"Penny Wise and Pound Foolish"

Comments (20)


"Penny Wise and Pound Foolish"

By: Sue and Chuck DeFiore

This saying came to mind when reading my Icop newsletter. JL was discussing things that Chuck and I talk about all the time. A couple of weeks ago while listening to Jim Edwards' audio newsletter he ranted about the "psycho freebie seekers" (love that name). Jim rants almost as well as Dennis Miller.

Anyway these two newsletters and what they had to say have been rolling around in my head for a couple of days now. What came to mind is that people who run Internet businesses from their home are no different than those who ran businesses out of their home in the 80's.....they don't want to pay for anything. You would think with all the failed businesses they've had it would dawn on them that it is because they have done no research, no business plan, no determination on whether or not there is a market for their business in their vicinity. They don't do mission statements. I could go on and on.

Unfortunately, too many people still think all they need is a computer, fax, and some business cards. In fact, they don't even give out the business cards, they leave those in their office in nice little card files. A lot of good that's doing them.

They will spend money on all the trappings but not on education, mentoring or consulting. As Chuck once said to me when I started my first business, and didn't do any marketing "You will be the most organized business in bankruptcy court". It was a wake up call.

As Jim and JL discussed, and Chuck and I run into every day, people want to pick our brains for information and answers. After all, they have been conditioned that IT'S FREE. They feel it is their right to do so.

The Internet especially has made people think that information is FREE. Yes, it is, but those of us who have niches, and have written books all put in a lot of time, effort, and energy in researching, writing and marketing our products. SO NO IT IS NOT FREE. We worked very hard to put together excellent products to the best of our ability and WE EXPECT TO GET PAID FOR THEM.

These individuals also have over inflated egos. "Who me, ask someone for help, and what pay for it. Oh, no I'm sure my way is the right way. People just don't appreciate my great product (service or fill in the blank). I'm just as good, if not better than he/she is."

It would never occur to them to pay someone to show them what is wrong. Or take a class, or purchase a book that might help. Nope, they say, it's not that, it must be something else. It's always some one else's' fault or some things' fault, never theirs.

Unfortunately, the impetus for this behavior was fostered starting back in the 80's when home based businesses were just starting to come into their own. Many of the magazines and publications of the 80's (and now the Internet) fostered the idea that ANYONE can run a home based business. Remember those magazines that had little kits for Word Processing businesses, basket making, medical records, etc. People bought them, followed them. Some did well, but others couldn't figure out why they didn't succeed.

They didn't succeed for several reasons. First, none of them did the basics, the grunt work. Checking first to ascertain whether or not this business was even a viable one in their area. If it was, checking out the competition, making up a business plan, a mission statement. Setting up goals for themselves for daily, weekly, monthly, short and long term. Setting up a publicity campaign, working with the different media, setting up a marketing plan, networking.

All of the things that those of us that have been in business did so that we can stay in business. We were not "penny wise and pound foolish! " We succeeded, through a great deal of hard work, effort and hard knocks that we plan to get compensated for. We are not going to give it away for "free".

Copyright 2003 DeFiore Enterprises

About The Author

Interested in having your own successful, home based creative real estate investing business? Chuck and Sue have been helping folks start successful home based businesses for over 19 years, and we can help you too! To see how, visit http://www.homebusinesssolutions.com for the latest FREE tips and tricks, educational products and coaching in creative real estate investing and home based businesses. No time to visit the site? Subscribe to our "how to" Home Business Solutions Digest, it's like having your own personal coach: mailto:subscribeHBS@homebusinesssolutions.com.

coaches@homebusinesssolutions.com

Comments

DJ Goodies 18.04.2008. 10:25

What does the saying "penny wise, pound foolish" mean? "Penny wise, pound foolish" is a saying that was discovered in Personal Finance today and I was wondering what this meant in easier terms. If you could provide your own meaning to this question and where is this term most important?

DJ Goodies

Admin 18.04.2008. 10:25

It's when you try hard and save small amounts of money (pennies) and then on impulse or unthinkingly spend larger amounts to render the act of saving the pennies quite ineffective.

Here's what a website says:
A penny is a small amount of money and a pound is a larger amount. "Penny-wise, pound-foolish" is to be cautious (wise) with small amounts of money but wasteful (foolish) with larger amounts. Example: "We've worked so hard to save money that if we took a vacation now it would be penny-wise, pound-foolish." People sometimes worry about spending small amounts of money; then they carelessly spend much larger amounts. Example: "He spends very little on food during the week, then blows all his money drinking on the weekends. He really is penny-wise, pound-foolish."

