How To Figure Out Net Income

Funny how the mind works.  You don’t think about things for a long time and then one day you remember a whole bunch of stuff.

Well I just remembered my big gray binder.  In it, I have a whole collection of awesome stuff people have written over the years.  Some of it is funny, funny, funny and some of it will make you cry.  So I am going to start sharing these with you so you can enjoy them too.

One of my most treasured ones was written by John Rhoades.  He was one of our group at Western Business College, Portland, OR, 1985.  I was taking an accounting class—I am no good at accounting.  It drives me crazy.  We had gotten to the section on net income.  Another girl, Lori, was also having trouble trying to catch on to the concept.

John decided to try to help us understand it.  One thing you need to know about John.  At that time, he may not be that way now, he would get frustrated very easy and was way more fun in that condition.

John started trying to explain it to us.  He would give us an example and then ask if we understood and at first, we really didn’t.  Then he started to get frustrated and that is when Lori and I started in.  He would explain, and then ask if we understood and we would say no and he would try again.

Now we were in the lunchroom and each time we told John we did not understand he would get louder until people all over the room were listening and becoming amused.

Finally, in desperation he said, “I am going to put it in terms you both can understand.”  Here is what he said:

How to figure out net income

A hooker on Union Street receives money for her nights services {Revenue}

The next day she gives money to her pimp {Expense}

What she has left over is her NET INCOME

The pimp receives money from his girls {Revenue}

Then he buys his drugs {Expense}

What he has left over is his NET INCOME

The drug dealer receives money from the pimp {Revenue}

Then he goes to Union Street and buys a hooker {Expense}

What he has left over is his NET INCOME

A VICIOUS CIRCLE ISN’T IT?

By the time he finished almost everyone in the room was laughing and he said, “Now do you understand?”  and we said “When you put it like that John of course we understand.”

Do YOU understand net income?

I told him he had to write it down because it was so good and he did.  I had the hand written copy for a long time and had the good sense to copy it to the computer because I lost the hand written copy.

 John if your out there reading this or if someone that knows John Rhoades that went to Western Business College in 1985 in Portland, OR, please contact me.  Babett would love to hear from you, too.