Are you "Penny Wise & Pound Foolish"? Do you even know what it means?

23 replies
Lately I've reached a new level in my business. Things are going well, and seem to be getting better. And I credit a large portion of that to my recent understanding of just one simple (yet mindbogglingly complex) saying.

It's been a solid 5 years now that I've been in business (maybe a little longer actually), and just recently I've truly grasped what it means to be "penny wise and pound foolish".

I think it finally actually clicked 100% tonight actually.

The simple understanding of this one single concept has absolutely changed my business, and life.

So, what does it mean???


You know what, I'm not going to hand it to you on a silver platter.... sorry.


But what I want to do, is pose a question for those of you that may be struggling with your businesses (and even those that aren't):


How are you currently being penny wise and pound foolish in your business?


It's not a rhetoric, I actually want answers... And with any luck, maybe we can all sort out the meaning with real life examples.

I think once you "get it" you start "getting it", so let's get to gettin'!
#foolish #means #penny #pound #success #wise
  • Profile picture of the author sbucciarel
    Banned
    I've never been penny wise or pound foolish. For my niche blog business, I've paid a lot of money for premium themes, developer's licensing, domains, hosting, commercial plugins, content, etc.

    That being said, I have no need to piss money away needlessly on unnecessary shiny objects. I don't need "courses" that cost $2000 or more.

    Many people look for "free" this and "free" that and don't want to spend a penny on essentials, but will throw money into every outrageous promise time after time after time, expecting different results the next time around.
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  • Profile picture of the author DogScout
    Penny Wise = Not spending that $100 (on programs, info or outsourcing, etc)

    Pound Foolish = Even when spending it has the potential of making you $1,000s more or saving you $1,000s in reduced costs or freed up time.

    (Ten to one ROI is pretty strong!)
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  • Profile picture of the author 04real
    To me it means being very careful with small matters while not being so careful with larger things that matter more. For example, you may be caught up in all of the little details and the little intricacies of something but when it comes to the big picture or the details that actually matter you sometimes overlook it or are completely clueless about it.

    Perhaps someone is designing the best product and has all the little details down but when it comes to the big picture, which is marketing and sales, they have no clue what they're doing.


    JP
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  • Profile picture of the author Gary King
    I think for most, it's what Suzanne suggests above...

    Buying the next Get Rich Quick package again and again and again.

    We all KNOW that people don't even open the files they download or watch past the first couple minutes of Video 1.

    For me, I'm not. After 16+ years of being my own boss, I've passed that point. You either make sound business decisions, or you're out of business.

    Glad you "got it" mr2monster - welcome to the club!

    Gary
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  • Profile picture of the author affluence.p
    Originally Posted by mr2monster View Post

    Lately I've reached a new level in my business. Things are going well, and seem to be getting better. And I credit a large portion of that to my recent understanding of just one simple (yet mindbogglingly complex) saying.

    It's been a solid 5 years now that I've been in business (maybe a little longer actually), and just recently I've truly grasped what it means to be "penny wise and pound foolish".

    I think it finally actually clicked 100% tonight actually.

    The simple understanding of this one single concept has absolutely changed my business, and life.

    So, what does it mean???


    You know what, I'm not going to hand it to you on a silver platter.... sorry.


    But what I want to do, is pose a question for those of you that may be struggling with your businesses (and even those that aren't):


    How are you currently being penny wise and pound foolish in your business?


    It's not a rhetoric, I actually want answers... And with any luck, maybe we can all sort out the meaning with real life examples.

    I think once you "get it" you start "getting it", so let's get to gettin'!
    I actually thought that It would have been finer if you had
    given us your own discovery which produced all those terrific
    results and change in your business.

    That will go a long way to give this discussion a better direction
    and a stronger life.

    That's my opinion anyway.
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  • Profile picture of the author John Durham
    I've never been a penny wise and a pound foolish either... I always think making more is a better solution than saving more. I dont invent ways save it... always to make it.

    Admittedly that has gotten me in some trouble at times, but I cannot imagine living life from the scarcity mindset. I would not trade my way of being for the way of a person who is afraid to spend.

    Also, when you act as if there is abundance there generally is.
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  • Profile picture of the author cashcow
    Also, when you act as if there is abundance there generally is.
    So true, I've always believed in investing in my business.

    I know that some people simply don't have the money but when I always see people refusing to spend any money on anything at all, it makes me think that they don't believe that they will make money and it becomes a self fulfilling prophecy.

    So, I've never been penny wise or pound foolish. Sure, I've spend good money on courses but I don't consider that foolish because I typically learn something that can be applied to make me even more than I spent in the long run.

