Say you have a regular 9 to 5 job. You punch in, punch out and you get paid for days you were in the office, even though the work you do may be variable based on the season and time of the year. Many accountants & auditors get busy during the tax season but have a smooth sailing for a few months after. Similarly many (especially Indian) IT companies have employees on the “bench” . Say you are paid Rs.1,00,000 a month but the work you do perform varies.
And let us plot the same on a chart:
Here you exchange time for money, even though the amount of time you work may vary on a month to month basis. You can spend a month doing absolutely nothing and spend another month doing 3 months worth of work in a month.
Now we take a look at someone who has to work a lot during the initial stages without a fixed pay for the potential of a greater reward, say an author writing a book or a movie maker who would take 6 months to put the movie out there.
Take the case of the movie maker, he/she works with a great outflow in the first 6 months but based on his own calculation, expects a hefty payout. Again let us put in some numbers and plot them to make it simpler.
And here is the chart:
So even of things do not pan out, the movie maker knows what he loses, whereas the potential gain is theoretically all the money in the world.
When we put the two scenarios in context, in the former case, the payout is fixed, whereas the workload is variable. In case of the latter, the payout is uncertain, whereas the maximum loss the movie maker would bear is Rs.8,65,000.
So while working 9 to 5 is easy and somewhat guarantees a regular paycheque, “working”, while not guaranteeing a paycheque, does have a great payoff.
|Choose wisely!|
P.S: Interesting to note is that most employers believe that employees are underworked whereas most employees believe that they are overworked. That I believe depends on which version of reality is seen & by whom.
Fund Managing Monk 