Survival in Tough Times: Smart Shopping
This is a guest post from Al Jacobs, who is the publisher of OnTheMoneyTrail.com. His book is called Nobody’s Fool: A Skeptics Guide to Prosperity.
When economic times are good, you may be inclined to shop with little regard for price or value. But when conditions turn sour it’s another story. As your dollars must now be stretched longer and harder, you’d better spend each of them wisely.
What brand of watch do you wear? Whether a top-of-the-line Rolex or an economy Timex, recognize both keep excellent time. The current models all do a better job than the “precision” pocket watch your Great-grand-uncle Elmo used as a railroad engineer. The only justification for a high-priced model is self-image and the illusion of prosperity. These are both overrated.
And while on the subject of small mechanical devices which serve a need, consider the hyperbole employed by one firm to convince us of the importance of a $600 ballpoint pen. The arguments include an appreciation of beauty and workmanship, the profound emotional experience you receive utilizing a fine writing implement, and the implication you will be admired by clients and associates for your taste and culture. There are two fascinating aspects of this campaign, the first being that the hired pitchmen manage to keep a straight face while reading their lines. The other is that anyone not certifiably demented actually believes a word of it.
What can be said about wristwatches and ballpoint pens is equally true as to other highly promoted products. These include magazine offerings, timeshare projects, $300 per ounce bottles of perfume, Las Vegas weekend getaways, and the purchase of lottery tickets, to name just a few. As a rule of thumb, the more overpriced the merchandise, the more innovative its promotion.
Let me offer a few other examples of money badly spent, which added up over a lifetime represents a fair chunk of your earnings. Twenty-four rolls of a popular brand of toilet paper is available at Wal-Mart for $10.19. Six rolls of the same product, selling at a major market of $6.46, are easily dropped into a shopping cart. The 250% markup doesn’t seem to bother many housewives. It should.
And speaking of paper products, where might stationery be bought cheaply? Except for top-grade rag content or custom-engraved stock, avoid the stationery stores. Even the major discounters are not the places to go. A little comparison-shopping reveals paper supply houses offer the lowest prices, and most are open to the general public.
When you fill your car with gasoline, does the lesser-priced regular grade or the higher-priced premium grade end up in your tank? Don’t base your decision on assurances by the service station manager promoting the more expensive fuel, but on performance you can actually experience. The fundamental difference between the two grades is octane number burning speed—when in earlier years slower burning helped prevent engine “knock.” Because of the lower compression ratios of today’s cars, most function satisfactorily on 87-octane fuel. Unless that causes your auto engine to “ping” when climbing a slight hill, use the cheaper fuel.
I hope this message is coming across clearly. Don’t make your buying decisions based on urging from shopkeepers or exhortation from advertising. Sharpen your buying habits with a healthy dose of skepticism. Look closely at the product, read the specifications, verify the quality, and compare prices. You’ll often find what is claimed is not what is offered. In most of your purchases you are less familiar with a product than are its vendors. You can overcome this disadvantage with a little effort and by educating yourself. The results are cumulative and your performance will improve with time.
Al Jacobs has been a professional investor for nearly four decades. He is a nationally syndicated columnist and appears regularly on ProducersWeb.com, DrLaura.com and SheKnows.com. He draws on his extensive expertise in real estate, mortgage, and securities investments to counsel millions on how to invest wisely and spend prudently. He is the author of Nobody’s Fool: A Skeptic’s Guide to Prosperity. Subscribe to his financial column, “On the Money Trail,” at no cost or obligation, by visiting www.onthemoneytrail.com.
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Al Jacobs has been a professional investor for nearly four decades. He is a nationally syndicated columnist and appears regularly on ProducersWeb.com, DrLaura.com and SheKnows.com. He draws on his extensive expertise in real estate, mortgage, and securities investments to counsel millions on how to invest wisely and spend prudently. Online Shopping Now