When it comes to money, there’s a lot of lingo that may confuse us, making us feel as though we need to have a degree in economics to know what’s being spoken about. And one phrase that you may or may not recognise is “pennies on the dollar”.
Today, I want to talk about what it means, where it comes from, alternatives and why it may be useful.
What does “Pennies on the dollar” mean?
“Pennies on the dollar” is when something is being sold for a lower price than it’s typically sold for. Usually, the price drop will be significant.
For example, if something was $200 but is now $50, you could describe it as “pennies on the dollar”.
“Pennies on the dollar” does not mean cheap
Something important to remember about “pennies on the dollar” is that it doesn’t necessarily have the same meaning as “cheap”.
When something is cheap, the price is low. But when something is “pennies on the dollar”, it’s cheaper than it used to be. For example, if something was $1000 but is now $100, it would be “pennies on the dollar”.
However, if the “thing” in question is a pencil, it’s hard to argue it’s cheap.
Knowing this can help us to better understand when something is “pennies on the dollar”.
Origin of the phrase “Pennies on the dollar”
Finding the origin of the phrase “pennies on the dollar” was a difficult task. To get the answer, I had to use Google Books, so please take the following information with a pinch of salt. This is just the earliest reference I could find, not the earliest there is.
The phrase “pennies on the dollar” was coined in 1992, when Andrew James McLean wrote a book titled “Buying real estate for pennies on the dollar”. He explained how to buy real estate for a lower price than most other people.
Examples of how to use “Pennies on the dollar”
Let’s take a few examples of sentences to understand why people might choose to say it and the different contexts in which it may be used.
“That’s why banks are willing to unload the properties at a fraction of their real worth—for pennies on the dollar.”
“That’s 20 percent off appraised value, which is more in line with a bargain hunter’s attitude of buying for pennies on the dollar.”
“It’s probably not realistic to expect to settle your debts for pennies on the dollar.”
“Anything being sold at a discount of 1% or more is technically going for “pennies on the dollar”.”
“Though these shares are usually very cheap (often trading for pennies on the dollar)”
“We are using 5,000-ounce COMEX silver options to create our “pennies on the dollar” strategy. “
“In other words, you’ll be able to score some of McDonald’s most popular items for pennies on the dollar.”
“For those 20% the result can be pennies on the dollar or like in a case that I worked on .0002 cents.”
“Maximum coverage for your home and auto policies for pennies on the dollar. Condo & Renters Insurance.”
Other ways of saying “cheap”
We’ve already spoken about how “pennies on the dollar” is not the same as cheap. But there is more than one way of saying that something is at a low price. Here are a few examples of how to say that something is cheap.
“I was really happy with my new bookshelf, I got it from a charity shop so it was cheap as cheap”.
“I got all of this for under a tenner! What a bargain!”
“I wasn’t too happy about having to buy a new one, thankfully the price was reasonable”.
“It wasn’t very expensive. In fact it was dirt cheap”.
“My budget was low, thankfully Igot it for a song”.
Why “Pennies on the dollar” can be helpful to you
But now, back onto “pennies on the dollar”. Although it might seem like a bit of a trivial phrase, being able to spot when something is “pennies on the dollar” can be of massive benefit to you.
We all like to save money. Whether it’s for a house, a car, a pen, an apple, or anything else we might spend money on.
None of us wants to be spending more money than we have to. Finding something we had planned on buying anyway for “pennies on the dollar” will mean that we end up saving money.
Why”Pennies on the dollar” can be helpful to stock traders
For those who work in the stock market, being able to spot when a stock is being sold for “pennies on the dollar” is a great way to determine whether they should buy it. The basic rule of thumb for trading stocks is to buy low, sell high.
When the price of a stock is high but quickly falls, there is a chance that it could become high again in the future. Buying a stock when it’s lower than usual enables traders to buy it and then sell it again when the stock price goes up. Of course, there is more to it than that, but that’s the long and short of it.
Is “Pennies on the dollar” a marketing phrase?
You need to be slightly careful of people who use the phrase “pennies on the dollar” as a lot of the time, it could just be used as a marketing gimmick. As one of our example sentences stated,“Anything being sold at a discount of 1% or more is technically going for “pennies on the dollar”.”
Sometimes, people who use this phrase aren’t actually interested in saving you money but trying to make you spend more by convincing you you’re saving.
“Pennies on the dollar” is a phrase that means something is cheaper than it used to be. It’s useful for both regular folks who want to save money on their day to day expenses and for stock market traders who rely on that philosophy to make a profit.
Remember, “pennies on the dollar” does not have the same meaning as cheap. Although when used as a marketing tactic, companies who describe their products as “pennies on the dollar” will be trying to convince you, you’re getting a great deal.
I hope you will have a better idea of what some of this financial jargon means, and you won’t fall prey to common marketing tactics.