Mental Ruts of a Financial Nature
02 Feb 2007
Humans are such creatures of habit. Take, for example, the matter of salary. In the States it’s always a yearly figure. I have a good idea of how an American can live in $50k a year, or $75k a year, or $100k a year, etc. Likewise, salaries in China are always given per month. I have a good idea what it means to live in China on RMB 1k per month, RMB 5k per month, RMB 10k per month, etc. However, if an American asks me about Chinese yearly salaries, or a Chinese person asks me about American monthly salaries, I am thrown for a loop every time. I have to do the calculations. I don’t have a “sense” for it because I’m not in the habit of thinking about the figures that way. It’s really quite annoying.
Maybe I’m the only one that will ever use it, but I’ve made a little conversion table based on the current conversion rate of US$1 = RMB7.7743. (Numbers rounded to the nearest unit.)
The chart also reveals a shortcut that the non-mathematicians among us may not have been aware of: if you increase the RMB monthly salary by 50%, you get very close to the annual dollar salary. Conversely, if you decrease the annual dollar salary by one third, you get close to the monthly RMB salary. (This would work more precisely if the conversion were still 8 RMB to the US dollar.) Anyway, this might be useful to some people. I should have noticed this long ago.