A business blog by an MBA graduate who's currently no longer interested in getting a Ph.D. This blog aims to share insights into the business world such as investments, economic policies, and more. Feel free to poke around, and learn more about what I have and want to say.
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Why Being a Miser Isn't the Right Way to Do Business or to Live Life
Sometimes, people can confuse frugality with being a miser. I think about a couple of times when I watched Spongebob Squarepants back some time ago and getting irritated at Mr. Krabs. Unfortunately, there are some people who are so obsessed with money (or money comes first) that they end up becoming misers. As I was watching Spongebob while studying to get my bachelor's degree in business administration--I felt that the Krusty Krab model won't work well in real life. I mean, I tend to eat at Jollibee almost daily since I was studying in the University of San Carlos-Main Campus (USC-Main). As I was eating there--I thought would have Tony Tancaktiong build Jollibee as an empire if he was a miser? Mr. Krabs ran his Krusty Krab on a miserly mindset--just one cook and one cashier. Mr. Krabs would even artificially inflate prices just to get more money. In real life, Mr. Krabs should go to jail.
Drawing the line between being thrifty and stingy
It's often easy to confuse both of them. So, we need to draw the difference between them. I was thinking about how it would be to have a stingy parent vs. a thrifty parent. For a stingy spouse, his or her thrifty spouse is extravagant. However, that's very far from it because there's a difference between a thrifty person from an extravagant person. Along the way, I felt going on the middle read of thriftiness though I tend to spend more than others.
Being thrifty means one spends money wisely. For a thrifty person, it would mean being willing to spend more if it will save more money in the long run. A thrifty person would buy a more expensive appliance if it gives good convenience, and service, and is power-efficient. A thrifty person may shun luxury brands because they're overpriced. However, a thrifty person may spend a little more for quality. It's like a person won't buy a luxury car but will spend more on a brand new Toyota car. A thrifty person may buy a brand new nice smartphone but will reject any overpriced smartphone. It's because the person seeks long-term savings even if it means spending more for the moment.
Meanwhile, being stingy is absolutely compromising on need and quality. You can think of a person who has so much money but like in some exaggerated stories--even deprive themselves of their needs. It's like in the children's story of The Miser and His Gold who hid his gold in his backyard than invest it in the bank. Another story has a miser who even doesn't buy new clothes. That would a very sad state because the person only thinks of raking in as much money as possible. It would also go as far as that such a person wants to always sell at a higher price while haggling with others for a lower price. In short, the person puts money above everything else.
The opportunity costs of the miserly lifestyle in contrast to being thrifty
I was thinking of certain fewer episodes of Spongebob that show the opportunity costs of being a miser. True, the cartoon may just be there to give you a laugh (though it's already worn out by now) but you might meet such people who can make some of the mistakes of Mr. Krabs. It had me thinking about how a miserly lifestyle can accumulate opportunity costs. In economics, an opportunity cost is something that you lost when you could've gotten it.
It reminds me of an incident when I decided to invest in AXA. For a miser, insurance is "worthless". For some, they don't even trust the banks so they might be hiding their money under the mattress. During my MBA days, one of the speakers in the financial symposium mentioned that her grandfather kept the money in a safe in the house. It was a truly sad thing since the value of money changes over time. Something considered of high value during the 1970s may no longer be of high value today. I had some toys that cost around PHP 200.00--PHP 300.00 during the 1990s were considered costly. Now, those values are considerably low.
Instead, one can think about a diversified portfolio is the thrifty way to go. The miser may scoff at it as a scam. However, a thrifty person carefully investigates financial companies. For example, a thrifty person dismisses all "too good to be true" promises. Meanwhile, a miser may either buy them in (because of greed) or shun them along with the good financial companies. A thrifty person may decide to put some money in stocks or a managed fund, get some insurance (such as health insurance), and insure as much stuff as possible. A thrifty person may think that stocks can be of higher risk so managed funds can be a good alternative. A thrifty person decides to put some money in this and that bank investment to let it grow.
What would be the big disadvantage of keeping all your money under the mattress or a private safe? Depositing your money in a legitimate bank means there's some form of insurance if ever the bank gets bankrupt. There's also the option to pull out of a bank you know is misusing clients' money for a trustworthy bank like Metrobank or Banco De Oro. Meanwhile, keeping all your money under the mattress or a private safe will mean it rots in there. Not to mention, new currency is printed every now and then. That means the coins and bills need to be changed for them and older currency becomes obsolete. Not to mention, there's no chance to grow at all since banks pay their clients interest since they're practically borrowing money from depositors. That's why banks need to be very wary about who gets loans or does mortgages--it's also to protect clients!
