Think and Make Money

You’ve heard of Elon Musk? He’s the CEO of Tesla Motors (NASDAQ:TSLA), the upstart luxury electric car manufacturer. He’s also, according to an article published in Forbes, “The Coolest Guy on Earth”, “a genius”, “formidable competitor”, “one heck of [a] stand-up guy”, and oozes “greatness”.

Those are some accolades. But that’s how so much of media operates. The goal being to draw in readers through schlocky headlines and exaggerated entertainment pieces masquerading as impartial reporting. Objective information? Too often, nothing but an unfortunate casualty of the sales and ratings game.

Of course, Musk could have paid for this lavish flattery (unlikely given his public persona and accomplishments straight out of central story casting). Or maybe the writer is a slobbering acolyte of the highest order unable to contain his worship of the Coolest Guy. Still, he’s not the only one (for better or worse) as many others sing Musk’s praises.

Warranted or not, that’s not for me to comment. Instead, as an investor (note: I have never owned Tesla shares), I have zero interest as to whether the CEO of a company is anointed by media as cool.

[Another note: a comparable example is the cult of Steve Jobs, who passed on a few years ago. There were many proclaiming that Apple would tank without Jobs at the helm. They were wrong. Because the organization is bigger than one person. And as extraordinarily talented as Jobs was, he wasn’t the God of Technology; other mortals could, and have, filled his boots].

See … if I’m a Tesla investor, I’m not investing in Elon Musk fanciful imagery. Sure, I’m looking for a strong management team to run the company, and a savvy, capable CEO is always preferred. But if I’m buying Tesla stock, I’m investing in Tesla, the company. And if I’m thinking of becoming a Tesla shareholder, I want to know a few things, such as:

  • What are projected future sales of electric vehicles?
  • To what extent do sales depend on infrastructure (i.e., charging stations) that does not (yet) exist?
  • What about range? If I’m only getting 200-300 miles for each full charge, I can’t drive too far on the highway without needing a recharge. Where do I recharge given that charging stations are few and far between?
  • What does Tesla offer that Nissan and GM and Toyota and the other older kids on the block don’t?
  • Given its measly number of auto sales compared to the big manufacturers (i.e., Ford, BMW, etc), what’s to say that Tesla’s not a shooting star destined to flame out, with the established players already chipping away at market share?

If you live in a high electricity cost jurisdiction (i.e., Massachusetts or Ontario), is an electric vehicle worth the cost? What is cost per mile (km) driven compared to cost of gas? Of course the higher the cost of electricity compared to gas, the less incentive to switch from gas powered vehicles. (no, I’m not ignoring the real and pressing environmental argument. But to my thinking, electric cars will not become a popular option unless they’re affordable to the vast majority of consumers).


Dig Before You Buy

I enjoy gardening. Being outside, planting, digging, pruning, these activities bring me peace and relaxation. Sometimes to the point where I’m in a meditative state, my focus entirely on the task at hand, no other thoughts or stories running wild in my head. In the here, now, this is what I call a state of bliss.

And I identify with the idea that investing money is similar to gardening. First, you research what kind of crop (companies, etfs, etc) you would like to grow (buy). Next, you plant the seeds (buy shares). And like any seed, investments take time to produce results. In the meantime, you check in on the seed and the soil (company specific news, general industry zeitgeist) and if they’re not thirsting for water or sunlight (fundamental change in company business), then you sit back, relax and admire your holdings. Still, you don’t ignore them. Weeding and nurturing (monitoring portfolio) is essential.

Alright. Enough of the analogies. Here’s what I’m getting at: Good investors do their homework. Good investors don’t get caught up in hype. Good investors don’t let emotions drive decision-making. Good investors ask, ‘what am I missing? What are the holes in my reasons for buying shares of this company?’ Good investors are turtles, playing the long game, slow and steady.


Stock Investing: The Nuts and Bolts

When buying shares of a company such as Tesla, you buy a piece of the company, participating in its growth (and, hopefully not, its decline). As corporate profits grow, share price is likely to increase.

In the myopic short-run, share price is influenced by factors such as: immediate economic forecast, interest rates, degree of optimism/pessimism among investors (for better or worse, often influenced by media).

But the short run approach is no way to invest. Buy a stock hoping to making a quick buck? You’re not an investor, you’re a trader. And you’re playing a high risk game, one that burns a whole lot of folks. Putting money to work long term is what good investors are all about. And in the long run, share values reflect past and projected growth in earnings and dividends. The more they grow, the more likely the stock increases in value.

