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Andrew Tobias
Andrew Tobias

Money and Other Subjects

The Link That Explains It All

April 29, 2005March 1, 2017

But first . . . two math errors of which I stand accused.

I am guilty of one of them, so let’s start with the other.

Thanks to the estimable Paul Lerman for pointing me to the May issue of Discover Magazine, which includes this item:

Basic arithmetic mistakes abound in print, in textbooks and in the popular media alike. Edward J. Barbeau, professor emeritus of mathematics at the University of Toronto, exposed the following miscalculations in his book Mathematical Fallacies, Flaws and Flimflam (Mathematical Association of America, 2000). Can you spot where the numbers go astray?

1. Andrew Tobias, in the May 17, 1993, issue of Time magazine, offered this financial advice:

Buy staples in bulk when they’re on sale. . . . Consider a family that buys one bottle of wine each week. With the 10% discount many stores offer on wine by the case, they would be saving 10% every twelve weeks-more than 40% a year, tax free and largely risk free.

[This is a miscalculation because] the 10 percent savings does not accumulate. If it did, then in three years the family would have saved more than 100 percent. The correct statement is that the family continues to save 10 percent of the total cost as they buy more wine.

Proud as I am to be first on any list, I did want to offer here the letter to the editor I hope Discover may print:

Dear Discover:

In your May issue, you cite an example of sloppy thinking from Edward J. Barbeau’s book. He quotes a snippet from my May 17, 1993 TIME column . . .

<< Consider a family that buys one bottle of wine each week. With the 10% discount many stores offer on wine by the case, they would be saving 10% every twelve weeks-more than 40% a year, tax free and largely risk free. >>

. . . and makes the point that, no, you are still only saving 10% on each bottle of wine. Quite true. But in fact you ARE earning more than 40%, compounded annually, on the cash required to change your buying habits this way. There wasn’t room in the TIME column to make this adequately clear — my fault — but for the record:

At $10 a bottle, you would save $52 over the course of the year by buying this way. And the most extra cash you would have to tie up to achieve that return would be $98 — the initial $108 case less the $10 you would have spent that week anyway. To “earn” $52 on a $98 investment, I am certain Professor Barbeau would agree, is to earn well in excess of 40%. The actual rate of return works out to 177% (although it’s still just a lousy $1 a bottle) . . . as detailed in my own book, THE ONLY INVESTMENT GUIDE YOU’LL EVER NEED.

Thanks for the opportunity to clarify this point!

Andrew Tobias

(I went ahead and ordered Professor Barbeau’s book and, well, I’m not just in it, this example leads the book, taking up most of Page 1. I don’t fault the good Professor for this – we have e-mailed, and he says he’ll consider my response for subsequent printings, should there be any. But this is not exactly how I hope to be remembered. [I hope to be remembered for my recipes.])

MATH ERROR – RE KANSAS

Daniel: ‘One correction that I’d note is that the article seems to state that the boys were somewhat more than 36 months apart in age. [When I saw that one was almost 15 and the other had until the week before been 17, my creaking brain saw that as almost 15 and 17 – two years apart – plus a little. Of course, it would be three years plus a little. Sorry!] But not withstanding that fact, what’s wrong with these people? Ignoring the absurd injustice, are they so blinded by hatred that they are willing to shunt so much of their resources into this punishment? Last I read, confining somebody in a place like Ellsworth costs somewhere around $25K per year (ignoring the capital costs of building the place) – and 17 x $25K = $425,000. Nearly half a million dollars to wreck the life of a boy who started to engage in sex with another boy and stopped when asked to stop. I just don’t get it.’

☞ Another of you not only got it, but wondered how I could ‘condone pedophilia’ by suggesting 17 years in prison was too harsh. People have very different and strongly held views, that’s for sure.

But enough of that. Let’s move on to the war of civilizations.

IT’S ALL EXPLAINED . . . HERE

Seriously. You want to know what Bin Laden is thinking, and the dynamic that’s been driving the world and our lives for the last few years? And what will happen next? No one knows for sure, of course. But you could do worse than to read this analysis from the Daily KOS. Have a great weekend.

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