on break-even

(my mother, father and I were in the living room)

My mother: Chinmay, tell your father with the profit I made by selling mangoes I would like to further develop our farmland.

Me: (gave a typical Indian head nod)

My father was pretending as if he did not hear.

Mother: re… ree (that is how my mother calls me father), did you hear what I said?

Father: (gave a typical Indian head nod)

Mother: say yes or no!

Father: with your money you develop but do not ask me to invest again and again on that farm where I do not get any returns.

Mother: Chinmay, if we want more mangoes next time then we have to start deweeding – ploughing the land – putting manure – redo the fencing as it is old…

(my mother started lowering her voice as she saw my father slowly getting up and leaving the room)

Father: (gave a quick wink to me when my mother was not seeing and gestured to meet him on the balcony)

Mother: Chinmay, see see see, every time your father does this. How can I take care of the farm all by myself? Didn’t you see how much profit we made this time? We can make more if we start taking care of the farm from now itself for the next season.

Me: Ma, I know you will not like me saying this, but I would suggest not to invest too much on the farm.

Mother: you and your father are all the same!

Me: Maaa… ok, let me have a word with Appa.

(Went upstairs where I saw my father, as usual, relaxing on the lazy chair with newspaper on one side and a few autobiography books on the other side, and some old music playing from his phone)

Father: Chinmay, I do not have to tell you about investing in our farmland as you teach others on finance. Why don’t you teach your mother how profit should be calculated and show her that the farm is making a loss!

Me: (gave a typical Indian head nod)

(Started walking downstairs to the living room where my mother as usual sitting on her lazy chair with cookery books on one side and magazines on the other side, and something playing on the TV)

Me: Ma, can you please tell me all the expenses incurred on our farm?

Mother: mainly salary, and then cost of buying manure and ploughing once in a while, and deweeding and other small miscellaneous expenses.

Me: The salary for the young family who takes care of the farm is Rs 15,000 per month, right?

Mother: yes, but they get electricity, water, and also I supply them with some groceries on top of that.

Me: hmm… so how much do the groceries cost you?

Mother: sometimes Rs 500, sometimes Rs 2,000, sometimes during the festival season I give them a bonus.

Me: Arrr…. Give me an average number for a month.

Mother: take it as Rs 5,000

Me: Ok, that will be Rs 60,000 for a year + a salary of Rs 1,80,000 for a year. Let us round it off to Rs 2,50,000

Mother: Ok

(Then I continued asking my mother how much does it cost for manuring, ploughing, deweeding and other miscellaneous expenses. She was able to give some number)

Me: have we missed considering any other expenses?

Mother: no, I do not think so.

Me: Ok, we made XXX by selling mangoes this year. This XXX amount is definitely less than the approximate expense that we just calculated.

Mother: (become very defensive) it is not just mangoes I grow. I sometimes sell flower, coconut, some vegetables. If your father supports me by paying for one more family to stay at our farm then I will do a bit of animal husbandry. You know I was doing that before right?

Me: yes, I remember. I also remember the unforeseen issues that came with that but let us know talk about it.

Me: Even if we take sales (income) from selling flowers, coconut and so on, how much do you think we will be making?

Mother: maybe some YYY number.

Me: Taking the best case scenario, we might be lucky to hit the break-even.

Mother: but with everyone’s support I can do better business with our farm.

Me: Ma, accordingly to me, for us farming is not a business. It is an expensive hobby!

We have not considered the salary to the driver who takes you to the farm? The fuel and wear & tear of the vehicle? Also, sometimes you take a few helpers from the factory to the farm? On top of that, how about your time & effort, and sometimes mine?

Mother: if your father cannot support me with at least that then how can you expect me to take care of everything?

I know he has asked you to tell me all of this. But I will not pay the driver and take care of those expenses. For all the work that I am doing 24×7 am I getting any salary? You might teach finance in business schools in Australia but you don’t know much about agriculture.

If we do not take care of the farm then do you know how much it will cost us to get the land back in shape?

By the way, it seems like the lockdown restriction will be eased next week, so we have to go to the farm.

Me: We? What happened to the driver?

Mother: (gave a cheeky reply) I let him go so that your father can save money. What do you call that in business… cost-cutting.

Me: (gave a typical Indian head nod)

(we heard some sound in the kitchen)

Mother: hmm… your father must be looking for snacks to munch. He can never find them. Let me go and give it… re… ree… it is on the other shelf, how many times should I tell you…

Me: (reminded myself of the words of Oscar Wilde, “Women are meant to be loved, not to be understood.”)

Here’s a video (150 secs) that explains the break-even point in simple laymen language:

#financemanagement #storytelling #breakeven #financeacademy