Non-essential Book Review: Scroogenomics

Scrooge says: Hoarding is so much more fun than gift-giving!

This is a nice time of year to be a practicing Tight Fister. Yes, this is the time of year when we can just sit  back and relax while out less enlightened friends waste their time and money in crowded, soulless temples of commercialism (aka shopping malls). While the subject of how to deal with gift-giving traditions has already been covered in old posts (here and here), a new book, Scroogenomics: "Why You Shouldn't Buy Presents for the Holidays," covers much of the same ground, adding some very light numerical analysis to the mix.

As all of you know, I would never recommend that anyone ever buy a book. Therefore, as my Christmas present to all of you, I'm going to just summarize the main points, and then none of you need bother to read it.

The main argument is that gift giving is economically inefficient. Common sense (and some experiments conducted by the author) tell us that on average, people value gifts around 20% less than gift givers spent on them. (I mean really, how much do you value your 37th tie?) So basically, the practice of gift giving creates gigantic waste in the economy, which the author estimates at $12 million.  Now, did you actually need a whole book to make that simple argument? Clearly no, but the author belabors the point for 186 pages.

There are a few interesting tidbits along the way. Although giving cash is clearly the most efficient gift, people don't tend to give cash due to a kind of 'cash stigma' perceived from cash gifts. For gift-givers who don't know the preferences of their recipients well (such as grandparents), their gifts tend to be the least efficient, and therefore tend to give cash more. Taking a bunch of questionable survey data, he estimates the 'cash stigma' to be equal to around $4 plus half the amount of cash given. Therefore a gift of $100 is valued at only $46 due to the stigma of receiving cash. Sucks, huh?

One way to square the circle here appears to be with gift cards. Well-planned gift cards can be a very good substitute for cash, but carry almost no stigma.

Well, there you go: ample reason to stop gift-exchanging. I know you will all take it to heart, because if can't trust a nerdy economist rambling on about efficiency, who can you trust?

Ask the Tight Fist: Saving on Moving Costs

Even works for Moving to Atlantis

Dear The Tight Fist,

Love the blog; I'm getting ready to move and was wondering how I can apply your principles to moving, which can be so expensive.

Any tips?

Thanks,

Sarah in Houston (soon to be San Antonio)
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Dear Sarah,

Shame on you: you have clearly not been following Tight Fist principles. If you had, moving would be a breeze as you would own hardly any possessions and no furniture worth moving. Over the last 7 years The Tight Fist has lived in 8 places in four countries. Total moving costs: 0 (beyond the cost of moving myself.) Yes, when all your life fits into two bags, so many things just simplify. 

But I'm going to assume that you have been naughty over the years: slowly acquiring furniture, dishes, electronics, and other modern vices that you just can't part with. 

It's here that you might expect a lengthy comparison of different options for moving your stuff: movers, shipping, those weird pods, etc. But really, this will just waste everyone's time. All the options are stupid expensive except for just renting a truck and driving yourself. A quick look on Budget shows you can get a moving truck for a day and drive it from Houston to San Antonio for around $75. Not too shabby.

Hold on. You honestly expect me to believe that social
protocol dictates we break our backs helping Wolowitz move,
and then he only need buy us a pizza?

But, you say, how can a young lady be expected to haul couches and dressers by herself? Well, that's where a wonderful social equation comes into play: Pizza = Moving. That's right, your burly male friends are required by covenant of friendship to do a day's worth of manual labor with only pizza (and maybe some beer) in return. 

So with pizza and beer on both ends, we're talking about around $125 bucks for your move. Not bad.

But what if you have no burly friends to come to your rescue? Well, fortunately in Texas "friends" are easy to purchase, standing each day outside of Home Depot. You might have to pay your new amigo a bit more than the price of a pizza, but not too much.

Enjoy your move!

Tight Fist Tip #50: Reschedule the Holidays

Tight Fist Thanksgiving: Saturday, Nov 17, 2012

Everyone loves getting the family together for the holidays, but the traveling can be a nightmare. On Thanksgiving weekend especially, roads are clogged and airport lines are long. And perhaps even more important, ticket prices are insane. It makes you wonder whether seeing your family is even worth it at all. So what is a Tight Fisted family supposed to do?

The answer is simple: reschedule the holidays! Say goodbye to all those suckers who think that for some crazy reason thanksgiving HAS to be celebrated on the fourth Thursday of every months, and say hello to low-stress travel, cheap tickets, and a happy family! 