All that said, every company is exposed to a host of risks that potentially affect share price. And these risks may fluctuate monthly, annually … really, there’s no set timetable for when risk appears. But here’s the beauty of it: as a long term investor, you know that the emergence of risk often results in stock price volatility. You also know that volatility in share price of a fundamentally sound and prosperous company represents a buying opportunity. To be clear, in stock markets, volatility and downturns are inevitable. When the inevitable happens, the good investor goes shopping for quality companies at bargain prices.

The Buddha of Investing (Warrant Buffet) puts it this way:

“It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”

and …

“Price is what you pay; value is what you get. Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.”

Why bother buying shares of quality companies when there’s risk and volatility? First off, unless you or your advisor has a special knack for it, don’t buy individual companies. Instead, buy stock based Exchange Traded Funds (ETF) (which I talk about in Swinging For Singles).

Either way, good investors hold stocks. Because quality stocks generate superior returns over extended periods of time. Superior to what? To fixed income (i.e., bonds) and cash instruments (click for a detailed review of returns from 1928-2016).

As I wrap up this post, the question arises: why bother? Why bother undertaking all the time, effort, research, monitoring, decision-making when it comes to investing? Well, the typical responses have something to do with being able to afford a decent lifestyle (defined by you); provide for you and your family; and wisely prepare for retirement, those days when you no longer collect a paycheck, instead you’re living off your accumulated funds.

Really though, it’s an issue for you to decide. What do you need in your life? What do you want? And how are going to reach your goals?




Suze Orman: What Does She Know?

If Americans know one person who dishes out financial advice, it’s Suze Orman. She’s huge, right? USA Today (who doesn’t trust this reputable publication? Um, okay, sarcasm creeping in …) says Suze has been called “a force in the world of personal finance” and “a one woman financial advice powerhouse.”

Never mind those shiny accolades, according to her website, Suze is a “New York Times mega best selling author” (mega? Is this necessary? The book either makes the cut as a best seller or not, there’s no minor, middling, or mega best sellers – but, hey, that’s hollow marketing schtick for you); “two-time Emmy award winning television host, magazine and online columnist, writer/producer, and one of the top motivational speakers in the world today. Orman is undeniably America’s most recognized expert on personal finance.”

Whew! Those are some credentials!?

But … so what? Why should I listen to Orman? Because mainstream pop media sings her praises? Because she’s an extremely capable, and well-financed, self- promoter? Here’s my concern: with all of her activities, how is it possible that she’s able to focus sufficient energy on remaining a financial expert?

Let me be clear: my point is not to undermine Suze Orman. In fact, based on my readings of her, and despite over the top promotional glop, I’d say that she’s one of the more reliably informative talking heads operating in the personal finance sphere. And I completely respect her becoming the Oprah of personal finance, morphing her self into a hugely successful business. But again, her fame and fortune by itself isn’t sufficient reason for me to follow her advice.

Who Do You Trust?

Not only does Orman dish out piles of financial advice, she also sells stuff like a “Protection Portfolio: Gold Edition with Personal Finance Online Course Offer”. And you have the option of paying in five easy instalments! Or, take her online Personal Finance course for a fee, buy one of her many books, finance related ‘kits’, CDs or DVDs.

For me, this is where I raise a bushy eyebrow or two. Because her business model works like this: continually churn out financial advice/information for the purpose of drawing more eyeballs. Convert eyeballs to acolytes who open their wallets to buy stuff peddled via website. And repeat.

With a clear cut self-interest in generating revenue through sales, should I trust her advice knowing she’s serving it out with the intent to sell? I mean, her advice could be construed as a movie teaser: read me, like me, trust me. Now that I have your trust, buy my stuff.

That said, simply because Orman’s hustling to make a buck, or several million, this alone doesn’t make her untrustworthy. Besides, it’s not like she’s the only one looking to monetize her know how.

But she’s the biggest in the personal finance guru world. And given her public stature, I figure she’s fair game to illustrate my point:

When educating your self about finances, money management, investing and all others matters related to money, consider your source.

Question not only the authors qualifications to broadcast their know how, but also the bias that we all bring to the broadsheet, which way do we slant, right, left, somewhere in the middle? Is there an ulterior motive underlying the publication? And don’t limit yourself to only one source. Read several so-called expert advice bloggers or mainstream publishers to get a comprehensive lay of the land.

