Episode 1

Gender pay gap, porn and becoming “in demand”

Welcome to the first episode of Finance and Fury and today we’re going to be setting the scene for the rest of the podcast. The whole podcast is about helping to solve misunderstandings… and one really big one is actually how to get what you want financially!

So, today we’ll be running through two underlying factors that you can actually use to get what you want financially and to do so, we’ll actually be talking about a few hot or explosive topics, so as a bit of a warning if you are offended by sensitive things this might not be the right episode. But it’s not meant to be offensive in any way, it’s purely helping to provide some illustration on a few factors behind what actually causes a bit of a disparity and financial pay and a few other things. And the most important thing is actually going to be covering through what they really mean for you and how to use them, because fortunately these same underlying factors can be really applied or harnessed by anyone when they know how.

Before covering the factors behind how to get what you want financially, let’s cover the hot topics. If anyone’s been paying attention to the news, or I actually saw it in my Facebook feed, an article about a pay gap between the stars of a Netflix show, The Crown. So, the male actor and female actor in that are apparently being paid separate amounts… with the male earning more.

Does this mean that Netflix is sexist? Well, if we only look at the difference between these two as being the gender then it’s actually probably the correct answer. Unfortunately, the issues of this nature tend to have many actual causal relationships and it’s almost impossible to put the blame at the feet of just one. The problem with that line of thinking as well is what’s the next step, if there’s not another reason between genders as to why they’re owning a different amount then you can break it down where regardless of the position that they have if they’re costars, main star, even just the extra that walks… Shouldn’t everyone get the same?

Even if another actress at similar level is in one episode, should she be paid the exact same amount as the recurring star of the show? So, it’s gets very hard when factors are brought in without actually picking up the cause and treating them like symptoms and distributions happen everywhere. The 80/20 principle is actually seen when you look at rugby or soccer or cricket, any professional sport. The best players get paid the most money and that’s all due to people wanting to watch them. Music as well, a very tiny proportion of people sell the majority of records or even sell the most amount of theatres around the world. Even athletics. It’s all relative to the individual inequality people have, so inequality itself isn’t inherently a bad thing.

The bad thing about it is it’s used to measure bad things. So, income inequality in this regard, if people are in poverty that’s awful and that should be the focus not that Bill Gates has a billion dollars every single year in addition to, you know, your standard average Australian income because if everyone’s doing okay then who cares how much he has. It’s more about focusing on solving the underlying cause and not looking at the symptom and there’s always going to be bad situations to measure with inequality but treating the fact that inequality exists is the enemy and focusing on one factor to solve it can lead to some issues over time and especially when the policies to solve equality really means just to have the same outcome for everyone, which will always be at the expense of someone else.

So, what are some factors? Well, let’s break it down.

I spent a lot of time covering economics, so why not use demand and supply here again. Even in entertainment going back to Hollywood, even T.V. hosts, people watch shows for most of the time the stars that are on them, therefore the T.V. production companies or show producers they are going to want actors that are going to have “eyes to the screen”. So, they’re going to pay them more to incentivize them and if viewers have a problem with them getting paid different amounts, well it’s pretty hard to change our preferences on who we like to watch, because if some individuals like certain actors more, they’re going to see those movies… and if those actors might be a different gender then that gets a little hard to change your individual preference on what movie type you actually prefer.

It’s a touchy subject the next one but as a great example of one place where women actually dominate men in the industry of pay (and in just more ways than one apparently!) …is porn.

Demand here creates a lot of viewers (which are men) so I actually got to research a little bit of this around who the top-ranking porn stars are for income and current assets.

It was more enjoyable then looking at economic trends but looking at the figures of the top twenty rankings after looking at a couple of the ranking sites one of which did include Forbes, on average the top twenty stars in earnings and wealth, only three to five or so were actually male actors.

Of the top twenty the closest I could actually find to the top that was a male actor was at number three. It’s pretty high up actually – ten million dollars but to get there that’s 2,583 films and this individual actually directed 61 films himself.

The next one down the list number four is a female actress with a net worth of eight million. To get there, 82 films.

