News of new household income surveys, like those being planned by government bodies (see here), always catches my attention. Collecting data on income, expenditure, and consumption is a vital exercise for any nation. It provides a snapshot, a statistical baseline from which policymakers can work. But as I reflect on this, I'm reminded that these surveys, while important, often miss the more dynamic and fundamental question: not just what people earn, but how they create wealth.
This takes me back more than two decades to a note I wrote in April 2003, titled "Make More Money". Seeing the renewed focus on household income today, it's striking how relevant those earlier insights still are. I had already been exploring this topic, suggesting a framework that goes beyond simple income figures. I proposed a concept I called Return on Time Invested (ROTI), urging a shift in perspective from merely earning money to actively creating wealth.
My core idea was simple: categorize all our activities into three buckets:
- Wealth-Creating Activities: These directly generate income or assets that appreciate in value.
- Maintenance Activities: These are necessary for life but don't directly create wealth (e.g., chores, daily commute).
- Wealth-Depleting Activities: These consume resources—both time and money—without providing a return.
The goal was to consciously maximize the first, optimize the second, and minimize the third. A household income survey can tell you the result—the final number—but it can't tell you anything about the underlying process, the strategy, or the ROTI of the individuals involved.
Reflecting on it now, I feel a sense of validation. The national conversation is centered on income, but the personal challenge has always been about wealth generation. A high income can be easily squandered, while a modest one, if managed with a focus on high-ROTI activities, can build lasting security. The principles I outlined then are timeless. They are about the discipline and mindset behind financial health, something no survey can truly capture.
While I commend the effort to gather better data, I believe the real understanding lies in looking at the how and not just the how much. True economic empowerment begins with understanding the value of one's time and directing it towards genuine wealth creation.
Regards,
Hemen Parekh
Of course, if you wish, you can debate this topic with my Virtual Avatar at : hemenparekh.ai
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