Hat tip the The Tight Fist's Aunt Barb, who promptly rescheduled the holiday after realizing that she could spend $300 less on plane tickets the weekend before Thanksgiving. The turkey never tasted sweeter.

Tight Fist Tip #49: Drinking at the Bar? Drink Beer.

God Bless America

In my last post, we determined that if staying in or pregaming, drinking shots is the Tight Fist friendly way to get drunk. But what if you've been dragged out to a bar, and are being forced to inebriate yourself at sobriety-inducing prices?

As always we use our go-to benchmark: volume alcohol per dollar. Let's start in the US, using the excellent DC dive bar The Mad Hatter as our pricing benchmark. I used happy hour prices (as I assume my followers are doing most of their drinking during happy hour), but the relative prices are indicative of normal pricing as well: a pint of beer and a well mixed drink are priced about equally, with wine being higher. So, how do they stack up?

Budweiser, 16oz: $3. Abv 5% = .8 oz alcohol; 193.3 calories; Calories/Oz alcohol = 241.67; Oz Alc/$ = .27
Mixed Drinks, 1.5 oz: $3. Avb 40% = .6 oz alcohol; 109.5 Calories; Calories/Oz alcohol = 182.5; Oz Alc/$ = .2
Wine, 6oz: $5. Abv 12% = .72 oz alcohol; 125.5 calories; Calories/Oz alcohol = 211.72; Oz Alc/$ = .14

The beer is the winner, by virtue of it containing a bit more alcohol per drink than a mixed drink. But notice that it's pretty close- if you're at a bar with generous mixed drink pours or pricey beers, the balance could easily tip in the drinks' favor. Shot and a beer combo? Don't mind if I do.

But what if you're across the pond in Europe? Well, it's well-known that spirit prices in Europe are totally out of whack.(Especially since most places have the gall to charge extra for the mixer, which I don't even get into here.) Let's do the same comparison at one of my favorite London haunts, The Lexington:

Kronenbourg 1664, 19.2 oz: £3.50. Abv 4.7% = .9 oz alcohol; 227 calories; Calories/Oz Alc = 254.44; Oz Alc/£: .26
Red Wine, 5.9oz: £4.10. Abv 12% = .71 oz alchohol; 149.9 Calories; Calories/Oz alcohol = 211.1; Oz Alcohol/Pound = .17
Smirnoff, 1.69oz: £4.15. Abv 40% = .68 oz alcohol; 123.4 Calories; Calories/Oz alcohol = 182; Oz Alcohol/Pound = .16

Here the beer easily defeats all comers, and the wine even edges out the spirits. And since the ridiculous Weights and Measures Act in the UK assures that you can never get a decent pour of a mixed drink, there is just no chance for the limey cocktail lover.

So kids, the formula has been discovered: take (a lot of) shots before you go out, and then nurse a few beers at the bar. Drunk with a full wallet- it's a good life.

Tight Fist Tip #48: Drinking at Home? Take Shots.

These Girls Are Smarter Than They Look.

In my last post, we explored different beer types and came to one clear conclusion: never drink light beer. But with so many drunkefying options available, is beer really your best choice? When you head out on the town, what's your call? Beer, wine, or hard alcohol? We will again rely on our go-to metric: ounces of alcohol per dollar.

This comparison is less straightforward, as prices vary widely by bar and by type of booze. In this post, we concentrate on supermarket prices, taken from Bevmo. As any good Tight Fister knows, "premium" wine and spirits are nothing more than branding trickery, so we go with low-priced options. (Prices are $2.99 for a bottle of wine, and $15 for a 1.75L handle of Gordon's Vodka.) Here's the breakdown, using USA "standard drink" volumes for easy comparison:

Budweiser, 12oz: $1.10. Avb 5% = .6 oz alcohol; 145 Calories
Ounces of Alcohol/Dollar = .55; Calories/Oz alcohol = 241.67

Vodka, 1.5 oz: $.38. Avb 40% = .6 oz alcohol; 109.5 Calories
Oz Alcohol/Dollar = 1.57; Calories/Oz alcohol = 182.5

Wine, 5oz: $.59. Abv 12% =.6 oz alcohol; 127 Calories
Ounces of Alcohol/Dollar = 1.02; Calories/Oz alcohol = 211.67

The vodka comes out as the winner by a long shot, providing almost 3 times as much alcohol per dollar as a Bud! The astute among you may argue that the purchase of spirits allows more of a scale factor, but we could do the same analysis of if you bought an entire keg of Bud, and it still gets smoked:

Budweiser, 12oz: $.71. Avb 5% = .6 oz alcohol; 145 Calories
Ounces of Alcohol/Dollar = .85; Calories/Oz alcohol = 241.67

And just to be clear, I didn't even pick the super-cheap hangover-inducing homeless person vodka. (Which of course, I do support in theory.) Gordon's is standard well booze.