How being thrifty vs. being stingy affects businesses too
I was thinking about how some of the biggest businessmen are philanthropists. Maybe, it's because some of them know what it's like to be poor. For example, the late Henry Sy dealt with shoes before opening SM or how Tony Tancaktiong started small before establishing Jollibee. Some businessmen believe in the power of giving to charity. Some of them even give generous tips and founded their companies hoping to create a future for their employees. These people can easily build a good brand image which will have you coming back for more.
How would being thrifty be good for business? It would be good to live a life built on quality over luxury goods. What's wrong, really, if a wealthy man doesn't wear branded goods or uses an expensive mobile phone? What's wrong if a wealthy businessman chooses to celebrate his parties in private? It's wise to avoid lavish living as that could soon compromise the income. Some businessmen fall down because of lavish living. Living within one's means is advantageous as it generates wealth for the next generation. Teaching the children to do the same might create a future emergency fund for the next generations in contrast to raising spoiled children.
However, why is being a miser a bad way to do business? When a businessman only cares about money--he forgets about that raking in the profits is not a one-man job. Do you think Jollibee will be Jollibee without its entry-level service crew and restaurant managers? Do you think that a factory is a factory without factory workers? A miser would only care about how much money he can save even if the quality is compromised. It's like not spending even on necessities which, in turn, will eventually slow down work processes. It's like refusing to buy newer and better equipment and then complaining why work quality has been bad. It's like refusing to carry out repairs, waiting for the damage to become worse, then stupidly complaining about why the expenses suddenly piled up. In short, being a miser is all about compromising quality so one can save money. However, it means one ends up having opportunity losses out of being a miser. Besides, safety may also be compromised resulting in heavy lawsuits or even jail time in the long run.
Having sea crab yesterday or just eating crab, I always think of that old commercial in the 1990s. It was called, "Iwasan ang crab mentality." or "Avoid crab mentality." This makes me recall a scene when I was a child. I saw a pail full of mud crabs (called alimango in Filipino) and if one crab got out, the others pulled it down. The TV commercial showed how if the crabs got together, they could all escape their grizzly fate of becoming eaten for human consumption. Chefs are just lucky crabs pull each other down. However, it also shows that the crabs would rather all be cooked together than let that crab escape. Unfortunately, crab mentality is one of the biggest problems in the Philippines. It's not all that unique among Filipinos. However, it doesn't Filipinos should ever take comfort in engaging in a crab mentality, just because other people do it . Here's an interesting excerpt from Inquirer by Jerry Peres de Tagle PhD: Studies in human behavior ...
Happy New Year, right? There's this statement in Cebuano that says, "Sa Disyembre nag lipay-lipay. Sa Enero, naglikay-likay." For non-Cebuano speakers, it means, "Enjoying all December. Fleeing in January." It's because of the bad habits that are common during the Christmas season. I wrote an entry talking about when a Merry Christmas leads to an Unhappy New Year . After Christmas vacation, it can be common to talk about New Year's Resolutions. Sadly, there are resolutions meant to be broken or resolutions on paper only. Several people finish high school, go to college, get a job, but never gain the necessary knowledge of economics and finances. Instead, they continue to live the same habits year after year. Even worse, the same foolish behavioral patterns get passed down f rom parent to child to grandchild. Still stuck with financial habits that put one in a financial dodo The New Year starts and it can get funny. I tend to hate December because of the ...
The Philippine senatorial elections are on, right? One of the many things candidates (regardless of party) need to hold is the need for economic reform. As I continue discussing economic charter change, several objections are held. One of the objections is allowing 100% FDI--a subject often subjected to mockery. These mockeries can range from promoting colonial mentality, selling the Filipino to foreigners, borrowing money from abroad (which is definitely not investment, read here ), or even the ridiculous notion that FDI includes Filipino women dating foreigners (read here ). This time, I would like to address another hypocrisy. This time, it's all about Filipinos who rejoice that Filipino businesses are investing with 100% FDI ownership. All the while, this is crying foul when there's a law passed that will allow foreigners to own 100% FDI ownership , in the Philippines. This is a meme to expose the hypocrisy. Jollibee has 158 branches in Vietnam, which I assume happened bec...
The Express Tribune The recent Microsoft Global Outage was caused by Crowdstrike. Since I'm no IT or CS expert--it's better if I let them talk in the news. From BBC News , here's a detail from Crowdstrike that reveals the root cause of the problem has been systemic with an update: This is still a little unclear. CrowdStrike is known for producing antivirus software, intended to prevent hackers from causing this very type of disruption. According to CrowdStrike boss George Kurtz, the issues are only impacting Windows PCs and no other operating systems, and were caused by a defect in a recent update . "The issue has been identified, isolated and a fix has been deployed," he said. "This is not a security incident or cyber-attack." What exactly was wrong with the update is yet to be revealed, but as a potential fix involves deleting a single file, it is possible that just one rogue file could be at the root of all the mayhem. Thankfully, those who created th...