Wear A Mustache

Contrast Orman with a website called The site was started six years ago by a guy who wanted to share his thoughts about all financial matters, big and small.

In my opinion, this was the best personal finance site not only in the blogging virtual world but also compared to any mainstream media (notice I used the past tense. This is because the site publishes only one or two posts a month now; after six years and more than 400 posts, the author is understandably slowing down. For a review of some of the author’s best material, go to the archives page).

Within a year or two of the first posting, hundreds of thousands of people visited the site daily, with many of them engaging with fellow readers on the sites interactive forums. And here’s what made the site special: the author is smart, funny, and well educated when it comes to finance issues. Posts are well written, hugely informative, cover a range of topics and are holistic in that the author ties in money issues to broader perspectives related to life and the meaning of money.

Does Mustache sell anything on his site? Nope. While there’s the occasional third party advertisement from which the author derives revenue, the site is not a shopping destination. And for me, this adds to the author’s honesty and credibility.

Why am I singing this person’s praises, given that he’s a blogging competitor? Ha! Why not? Why shouldn’t I direct readers to another site I consider worthwhile? Why shouldn’t I be generous with my knowledge and share with others? Besides, it feels good and right to give back.

Meditate On This

BuddhaMoney (that’s us!) and other personal finance bloggers have this advantage over corporate media: we’re not necessarily in it for the dough. Then why do we spend so much time and energy, and our own coin, building a blog and sharing knowledge? Well, the motivating reward is not always money.

Sometimes, for those lucky enough, the reward comes in the forum of giving, not taking. Sure, it’s a kick to see readership numbers increase, to know that you’re reaching a wider audience, to receive positive reader feedback that proves, if only for one post, that you’re writing hasn’t been sucked into a black hole.

As for me, I count myself among the lucky.







The Gift of Generosity

There’s a website that goes by the name of Rockstar Finance. The primary purpose of the site is to aggregate all personal finance blogs in one space, and organize blog postings according to subject matter, and other relevant categories. As of today, the site boasts 1,321 listed blogs. That’s a whole lot of folks (including yours truly) sharing thoughts about money, doing their best to inform and educate readers about anything and everything related to the notion of money.

How to earn more money.

Get out of debt.

Save for retirement.

Stick to a budget.

Pay off your mortgage.

Build wealth.

Invest smart.

Spend wisely.

Reduce expenses.

Become a millionaire.

Live frugally.

Consume less.

These are some of the common topics discussed by bloggers. And the posts are often helpful. Because we live in a money-centric world. And too many people lack knowledge/information supporting effective navigation of day-to-day money issues. So, we educate our self thereby increasing our self-sufficiency, maximizing our sense of freedom.


What About Giving?

The tagline for the BuddhaMoney site is: Find Balance, Be Wealthy. And my idea of balance comes from more than focusing on the self and improving the state of my finances. Don’t get me wrong here; money is important, we need money just to get by in life never mind affording luxuries.

But money and accumulating stuff can’t be the sole focus because an integral part of balance and wealth includes sharing and giving to others. A little something called generosity. And when we are generous, when our focus is not solely on our self, well, this is when we experience peace and freedom and happiness.

You ever hold the door open for another person to walk through ahead of you? Give directions to a stranger? Snap a photo for a tourist? Recognize someone’s birthday? Give clothing to charity? Say ‘thank you’ and mean it. Listen, truly listen, to someone without interrupting, without judging? Say ‘I’m sorry’ after you’ve caused hurt through words or actions? Lend money because the other person needs it and because you can afford to?

These are all small acts of generosity. No, wait. Let me clarify. There are no ‘big’ or ‘small’ generous gestures. Because generosity is generosity. There’s no point in quantifying or measuring. It’s not a competition.

When we feel generous, we give. What we give is entirely up to us (i.e., money, material objects, time, wisdom, support, etc). But whatever the gift, the act of giving itself says ‘I’m putting another being first, relegating my personal wants to the backseat’.

Why does this matter? Because when we give without reservation, give from the heart, we feel pure joy, a sort of lightness of being. And it’s an amazing feeling.

In part, this feeling is generated by a sense of letting go of whatever you’re holding onto too tightly, i.e., money, stuff, an idea, expectation, or your own sense of importance. And when we let go, we broaden our perspective and broaden our world simply because we’re no longer self focused, and others gain as much importance as we ascribe to our self. Then our world grows more expansive and our happiness more habitual.


