Hundreds of times I have seen a situation where young men and women working in the field of gamedev earn 15-20 times more money than their parents. But a striking fact: At the end of the month, their parents have some amount of money, and young game development professionals go without a single cent in their pocket.
How does this happen? Why we can’t become rich? Let’s consider this issue in the next two articles.
Today, in a special separate article, we learn what wealth is and where you are going.
My name is Einar. I work as a Project Manager in the “Take Games” game development studio.
This is our online school and I will help you to practice to master Project manager profession. The shortest and easiest way.
And also I’ll help you understand how to get rich and learn to see your personal finances transparently.
Learn the balance!
Probably you will be surprised, but already 4400 years ago the ancient Babylonians knew about the personal economy much more than most people know today.
For some reason our education system does not teach us simple and clear rules for handling money and does not talk about simple ways that allow us to grow and multiply our own capital.
To begin with, let’s think up the usual guy Billy, who works in an outsourcing gamedev studio!
Billy works as a Project Manager and controls the process of creating games. Billy is an excellent young specialist and earns a conditional $60,000 a year.
Is PM Billy is getting richer?
In fact, it’s very simple. We will calculate all the money that Billy earns in one month and take away from this sum all the money that Billy spends for this month.
1) Salary: $5,000 ($60,000 / 12 months)
2) Birthday Gifts: $200
1) Taxes: $400
2) Rental apartment: $1,350
3) Expenses for the car: $450
4) Power and beer: $1,650
5) Entertainment, travel and clothing purchase: $1,850
6) Repayment of the loan: $180
Personal financial balance of Billy for one month is: – $680
Now we see that every month our young and highly paid specialist Billy is more and more immersed in debt.
The root of the problem
Billy himself does not calculate his income and expenses.
Billy simply tries to economically spend money in every particular case and knows that he still lacks money, although he does not make big rash purchases.
When running out of money, and to obtain wages still 5 days, Billy begins tough to limit myself, but for food and gasoline to pay by credit card.
He was just tired all the time, every month, to feel like a slave to the money!
So what is wealth? What can you say?
Personally, I, Master of Economics and Management with fifteen years of experience in these fields, learned the correct answer quite recently.
The definition of wealth is the number of days you can survive without physically working (or anyone in your household physically working) and still maintain your standard of living.
I was quite surprised to read such a formulation of the concept of “Wealth”!
I never thought that wealth is time!
But after a little reflection, I realized that this was so. That wealth is precisely the time, and not the amount of money you have.
I will give an example:
You are rich!
Right now you have $500 million!
But let’s take a look at your income and expenses for this month:
1) Revenues from the furniture factory: $237,000
2) Income from a deposit in a bank: $12,000
3) Gifts for Birthday: $6 500
1) The state accused you of tax evasion and fined $120,000,000.
2) Your ex-wife won the court and you are forced to pay her $230,000,000
3) Expenses for the furniture manufacturing factory: $165,900
4) Taxes for this month: $29,880
5) Expenses for family, products and transport: $48,000
6) Expenses for the house and the villa by the lake: $21,850
7) Yacht expenses and participation in the golf club: $19,000
8) Interest on the loan: $36,000
9) Journey to Japan: $42,000
10) Purchase and delivery of a sports car: $280,000
11) Unsuccessful investment in a failed start-up: $4,000,000
12) Birthdays expenses in the family circle: $72,000
And what do we get? The money you had at the beginning of the month was supplemented with money from business, deposit and gifts.
All together amounted to: $500 255 500
At the end of this month, we have: $143,582,870 ($500,255,500 – $356,672,630)
So, for one month we lost: $356 417 130
I’m sure you have already realized that by keeping such a pace you can become bankrupt within a month or two. You will owe hundreds of millions of dollars to creditors and will most likely end up behind bars.
Now calculate your personal income and expenses.
What is the balance? Where are you going?
You have to understand that there is exactly one guaranteed way to become rich: your expenses should be less than income.
And the remaining money should be your assets. What brings you passive income!
I hope you understand the first half of the information that I want to convey to you in these two articles devoted to personal finance.
You need to know how much you receive and how much you spend, and then make it to earn more than you spend.
How to do it?
Find out in the next article.
And do not get frustrated that now you are not a rich man!
“The hungrier one becomes, the clearer one’s mind works— also the more sensitive one becomes to the odors of food.”
George S. Clason, The Richest Man in Babylon
Grow your wealth by watering it with knowledge and work.
Learn more, get rich!
I hope that I interested you in this article and you will read the following. To do this, subscribe to our group on Facebook and you definitely do not miss it!
You will understand that you can develop games, work as a Project Manager, or be a designer who specializes in games reskins, and in 5 years become a truly wealthy person who is rapidly moving towards wealth, travel, health and a long life.
Let’s learn more!
“Rich people have small TVs and big libraries, and poor people have small libraries and big TVs.”
With you was Einar and online school of game development studio “Take Games”!
Homework is simple:
Calculate your income and expenses.
Share our articles, read our blog and order games from us!
P.S. The list of articles in this series:
- The Way of PM
- How to walk this path – self motivation
- “Time Lords” time-management for PM
- Where to start your Way of Project Manager?
- The Way of PM: Employment in practice. Your resume.
- The Way of PM: In a new place!
- The Way of PM – Let’s become rich!
- The Way of PM – Let’s become rich! Part 2
- The Way of PM: Papers and teams. Be a leader
- The Way of PM: Different people working in the same studio.
- The Way of PM: Workplace and business processes
- The Way of PM: Special, mental magic! Mind map
- The Way of PM: Estimation of the project. How not to fail.
- 4 falling graphics. Only one is good Burndown Chart.
Literature and sources:
– George Samuel Clason: “The Richest Man in Babylon”
– Robert Kiyosaki: “Cashflow quadrant”
– Robert Kiyosaki: “Rich Dad Poor Dad”