Wisdom From Books

On increasing income – Why does Madonna earn more than a heart surgeon?

Posted on: August 10, 2010

If Madonna sings and record an album on one hand and a great heart surgeon work for three hours on one patient, who is going to earn more?

Can you guess?

If your answer is
Madonna,

As per the youngest millionaire of Singapore, Adam Khoo, you are right.

In three hours, Madonna sings, gets a song recorded and earns more than a heart surgeon.

Now the question is: WHY?

Please note that this post is not being made to offense anyone. My doctor friends should not lose their heart or think that I am criticizing any one.  This post is being made to bring out some important point which is generally not taught in schools and colleges and that relates to financial literacy.

Earning / Income is component of a few factors and to increase income, people need to understand what constitutes income. 

Income is a product of three factors:
1. Value
2. Time; and
3. Scalability

In other words, Income = Time x Value x Scalability

Both Madonna and the heart surgeon invest three hours (time) and give great value. The factor which makes Madonna (or any other celebrity / artist) richer is the scalability factor. (Please note that there is no comparison of Madonna and any heart surgeon. This is an example only.)

A heart surgeon is great as he / she saves life which is too precious to be compared with a singer’s work. However, this is just to give an example and to answer the quesion: Why some people earn more that some other people?.

Artists earn more as their value spreads across many countries around the world and this is called the ‘scalability’ factor. If a singer records an album or a video, it reaches out to more people than a person who is working on a limited scale. People who are working as employees do invest great value and a lot of hours but the businessmen provide scale i.e. the business person’s product reaches many people as compared to an employee.

This can be explained by the real life example of Colonel Sanders – The Kentucky Fried Chicken’s founder. After retirement, he thought to start a business. He had a recipe – Recipe of Fried Chicken. He opened up his shop and it ran well. His income was due to the effect of his time and the value he was giving to the customers. However, one good day, Government changed the express way route. Consequently, customer were not coming to his shop and as a result, he got broke. What did he do?

He decided to ‘scale’ his business and sold the technique to the restaurant owners. He went to various restaurant owners and asked them to buy his recipe of a fried chicken and there you go!

 KFC become a world-wide phenomenon. This is why franchises earn more – the scalability factor!

How can a doctor scale up his or her services? He or she can do so through website, by writing books, by online sessions and seminars etc.

I thought to share the above ideas while reading Adam Khoo’s book: Secrets Of Self Made Millionaires

Your thoughts?

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11 Responses to "On increasing income – Why does Madonna earn more than a heart surgeon?"

It is really a great concept in simple way, awarness is really important but the fact is that we must think how to expand the outreach of the students, may be by providing them more opportunity in real world, like internship programes. Accomodating students in research and project work, where they can interact with the world..
I think parents can play a significant role in expanding outreach of their child..its all about “SELF MARKETING”..

I really appreciate your contribution towards this vision..

Happy writing 🙂

regards

Thanks Saleem for expanding upon the idea – Happy reading and keep contributing!

This is all about what you value in life most…like in the surgeon’s case its the precious life he saves and the prayers he gets from the patient and his family. Being a doctor, believe me its the best gift the patients give you: prayers:))

As far as scalability of the surgeons or doctors is concerned, they are increasing it by the valuable research they are doing for the population at large. I cannot say that every doc can give enough time for it as after being busy in their professional routine, they have to save some time for their family too.

Here I am not saying that money is not important..it has its own value and everyone needs it for living..its just a matter of satisfaction one gets from job and his profession…:))

Thnx Mr Malik for bringing this great concept in a very SIMPLE way!

Your lines are so true… “This post is being made to bring out some important point which is generally not taught in schools and colleges and that relates to financial literacy.”

I agree with you that we spend too much years in schools/colleges, studying many books/courses which have minor role and then preparing our students for the world which no more exists. There are so many real life simple concepts which if we could taught at early/school/college age, a student can save a lot of years of frustration, unemployment/underemployment. I know somebody may say we can’t upgrade our education system then what’s the solution? Solution is very simple. Start from y-o-u-r-s-e-l-f. Learn the life-skills which are not taught in the formal education.

Jim Rohn, my mentor, always said: “Formal education will make you a living; self-education will make you a fortune.” and day by day we are seeing stories of successfull people which proves how true this concept is!

This blog is a good initiative to bring this life changing/improving wisdom to everyone, specially Pakistanis, who wants/dreams to BUILD a better life, family, society and nation.

Keep spreeding wisdom! YOU are doing great contribution!

Javed Iqbal
Educator | Empower | Entrepreneur
Lahore

Thanks Javed sb; What you have said should be spread to as many students as we can. Times are changing and students should learn to keep pace with the change. Thanks for your appreciation of the blog and comments.

Excellent

Scalability – indeed a great great thing. Instead of linear addition, it adds value exponentially.

Thanks for the nice perspective Mirza sb!!

Wow Wonderfullll Article. MR. Malik I agree with your points but in my opinion (its my opinion through reading books and observing people) the first step to riches is to have VISION.
To have some goal & determination that they will succeed. I am impressed with Mark Zuckerberg, how he outright Orkut (operated by Google) with his just simplest techniques. If you read about him he only had one thing.. that is VISION.
If we read about Billgates or Steve Jobs or even if we go to the religious side, our Prophet PBUH had vision, Jesus had vision… And finally the person who wins is the one who had a BIG IDEA.
Thank you for listneing to me 🙂

Thanks Usman sb – I can ‘t agree more with you on the importance of vision. You may read older posts in which nine habits of self made millionaires have been described. Link is: http://wp.me/pHUHq-bf.
Also, I have written on importance of vision in previous posts and you may go through them to contribute your thoughts. Thanks again

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