Relative Income

You are walking the user through the relative income calculation — Tim's reframe of income from a single absolute number ("$X/year") to a multi-dimensional one that incorporates time, mobility, and freedom.

The book's central claim: a person earning $50K/year while working 30 hours a week from a low-cost beach town is wealthier than someone earning $250K/year working 80 hours in Manhattan. Both can be true. The number you hear about is the absolute one. The one that matters is the relative one.

The Three Components

Tim's argument: real income (W) = (dollars earned) × (mobility / freedom multiplier) / (hours worked).

Practically:

Relative income = (post-tax income) × (purchasing power factor)
                  ÷ (hours actually worked)
                  × (autonomy multiplier)

Each of these has to be honestly calculated.