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The Rich Don't Penny Pinch

seanmcclure.substack.com

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Re: The Rich Don't Penny Pinch

#31

Post by gtfoutttt »

>What I want to talk about here is how the type of behavior that makes us look smart in the moment (i.e. penny pinching) ends up not being smart in the long run.

Well said. I disagree with the article title, due to my experience with delivering pizza.

We all certainly knew the non-tippers. And they almost always were in the wealthiest neighborhoods. So once you go to a house 3 or 4 times, and get stiffed (or hear about it from the other drivers), they become your lowest priority.

Working class and poor neighborhoods almost always got better service and faster food delivery from us because we knew they tipped more often. The non tippers typically ended up with cold pizza and dropped 2 liters cause we didn't give a crap.

Re: The Rich Don't Penny Pinch

#32

Post by motohagiography »

In the context of ML, there is a great blog post from years ago that compares the ROC curve to an indifference curve in economics, which describes how without a sense of what the costs and conseqeunces of the precision in the ROC curve are, you can't really optimize a model well. It's a question of internal vs. external consistency.

There is a heuristic I learned related to a bunch of others, but it's being able to do a fast assessment of the returns on precision. I talk about it to clients in conceptual terms of doing depth-first searches vs. breadth-first. Technologists tend to be depth first and very deep in a relatively narrow context, where dynamics people tend to be breadth first across a wider set of contexts.

The penny pinching metaphor the author uses reduces to an admonition to look at the "bigger picture." Personally I dislike that trope, but a general set of cognitive tools for depth-first thinkers to pop up conceptual levels, particularly into ones where they can apply their skills to navigate the uncertainties of breadth-first thinking with its dynamics of multiple simultaneous equivalents, it would be really useful to summarize and teach.

There is the issue where the details of precision in fact have nonlinear effects and they are worth drilling down into, but that's part of the analysis.

Re: The Rich Don't Penny Pinch

#33

Post by lotsofpulp »

nanis wrote: post #11
lotsofpulp wrote: post #4

Earlier quoted context omitted.

> A penny pincher is the person who goes to dinner with a dozen people and ends up spending an hour trying to "fairly" divide the check among everyone. Or, the one who says a few days later that you should treat him to lunch because he only had a single glass of wine whereas everyone else had two or some such. Alcoholic drinks in most popular cities are $10+ per drink, if not $18+ in tier 1 cities. If someone that do…

> penny pincher for not wanting to spend thousands of pennies Yes, literally, the dictionary meaning of a "penny pincher" is one who does not want to part with his pennies. The author of the article, on the other hand, seems to call people "penny pinchers" if they do not adopt rules of thumb but instead painstakingly analyze all alternatives. Sure, paralysis by analysis can be bad or there is nothing wrong with focus…

> Yes, literally, the dictionary meaning of a "penny pincher" is one who does not want to part with his pennies.

I understood the context to be pennies being insignificant. Thousands, tens of thousands, or hundreds of thousands of pennies are not insignificant (to most people), so penny pincher would be a useless term in that situation. The alternative is where even saving a billion dollars, since it can be translated to 100 billion pennies, is being a penny pincher.

> You preferences may say "it is more important for me to save seven bucks in this context." That does not compel other people to enjoy your preferences.

It is not usually seven bucks when you are out with a decent size group in a city for a few hours.

> In my life, I have been in groups where if a few people consumed some relatively more expensive food or drinks, they are responsible enough to take care of that.

Ideally, but many times I have been out where it needs to be brought up. But that does not make one a penny pincher.

> Also, when you go out with a large group, you do tip the wait staff generously, right?

How is this relevant?

Re: The Rich Don't Penny Pinch

#34

Post by [deleted] »

api wrote: post #5

The converse is not true; you don't get rich by spending freely. That being said, there's good frugality and bad frugality. Bad frugality is being "penny wise and pound foolish," spending less now in ways that result in spending more later.

[deleted]

Re: The Rich Don't Penny Pinch

#35

Post by lotsofpulp »

foobarian wrote: post #17
lotsofpulp wrote: post #4

Earlier quoted context omitted.

> A penny pincher is the person who goes to dinner with a dozen people and ends up spending an hour trying to "fairly" divide the check among everyone. Or, the one who says a few days later that you should treat him to lunch because he only had a single glass of wine whereas everyone else had two or some such. Alcoholic drinks in most popular cities are $10+ per drink, if not $18+ in tier 1 cities. If someone that do…

To be fair, OP was more specific than "not wanting to spend thousands of pennies for others’ alcohol consumption." The penny pincher also goes out of their way to be compensated, going against the social etiquette. One can also remedy this by not spending time with people who do not on their own initiative recognize the inequity of the situation and help make it fair. In fact perhaps you can think of it as an excelle…

Sometimes you go out, and your friends invite their friends, and you are no longer with your core friend circle. I would say it happened most nights in my 20s in a big city.

Re: The Rich Don't Penny Pinch

#36

Post by tristor »

motohagiography wrote: post #13
lotsofpulp wrote: post #4

Earlier quoted context omitted.

