See a penny pick it upMany years ago, a friend told me that Bill Gates makes so much money that if he saw a $100 bill, it would not be worth his time to pick it up. Most of us are not in this category, but still struggle with whether we should pick up smaller value currency, like the penny. My mother always picked up pennies. She had a fondness for both superstition and poetry, and so could often be heard quoting the following poem:

See a penny
Pick it up
And all the day
You'll have good luck

So I understood whenever my mother would pick up a penny, she did it because she thought it was lucky. But other people have told me that they pick up pennies because they represent free money. But they aren't. Pennies on the ground don't just magically transport themselves into your pocket. It takes effort to cash in on this apparent free money.

In order to determine just what these pennies are worth, I poured a bunch of them at my feet and timed how long it took to pick up ten pennies, one at a time. It took 25 seconds. This means that I could—in theory—pick up 24 pennies in a minute. This comes to $14.40 per hour, or $13.80 per hour when you take into account the California State requirement that workers take a ten minute break every four hours. Overall, that sounds pretty good—substantially above minimum wage, but hardly "1% here I come!" territory.

There is an important aspect of this test that would bring this number way down: I could not keep up this pace for an hour, much less eight hours. But I'm not going to do an experiment. For extended periods of time, I doubt that I could do better than half this rate: 12 pennies per minute. That would bring the hourly pay down to $7.90 per hour—just below minimum wage in California, unless you work in San Francisco, in which case it is far below the $10.24 rate as of the beginning of 2012.

How it was determined that Bill Gates is wasting his time to pick up a $100 bill is easy to determine with a little thought: figured out how much money he makes and divided it by the time it takes to pick up a $100 bill. Who knows if anyone has actually done this calculation. This is typical folklore: the point is what's important, not the detail.[1] Clearly, picking up $100 bills would result in a pretty good salary if the bills were just sitting around waiting to be picked up (an invalid assumption even for pennies). Just one bill an hour would result in a yearly salary of $200,000—four times the median salary of a worker in the US. But a penny?

Even picking up pennies at a back and knee breaking pace would result, at best, in something like a minimum wage job. A similar job with nickles probably wouldn't be too bad, but in general, I can't see that a nickle is really worth the time to pick up, either. Dimes seem like a safe bet and quarters most certainly are. Obviously, any paper money is worth picking up. Regardless of the denomination, however, such money is most definitely not free.

[1] Like most people, I think this is a stupid example. Gates makes his money indirectly by what he owns. So if he managed to pick up an extra $100, it doesn't lower his productivity.