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In a world of rational thinkers, goods would cost exactly what they're worth to us. This is not that world, however, so we wind up spending five dollars on a cup of coffee, and somewhere there is a guy still hanging on to a room full of collectible Beanie Babies that he was sure would fund his retirement.

But even outside of the obvious and silly examples, there are all sorts of situations where money works in ways that we just can't wrap our minds around. As hard as it is to believe, experts say ...

5
Buying Homes for the Homeless Would Actually Save Money

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The homeless will always be with us. No one wants to hire them, and there's no way society can afford to just give them a place to live. When a dude is sleeping in a box he found in the alleyway and eating rats cooked over a cigarette lighter, it's sad, but he's not costing us anything -- at most, he costs whatever spare change he collects in his hat every day.

But has anyone gone ahead and calculated the actual cost of keeping someone alive and homeless? Someone did! And it's around a million dollars.

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"This city is my mansion, and you're all terribly ungrateful butlers."

Wait, What?

First of all, as a society we're not cool with just letting poor people die in the streets. So while we don't provide housing, we do provide emergency room care. It's counterintuitive, but this begrudging little bit of help actually winds up costing society way more than if we just went the whole way.

Why? Well, it should come as a surprise to nobody that living on the street is kind of unhealthy, and that's before the depression and its accompanying substance abuse come into play. For example, Boston Health Care for the Homeless tracked 119 chronically homeless people for five years. In that time, those 119 people racked up an astounding 18,834 emergency room visits, despite the fact that 33 of them died and seven were placed in a nursing home during that time. In Washington in 2002, 198 individuals generated 9,000 emergency room visits, or a little under one a week. At a minimum of $1,000 a visit, that's a heck of a medical bill that those hospitals are trying to collect from a homeless person. Unless they have a really good day panhandling, that money is coming out of your pocket.

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"You mean this won't cover my co-pay?"

Add in the annual cost of $24,000 if they take advantage of a shelter, plus the cost of the police to arrest and process those who misbehave (plus the round-the-clock housing, feeding and guarding they get once they're in jail), and it all adds up to a tidy sum for taxpayers to handle. Experts say it really would be cheaper just to house them and treat them.

For instance, a San Diego program found that "When patients were connected with housing, income benefits, health insurance and a primary care home, a 61 percent decrease in emergency department visits and a 62 percent decrease in inpatient days occurred over two years." Statistically, a person just doesn't get as sick, and doesn't get into as much trouble, once they have a roof over their head.

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"... and no more lighter rats for me. It's strictly propane rats from now on."

The general public, of course, would never go for this idea, on principle alone. But it turns out principle is expensive as hell. And if you automatically rebel against the idea of giving free houses to hobos, you're going to hate this next one even more ...

4
Paying Children for Good Grades Pays Off in the Long Run

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You're probably thinking that we already place enormous value on our grades. Many of us worked our asses off for 12 years just so we could get into college to study some more. But since the average college graduate earns about half a million dollars more in their lifetime than someone with just a high school diploma, you have to wonder, do we really value our grades enough? Research suggests that we'd all be better off if we opened our wallets and paid our kids to study.

Wait, What?

This is an outrage! Nobody paid you to go to school! Those little spoiled brats should be thankful they even have school!

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"You punks are just lucky we don't make you fistfight chinchillas for our amusement."

But here's something funny about minors: They a) don't like to listen to adults and b) aren't the best long-term planners. When we tell 12-year-olds to earn good grades so that, in more than five years, they can go to a place where they have to earn more good grades to have a better chance at having a great job five years after that, they had already stopped listening before we got halfway through the sentence. Kids need more immediacy in their rewards. In short, you need to bribe them.

A Harvard University economist analyzed what happened when schools paid their students to study. And guess what? The grades improved, the students were more likely to go to college and get hired, and sales of music designed to piss off parents probably rose 500 percent. But that's probably not all that surprising -- what was especially crazy in this study was that the students earned better grades even when they were paid just for showing up.

In other words: Just treat school like a job.

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"Looking at these grades, I don't think this whole 'son' thing is going to work out.
However, we do have an opening at the position of 'dog'."

But why should the government pay your snotty kid not to waste his potential? Because society makes money in the long run. Better grades equal a better job, a better job means a higher income and a higher income means more money paid in taxes. It also means less chance the kid will drop out and burden society with endless bar brawls and infections from dirty tattoo needles.

So let's say we pay an eighth grader $20 a week to attend school until graduation. That amounts to a little over five grand. If she graduates, she will earn more money, which means she will pay more tax -- around $2,400 more. Which means that, within two years, we break even on the investment. Continue the principle throughout college, and it's all dollar signs, according to this chart:

americanradioworks.publicradio.org

This is why the District of Columbia recently announced that it would be paying kids to attend summer school. Again, it seems kind of cynical. But then again ... what are we afraid of? That we're not preparing these kids for what to expect in the adult world? Where people don't do things purely for financial incentive?

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3
The Metal in Your Coins Is Worth More Than the Currency

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For all but the most frugal of us, loose change is more annoying than it's worth. Whenever we buy something with a price ending in a 6 and all we have is cash, it means we'll wind up with four useless pennies that we'll throw into a jar and probably never see again. But those pennies and nickels aren't quite as cheap as you've been led to believe. What if we told you that your change is worth up to twice what it says on the face?

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"Sorry, I'm gonna need that back."

Wait, What?

The tiny chunk of metal that a penny is made from is worth more than twice the value printed on the face of it. In other words, if you took your $500 paycheck and asked the bank to give it to you in pennies, you'd have more than $1,000 in precious metals (if you could find someone to melt them down).

