Always Treat Money Like It Is Your Own (Part 2)

Fred Wilson has a good post up about why you should Always Treat Money Like It Is Your Own.

Fred's point is that using OPM (other people's money) often has a corrosive effect on decision-making. As he writes:

When you are writing a [personal] check every time you make an investment, it has a way of clarifying the mind.

Very true. But there is also another important reason to treat OPM like it was your own.

If you always treat money like it is your own, other people are more likely to trust you with their money.

I have always been entrusted with a lot of spending authority because people know that I am so cheap that I cannot bear to waste money, even if it isn't my own. And when people invest in one of my startups, they know I'll do my best not to spend their money unless it's absolutely necessary, even if it doesn't always make me the most popular guy in the office.*

* Two true stories:

1) At one of my companies, one of my employees complained about a bunch of work I asked him to do. "That's a lot of work just to save $25,000 per month," he said. He was lucky to make it home alive that day.

2) At another company, I brought back a hefty pile of prizes (including a tablet PC, a smartphone, and an Xbox) by winning a number of pitch contests at a conference. The guys at the office were quite crestfallen when I told them to eBay all the loot so that we could deposit the cash in the bank.

Why Asians Love Stephon Marbury

Today, I decided to contribute to the rapid decline of American retail by bargain shopping at the Great Mall of the Bay Area.

After my recent weight loss, I needed new jeans, and I'd been hunting for cheap ones for a number of weeks. Unfortunately, I'm such a cheapskate that I refuse to pay more than $8 for a pair of jeans, so I'd been looking for a while.

Lo and behold, after about 30 minutes at the mall, my family ran across Steve & Barry's. Founded in 1985, S&B's had a long history of success based on low prices. Enter Stephon Marbury.

Starting in 2006, S&B's embarked on a massive expansion, including "celebrity" (and I use that term advisedly) clothing lines by Sarah Jessica Parker, Venus Williams, and the aforementioned Starbury.

The ultimate result? As I strolled into the store, it was a madhouse. Giant piles of clothing were everywhere, and even the displays and racks were for sale. I picked up five pairs of jeans and three pairs of cargo pants for $3 apiece, and a couple of pairs of shorts for $1 each. Starbury basketball jerseys were selling for only $2 (I was tempted to sock away enough jerseys to outfit an entire squad, but decided that forcing a team to wear Stephon Marbury jerseys would qualify as cruel and unusual punishment).

After gathering a generous armful of bargains, I turned the corner and encountered the giant catch: In what seemed to be a truly ill-advised attempt at economy, S&B's only seemed to have one checker on duty, resulting in a 100-yard line at the registers.

The rational thing would have been to drop the clothes and head for the exits--after all, isn't my time worth more money? But since I'm no more immune to predictable irrationality than anyone else, and since I hadn't lined up any $500/hour consulting gigs this particular Saturday, I decided to settle in and make my purchase.

My first mistake was that I hadn't secured a loose fixture or cardboard box to stow my clothes. Realizing that I might be stuck for quite some time, I carefully folded and stacked my future wardrobe additions into a neat pile, which doubled nicely as a simple seat.

After sitting for a few minutes, I realized something very interesting. Roughly 95% of the people waiting in line were Asian. And quite a few of them were buying entire *racks* of clothing. Forget my simple armful; many of these people were buying enough items to fill your average van. This included the grey-haired septuagenarian in front of me, who was rocking suede Converse sneakers and listening to his iPod and had an entire box of Starbury gear in tow.

That's when it hit me. This wasn't simple bargain hunting. This was a sale of the century whose legend had spread throughout the Asian community, who were showing up in droves to stock up on a once in a lifetime opportunity.



In the years to come, we'll be seeing gangs of Asian teens playing pickup hoops in matching Starbury jerseys. Heck, there are some families that bought enough clothes to be wearing Steve & Barry's gear for generations to come, with $1 shorts being handed from one generation to the next.

I was sorely tempted to run back to the racks and triple my purchase quantities. After all, all of these people couldn't be wrong, right?

90 minutes later, I finally finished checking out. As I write this post, I'm wearing a new pair of Carpenter Pants, and man are they comfortable. RIP, Steve & Barry's.