Depending on how you look at it’s a massive disparity in the paid per film because number three is done 31.5 times the number of films, directed 61, and has $2,000,000 left at the end of it. If you’re only looking at gender, it looks fairly unequal but there’s a million factors behind the scenes. As where focusing again just on the one leads to a generally incorrect outcome.

Companies in this case want to make money. They’re going to pay people to star in films or roles based on demand for them. So, if there’s a high demand for something they’re going to pay more for it, but it also has to do supply because the more of something there is out there, the less they’re going to pay because it’s not as scarce and that actually works very well back to that previous example, where the entry requirements for that industry for males is far lower so there’s a much higher supply, therefore they can’t really demand as much money unless they work very, very hard like number three, or they find some sort of niche and that’s where supply actually comes into the equation again because if in entertainment there’s a greater supply of something then people won’t want to demand it as much.

Think about some of the highest paid actors in this case, how many “The Rocks” are out there? Someone who is as talented as him, and as big as him, and as funny as him, (I don’t have a crush on him) but that’s a bit of a reason why he actually can demand such a high salary for films, so what does this mean for you?

Supply and demand.

On the individual level you can actually use these in your advantage. Using demand is about not demanding things but making people really demand you and your service. It’s about making yourself “in demand” by the people who will actually pay you more money. It’s more or less self-improvement and finding niches. So, focusing on what your good out is a pretty decent place to start in finding out what a niche for you is. If you don’t know what it is maybe finding that out is a good place to start as well but once you get good at something or even do more of something, people will find you more valuable to actually pay you more money.

Think about in any employment situation, if you could go to your boss with a solution to some issue that they might not even know about – saving money, time, resources and introduce that in a way, they might actually give you quite a big bonus. So, using supply as well, increasing your own personal capacity and supply is simply in this case investing and building wealth because if you have a greater passive income then your wealth actually at a nominal or just real value actually increases at a greater rate as well

And this is a reason why the same, rich keep getting richer is the thing because if you have a billion dollars and it goes up by even 5% you’ve got a lot of a greater increase in someone who’s got a $100,000, it goes up by 50%. So, at a nominal rate the rich will get richer because they’ve got a greater supply of assets to grow and that’s where again if you have more money, you can then demand more things yourself.

So, don’t focus on factors outside of your control.

Focus first on what you can’t control with your individual supply and demand and why spend time on things you can’t actually change? And forcing it won’t end well because someone will always lose. It comes back to that previous example in a few episodes ago of pure competition vs cooperation. If everyone’s working together and people are actually engaging in your services willingly because you’re one of the best – then that’s a good thing. If you’re forcing people to use your services, it doesn’t work out so well.

So, in my business I can’t demand people come to see me and pay me money if I’m actually not worth it in the first place. And how bad would the service actually be if that’s how the world worked?

But thankfully there’s only one example of that occurring today …but there’s plenty of other ones where there’s limited choice in a situation, and how bad is the service there! Internet or phone providers, if you’re locked into just one in a certain area. I’m sure everyone’s had an experience like that.

It’s about what you yourself can demand and negotiate purely once you’ve got the value there to back it and becoming “in demand” is the most important thing. So, increasing what you can offer to someone in return for money is truly one of the best ways to increase your individual wealth.

Any of the top billionaires have done exactly that. They have offered something that people have really – really demanded, whether it be a product, service, even entertainment value. So, it’s all about really, rather than just demanding or forcing something, making people want something off you.

So, the point of this episode was just to set the tone for the rest of the podcast and introduce what the format is going to be like. The whole purpose is to help solve misunderstandings, so the framework will be broken down into two episodes a week.

One will be simply on finance, things in your lives where you can actually increase your supply; so, investing, how things work, even just reducing your tax or increasing income. Then also just on demand, things that can be improved on to help you make more money.

So, the next episode actually is the part two, which is questions where it clears up any misunderstandings that any of you may have as well. If you actually have any questions, feel free just to go to financeandfury.com.au, go to the contact page and leave them there because every week the second episode will just be dedicated to help clearing up those misunderstandings and answering questions that you guys have. So, thanks for listening and we’ll see you next time.

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