    Lee
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    Gone Fishing
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    • Profile picture of the author Tina Golden
      I can't think of an example of myself being penny wise and pound foolish..well, maybe a small one.

      I had tested a cheaper designer here on the forum and though I saved money compared to my higher priced designer, it just wasn't the same in quality. I ended up scrapping the cheaper design and paying for the better designer to remake it so I spent more than I would have using the pro to start with.

      A classic example in this business would be the people who don't want to pay for Aweber or another autoresponder. Eventually they find out that they shot themselves in the foot going with free services or using their own servers.

      Tina
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      • Profile picture of the author Kay King
        A classic example in this business would be the people who don't want to pay for Aweber or another autoresponder.
        Good analogy, Tina - and often those are the same people posting "I just bought this" in multiple WSO threads about making money fast/easy/guaranteed.

        Put your money where your business is - you can dream for free.

        kay
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        • Profile picture of the author Blogmudgeon
          At issue is that our system of American capitalism teaches us to behave in that manner--it is the belief system that makes our "consumer" society possible. One needs look no further as a proof than someone who will shop around for the cheapest price on something that they really cannot afford in the first place--using credit to broker the deal. Add to that the whole Horatio Alger easy success paradigm, and you have the mix for economic slavery.

          If you make a survey of the promotional content that many of the "Big Three" wealth creation systems (Investing/Trading, Real Estate, Internet Marketing) courses stress, you will find at the root a personal development component. Attitude, attitude, attitude. In order to truly succeed, one must have an attitude and approach epiphany.

          At the core of this is how one thinks about their time and money. The typical consumer thinks in terms of spending--how much they have spent in terms of time or money. A true entrepreneur--and those who have accumulated real wealth--think in terms of how much time or money they have INVESTED. An investment means that a calculated return is anticipated--and is considered simply a cost of doing business. Those who try to run "spending" models of business either fail or perform on a mediocre level.

          I opened my first real business 30 years ago--a television sales and service shop. My epiphany was understanding that EVERYTHING including my time was an investment--had to be tracked--and compensated before I could consider any part of the cash flow "profit". Many of my cohorts did not invest in equipment or serious advertising, and as a result fell by the wayside as technologies changed. Many small businesses simply do not understand that your compensation for time is not profit--profit only exists after you have paid yourself and your expenses.

          Recently, I attended a Stephen Pierce intro seminar. The cost to buy in to training was $4000. My purpose was information gathering--but I saw many who shelled out the dollars in hopes of easy wealth. The honest truth is that what they might have acquired through this was not an investment--that the majority of them simply did not have the innate skills or mettle to stick through the time consuming and intensive process necessary to make IM into a real business.

          For the past three weeks, I have been investing time and money--an average of 14 hours per day, seven days a week--into IM strategies. My experience coming to the table is as a web developer--now every aspect is examined through the lens of marketing for monetizing possibilities. Time is carefully tracked--and what I have invested must be paid back before the business can be considered profitable. Expenditure for tools and education are an investment as well--and must meet a positive cost benefit projection. One has to invest money to make money--but they must also understand the cost basis of return on investment.

          There ain't no secret sauce--not at any price. Cutting corners means cutting potential profits. Failing to invest means failing to grow and remain current. This is no mystery. Penny wise and pound foolish? It means to stop thinking like a consumer and start thinking like an entrepreneur...
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          • Profile picture of the author BrittyBritt
            To me, "Penny wise and Pound foolish", not only applies to money, but to time as well.

            For example,not wanting to spend 'x' amount of money on a program that will automate a task/tasks for you, but deciding to do it manually instead. While you may have kept a few dollars in your pocket, how much time did you actually lose?

            The automated program could have been doing the tasks for you, giving you more time to learn a new technique/strategy, spend time with the family, etc.

            Remember: You can always create more money or make your money back, but you can't do that with time.
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            • Profile picture of the author Joe Mobley
              As a follow-on to BrittyBritt's posts: People who will not outsource.

              If they only knew...


              Joe
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              • Profile picture of the author Kay King
                When i started out i used to think i could do it all for free...
                What I tell people who are working with a limited budget is that you can learn what you need to know to get started....for free.

                BUT - there are tools you need, domains, hosting, etc - that you must pay for if you are serious. Skip the tutorials for sale - and save your money for crucial tools you need.

                kay
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                • Profile picture of the author VanessaB
                  I refer to what you're saying as 'stepping over the dollars to get to the dimes'.

                  For simplicity's sake, I'll use 'round' numbers.

                  Let's say that I could sell a 1 day old blog for $150.

                  Now, if I could do this every single day, day in, and day out, I have the potential of making $750 a week.

