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Subject: |
Survival In Tough Times: Smart Shopping |
| Date: |
2009-02-09
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Survival In Tough
Times: Smart Shopping
By Al Jacobs
www.onthemoneytrail.com
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.
Permission
granted for use on DrLaura.com.
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