RELATIVE INCOME VERSUS ABSOLUTE INCOME
Bheema electronic store is successfully executed and making good turn over,everyday he counts his profit and turnover as it surge he is even more motivated to apply Innovative solutions to his business,being enthusiastic he meets ram to share that he is now richest man in his town.
BHEEMA: Hello ram,now I am the richest man in my town
Ram: OH good to hear
BHEEMA: Do you know my monthly turn over is 50 lakh and profit of almost 30 lakh
RAM: How come,your town population is too less to make such a whooping profit
BHEEMA: Good question,I have scaled my business to neighboring town through E commerce,people are finding comfortable to purchase from local brand than a corporate one.
RAM: Everything is ok,how many hours you have dedicated to your business
BHEEMA: Eighty hours in a week
RAM: Then you are not the richest man in your town
BHEEMA: What,are you joking?
RAM: No,In your town there are people making 20lakh profit by working 40 hours a week.
BHEEMA: But its less
RAM:Yes,there is standard terms to calculate whether a person is rich or not that is known as RELATIVE INCOME VS ABSOLUTE INCOME
BHEEMA: What is it?
RAM: RELATIVE INCOME is hourly income,ABSOLUTE INCOME is per year income,3crore per year/50 work week=600,000 per work week,600,000per week/80 hours work week=7500 per hour,on the other hand your neighbor 2crore per year/50 work week=4lakh per week, 4lakh work week/40hours work week=10,000 per hour
BHEEMA: What is this per hour?
RAM: You are making 7,500 per hour but your neighbor is making 10,000 per hour who is richer
BHEEMA: But how come for me you calculated by 80 , for him it is 40 hour only
RAM: He is working 40 hours per week,but you are working 80 hours per week that is why
BHEEMA: In real terms I am working harder than him,just to make less money compared to him
RAM: Yes
LESSON LEARNED
ALWAYS CALCULATE YOUR INCOME BASED ON WORKING HOURS
RELATIVE INCOME IS THE REAL MEASUREMENT OF WEALTH FOR THE NEW RICH
-TIMOTHY FERRIS
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