When you buy something, you don’t pay in Dollars or Rupees instead...................

 When you buy something, you don’t pay in Dollars or Rupees instead you pay in hours worked and this is what exactly what people don’t realise which makes them broke.

You see an iPhone 8 being sold for INR 60,000 ($1,000 approx.), you have the money in your bank, you make the transaction.

You think that you have traded off 60k for a phone, but in reality you have just traded off your time and hours worked.

Assuming you have a salary of INR 38,000 per month and you work 22 days in a month for 8 hours, total worked hours would be 22x8 = 176 hours.

38,000 / 176 = INR 215 per hour is your hourly rate.

Which means that to buy an iPhone 8, you need to work for 60,000 / 215 = 279 hours.

Which is equivalent of 279/ 8 working hours per day = 34 days.

Now what if you had bought a cheap Xiaomi phone which has decent features for INR 10,000 or about $170 ?

It would take you 10,000/ 215 = 46 hours.

Which is equivalent to 46/ 8 working hours per day = just 5.8 / 6 days.

Yes iPhone 8 obviously has a lot better features as compared to Xiaomi, but when you compare it with working 6 days for owning a Xiaomi vs working for 34 days for an iPhone just for those extra features and a good camera, is it really worth it?

You have to work a whopping 28 days for 8 hours to afford those additional features in a phone which you are barely going to use.

Are those additional features are worth 28 working days for you ? You decide for yourselves.

What most people do is that they buy things which:

1. They don’t absolutely need.
2. They have to work for days to afford.

Now this was just an example to demonstrate however this can only be applied to anything when you want to make a buying discussion.

When you are out to buy something, calculate the days you would need to work to afford that. Then consider the value it actually provides you and later decide if that is a good investment for you.

Buying an iPhone or any expensive stuff only makes sense in two cases:

1. If your hourly rate exceeds the price of the product, if your hourly rate is around $50 to $100 per hour then you don’t have to think twice to buy an iPhone.
2. In case that particular thing is still expensive as per your hourly rate but it is something you absolutely need. Like if you are an iOS developer and need an iPhone to test out your app. Or maybe you are an interior designer who has to click and share pictures of your work to your clients and hence need a good camera with you all times.

Once you realise the real math behind buying things, you will never be broke again.

P.S Do suggest if there are any mathematical errors.

-Saurav Sharma