That's because, strangely, society halved the value of that glob of metal as soon as we stamped Lincoln's face on it. It's worth a penny because we etched "one penny" on the surface, even though the inherent value of the material in some older pennies is more than two cents. The same goes for nickels -- they're made from a blend of copper and, well, nickel, which is worth about seven cents per coin.

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"Man, if I had a nickel for every time I had a nickel, I'd have -- like, three times as many nickels."

But before you fire up the furnace to magically double the value of your piggy bank, know that the United States government has a law against melting coins for exactly this reason. Doing so can earn you five years in the slammer, which is probably more than you're willing to risk for that extra cent per penny. But that doesn't mean you should go ahead and flatten them on the railroad tracks, either.

There are people out there who are willing to buy your coins for more than they are worth as currency. Of particular interest are pennies minted before 1982, which are made of copper (as opposed to modern pennies, which are made of zinc) and are worth more due to the steadily increasing price of copper. A business owner in Portland, Oregon, sells $100 worth of pre-1982 pennies for $175, and another guy scours 15 banks a week for pennies, of which he has $2,000 worth in his shed (which coincidentally sounds like the setup for the lamest heist movie ever).

But the grand poobah of them all may be a hedge fund manager named Kyle Bass, who predicted the housing crisis and Europe's sovereign debt crisis, and who has 20 million nickels stashed at an undisclosed location. To put that into perspective, that's one out of every thousand nickels in circulation.

The reason? Coin hoarders believe that the time will come soon when the U.S. Treasury just doesn't think it's worth it to print pennies and nickels anymore, and promotes the dime to the smallest legal currency. When that happens, it won't be illegal to melt your pennies and nickels, and it'll be payday for the hoarders. So you may not be able to take advantage of hoarding coins, but you can take advantage of those who think they can.

2
Being Cynical About Other People Costs You Money

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We can't deny that people can be pretty dumb. Like Tommy Lee Jones said in that movie about aliens, "A person is smart. People are dumb, panicky, dangerous animals, and you know it." But what if this is all backward? What if most of the terrible financial decisions we make in our lives could be avoided if we just listened to the random assholes around us instead of trusting our own individual brilliance?

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"Why would I want to invest in this Google thing when I've still got all my AltaVista stock?"

Wait, What?

This isn't a new idea. Back in 1907, a mathematician named Francis Galton asked a bunch of people to guess the weight of an ox. Most were off, and some were way off. But, as a crowd, they nailed it: The average of the entire crowd was off by less than 1 percent. The hive mind was smarter than the individual.

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And that attention whore of an ox was the smartest of them all.

And consider a game of Who Wants to Be a Millionaire? The game would be a lot easier if you could just use the audience lifeline on every question -- the audience picks the right answer 95 percent of the time. Of course, some smart people have pointed out that the accuracy of the crowd decreases as the questions get harder. But they also point out that this can be remedied with a smaller pool of smarter people.

The point is that we value our own gut a little too much, and the wisdom of the horde not nearly enough. Especially when we think that we're the expert about, say, the awesomeness of the brands we buy. The principle is known as the endowment effect; we are more willing to value something once it's been established as ours, regardless of what those dumbasses at the office say about it. So, let's say you own a Mac (or a pair of Doc Marten boots, or a Buick sedan, whatever). You're more likely to think your brand is the shit, regardless of how it actually performs or what other people tell you about how much they like the competing brand.


As evidenced by the thousands of lives lost in battle during the Cola War of the 1980s.

This has a monetary consequence: Namely, that brand loyalty costs you money out the ass. Or as one study found, "Loyal Buick customers paid $1,051 more on average than customers who switched from another make to Buick. Even more striking: Mercedes 'loyalists' paid an average of $7,410 more for their new cars than buyers who switched to Mercedes from another make."

And it doesn't matter if the person trying to give us information is an expert and we're a layman. Research has found that you can, for example, manipulate whether or not subjects believed in global warming just by turning up the heat in the laboratory. Mountains of data mean nothing; we insist on going with our "gut."

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1
Your Personal Information Is Worth $81 to Facebook Alone

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Ever wonder where Facebook gets all its money from? Think about that for a moment. They're not selling anything, and they're not huge on ads. And yet the company is worth billions. Why?

The answer is juicy, juicy information. It turns out that what companies buy from Facebook is you. Facebook is selling your life for billions of dollars, and you're giving it to them for free.

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"To be fair, we did give you Timeline."

Wait, What?

We've covered the lengths that Facebook and other social networking sites go to to get us to stick around. And that makes sense, because you're a money machine even when you're not buying anything. That's because social networking is essentially a massive, hugely comprehensive marketing survey. Every time you click "like," share a link, join a fan page or even make a friend, you're generating a suite of statistics that corporations will sell their left nut to get hold of.

To put a real dollar value on it, based on Facebook's filing before its stock went public, The Wall Street Journal estimated that each profile page was worth about $81, each friend was worth about $0.62 and each "like" was worth about $0.03. Stretch that out across Facebook's billion or so users, who spend a total of 9.7 million minutes a day on Facebook actively adding information.


"Shit, this changes everything we knew about her."

Given that the federal minimum wage is $7.25 an hour, this means Facebook receives about $1.2 million a day in free labor, creating what The Wall Street Journal calls "the largest unpaid workforce in history." Though "unpaid" may not be accurate, since most of us are browsing Facebook at work anyway. So we suppose it's really our employers that Facebook is screwing.

Chris Zeigler blogs about superheroes and ethics for Subculture for the Cultured. He'd like to thank Aviva Westheim for editing.

For more things that were actually really valuable, check out 5 Pieces of Junk That Turned Out to be Invaluable Artifacts and 5 Ingenious Contraptions Built Out of Nothing But Garbage.

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