Last week, Call Me What You Want, Even Cheap mentioned that she picks up pennies. Thank you! Now I can tell people that I’m not the only one who does that!
People laugh and claim it’s a waste of time, but I always pick up change that I see laying on the ground. I will never get rich off that practice, but I probably manage $20-$30 a year in free money for taking a few seconds longer to get where I’m going.
I can live with a little ridicule, so I’ve gone merrily on with my life picking up change as i find it. But a friend of mine just started taking Macro-economics as a Gen-Ed in college and mentioned learning about opportunity cost. In case you aren’t aware of opportunity cost, it is basically the concept that if you spend your time or money on one thing, that time or money is no longer available to be spent on something else. It costs you the opportunity to do something else.
That brings us to the concepts of “time is money” and “time is precious, because there is so little of it.” Let me start with the second one.
If I live to be 75 (that seems to be about the average expiration date in my family), I will have lived over 650,000 hours, nearly 40 millions minutes, or over 2 billion seconds. Personally, that seems to be an awful lot of time. If I waste an hour tonight, so what? I still have almost 400,000 left. If I take 15 seconds to stop and pick up a nickel, it is but a drop in the bucket compared to the 2 billion in my budget. It’s like being Warren Buffet and being worried about buying a cup of coffee.
Now for “time is money.” If the time indeed would or even COULD have been spent making money, you can claim this is true. But if it’s spare time, then wasting it isn’t costing you anything. Your time is NOT money.
There was a famous example of opportunity cost a few years ago regarding Bill Gates. According to the story, Gates was so rich that stopping to pick up a $100 bill would cost him money, because his time was worth so much more than that.
I’m pretty sure that Bill Gates hasn’t done much programming himself in quite a long time. He makes his money from thinking and planning (now, he makes his money by sitting back and waiting for his share of Microsoft’s revenues to pour in) which are activities anyone can do while stopping to pick up a Franklin on the sidewalk. So in that example, picking up $100 doesn’t cost Bill Gates anything, but NOT picking up would cost him $100!
Do you believe the opportunity cost of picking up change outweighs the amount you gain?
- Is Opportunity Cost important to you… [Fraser Hay] (ecademy.com)
- Bill Gates backs ‘future’ toilet (bbc.co.uk)
- Small Business (Time) Management (bizoffice.com)
- The opportunity cost of hoarding cash is lower than you think (ftalphaville.ft.com)