Joy to the World

When I was in third grade, my teacher was friends with a producer of the kids television show, Sesame Street. Somehow, my teacher finagled for myself and several other students to appear on the show, mostly to sing a song the title of which I knew to be Jeremiah Was A Bullfrog. Sometime later, I learned that the actual title is Joy To The World (the band Three Dog Night sings the most well known version. Although, in my biased opinion, I will say that the version belted out by my enthusiastic classmates and I would surely hold its own against Three Dog Night).

Such generosity! What an amazing gift! And to this day, I thank my teacher for her kindness, for going out of her way to bring this experience to her students. And it’s an experience I always look back upon fondly and with appreciation (the memory is most often triggered by hearing the song!).

Everyday, several times per day, we have the choice to bring it, to bring Joy, to our self, and spread it to others. And we can do this in so many ways starting with showing respect, offering good wishes, or being polite to others. Not just because family and society teaches us this sort of behavior, but because this is our nature. And when we behave in a manner that’s true to our nature, we feel balanced and calm.

To the contrary, when anger or jealousy or pride take hold, we’re completely out of balance, filled with negativity, suspicion and distrust. Who wants to be around people like that? I mean, when I’m feeling negative, I don’t want to be around myself!


Find Balance, Be Wealthy

Read personal finance blogs (shameless plug: BuddhaMoney knows a thing or two), mainstream financial media, and other sources of information intended to educate your self about money management. Learn ways to up your income, decrease expenses, save, invest and grow wealthy.

And … if you’re of the mind that peace and happiness are important, know that a starting point to healthy well being and relationships with others includes practicing and cultivating generosity of spirit. Because this, not a seven figure portfolio, is where true freedom and joy come from (that, and daily sing alongs with Three Dog Night to Jeremiah Was A Bullfrog).

Holiday Shopping: Yikes!

As I write this, it is one day before Halloween, one day before North Americans jive to the Monster Mash and Time Warp, shed their standard wardrobe in favor of a scary, weird, sexy and/or funny costume, watch a horror flick or two, and feast on anything and everything sweet and tasty and completely and utterly unhealthy (except for that dentist, you know who you are, who seems to live in every neighborhood, taking perverse pleasure in handing out toothbrushes and floss and moralizing lectures to kids bent on releasing their inner hound and getting as much candy as they can while the getting’s good).

It’s a totally chilled holiday. A spirited (think ghosts and goblins and spooky pumpkins) celebration void of gifts (other than candy) and sentimentality (except for those who wake up the next morning wishing they hadn’t gorged on chocolate or generously imbibed other feel good, mind altering products; now realizing that gluttony comes with costs, i.e., morning after cymbal drum pounding headache and/or digestive system staging urgent revolt). But hey, even for those who over indulged, the body has an amazing way of righting the ship, eventually, and memory is ever so short that we do it all over again next year.

And before you’ve taken down toilet paper decorations wrapped around colorful autumn trees, and recovered from wolfing down half your kids candy while blaming missing goodies on the sleeping dog, out comes the same old jingle bell ditties, blaring over and over and over on AM radio, because up next on the Gregorian calendar is THE HOLIDAY SEASON.

You know what that means? Open up your wallet because this is make or break time for a whole lot of retail stores and there’s tremendous societal pressure on consumers to buy stuff (see, we’re not really individual people; rather, the corporate world sees consumers as pods existing to be persuaded, cajoled, encouraged, to spend, spend, SPEND whatever you have and more than you have).


Know This About Gift Cards

But now is not the time or place for rants against mindless consumerism (for those so inclined, take a peek here). Rather, this post is for those who don’t have time or energy to buy the perfect gift for everyone on their list, opting instead for a gift card.

It’s a huge, colossal, business, gift cards, with about $150 Billion spent on cards annually. And they’re convenient and almost as good as cash.

But even if you give an iTunes card to a music lover, unlike cash, there’s a decent chance that music lover will not use all of your gift. Because every year, several billion dollars worth of money spent on gift cards remains unused. And guess who gleefully pockets the unspent dough? The company issuing the card. Probably not the gift you had in mind.

