I did a 20-year projection on how much money a chess coach/organizer can make compared with a fresh graduate. Of course I had to make certain assumptions.
1. Based on the Stonemaster's figures, I assumed that 100% of his income comes from coaching. Because of that, a chess coach will find it hard to increase tuition fees in the near term. Hence, I allow a 10% upward revision in coaching fees every five years. It is hard to estimate the profits of an organizer because I do not have any data of the costs involved, and many times, organizers depend on sponsorship to obtain profits. In short, I can't calculate what I can't estimate.
2. I assume the Stonemaster does not pay taxes
3. I also assumed that the Stonemaster has already maxed out the number of hours that he is willing to spend on coaching and organizing. This means that he is unable to increase income simply by increasing the number of hours coached. Hence, the increase in income must only come out of the increase in coaching fees.
Table 1 below shows the income projection of the Stonemaster in the next 20 years.
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| Table 1 |
1. Based on this, I assumed that the fresh graduate will get a salary increment of 5% per year for the next 20 years. I think this is on the low side. But let's be conservative.
2. I assumed that the EPF contribution from the employer is 12% of his gross income. This is standard. This should be handy during your retirement. If you are a chess coach, when are you going to retire?
3. I based the tax rate on the 2010 tax brackets. I used the full gross income as the taxable income. This means that I did not subtract all the deductibles. Once again, trying to be conservative. You can view the tax bracket here.
4. I assumed that the medical and other benefits begin at RM200 per year and will grow at 5% per annum. This could easily be more. Another thing I did not include is that if there is a serious medical condition, the coverage could be more. Even if you are hospitalized, you will still continue to receive income. If you were to be coaching chess, you do not get paid if you are hospitalized. What will you eat then?
5. I assume that no bonuses are paid throughout the 20 years. Again, this is to be conservative. Most banks pay about two months bonus annually. Again, correct me if I am wrong.
Table 2 shows the projection of the fresh graduate's total compensation.
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| Table 2 |
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| Chart 1 |
It is more or less an established fact that there is little money in chess. Look at the players, for example. The top 10 chess players in the world make much less than the top 100 football players in the world, no matter how you look at it(endorsements, winnings, etc.).
ReplyDeleteCoaching? Unlikely, especially in Malaysia. How many decent chess coaches are there in Malaysia? 10? 20? Chess coaching is a very specialised market. And honestly, teaching at a beginner's level can only make you so much. To have any chance of making good money, you need to be able to teach at a more advanced level. Which generally means you need to be a stronger player, i.e. invest even more time in chess.
A famous chess teacher in Malaysia makes RM50,000 in a year. A reasonably well-known academic tuition teacher can charge at the very least RM100 per month. Getting, say, 50 students is no challenge. The math can take over there.
But generally, is RM5,000 a month considered a great salary, when you are one of the top earners in your industry? I don't think so.
There are many better ways to put food on the table. Unless you're naturally talented at chess, love the game and every minute you spend coaching, the effort is just not worth it.
Yeah, I think it's pretty clear intuitively. Just trying to put some numbers together to give a better picture of what the prospects truly are. I mean, money is most certainly not everything. To some people, getting a GM title can be worth more than say, RM10 million. It's a personal preference.
ReplyDeleteI think this is some kind of a perspective on what you would be giving up if you wish to immerse yourself into chess. Granted, chess coaching gives you a bit more flexibility which you may or may not use productively to work on improving your chess perhaps towards whatever goal you're aiming at.
As I said, how badly do you want it?
A fresh grad starting work in a bank will not be getting Rm3K per month. I think one bank does pay RM3K but most banks pay like Rm2.5K.
ReplyDeleteFurthermore you are assuming that the fresh grad will not be promoted. Promotion comes with a better salary scale. As you move up, your salary will move but not incrementally. Some 10-15 years, assuming our grad has learned the ropes , increased his/her experience, he/she could be looking at at least Rm10-15K monthly in a senior position.
Mr Phang Yu Hon, 43, is proof that the tuition industry in Singapore is booming.
ReplyDeleteHe is one of Singapore's highest paid tutors, with an average monthly salary of $43,000. He was also featured on the Straits Times in 2008 as one of a few "Super Tutors".
In an interview with the full-time physics tutor, the Straits Times' RazorTV reported that last year alone, he earned about $520,000, after deduction of expenses, and paid $85,000 in taxes.
Mr Phang conducts group tuition so he can "teach more students", and says he currently has more 200 students. He charges secondary school students between $300 to $360 a month.
Although he operates his classes seven days a week, Mr Phang essentially only teaches for 27 hours a week, less than the average Singaporean office worker.
Mr Phang graduated with an electrical engineering degree from the National University of Singapore in 1991, and became a research engineer in the Ministry of Defence. He was drawing a salary of about $3,000 then.
He discovered his flair for teaching while giving private tuition part-time on the weekends, and eventually gave up his full-time job after four years to go into tutoring full-time. With only one student, his average monthly salary at the beginning was only $220.
http://www.edvantage.com.sg/edvantage/features/people/449556/The_tutor_who_earned_520_000.html
A poster in the room at Goldhill Centre reads: "Miss Loi's temple, enter and be saved."
ReplyDeleteJoss Sticks is the name of Ms Celine Loi's tuition centre, where at least 20 students walk in every weekend to work on their maths.
The full-time tutor of eight years has about 80 students under her charge now, each paying $60 a lesson.
The maths guru earns a five-figure monthly income from tutoring.
News of her centre spread by word of mouth and also through her website (www.exampapers.com.sg).
http://www.asiaone.com/News/Education/Story/A1Story20080616-71145.html
VERY IMPRESSIVE ARTICLE!!! I AGREE WITH ALMOST THE WHOLE IDEA IN YOUR ARTICLE!
ReplyDeleteHow to make money when you have only 2 non-paying students?
ReplyDeleteBecome a footballer! If you make it to a decent club you'll earn in one week what Stonemaster earns in a year... :P
ReplyDelete