                  Factoring in the start up cost of $10 for the domain name and $20.00 for a listing fee on WSO or Flippa, whatever..

                  I've already cut my margin to $120 profit per blog

                  All this, of course, assumes that I do all the writing, insertion of graphics, basic SEO and other various tasks that would make this a property attractive to a buyer, MYSELF.... well even if I could do ALL that in just ONE day, and I valued my time at $10.00 per hour (hours) my investment is:

                  $10 domain
                  $20 listing fee
                  $80 in 'labor costs'

                  My margin is $90.00 per blog

                  Now, if I outsource, assuming I have 5 good freelancers, I can have 5 blogs A DAY selling at a profit of $120 each, reaching a grand total of $600 a day, or $3,000 a week.

                  Of course, these numbers are based on 'a perfect world' but the encompass the meaning of "Don't step over the dollars to get to the dimes."

                  -Dani
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  • Profile picture of the author grumpyjacksa
    When i started out i used to think i could do it all for free...

    after all, there was just so much free info on offer...

    problem:

    penny wise + pound foolish = info overload

    very foolish

    guess the wisest decision i ever made was the day i eventually got my own autoresponder...

    so...

    been there

    tried it

    didn't work

    and now it drives me nuts when i see people doing it...
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  • Profile picture of the author mr2monster
    Lots of good conversation going on here.


    For me, it was a multitude of things really. It was mostly a change of mindset as Blogmudgeon (and a few others) said above.

    I used to hesitate to spend money on my business just based on the principle that I didn't want to spend the money (scarcity mindset). Logically, I knew it was an investment, but emotionally I felt like it was a expenditure that I could do without, no matter how important.

    I used to only outsource small stuff, and now I'm looking at ways that I can replace myself entirely.

    I used to be a control freak, and now I'm open to my business heading in its own direction and creating an identity of its own.

    I used to spend money very rarely on products, information, and education thinking I could just find it for free, now I realize that paying for that information/education is quicker, and ultimately more profitable (assuming your source is good obviously).

    I used to spend hours and hours researching how to do something, or learning to code this or that, and it was ultimately destroying my ability to "get to market" quickly or accomplish my task in a timely fashion.

    I have always known money is a function of time (most commonly expressed incorrectly as time = money), but only recently have I been able to apply that knowledge to REAL LIFE instances within my business and life.


    Only recently have I realized that time DOES NOT equal money. Money is a variable in the equation of time.


    Those are just some of the things that I've come to realize over the past year that have improved the way I think about my life and my business. They've changed my decision making habits, and allowed me to let my business work more for me, rather than me be an employee of my business.


    When you can change yourself from "Self-EMPLOYED" to "Business Owner" stuff starts moving pretty quickly.
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    • Profile picture of the author Dennis Gaskill
      Originally Posted by mr2monster View Post

      I used to hesitate to spend money on my business just based on the principle that I didn't want to spend the money (scarcity mindset). Logically, I knew it was an investment, but emotionally I felt like it was a expenditure that I could do without, no matter how important.
      I think that's a big one for a lot of people. I fell into that trap, only my reason for falling into it wasn't a scarcity mindset, it was because I don't like being played for a fool or sucker, and that's how a lot of the sales pages struck me, like they were being manipulative rather than informative.
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      • May be it´s about people who only want to sell expensive products with high commissions and think cheaper products, or Adsense sites, aren´t worth the effort. Expensive products are more difficult to sell and one has to be more skilled to succeed. So someone who is selling cheap products may be selling much more and these small commissions add up to quite an amount of money, while the guy with the expensive products isn´t selling anything.
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  • Profile picture of the author JoesMillion
    I don't know what it means.
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  • Profile picture of the author Steve Wise
    I've been a member of the WF since May and I've only just joined the War Room. Not paying the $37 is being penny wise and pound foolish imo.
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    • Profile picture of the author affluence.p
      Originally Posted by Alice Ayres View Post

      I've been a member of the WF since May and I've only just joined the War Room. Not paying the $37 is being penny wise and pound foolish imo.

      What are your real reasons for thinking that way???
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      • Profile picture of the author Justin Jordan
        Penny wise and pound foolish is pretty common in IM; you find loads of people who will try to outsource tasks for absolutely minimal amounts but will happily spend hundreds or even thousands on the next new course to come round the bend.

        If they flipped that and spent most of their money on outsourcing and building their business and a minimum of hype, they'd be about a thousand times more successful.

        I am not penny wise and pound foolish, but I am subject to something slightly related: I'm too busy making a living to make any money. That is a situation I am fixing, though.
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