Then there are those people who place the gift card in a drawer and promptly forget about it. Others lose the cards. And some wait too long before using the card, letting it expire before the feeling of shopping takes hold. Or the card balance is reduced by activation fees or other issuer fees: don’t use the card within a limited time period (usually 12 months) and the card issuer may charge a monthly inactivity fee. For the most part, store specific cards aren’t saddled with extra fees, but you typically get nickel and dimed with Visa or MasterCard branded cards (i.e., monthly service fee, cash advance fee, foreign currency conversion fee …need I continue?)

As for the card buyer, mostly with the Visa and Mastercard gift cards (essentially a debit card), you’ll be paying a privilege fee to purchase the card (anywhere from $3-$15). And if the card is lost or stolen, some issuers will replace the card for a fee, others say you’re out of luck.


The Rap

“They’re so impersonal.”

“Talk about giving no effort.”

“What if the card issuing retailer goes out of business before the card is used?”

These are common refrains surrounding gift cards, along with carping about card fees and people not using, or losing, the cards.

On the upside, gift cards allow people to buy what they want, making it more likely they will enjoy the gift; not to mention less stress for you, the purchaser, who no longer has to worry about what the heck you should buy Sandy or Thor. And for last minute mad about town shoppers, well, you can send e-cards instantly to a recipients email.

Personally, I prefer giving cash. Really. I mean, if the tackiness element has been removed from gift cards, why does it remain for cash? Is there any difference? A gift card is, essentially, cash in the form of a pretty little socially acceptable seemingly fun to receive card. And the bonus is that, other than potentially getting lost, cash doesn’t have any hangups, i.e., fees, expiry dates or restrictions on using funds at only one store.

Ya, I know, that’s just poor taste! Uh huh. And taste evolves. That’s how gift cards have come to be THE most requested gift for the holidays.

Here’s the thing: I’ve given cash and I’ve given gift cards. Why? Plain and simple: convenience and laziness. And it’s not something I’m proud of. Nope. Instead, when it comes to gift giving, what makes me feel good is giving effort. Really, just thinking about who is the recipient, understanding their wants and needs, and making an educated guess as to what they would like. And if I’m stuck, then I call them and ask: ‘hey, I want to give you a gift. What would you like?’

That’s a gift in itself, thinking well about someone else, focusing on someone else, wanting to do something nice for another person. And if you live in the same city as the recipient, you could even do something totally radical and old fashioned like, oh, I don’t know, spending time with the recipient, hanging out together, talking about life, laughing, sharing a cup of hot chocolate or whatever moves you. That’s a true gift that never goes out of style: sharing our self, our caring nature, our friendship, with another person. Sure, an outdated notion. But one that we would do well to reintroduce into our life.





Don’t Fall For The UpSell!

Released in 2004, Supersize Me is a documentary that follows director, Morgan Spurlock, on his quest to discover what will happen to his body and mind when scarfing down nothing but McDonalds food for 30 consecutive days. For those of you who haven’t watched the film (spoiler alert!) let’s just say that Spurlock gained close to one pound/day, increased his body fat by almost 15%, nearly destroyed his previously healthy liver, saw a 65 point cholesterol spike, became depressed, exhausted, impotent … need I say more?

But I’m not here to review the film or comment on the garbage food (uh, oh, I suppose my reference to fast food as ‘garbage’ counts as a comment) dished out by the conventional fast food industry. Nah. Instead, I’m using Supersize Me as an excellent example of what’s known as ‘UpSelling’.


What Is Upselling?

Upsell. verbDefinition. A sales technique where seller induces the customer to purchase more expensive items, upgrades or other add-ons in an attempt to make a more profitable sale.

Part of the rules Spurlock set for himself included accepting the offer to ‘Supersize’ his order whenever offered by a McDonalds employee (thereby speeding up his march toward organ failure and mental breakdown … uh oh, I did it again! Revealed my bias by commenting).

The marketing geniuses struck gold with this catchy phrase. People loved saying it. And the more they said it when ordering fries or pop, the bigger their bill, and the more money McDonalds made.

See, that’s where the genius comes to play. To upsell customers, to get them to buy more than they want without knowing it, a cute, fun phrase is invented and actively sold to consumers.

Unfortunately, too many consumers saw only the fun of it all, failing to realize not only that the food (if you can call it that) is making them sick but, like the McDonalds Burglar (one of their cartoon characters intended to suck kids into the nefarious arched orbit), the company slyly dipped into consumers pocket for a few more bucks, lightening their wallet.


That said, no one forced consumers to buy enough pop to quench a small village’s thirst, or so many fries that Idaho potato farmers were working overtime to satisfy ever growing demand. Ultimately, each consumer made that choice.