Admin

Heather 02.09.2008. 13:11

Why is a comfortable temperature such a low priority in many people's houses? I think this might be a case of penny-wise and pound foolish. People save a few dollars (or even a few hundred dollar) by being too cold or too hot, yet they have money to spend on cars they don't need, and other junk.

Heather

Admin 02.09.2008. 13:11

I agree. I love being home. I tire of being too hot and especially too cold. Sometimes it's worth being comfortable and content. Yes, energy is expensive, but good lord, we pay $5 for a freakin coffee!!

Admin

Suresh P 23.04.2006. 18:11

Is there a way to get out of credit trap of Credit Cards? First a lucrative credit offer. You get trapped. To come out of the trap you take another credit.YOu avail a bigger credit to repay another credit. You are offered penny concessions at the cost of pound iterest rates. You go penny wise and pound foolish. You find yourself in a debt-trap. Hou do you think you can escape honourably?

Suresh P

Admin 23.04.2006. 18:11

Learn to live within your means.I'm not trying to come off harsh here,its justa simple fact that so many people can't grasp.What you need if you want something you can't buy right at the moment is a better job,not a credit card.

I know people that have to go out and buy something just because someone else got/has one now,even if they don't need it.(Keeping up with the Jones').

Hunker down,put the cards away,and work on paying the debt down.(You bought all that stuff now you own it.)

Admin

lakecity21 03.08.2010. 22:47

How does being cheap get people ahead? Would you agree that most of the time when people are people cheap they are only being penny wise but, pound foolish?
Have you found that the 2 cents per gallon on gas you save you end up spending it on something else?

lakecity21

Admin 03.08.2010. 22:47

I don't think that people who are cheap get ahead at all. People who spend smartly get ahead, but cheapskates are often poor shoppers, so they'll buy things that are lower quality for a lower price, for example, and end up having to replace that item sooner/more frequently. My sister and her boyfriend are super cheap, so they just end up not enjoying life and not gaining anything financially from their cheapness.

Admin

Richard D 12.08.2012. 16:47

Is NBC wise to preempt all programming for the Olympics? It seems to me when the Olympics are over they will find that many viewers have fled to other networks. I myself enjoy a few minutes of the Olympics ( I am not a sports fan) but I wonder how many really want a steady diet of Olympics and nothing but Olympics? It seems strange to suddenly eliminate favorites like Leno or SNL. Is NBC penny-wise and pound-foolish?

Richard D

Admin 12.08.2012. 16:47

There are some people enjoyed watching the Olympics from beginning to end, like me.

Admin

YR 29.10.2006. 16:16

How to get the attention of a large corporate CEO? My sister was recently laid off after a large corporation acquired her company. She was offered a position with the new firm for less $ than she was making even though the new company's salary range for the position she was offered would accommodate her old salary. Employees with less experience & less reputation are making more $ than she was offered. If my sister accepted the lesser offer, she would no longer be able to make her house payment so she declined. She was given 12 weeks severance (to be paid by the acquired company). I know from an accounting perspective, the new company's bottom line will look good, and the old company's bottom line takes the hit for the severance pay. BUT when you put it all together at the larger corporate level, it is penny-wise and pound foolish, to let a really good employee slip away due to a very short-sighted middle management decision. I want to vent to someone high up in the food chain and know that they will read it, and maybe respond.

YR

Admin 29.10.2006. 16:16

Write a letter to the CEO. I mean a "real" letter , not e-mail.

Admin

slipstreamer 26.03.2008. 19:40

Are abusive bosses and corporations just sadistic at heart? Where is the logic? Many, many studies both business/productivity oriented and psychological show that treating employees well (like humans) increases productivity, creativity, worker retention - all the good things one wants in an employee. While abusing and micromanaging employees creates stress, absenteeism/health problems, low productivity workplace errors, waste and theft ...not to mention violence by disgruntled employees.

Yet many corporations are penny wise pound foolish and mistreat their workforce for the short term gain. Even though these methods have been shown through data and practical experience to not be efficient or productive.

Is this just a control issue, an abuse of power? Is the actual business an afterthought?

slipstreamer

Admin 26.03.2008. 19:40

Greed. Control, power, simply bad folks.

Much is made of those who try honestly and still get criticised. That is inevitable.

Some try and give up.

I'd say personally, that many folks are in positions of power they've not actually earned. They may have used every dirty trick in the book to gain that position, and then they find out that they're not getting their "deserved prestige" from their underlings.

