Disclosure – I have investments with both Vanguard and Schwab, they are both good companies. I don’t blame Schwab for this ad, odds are good that they used an outside firm. One that should be fired.
Do you see where they went wrong? .03 is 80% less than .15. But the reverse isn’t true, .15 is five times .03, not “Nearly 80% more.”
Say, we have 2 dogs. Mine is 10 lbs, yours is 20 lbs. Mine is 50% the size of yours, but yours is not then 50% larger. He’s twice the size. This is math we expect our kids to learn in grade school, well before high school.
And for the record, Vanguard charges me .02% for the S&P fund in my 401(k) retirement account. The ticker is VIIIX, look it up.
The Globe ad was just one example of how ad writers can be clueless. Here’s another example. I scanned this from an advertisement from a company trying to sell you gold coins. Set aside the timeframe of this ad, by the end of 2016 the S&P had recovered so that 2000-2016 would have shown growth to $21,000, otherwise known as +110%.
Look at the percent growth the ad shows for Real Estate and Gold. $10,000 to $26,065 is “Up $16,065” which, from a starting point of $10,000 is +161% (rounding up). Not +260%. If gold was worth just $11000, would they have advertised “Up 110%”?
I can’t help but wonder what the qualifications are for ad writer at these companies.
This speaks for itself. “Was $235” and “90% off” makes the math easy. 10% is left. $23.50. If they rounded to $24, I’d cut them some slack. $29 is, well, 87.66% off.
“Others pay twice as much.” And yet, I’m saving 75% if I take this deal. The deal is better than the copy reads, but still, the math is just awful.
Do you have any examples like this? Please click above to submit or forward to me at badmath at b-1.org.
This is an ad I set aside some time back. It took a few seconds to see what I found so wrong with this ad. Was it that this chart had no vertical axis, showing investment return over time? No.
It was the failure of the marketing department to catch the simplest of math errors. When we see a price rise from $10,000 to $14,197, it’s 5th grade math that will tell us the percent growth. 10000/14197 = 1.4197 or a 42% rise. Similarly, The $10,000 rise to $26,065 isn’t “Up 260%”, it’s actually up 161%. They can have their 1% extra due to rounding.
In the US, there’s a TV program called “Are You Smarter than a 5th Grader?” In the case of whoever edited this copy, I believe we have our answer.