Unlike Spurlock, consumers are not bound by any rules saying that YOU MUST CONSUME MORE if someone offers you more food or drink. Regardless, this is exactly what fast food consumers did. (However, to be fair, Spurlock claims that, eaten often enough, people develop a physical addiction to fast food not unlike a drug addiction that is terribly difficult to break).

And it took Spurlock’s film, and the ensuing outrage it sparked, for McDonalds to shelve the Supersize Me schtick. I mean, hey, when publicity negatively affects sales, you return to the drawing board to scheme other, less slippery, ways to fleece the public.

Here’s what McDonald’s Canada spokesman Ron Christianson said way back in 2004:

“We’ve not eliminated any portion sizes that used to be there. We’ve simply done an adjustment of the terminology Super Size to a large and ceased promoting it in our restaurants.”

Hah! So nothing has changed but terminology? The menu still offers fish tank sized cups of pop and flat boards full of fries … but it goes by a different name. And they don’t actively promote buying more food? Right. When was the last time you ordered a burger and weren’t asked, ‘would you like fries or salad or a drink with that?’ (Technically, this is known as ‘cross-selling’ since the customer is being induced to buy a separate item, not increase the size of the item already ordered. For this post, I’m lumping together upselling and cross selling).


Who Doesn’t Upsell?

So while McDonald’s no longer has the benefit of upselling with a clever phrase, they still upsell. And just so you won’t think that I’ve got a bee in my bonnet (um, that’s a metaphor because, um, I don’t actually have a bonnet, haven’t ever worn a bonnet and, really, wouldn’t even know where to get one), there aren’t too many for-profit organizations that don’t upsell, given the opportunity.

Cases in point:

Airlines. They’ve unbundled prices. Meaning, first you pay for airfare. Then you pay for a seat. And the closer you want to sit to the front of the plane, the more you pay. And unless you have an airline affiliated credit card or other related membership, you’re paying for baggage. Why, because major airlines are public companies. And public companies care more about shareholders than customers.

Rental Car. You’ve rented an economy car, arrive at the rental counter, and you hear, “… for $10 more, we could put you in a full size sedan; for $25, a convertible!” Then the agent tries to convince you that you need to buy their insurance; and it’s better to let the rental agency fill the tank. Just say NO, to all of that. Do your research, find the car you need, know that the rental agency rep will run a full court pressure on you, trying to sell you everything you don’t need, and say no.

Restaurants. It comes down to knowing what you want. To not being “sold” on extras. So if you just want a burger, don’t say yes to the fries simply because someone asked. The employee is responsible for asking, for trying to sell you. You are responsible for knowing what’s best for you. And this means health wise and pocketbook wise.

Clothing. Don’t browse. Know what articles of clothing you want before you visit a store, whether online or bricks and mortar. You need pants? Buy the pants but don’t let the sales clerk talk you into adding a belt when you don’t need another belt. Related, know your budget. If you’re buying shoes and your limit is $75, don’t be sweet talked into the $150 pair because they’re a ‘cool’ brand name. Say no to the more expensive pair, exercise patience, and check out other stores to find shoes you like that are within your budget.

Amazon. (yes, Amazon gets a category all its own!) Jeff Bezos and Co. are excellent at upselling. Choose an item and the site immediately recommends five other items. Drop a laptop in your checkout basket and they offer a larger, more powerful laptop. From what I’ve read, Amazon generates up to 35% of its gazillion dollars in revenue from upselling techniques. Beware! 🙂


Avoiding The Upsell

First, know what you want and stick to it. Second, don’t even consider items not o your ‘want list’. Third, know that sales drive revenue, successful companies are hugely effective at selling, and sales clerks are focused on doing their job, on making the sale.

And most importantly, be ready to say no. In fact, make ‘no’ your default position. It’s nothing to feel bad about. Really, it’s your job, your responsibility to yourself, as a consumer, to say no. Because NOT buying what you DON’T need is good for your wallet, good for building your wealth.












Inside The Happiest Country: Denmark

Back in July, I posted an article titled, The Danish Way of Wealth. The article was a hit, with readers sending me oodles of positive feedback. And included in the feedback were comments from a few kind souls who were born and raised in Denmark.

Not being an expert on the home of Hans Christian Andersen, I invited one such friendly, bicycle loving soul, Carl, (who maintains his own personal finance blog: into my virtual world to provide his take on Denmark, and why its citizens are consistently rated as the happiest folks on the planet.

