Thursday, October 04, 2007

Great ways to lose money

Now first, I must admit that most Americans really don't have any trouble doing this. We are, after all, the country that turned Lost Wages into a city.

That said, we do a great job of throwing away money in a lot of other areas; by buying far more than we can reasonably use, by buying cheap junk that we need to replace often, and by being stingy.

Yes, by being stingy. Look at Proverbs 11:25 "The generous soul will be made rich, and he who waters will also be watered himself." Look at Proverbs 22:9; "He who has a generous eye will be blessed, for he gives of his bread to the poor."

Gary North commented on this principle with a pithy comment; to the effect that the generous man interacts with people who will say "let's do this again." Not so the miser. At the risk of offending fans of Dickens, I think that that great writer got it wrong; wealth isn't accumulated by always trying to squeeze the last penny out of a deal. It's accumulated by making deals that benefit both parties.

Lots of applications here, but one that particularly comes to mind is the modern idea that a good businessman is one who squeezes the most out of every deal, paying the bare minimum; someone like Scrooge or Donald Trump. What's lost is that the squeezed have other ways of exacting a price from the squeezer.

Which might have something to do, for what it's worth, with Trump's two filings for bankruptcy.

5 comments:

Jim Peet said...

Good comments on generosity and stinginess.

You may be interested in micro / peer to peer lending.

The guy who started E-Trade started Prosper.com

Comment: "Not FDIC insured"

Shawn said...

HA! :) ...i'm a fan of dickens' writing, especially his characterization and turns of phrase. His economic theory is...well...let's just call it 'zero sum' at times.

I remember one of the first things I ever saw from "some place called 'mises.org'" was a paper written on the virtues of Scrooge, and his wages paid to Bob Cratchit.

His ever-present tendency to have the capitalist bad-guy is a bit annoying.

Marklark said...

One symptom of this is the tendency for people to look at the price of a PC vs the Mac's. There used to be a difference.

Not so much today, but there are very cheap PCs -- they just need to be replaced sooner.

I'm about to replace my 5 year old Mac with a much more capable 2 year old Mac that's about 10x the computer. It should last me a long time, too. :^)

Have you gotten a new PC since you abandoned Colorado, Bert?

Bike Bubba said...

Just one. My PCs tend to last about five years, just like yours.

And the weak point is, as always, that thing that spins all the time, and I'm not talking about the exhaust fan. :^)

Bike Bubba said...

Jim, interesting concept....might be worth some thought on how it might be better than, or worse than, the ordinary use of the deacons' fund. I remember the portions of the Torah where we are to lend to the poor (without usury if I remember correctly), and I also remember other parts of the Scriptures discourage debt.

(and frankly, a lot of the loan requests....don't seem like things that qualify for the Torah side)

At any rate, maybe if you fleshed it out here or on your site...