2019: Reflections and Resolutions

December 03, 2019

In 2019, I made roughly 200K BDT for around 8 months of working from home, which is entirely me, sitting in front of a computer in my air-conditioned room, chugging coffee and writing. Needless to say, even when you try to contextualize it, 200K BDT a year is below average by any definition. You don’t need to be a math wiz to figure out that a substandard pay of 20K BDT/mo will get you more (Heck, I even earned more as a sophomore working part-time). However, that’s not the point I am trying to make. In the entirety of working from home for a year, and evaluating my returns on time that I have put in, I learned some very valuable lessons on how you can leverage the power of technology to transcend physical barriers and break free from traditional 9–6 desk jobs and get even higher returns. And the best part is that I have only begun to scratch the surface.

But first, I think I owe a little personal anecdote. This year I became very self-aware of my finance, mostly because it became very relevant in my life. Out of nowhere, it became the single biggest problem that I needed to address immediately and find a solution to. I did not anticipate the magnitude of the problem so I was fairly taken aback when it hit me. To know that you are 24 years old and all the money that you have to your name can all fit into your tiny wallet is extremely daunting. To be fair to myself, I was not equipped with the necessary financial knowledge, like most of my peers, to make sense of it all. So, for an entire year, I voraciously consumed finance and productivity content — articles and videos — to make up for the differentials. What I realized in the process is that the finance monster can be tamed, if you are smart enough.

FOCUS ON NET INCOME

Most people mistake their income with their net income when they should be prioritizing the latter instead. Your net income is your earnings after your expenses have been deducted from it. Very intuitive, yet we fail to set our priority straight. Earning 35K/mo with expenses of 20K/mo leaves you with 15K at the end of the month. On the other hand, if you can develop a plan to bring your costs down to 10K/mo, even with an income of as low as 25K/mo will leave you with the same amount of money. A high income does not necessarily ensure a high net income. More practically, you should spend as much time bringing down your expenses as you would put in trying to raise your income.

LAWS OF DIMINISHING RETURNS

You would be surprised to find out that your lifestyle does not necessarily need to take a major blowback with a cutdown in expenses. Here’s what I learned — understanding the law of diminishing returns helps. For any product or service that you consider purchasing, there is a different price point for each of them. Let’s say you need a Bluetooth headphone. You truly feel that it will add value to your life and will help you become more efficient. You start doing your research on headphones and narrow your options down to Remax 300 HB retailing for BDT 3000, TaoTronics ANC for BDT 6000, and Sony Headphones for BDT 30,000. You have established from your research that TaoTronics perform significantly better than Remax with a 3K increase in price, but while Sony performs better than TaoTronics, the rate at which the Sony retails is much higher than the comparative value that you can derive from it. Assuming you don’t make a living producing music or dissecting musical notes, you are better off with a TaoTronics than a Remax, or even a Sony. All products and services comply with this general law. You need to locate the margin for each of your purchases to get the best returns on your investment.

There is an exception to this rule, however, when money saved overlaps with time invested. In the context of Bangladesh, suppose you can either take a Pathao or a bus ride to your destination. While Pathao costs higher than the bus ride, you can potentially reach your destination earlier. You need to evaluate whether if the time saved can generate higher income than you can save by opting for the bus ride. If it can indeed, Pathao is your best option which still complies with the law of diminishing returns. Therefore, the law does not only speak in terms of money. You need to also take convenience, time, and health (physical and mental) into consideration when applying the law to ensure pay off in the long run.

DIVERSIFYING INCOME STREAMS

Diversifying your income streams is important in bringing down your risks of getting significantly impacted by unpredictable events, such as getting laid off, economy going through a recession, sustaining a physical injury, etc. This further translates to more stability and security. People working in the traditional workforce often try to conform to the conventions of the workplace. That comes at the cost of not being able to explore or express ideas that are not guaranteed to succeed. However, if you are not prepared to be wrong, you will never come up with anything original, borrowing the words of Ken Robinson. Knowing you don’t have all your eggs in one basket gives you the reassurance and unflickering confidence to be unapologetically yourself.

WORK SMARTER, NOT HARDER

Work smarter, not harder. There is no novelty in waking up when it’s still dark, missing your breakfast, commuting for an hour, enduring the unbearable heat and unimaginable traffic to reach office soaked in sweat. If that’s what you feel will drive your personal growth, go for it by all means. Don’t let me tell you otherwise. However, you don’t owe it to the world to work harder just for the sake of it. You should strive to be smarter than your ancestors, who didn’t know any better, to get more done in less. Take your time to assess the returns on your time and effort that you are putting in. It usually translates to money at the end of the month because you don’t always find fulfillment from your work. That’s not an issue since there could be several other places where you can find the enjoyment that doesn’t necessarily pay you but is rewarding nonetheless. If the work that you are pouring your soul in eventually translates to money at the end of the month, try asking these questions — Can you put in fewer hours and still get paid the same? Can you put in the same hours and get paid more? Are there different opportunities that will pay you more and are less demanding of your time? Can you get paid the same without you having to physically be there at the office? Do you have the flexibility to take on multiple gigs or invest time in self-growth (which will largely pan out in the long run)?

ENGINEER YOUR SURROUNDING

Surround yourself with smart people, in the physical world, and the digital. You are the product of the ideas that you consume daily. The wall of your inner prejudices gets a little taller if you consume hateful posts every day. You will lose a sense of purpose if you constantly listen to people spewing hatred in the digital space. Filter them out, unfollow them. Your world could do with one less noise. Welcome more people in your life who add value to your purpose. Additionally, recognizing that Facebook and Twitter are two very different products is helpful in understanding which deserves more of your time. Both are not mere means of connecting with people, they differentiate in the way they let you connect. There are hundreds of really good tweets shared on Twitter every day. Develop an internal mental framework that will help you recognize genuinely smart people, put them on a list, and follow them religiously. Read what they share, follow their habits, use their tools. The cumulative positives you can extract from hundreds of smart people across the world every day is immense.

WRITING IS AN UNDERRATED SKILL

The skill of writing and writing well is heavily undervalued. Writing and speaking are two primary ways to express and share your unique thoughts with the world. Never underestimate the power of a well-written email — it can move mountains. Bring more clarity in your thoughts and write often. I mailed when I needed letters of recommendation from my professors’ counties apart and I got them. I mailed when I needed a raise in my job and I got them. I mailed when I went on a week-long pleasure trip to Shillong and Hong Kong on two separate occasions in the middle of the year and was still able to keep my job. Your writing should be representative of your personality and the reader should be able to feel that your heart is in the right place. For all of 2019, I made all my money simply by writing, which somehow added value to different businesses for which I got paid.

My New Years’s Resolution is to become a more convincing story-teller and harness the craft of writing well, and in the process, hit the 400K a year mark without having to step out of my room. Being a really good story-teller is also knowing when to end. So I wish you all a very Happy New Year and thanks for reading!

© Amitabha Dey. All rights reserved.