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IN SPAIN, “CHAPUZA” means something botched because of inattention or sloppy work. We learned the word when repairmen rewired the buzzers in our apartment building. They finished the work quickly so they’d be done in a single day. At 2 a.m. that night, we discovered the job was chapuza when our neighbor kept buzzing our apartment—because the buzzer had been mislabeled.
Chapuza can be found everywhere. Back in the U.S., we hired a highly recommended electrician to do major work on our home. The two-day job went into a third hot day. Everyone wanted it done. Unfortunately, one of the younger guys in the crew rushed. We discovered afterwards that he’d dropped a tool out of the attic door that gashed our wall. That cost the company owner $100 to repair.
Even worse, a week after the job was finished, I found two trucks and a bevy of people from our city power company clustered around our meter. The lead guy said it was running backwards and not charging us. I thought it was a joke and asked if the city was going to write me a check.
It was no joke. Our electricians had gone chapuzas and, in the end, the city assessed us $782 to correct the meter. Of course, I passed this on to the electricians, who agreed to cover it. I’m sure that, combined with the $100 wall repair, it more than ate up their profit on the job.
Chapuza can also be found in financial decisions. A young man, whom we know extremely well, was lucky enough to get a good, high-paying job straight out of college as a software engineer. He had money to invest and decided to blindly go with an investment company that was recommended to him, rather than checking it out. He didn’t want to bother with all that research. Despite our warnings, he’s being charged unnecessary and exorbitant fees by this large institutional behemoth. Perhaps when he realizes the needlessly subtraction from his profit, and calculates the compound loss over time, he might be a little less chapuza about investing—and also realize Mom and Dad know a thing or two.
As the Spanish say, “No seas chapuza.”
I recently calculated how much a 1% AUM fee would have cost me over the last twenty years. Even leaving aside the lost growth, the amount was astounding. Instead, my money has been sitting quietly in Vanguard funds at very low fees. Aside from rebalancing and a gradual reduction in my stock allocation I have left it alone. I have a hard time believing I would be better off if I had paid that AUM to an “advisor”.