 every second or $30m a year.  Shock?  That long wait is $1m a year.

Compare with $1 per 30 secs

And look again.  The person earning $1 per minute, every 60 potatoes, is earning half what you are earning (500K).

Thought Experiment 3: Now imagine earning $1 every 15 minutes.  I am not going to ask you to count to 900 potatoes.  It will feel an age.  Certainly long enough to linger over your coffee and check your mail.  $1 by the time you have finished.  That’s all.

That 35K a year.  A respectable salary in England.

Compare with $1 per 15 mins

Thought Experiment 4:  And now imagine $1 per hour.  What do you do with $1?  Buy a packet of crisps?  That’s less than 9K a year.

Compare with $1 per Hr

Thought Experiment 5: And finally let’s look at the minimum wage.  75c an hour.  Around $6500 a year.  Green line at the top. Less than a litre of milk.  Half a loaf of bread.

Still it is better than $1 day which is the green line second from the bottom.

The red line underneath that is $1 per month.

Compare with 75c per hr

Seeing the other picture?

You are probably feeling a little muddled.  Good.  It’s good to turn numbers upside-down and inside-out and get another perspective.  So what have I done, here?

  • I’ve reminded you that employers quote wages by the hour because accountants use that number to do their costing.  This number doesn’t concern you.  What concerns you is the total per year (after taxes) and either the amount per second or the time it takes you to earn $1 – which is what I’ve shown you.  That’s the lifestyle you’ve earnedTotal after taxes divided by (365 days x 24 hours x 60 minutes x 60 seconds)At a dollar per second that comes to over 30m a year.
  • I’ve shown you how the gap between pay rates gets very big, very fast.   The way pay rates are quoted encourages us to make mistakes.  $1 per 30 seconds and we think half-a-minute and think we have half-the-lifestyle, when actually, we have 1/60 the lifestyle, or 1/60 the lifestyle, or 1/360 the lifestyle.

Forget about costs to your employer.  Let them run their own business.

You should be concentrating on the lifestyle you earn.

Ask: What do I earn per second because I am alive every second of the day not just the time I spend making money for other people.

Every second of the day.

Now tell me what you earn per second and how you intend to drive that up!

P.S.  If you want to play with the numbers or the graph, it is on Chartle.

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One Comment

  1. Too complex for a late night read, even as I caught the drift. Will be back over the weekend. Gnight.

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