> A penny pincher is the person who goes to dinner with a dozen people and ends up spending an hour trying to "fairly" divide the check among everyone. Or, the one who says a few days later that you should treat him to lunch because he only had a single glass of wine whereas everyone else had two or some such. Alcoholic drinks in most popular cities are $10+ per drink, if not $18+ in tier 1 cities. If someone that do…

Maybe they wouldn't be as budget constrained if they were easier to invite places? I can't invite my teetotaling and vegetarian friends out to many of the casual things I enjoy, and their purity issues create a self-imposed artificial constraint on their life opportunities. Someone with an actual medical issue learns to adapt to life and live it, where someone with a purity constraint selects for oppotunities where t…

> Dining out isn't about the food, it's about company and companionship, and I don't eat with anyone I'm not willing to pick up the entire tab for, because the pleasure of their company is well worth it. If their company is not worth that, I'd say that's the definition of wasted time.

Well said. In fact, I've made it a personal rule that if I invite someone out I pick up the tab to simply remove any budget constraint barriers for people spending time with me. Some of the people I most enjoy spending time with are much more budget constrained than I am, but I have no issue with picking up the tab if it lets me have a conversation with them for a few hours in a place where they can be relaxed enough from the stress of their daily life to mutually enjoy it.

Re: The Rich Don't Penny Pinch

#37

Post by borski »

lotsofpulp wrote: post #22
jkrems wrote: post #16

Earlier quoted context omitted.

If food or drink consumption was the primary purpose of going out, there'd be no reason to coordinate and meet. If a group of people meets for food, they don't meet for food. They meet for each other. They meet to enjoy each others company, the mood, and good discussions. The price of food and drinks for the group is meant to facilitate these things. For the group. That's not paying for other people's alcohol consump…

> I've been routinely in groups where somebody with budget constraint paid less. Not because they ate or drink less. But because the group decided that it was their fair share, based on the group's perception of fairness. That is interesting, I have never been in this situation because it seems awkward to bring it up explicitly. That is why I think it is better to simple expect people to pay for what they consume, so…

The most common solution to this I’ve seen is “I’ll get this one, you get the next one.” And the person that simply can’t just… doesn’t get it until they can, or chips in as much as they’re able (provided they’re at least covering themselves) in cash to the person getting it.

Re: The Rich Don't Penny Pinch

#38

Post by leoedin »

motohagiography wrote: post #13
lotsofpulp wrote: post #4

Earlier quoted context omitted.

> A penny pincher is the person who goes to dinner with a dozen people and ends up spending an hour trying to "fairly" divide the check among everyone. Or, the one who says a few days later that you should treat him to lunch because he only had a single glass of wine whereas everyone else had two or some such. Alcoholic drinks in most popular cities are $10+ per drink, if not $18+ in tier 1 cities. If someone that do…

Maybe they wouldn't be as budget constrained if they were easier to invite places? I can't invite my teetotaling and vegetarian friends out to many of the casual things I enjoy, and their purity issues create a self-imposed artificial constraint on their life opportunities. Someone with an actual medical issue learns to adapt to life and live it, where someone with a purity constraint selects for oppotunities where t…

> I can't invite my teetotaling and vegetarian friends out to many of the casual things I enjoy

I'm curious about this. Why not? I'm not vegetarian, but I go out for dinner with vegetarian friends all the time. They order a vegetarian dish, I order a meat one. It isn't an issue.

Similarly with drinking. As long as they want to be there, why would I care if they drink? If they're judging you for drinking, that's a tangential issue.

You say "Dining out isn't about the food" - so then why do you care what food your companion eats? As long as they're happy, what difference does it make?

Re: The Rich Don't Penny Pinch

#39

Post by kirse »

It means that the nitpicking, planning, penny pinching behavior that preceded the loss was pointless

Maybe the author is struggling with some sort of penny pinching behavior that preceded a life loss, but this is an incorrect conclusion.

Sometimes life just happens. And it has nothing to do with the validity or value of your preceding actions, but it's certainly a commentary on the futility of many of our efforts. The author sounds like he needs a good wisdom walk down the book of Ecclesiastes:

I have seen something else under the sun: The race is not to the swift or the battle to the strong, nor does food come to the wise or wealth to the brilliant or favor to the learned; but time and chance happen to them all."

Re: The Rich Don't Penny Pinch

#40

Post by borski »

don-code wrote: post #24
tonyedgecombe wrote: post #3

The world is full of people who take a casual attitude towards their finances. They are the ones we keep reading about when we are told most people can't raise $1000 in an emergency or don't think they will ever be able to afford retirement.

It's difficult for me to sympathize with coworkers who have trouble making rent, knowing that they make the same amount of money I do, but have wildly different spending patterns. Juxtaposing $200k+ of student debt with $100+ bar tabs, multiple nights per week (to be fair, the company we were at was on a death march at the time) doesn't seem like taking an opportunity, to use the article's phrasing - it seems frivolo…

Except that sometimes those bar tabs are where opportunities abound, not only for friendship but for future business. Many a startup has been started out of coworkers hanging out together after hours.
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