Moral of the story: get wasted on hard liquor at home. And as an added bonus, it's also the most calorie-efficient option. Of course, if you want to get less drunk and more fat you can waste your money by mixing your booze with sugar water, but even with that you're going to be more efficient than wine or beer.

Also, hard liquor is easy to put in a flask to make your experience at the bar (or ballgame) even more Tight Fist friendly. But what if you've screwed up and end up at a bar without your trusty flask, and are, God forbid, sober? Rest assured Tight Fisters, we will have the bar analysis in the next post. Preview: hard liquor is no longer the winner. Exciting!

Tight Fist Tip #47: Don't Drink Light Beer

Wasting money is so hot right now.

There's nothing like the introduction of a completely inessential product to test Tight Fist techniques. It's not immediately clear why anyone at Budweiser thought that Bud Light Platinum was a great idea, but it presents an interesting possibility: marketed as higher alcohol and lower calorie, this is potentially an efficient purchase. Let's break it down.

When considering what to buy, the metric is simple: most alcohol per dollar. Since we're considering light beers, we'll also vaguely consider the calorie count, as some of you people out there prefer to waste your money by eating too much food. As we will be just comparing various brands of Budweiser, we will not consider taste. That is because all these beers taste like crap. (Prices taken from Safeway.com.)

Budweiser, 12oz: $1.00. Avb 5% = .6 oz alcohol; 145 Calories
Ounces of Alcohol/Dollar = .6; Calories/Oz alcohol = 241.67

Bud Light, 12oz: $1.00. Avb 4.2% = .504 oz alcohol; 115 Calories
Ounces of Alcohol/Dollar = .504; Calories/Oz alcohol = 228.17

Bud Light Platinum, 12oz: $1.17. Avb 6% = .72 oz alcohol; 137 Calories
Ounces of Alcohol/Dollar = .61; Calories/Oz alcohol = 190.28

What's the takeaway message? Well, purchasing Bud Light is completely idiotic. Not only is it more expensive to get drunk, but saves you almost no calories over normal Bud. The new Bud Light Platinum, however, is not such a bad deal. It has basically the same amount of alcohol per dollar, but fewer calories for those who care. This analysis also relies on Bud Light Platinum being only 17% more expensive than normal Budweiser. If that wedge is greater, stick with the normal Bud.

In case you've forgotten, check out previous posts on efficient drinking here and here.

For a related perspective on Bud Light Platinum, check out my friends at J Street Beer.

Tight Fist Tip #46: Buy An Ugly House in a Shady Neighborhood

Chez Le Tight Fist

While David Ricardo's ideas on rent may have fallen out of fashion, I think we can all agree that a little part of us dies every time we write a rent check. Your landlord is likely doing nothing but sitting on his ass and feeling the money roll in from all his rental properties.

So what's a Tight Fist to do? (And no, I'm not going to suggest living under a cardboard box.) Get in on that action! If you choose carefully, in this market (see: historically low interest rates) you can get a house that basically pays for itself. The trick is to realize that housing prices are inflated by rich, confused yuppies. The house a Tight-Fister buys has to be filled with things that will freak yuppies out.

Nasty Carpet + Unnecessary Walls = HOTT!

What are they? Well first, you need to find a neighborhood where yuppies think they are going to get stabbed. (Hint, look for brown people.) And the kitchen will have no trace of either granite of stainless steel. Because you know what people love overpaying for? Granite! (So much sexier than those other rocks.) Also, find a place with a low bathroom/bedroom ratio. Even though you probably spend 3% of your waking hours in your bathroom, people will pay like 50 grand just to make sure that the other 97% of the time that place is VACANT. Finally, make sure whatever you buy is straight up ugly. The ugly discount is money in the bank.

Now you may ask: where the hell do I find the money for a down payment? Well my friends, The Tight Fist was started a bit under three years ago. Had you been following my instructions and living by the code, you would have built up a nest egg by now. And as long as you've got the nest egg, you might as well live in it. No nest egg? Well you'd better start at the beginning.