“A penny saved is a penny earned.” It has been noted that Benjamin Franklin coined this famous phrase (pardon the pun). I think it is safe to say that in today's economic climate not much thought is given to the measly penny. But, does valuing a penny influences how one thinks about money?
These days most everyone is thinking in terms of mass quantities of dollars, and with good reason! Seeing the need to go against the tide, I thought I would take a moment to consider the penny. The penny is the smallest tangible amount of coinage in the U.S. Treasury. It is named after the British penny, and is made of copper plated zinc. The penny, which was designed by Benjamin Franklin, was first minted in 1787. In 1909, on the one hundredth birthday of President Abraham Lincoln, the first Lincoln head penny was issued. This marked the first time the image of a President was minted on a coin. There is currently 1.5 billion dollars in Lincoln pennies in circulation today (source: Enchanted Learning).
It has been said that a penny contains enough copper to equal twice its face value. This means that if you had 2 million dollars in pennies you would also have about 4 million dollars worth of copper. Let this not be a reason to start hoarding pennies the way some hoard gold. It is just food for thought when considering the real value of a penny, which is the motive behind this article.
How is it that I can, of all the things, take into consideration something as small as a penny, and at such a financially volatile time? Why the penny? Shouldn't I be thinking about my 401K, which incidentally has lost more than $30,000 in the last two months? Why take the time to consider something so small and insignificant as a penny?Well, for one thing, there is not much I can do about the lost value in my 401K. The best that I can do is let it maintain its current holdings in the hopes that they will rebound in value. At this point nothing I trade into will make up the loss. I also realize that I was born into this world naked, and when I leave it I won't even be able to take my naked body with me. So, why fret over lost money when I can't take it when I leave here anyway? Another reason I consider the penny is because when I see a dusty neglected penny on the street I stop and pick it up, doing this while fighting off the urge to feel self-conscious.
I was watching an episode of Flip This House when I realized I was on to something. The main character, Armando, came to survey one of his job sites. As he walked up to the front of the house he saw a penny on the street. He stopped, picked it up and said “a dollar makes this in 30 days.” Then he put the penny in his pocket.
I thought to myself, here is a man who flips millions of dollars worth of real estate every year taking the time to stop and pick up a measly penny. Then what he said was priceless. It indicated that he was not just thinking about the dollar itself, but about what that dollar makes him when he puts it to work. It gave me some insight into his mindset. He was thinking about Return On Investment!
Creating and building wealth is all about mindset, the mindset that you bring to this task will determine your success or failure. At Wirespeed Wealth we think in terms of Return On Investment on those dollars and cents. We don't just think in terms of dollars alone. More on this subject later.
I'll leave you with a quote:
“Take care of the pennies, and the dollars will take care of themselves!” Author unknown.
Comments
Thanks for stopping by to check out the blog. I appreciate the encouragement.
It seems to me that since the economic downturn, the true value of each penny is beginning to be appreciated again.
Here in the UK this year, there has been a growing shift away from shopping in our "traditional" supermarkets to the "new kids on the block", the food discounters from Europe. The new kids (that's actually a bit of a misnomer as some of them have been here for over 15 years) have often been looked down on in the past because of their "pile 'em high, sell 'em cheap" approach. But now the perception of these stores has changed with both the media and the buying public having begun to recognise the value they offer. Consumers are now taking pride in finding new bargains under brand names no one has ever heard of before, just so they can boast about how much they have saved.
Nothing illustrates the value of looking after each penny better, than trying to save pennies on each item you buy at the supermarket. The cumulative savings you have achieved when you go through the checkout can translate into many pounds/dollars still left in your wallet.
The gloom-mongers are saying that this is just the start of the recession. If they are right, the humble penny may yet to have its finest hour!
Keep up the good work.
Hello Dave,
Thank you for your thoughtful comments! You raise an excellent point concerning savings through the purchase of less costly merchandise. The saving of a few pennies here and there does ad up to the saving of real dollars in the long run, or in you case pounds.
The pundits have been hinting of a recession for quite a while. If you ask me, we've been in one for some time now, and the denial of that fact has led us to our current economic crisis. It seems that an awful lot of wealth was created through deception and the misleading of the less savvy consumer. Now economic fear is making all of those financial gains evaporate. My only hope is that people will come to their senses and stop being afraid of losing what is not theirs to keep in the first place.
Thanks again for your comments. There are appreciated.