How many times have you heard the phrase, "never judge a book by its cover"? At least twice in your lifetime, I bet. And how many times have you personally experienced this phrase in your lives, thus far? Not even that many times, I'm sure. I recently had experienced this phrase in my life, and it is a moment which will stay with me forever.
I was born in Karachi, to middle / working class parents – whom I saw work hard to make ends meet. I had an excellent academic record and started working early, to get the "real world" experience – as soon as possible. Over the next years, I completed my ACCA; I did my MBA from a reputed institute and worked hard to make my way through the corporate ladder to reach where I am – today.
You're probably wondering why I am sharing my background - which is potentially irrelevant to the topic. Read on, though, and you will understand why.
We recently discovered the Weekend Bachat Bazaar in Clifton Block 2 – opposite the Summit (Bank) Tower. And my mother, sisters, and I frequent it every other weekend, if not every weekend. On one such trip this past weekend, we saw a hawker selling roasted channe – along with all the condiments (batashe, peanuts, makai).
Wearing a worn kurta / shalwar, along with an old pair of flip-flops, he looked like a beggar. With a heart full of sympathy, I walked across and initiated a conversation.
Me: Is this what you do for a living?
Hawker: Mein iss bazaar mein channe bech’ta hoon, hafte aur itwaar ku. Baqi din, school k baahir apne channe bech’ta hoon dupehr mein and raatun ku sarkun pe.
(Translated to English: I sell channe at this weekend bazaar, every Saturday and Sunday. The remaining days, I sell my channe (roasted chickpeas) outside schools in the afternoon and by the roadsides at night.)
Me: How much do your channe cost?
Hawker: Each pack is Rs10 (approx 4 cents as the exchange rate for a US dollar is Rs278.54 – the prevailing rate when I write this piece.)
Me: How much do you sell in a day?
Hawker: 200 on a bad day; otherwise, almost 300 on a normal day.
The financier inside me subconsciously started to calculate: average 250 pieces at Rs10 per pack equals Rs2,500 per day. Multiply that by 30 days a month and then by 12 months a year, to get Rs912,500 per year. Wow!
For a street hawker selling channe, this is not bad – at all, by any definition.
And my financier mind continued to re-calculate. Coming from somebody I felt genuine pity on just a few moments ago, pangs of indigestion had started setting in. These numbers would shame new graduates in my industry because these youngsters spend their initial incomes on gadgets and expensive clothes to cover their empty bank accounts with shiny personalities. But my financier mind was still not at ease; maybe there was something which I was missing. High costs causing reduced margins, possibly? To prove myself right, I dug a little deeper.
So, I popped the question, "What do your costs look like? Raw material?"
His reply was faster than my thoughts, "Sir, the only ingredient is channe, which I procure at Rs395 per kg. A single kilogramme is enough for 300 packs, and the only other costs are small paper packs (Rs. 0.5 per pack) and firewood (Rs20 per kg) for my grill. This is my stock for one day."
For reference: The grill was (obviously) a one-time investment.
This guy knew his numbers just as good as anyone else and he threw them at me like a ton of bricks: making me feel small and hurting my ego – which continued with the subconscious calculations.
This is what his cost looked like: Rs0.5 per paper pack cost at 300 packs, plus channe at Rs395 per kg, plus Rs20 for the firewood comes to about Rs565 per day. Multiply that by 30 days and then by 12 months, and you get Rs203,400 per month against a sale of Rs912,500 – meaning more than 450% return on investment.
My CFA-qualified cousin, with me at the time, was at a loss for words. With all her experience, knowledge, financial calculations, and mixing her portfolio with both high and low risk equities (re: risk spreading), she never got the kind of ROI that this guy was earning at less than a quarter of her risk. Our economics failed to explain this theory.
Just as I thought it was over, I was not ready for what was coming next.
A quick reconfirmation: "How much rent do you pay?" – while attempting to reinstate my ego.
"Sir, I don't have a fixed place. I stand outside schools and at this bazaar – basically anywhere that has enough awam to sell my channe. Yes, but I pay Rs350 weekly to the "thekedaars" at these bazaars. That means: I end up paying Rs1,400 to these guys every month. Consider it a security deposit of sorts. Outside schools, I pass by very inconspicuously." This was clearly a case of #ifyouknowyouknow.
To engage in some self-flattery, I had another question: Rs1,400 for rent is a lot – for no guaranteed sales.
No? Clifton, after all, is an expensive location, and similar bazaars do exist across the city.
Ha! His reply stunned me and shattered all the halo I had of all of my achievements.
He calmly replied, "You are right, baji. Clifton is expensive, but the bazaar in this vicinity has more business than anywhere else in the city. I have around five people from my village who work for me. Most of them are young boys who attend night college and work with me during the day for monetary support. I pay them Rs15,000 each per month. Some of these boys are not from here, so I have rented two rooms for them. I also live with them."
My brain was now too exhausted to continue with any further calculations. So, I decided to deviate from the topic and asked one last question: "Where is your family, and where do you invest whatever you earn?"
The answer was the final nail in my coffin, and it instantly shut me up.
"I come from Punjab and send all my earnings to my family back home. We have 50 acres of farmland and have several guesthouses that we rent out, at Rs2,500 per night; I earn around Rs150,000 per month from this rent. We sell our farm produce (sugar cane and beetroot) and earn around Rs3 million a year from that. I also have one SUV, that is rented out to cab agencies – bringing in about Rs50,000 a month."
I was speechless but also confused. The cynic in me was still in disbelief – I've heard financiers are negative by nature. But if I took him entirely at face value, I felt he used his attire to fool people and take advantage of them.
So, I asked him, "If you have so much money, why do you dress up like a beggar?"
His final answer before getting back to his "work": "baji, people buy from me more out of sympathy. If I wear expensive clothes, do you think people will be interested in buying my channe? I am dressed up for my business, like how you dress up for your workplace."
I eventually reached home, had my food, and tried to go to bed. But I was not able to sleep – because my mind was still in shock. I got up, pulled out a piece of paper and started jotting down all the numbers he had quoted; I couldn't leave the calculation midway. I had to see what his actual income was, and this is what it looked like:
| Total Income (Rs) | Defined Tenure | # of days | Total income/day | Total income/month | Total income/year | |
| 30 days | 365 days | |||||
| Income from Farm Produce | 22,000,000 | Per Annum | 365 | 60,274 | 350,000 | 4,258,333 |
| Guest House Rent | 350,000 | Per Month | 30 | 11,667 | 150,000 | 1,825,000 |
| SUV Vehicle Rental Income | 150,000 | Per Month | 30 | 5,000 | ||
| Quantity | Rate | |||||
| Sales: Channe | 250 | 10 | 1 | 2,500 | 75,000 | 912,500 |
| Total Family Income | 79,441 | 2,383,219 | 28,995,833 | |||
| Converted to US$ @ Rs278.54 | 104,099 |
This guy was super-rich by Pakistani standards, earning much more than his peers. For record purposes, the minimum wage in Sindh is legally Rs32,000 per month, and our channe wala is making twice this amount per day.
Truth be told, I was truly humbled. And why not? This hawker had just taught me the biggest business lesson of my life: he was not a hawker; but an entrepreneur in disguise.
All our lives, we talk about degrees, brands, budgets, statistics, insights, money, and growth. This guy is selling an unbranded generic product – that enabled massive achievement, over and above what we earn with all the resources we have.
The one thing he has is dedication and experience, and he knows his business better than anybody. But above everything else: he listens to his heart. And this is an eyeopener in the form of a lesson learnt – that I hope you understood as well.