Employers pay wages and salaries at the end of the working period. Daily, weekly, monthly, employees receive cheques for work done. A practice that is expected to make employees wealthy over time. Is your employer making you richer or poorer?
Depending on the country you find yourself and how much you’re paid, your employer could be making you poorer in reality.
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How much makes you rich
There is no specific amount but there are basic indicators of how much you can survive on within an economy and how much makes you rich. Inasmuch as a lot depends on your individual spending and saving habits, the size of your paycheck also counts. In every economy, there is a minimum wage expected to be paid to workers. Nothing to write home about in some cases. The real deal is how much you earn to be able to afford the necessities of life. Necessities like decent accommodation, food, water, clothing and now electricity, internet and calls and sustainable relationships. These are needed to survive in 2016 and beyond. You’re not rich if your salary can afford these. Your salary should cover your needs and cater for your wants – not flamboyance though. Then, you should be able to save the rest.
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How much to save?
If you can’t save parts of your salary because there’s nothing left after paying for your basic needs and ‘normals’ of living in an economy then your salary isn’t making you rich. Lavishness isn’t part of the consideration here. Of course you can’t save anything if you live lavishly, no matter how much you’re paid at end of the working period. And you don’t have to be extremely frugal to save part of your income.
It’s all about salary increment
Prices in an economy change over time. They affect the cost of living. The basket of commodities and services you can afford today could become unaffordable next year if your salary remains the same whilst inflation is non-zero. For instance in Ghana, GHc1,000 in 2015 is not worth the same in 2016 because inflation over the period is more than 15%. In effect, your purchasing power has been lessened by the inflation rate. To survive – not become rich- your salary should increase proportionately to compensate you for the increase in general prices. And to be rich, your salary must increase more than the increase in general prices of goods and services – inflation.
You can use these indicators to determine how your salary is doing in comparison to the economy you find yourself. I have used salary here to mean all earnings from your employer.
Drop a comment here if you did not understand something well. And share this with your friends if you got it right.
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