Comments on: 7 Deadly Sins of Personal Finance: Being Penny Wise, Pound Foolish

By: Betty Byrnes

Betty Byrnes — Sun, 28 Sep 2008 20:04:30 +0000

I am a REALTOR was just doing some research for “A Penny Wise, Pound Foolish” article my blog when I came across your posting.

Here’s what I found locally about buyer agent compensation that is definitely “Pound Foolish”!

Homes for sale in my area with less than 3% compensation to the buyer agent sold for less than homes with at least 3% compensation.

Example:
2% – 89% of asking price
3% – 94% of asking price
4% – 96% of asking price

So for a $100,000 home (which we do have here), one would save $890 to $1780 in agent compensation by paying 2% to the buyer’s agent; but would lose $5000 to $7000 on the sale price of their home!

I actually checked the figures for one company that usually offers 2% buyer compensation. Even within that office, these figures hold true. And get this – the homes offering 3% sell in half the time of those offering 2%!

Now, don’t get me wrong, the higher compensation isn’t going to sell the home; but it will get more showings and more showings mean more buyers will see it. The more buyers who see a home, the greater the likelihood of it selling quickly for the highest dollar.

By: Marc A

Marc A — Sat, 30 Aug 2008 06:16:08 +0000

I want to add to your comments about working while going to college. I too did the same, not for the money, but for the work experience.
In fact my work helped me land my first job out of school managing a Major Sawmill. And the pay and benefits were fantastic.
They not only looked at my schooling, but my ability to manage many tasks at the same time. My grades were very good and that helped.
So I agree that at times working is a good thing and in some instances is more important than extracurricular activities. It all depends upon your own career path.

By: Line

Line — Thu, 28 Aug 2008 12:00:52 +0000

Rick had the same thought as I did when reading the article. Lately I have become very interesting in “couponing” and make great deals at grocery store. Cutting coupons and planning out strategies take a lot of time, time that I could have used on learning about retirement savings, real estate investment strategies etc. Somehow the immediate gratification in walking out of a store paying only pennies for things that I don’t really need is greater than digging into books and articles with strange words and concepts that would actually allow me to retire sometime in the future..

Mary, not to mention the pretty pennies he would have to pay for dental care if buying cheap soda becomes a habit!

Great article!

By: Mary

Mary — Wed, 27 Aug 2008 19:16:49 +0000

I had to laugh when I read this post. My boyfriend, who is frugal in an interesting way, was recently here visiting me along with his 12-year old grandson who had a birthday while they were here. My boyfriend went out to shop and came home with 4 12-packs of soda because they were on sale 4/$11. He was very proud of himself for this deal. I don’t drink soda and there were a total of three kids at the birthday party. Try though he did, at the end of the visit he left me with at least 2 12-packs untouched. Also the better part of what looks like a gallon of generic mouthwash, purchased locally at a bargain price and impossible for him to take home. He never quite understands the logic that spending $11 on 48 cans of unneeded soda is a worse deal than spending $3 on 2 litres. He said I could use it for cocktail mixers – orange soda & rum anyone?

By: Rick Morley

Rick Morley — Wed, 27 Aug 2008 18:00:37 +0000

Another example of being penny-wise pound foolish is trying to focus on squeezing every last penny out of one area of your budget, while having a large hole in another part of your budget. For example, I find myself often worrying about how to save 30 cents on this, or 50 cents on that, meanwhile I’m losing thousands of dollars in the stock market on trades that I probably shouldn’t have made.