Discussing international marketing or world economics with boomer Filipinos can be painful. Some people still believe in the Filipino First Policy. I cite Vietnam as an example of why economic charter change (called econ cha cha) should be done. Some people cite that Vietnam's increase in FDI is because of the fight against corruption. I don't deny Vietnam has a crackdown on corruption. I don't deny that fighting against corruption helps the economy. However, fighting corruption without the proper tools and not having economic development, is useless. Fighting corruption isn't a panacea or cure-all either. Spanking is part of child discipline, not the whole of child discipline. People who only spank but never teach right and wrong, render spanking ineffective . Instead, look at Vietnam's economic policy vs. the Philippines' economic policy. Some people blame the following for the Philippines' lack of foreign investments, some things Vietnam also suffers fr...
I was laughing just thinking about ignorance about the bear and bull markets. Yes, we know about social media gossipers (seldom called a marites in Filipino) tend to spread gossip. I ran into several people panicking when the Philippine Stock Exchange Index (PSEi) was mostly red. Others would panic but Warren Edward Buffett recommends, "Be fearful when others are greedy. Be greedy when others are fearful." That's the best market timing. Some people do cost averaging because it's practically less risky in contrast to lump sum investing. Buffett recommends that non-technical people should periodically invest in a low-cost index fund over a period of ten years. Now, the Philippine Star has an article by Wilson Sy, where the first paragraph talks about the Philippines' entry towards the bull market : Most stock markets have undergone a dramatic shift to start the year, transitioning from a bear market to a bull market. Peak inflation, a slower pace of interest rate h...
During the pandemic, I was left in limbo thinking about my poor performance under K+10. It was something to think about that a classmate of mine who was both a summa cum laude and an honor student, ended up posting on his wall, "Students cheat because the education system cares more about grades instead of learning." The class salutatorian of our batch even commented about the good old days. I always had that feeling of insecurity and envy towards people better than me. But as Warren Edward Buffet would say, "Don't hate successful people. Learn from them instead." One of them is currently a teacher and the other is in Canada. I thought about my insecurities especially when I used to believe I was descended from a fine scholar and my family was a family of scholars. I remembered the time I was taking MBA and got conned. I was asked, "Is that what MBA taught you?" I got touchy and ended up admitting, eventually, that I was only taking MBA for the presti...
I was doing some news readings and I found out about the death of a certain Stephen Corilla. The incident happened in the Universal Robina Corporation's factory in Mandaue a few days ago. It really chilled my bones to read these details which I'll share from Sunstar : POLICE are set to investigate a food and beverage plant in Barangay Tabok, Mandaue City after one of its workers was killed on duty while cleaning a pulverizer machine Thursday afternoon, June 2, 2022. Cpl. Glenn Bordalba of the Mandaue City Police Office Station 3 in Barangay Basak who is leading the investigation told SunStar Cebu Monday, June 6, that they will visit the Universal Robina Corp. (URC) Mandaue City plant in Tabok on Tuesday, June 7, to investigate the matter. Bordalba added that they have not started the investigation yet as they were not allowed entry to the site by the URC management after the incident was reported to them. An approval from the corporation’s consultant is needed for the police to...
I have tasted several foreign-owned tea shops. My first experience with tea shops was with Chatime (read here ). Now, I heard of this new coffee shop (or tea shop, take your pick) called Tealive. At first, I thought it was Taiwanese but when I Googled it--it was Malaysian. It made sense that the company uses only Halal-approved ingredients since Malaysia has a huge Muslim population. The founder is Malaysian-Chinese businessman Bryan Loo of Loob Holdings. Loob here also means inside as the Tagalog language also derives from the Malay language. Tealive would later head to the Philippines. It would be like getting Filipinos closer to their Malaysian heritage after all. The branches in Cebu include SM City, SM Seaside, and Ayala Central Bloc. The one I ate was at Ayala Central Bloc. Someone gave me a taste of their sandwich and their signature coffee. I was pretty much impressed that I decided to dine in there. I went to try their lychee tea and chees burger. For a note, their ...
March is fire prevention month, right? If there are people who are too extravagant then I'd like to talk again about stingy people (read the article here ). I've tried growing up with the stingy vs. extravagant extremes. Some people become stingy even with the necessities. It's one thing to deny a child a children's party since it's a want . It's another thing to deny a child stuff they need all in the name of saving money . Even worse, some people may be more than stingy enough to ignore fire safety. A stingy person just wants to save. It's almost like the story of the Miser and His Gold or The Rich Miser . I really find these stories entertaining at the same time, irritating. The first story has the miser who hid his gold under the ground. Some people today are too distrustful of banks and investments. The second story has a rich man who even dresses in rags, denies his son's shoes, had his wife cook some cake only for him, and was so greedy he had it ...