Pride- they refuse to consider the possibility that the very same amount of effort and cunning that got them the positions are ill-suited to the proper running of that they control.

Stalin was once questioned by a young (and gutsy) young man-- "When will you stop killing so many people?"

His reply- "When it is no longer necessary".

It's amazing what kind of tunnel vision people are capable of in an effort to do what is "necessary".

Admin

Evidence-based Reality 20.08.2010. 20:37

Why don't rural areas voluntarily install gas pump vapor recovery nozzles? Are vapor recovery nozzles so expensive that it's not worth making the air as clean as possible, even if an area's pollution standard hasn't been exceeded? What's the typical cost per pump? Seems like a case of penny wise and pound foolish.

People standing right next to the pump could use relief from the fumes, regardless.
Nata T, those are two distinctly different types of fumes, and I'd rather breath a little second hand smoke than petroleum aromatics. I do see some economic arguments, though.

Evidence-based Reality

Admin 20.08.2010. 20:37

Perhaps for the reason that papers news papers cover taxes and how much people pay but do not include ideas that political parties might have like subsidies for small farmers and either using part of that money for gas nozzle help or replacing them with electric equipment. In addition ideas like free health care, and using taxes to support green parties and other political parties.
Also consider how in cities they arrest people for setting fire to cars after warnings about Global Warming so my thought is could save trial and arrest money plus stop event by supplying the person with job at local paper and using saved money to help with gas pump. Otherwise vase of penny wise and pound foolish. 2010 article on net called A.V. Times Arson spree 18-20 August editions.

Admin

Never 28.05.2013. 22:52

Dry unit cost ? for a guy doing it on the side? The guy doing it is a pro who works for a large fast food chain keeping all their AC & Heating going and He does work on the side and he fixed my heater a few years ago.

My outside AC unit has been bad for a number of years and I want it fixed.

But theres no way Im spending $3000 for some high end, high efficiency system either.

I think my old unit is a 2.0 or 2.5 goodman.

I have gas heat & a furnace upstairs.

I live in Alabama and I pay $8.56 a month or something for a gas bill 7-8 months a year despite no usage.
(To turn it off would cost a reconnect charge of $50)

Ive been using 2 window units for the last 4-5 years and Im getting too old & weak to put them in & take them out every year.

And I guess central AC will be more efficient.

Anyway, I have a small 3 bedroom 2 bath. I don't use the 2 smaller bedrooms or the 2nd bath and keep the things shut so I don't have to heat them. (Or cool them going forward)

I am 50 years old. I expect I will live in this house until I die.

How much can I expect to pay...total parts labor & freon to get me up & running ?

I cant afford $3000 but Im going to live here the rest of my life and don't want to be penny-wise and pound foolish either.

Another thing I noticed is a number of the other houses on my street have bigger units outside.

Im not sure how many of those are replacements but these houses were all built in 96.

When I was originally looking at getting it replaced, I was told something would need to be converted up in the attic. Now, I guess with dry units they don't need to be unless I go with a larger size I guess.

Final question, I absolutely HATE my programmable on/off/set unit and would much rather have the old manual kind. I cant operated it well, it delays and my sleep schedule is always changing so I wouldn't get the efficiency that many people get from programming it even if I wanted to.

So how hard is it to replace that ?


If you could give me advice as well as how much I can expect to pay for everything and also broken down into parts, labor & freon & so forth.

Give me my lowest price option and then a step up and the cost difference. Like I said, I want to keep the cost down, but I want the unit to last also.

Also, can you give me some idea of my enegy savings versus running window units 4 months of the year ?

Went down the street and a few of them have what look like significantly larger units. Maybe even double in size.
Help me understand what mandatory or unavailable ahu in years
to come.could mean to me and how to best prepare ?

Never

Admin 28.05.2013. 22:52

In Florida....we cannot permit and seldom deal with dry units
And the warranties are limited....however as long as the customer
Realizes the limitations. Especially with the laws being as they
are.....they are not illegal.....just could be faced with a mandatory or unavailable ahu in years
to come.

Admin

Diana 19.11.2010. 19:38

Can you think of a proverb which would apply in this situation? Any old saying about being wise with money, not careless.
Or planning for the future.
It would help me so much :)

Diana

Admin 19.11.2010. 19:38

Penny wise and pound foolish, it means careful and economical in small matters while being wasteful or extravagant in large ones.

or

a fool and his money are soon parted

or

threw money at it-- to try to solve by recklessly spending money on it, without due consideration of what is required.

Hope it helps,

Admin

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