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Comment by WhompingWindows | Hacker News Reader

You're mathematically incorrect, unless you consider a typical worker saving 25% of their take-home "doing nothing".

A typical take-home for a month's work in US might be $3000. Cheaper rent could net you $300-$600 more, which is between 10-20% of your take-home. Not going to Starbucks every day, saving $5 a day let's say, works out to 5*30 = $150 bucks a month, a full 5% of the take-home pay.

Is 25% really nothing? Maybe you make so much money that $450 bucks a month isn't a big deal, but most people don't see the insidious nature of costly habits and how they're spending thousands per year on their quality of living.

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Sure, Starbucks is negligible, but that much rent (assuming you're not in San Fran) makes the difference between a nice apartment in a nice location or a bad one in a bad location (or some such mix) in many place. There's all sorts of other implications that come with a better place that we can't necessarily chalk as simply extravagant unneeded spending.

I think where people get into trouble with fractions and especially where money is concerned, is in not realizing that lowering an expense by 1/4 means that the same money lasts 1/3 longer.

I can't count the number of times I've had to explain to someone, especially in project roadmap discussions, that ±20% doesn't cancel out. 1.2 x 0.8 != 1.0. ±5% almost does, and people extrapolate to larger numbers and make strategy based on it.

There is a fairground/fundraising con based on this.

Customer gives you one or two dollars. You set up a card to keep track of a set number of coin flips - 10 say.

The deal/catch: - heads = multiply their money by 1.25. - tails = multiply their money by 0.78.

People will usually see +0.25 payout vs -0.22 cost instead of the actual fractional payout as you've already noted.

The nice thing, is one person flips a coin and is the crowd pleaser, while another is the note taker. People can join at any time.

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