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I've often heard 'facts' bandied around that go something like, "If Bill Gates were to come across a wad of notes worth $10,000 lying on the ground, it wouldn't be worth his while to bend down and pick it up".
Now, if it isn't worth his while to pick up $10,000 it must be worth his while to pick up
*some* amount of money, i.e. there must be some threshold value. While Bill Gates' may have a threshold value of, say, $12,690, for the rest of us it will be much lower. A formula was given in one of the newspapers yesterday to work out how much your free time is worth per hour; it was a function of salary and hours worked - I can't remember if there were other contributory factors but apparently for the average British man, the value is £6.16. If we can work this value out and then assume that it takes 6 seconds to notice, stop, and pick up the money from the ground, we can each work out our personal threshold. For the average British man, it would then not quite be worth his while picking up a 1p as his threshold is £0.0102. He could, however, safely pick up 2p.
Each person also has another threshold - the smallest amount of money that you actually would bother to bend down and pick up. Personally I would tend to walk past a 1p, 2p, or 5p, but I would probably bend down to pick up a 10p.
Your penuriousness factor is then given as the upper threshold (the amount that it is worth your while bending down to pick up), divided by the lower threshold (the average minimum amount of money that you actually would pick up).
If your factor works out as 1, then you've got it right.
The news story
http://www.ananova....es.businessquirkies
Don't tell me it's silly - tell Ian Walker [stupop, May 30 2002]
The formula
http://www.guardian...71,-1769035,00.html
[stupop, May 30 2002]
[link]
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An amusing notion.
Find a penny
Pick it up
All that day
You'll have a penny. |
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There's a fundamental flaw with your 'upper threshold' factor, stupop.
Although you can work out the value of your free time, because it is 'free' you are not actually getting any return on it. So, to reduce your loss, it is always worth picking up any amount of money. Travel companies realised this many moons ago, which is why the cost of holidays, flights etc get cheaper the closer to departure date you book up. The reason being that things like the hotel rooms and places on the plane have been bought and paid for in advance, so any income is better than none. |
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Not necessarily [Dr Bob]. I think it's more complex than that. The key is to get a good formula for how much your free time is worth. I think other factors would have to be brought into the equation, but I can't think what they might be. I suppose you'd need to do a cost-benefit analysis on how valuable your free time is and whether it's worth wasting those valuable seconds to bend down. |
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I'm not convinced. Unless there is some way to actually bill someone for your time 24/7 it just hypothetical. Unless perhaps (as you say) if you could actually calculate what its worth to you just to sit and stare at the tele, I suppose it *might* be workable.
<aside>Reminds me of the Not Only But Also sketch:
Solicitor to client: "Good morning, five guineas. Sit down, please, ten guineas. What can I do for you, fifteen guineas?"</aside> |
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It is said Donald Trump has been known to use coupons for meager amounts. |
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I have to agree with [DrBob]. Any return I experience during a period when I'm not expecting income is a bonus. |
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Amortizing what I make during an 8-hour work day over the other 16 hours doesn't make much sense. I have to sleep. I have to eat. To imply those things cost me money simply because I don't get paid for them is silly. |
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That it's "not worth Bill Gates' time to bend down and pick up $10,000" is false. Because he has thousands of people working for him all the time, he earns money whether he's working, swimming, reading a book or getting a haircut. If Bill Gates had to earn all his money himself *then* it might not be worth his while to pick up that $10,000, but since he doesn't, it is. |
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Not to mention that much of Bill Gate's earnings are through interest on his bank account - which carry on accruing anytime. |
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Absolutely - what you need to calculate is the payback rate during working hours only, to give the worthwhile to pick up coefficient. At all other times, it's a bonus. |
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//I'm not sure if stinginess is the correct word to use // |
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I've found a couple of links to that formula I mentioned. Money picked up during free time is not necessarily a bonus if the act of bending down to pick it up is considered to work or to be eroding your free time. |
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In calculating if it's worthwhile bending over, you've got to factor in the probability of doing your back in when you bend over, multiplied by the expenses of medical bills and earnings lost due to being laid up in bed. |
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You could sue Bill Gates for not picking it up first. |
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If there's that much money laying around, it's got to be worth picking up. |
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My sister once found £1,600 lying in a transparent plastic bag on the Royal Mile in Edinburgh. |
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I gather the formula is just intended to get people thinking about the value of their time in quantitative terms, and (primarily) to get some publicity for the formula's formulators. To accurately value free time (that is, for the purpose of deciding whether to spend money to save time) must take into account many more factors than your current earnings and tax rate. You'd have to include, for instance:
1) remaining life expectancy
2) amount of money in the bank
3) future earning potential
4) your "marginal work threshhold," a term I use to refer to the amount of money someone would have to pay you to spend a similar amount of time doing work no more nor less enjoyable than the task that will save you money instead of time. |
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I really think no. 4 is closer to the mark than the proposed formula, because it is closer to the actual problem to be solved. |
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Don't forget the ‘greater fool’ theorum … just for fun, pass up your 1p, but take your coffee within sight of the coin and watch people. Eventually someone picks up the penny and away they go -- now, who's the greater fool? |
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That's nothing [stupop] - mates of mine found £38,000 and ten kilos of hash in a black bin liner in the woods near Abernethy. Being eight at the time and blissfully unaware of the substance they had found, they then spent the next couple of hours breaking the stuff off trees. |
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I was watching my fiance's six-year-old leave a restaurant ahead of me, this weekend. Just past the threshold, on the sidewalk, there was a penny. Naturally -- being six, and being Allie -- she bent down and picked it up. |
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In all probability, her life expectancy is far greater than mine; she has a decent-sized college fund, which will mature as she does; and she will almost certainly make more money than I will in her lifetime. All things considered, it was hardly worth the seven seconds of her valuable life that she spent bending down, picking up, and inspecting that penny. But she did it, because she's at an age where small money still means a whole lot. |
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If I can take my argument to the logical limit, we can factor in the meaning of those seven seconds to me (the child's stepmother-to-be, manager at a start-up, off the clock), her dad (father of two, insured, coach, off the clock), her sister (eleven, beautiful, quick-witted, good at everything she touches, healthy, planning to be an animal-rights lawyer), and everyone working at or eating in the restaurant, for that matter. The closer you get to the context of the moment, the less useful the equation becomes. |
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What I want to say is this: the child picked up the penny. I wish I had picked it up. I wish I'd seen it in the first place; I didn't. I wish I was able to put value in such small things, and believe in their importance. I wish I still had room in my life for pennies. |
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Next time, greedily snatch the penny just as the child is about to reach it. Much merriment and mirth will ensue. |
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1% - you are the icing on their cake I am sure! |
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I walk a lot (can't drive) and pick up all kinds of stuff, especially rubber bands dropped by the mailman. It's exercise, which some fools PAY to do in gyms ;D
Found 9 guitar picks the other day. |
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