Oh, but before I welcome you to our discussion, you should know that no money or other compensation will change hands between Carl and myself. We’re just having fun here, hoping to provide you with an informative, enlightening and entertaining read.


Enter Thy Kingdom!

Welcome to the Kingdom of Denmark! (is that introduction okay, Carl? Too hokey? Do tour guides speak like that in Denmark? No? I should stop now, shouldn’t I? Right.)

BuddhaMoney (BM, from here on in): Hey Carl, in the spirit of talk show hosts, welcome to the BM community! No, scratch that. It sounds ridiculous. I’m trying too hard. Let’s just dive right in, okay? How about we start with you filling in some general background about Denmark?

Carl: Sure! Here’s some general tidbits:

  • We’re a small country, about 5.5 million people living on land that’s about twice the size of the State of Massachusetts (the 7th smallest State of the Union).
  • Our native tongue is Danish, a useless language that pretty much no one speaks outside of Denmark. But mostly everyone speaks English as a second language, which is taught in school from third grade onward.
  • As for placing us on a map, our neighbors are Sweden to one side and Germany to the other.
  • And yes, as you already mentioned, I do love biking! And it’s made so much easier by the fact that Denmark is as flat as North Dakota.


The (Horrors!) Welfare State

BM: Tell me about the so-called ‘welfare state’, as some North Americans pejoratively label Denmark and the other Scandinavian countries.

Carl: Denmark is definitely a welfare state! But unlike residents of countries that favour more capitalist systems, we’re good with this. I mean, close to 100% of Danish citizens approve of our political system, a system that ensures an acceptable level of welfare for all people living in Denmark.

Not to be cute here, but think about the word, ‘welfare’. Divided in two parts, you have ‘well’ and ‘fare’. We want all of our residents to live well as they travel through life. Because we see this as society’s responsibility, and we are all a part of society. Why this is seen as a negative in some parts of the world is beyond my understanding.

BM: There’s complete consensus then about government support given to people?

Carl: There’s close to 100% agreement that taking care of all members of society is everyone’s responsibility. Sure, there’s quibbling about the degree to which the welfare state should support people but not the fact that it should.

BM: Based on what you’re saying, it comes across as though your political parties are generally in agreement on most issues.

Carl: Hey, politicians are politicians, right? Meaning there will always be differences between the party holding power and minority status parties. But I will say that our political landscape is way less fragmented than that of many other democracies. For the most part, all of our political parties are social democratic. And within the social democratic framework, some parties lean left, others right.


Free Education For All and Virtually No Debt!

BM: I hear that all education is free. Is this right?

Carl: Yup. 100% free tuition from elementary school through to completion of university studies. Bernie Sanders totally envies us! Hah! Know what else? From the age of 18, as long as we are in school and not living with our family, we get paid $1,000 / month. For those who still live with their family, the monthly stipend is slightly lower.

BM: What! Why?

Carl: The thinking is that this money allows us to focus on our studies rather than working a part-time job to support ourselves, which takes away from study time. Still, we are not prevented from working and some people do choose to work part-time jobs.

Also, unlike North America where so many people live with their parents into their mid and late 20s, most Danish people live on their own by the time they’re 20. Simply because, to a large extent, most people can afford to do so with the government giving them $1,000/month.

BM: It follows then that students graduate from university without any debt?

Carl: Correct. Student loans are available from the government at low interest rates but few people see any reason to take a loan.


Know What Else is Free? Health Care

BM: Tell me about health care in Denmark.

Carl: Like education, there’s no political debate about the provision of health care. It’s free and we all agree it should be free.

BM: Well, it’s not really ‘free’. Health care is paid for through income taxes, yes?

Carl: Fair enough. That’s right. Just like in Canada. The only medical procedures you’ll pay out of pocket for are cosmetic services. And included in health care is dental treatment. Although this is free only until age 18, after which you pay out of pocket.


We’re Not Utopia

BM: Not that I want to bring down this feel good story about your homeland, but are there any negatives you see about Denmark?

Carl: No problem, BM! Sure, Denmark isn’t utopia. We have our share of problems too. And the big time problems are similar to what other countries are experiencing.

Take immigration. Owing to increased immigration to Denmark, there has been a considerable rise in support for the right wing (nut) parties, with about 25% of Danish voters backing parties with a nationalist, close the border bent. The unfortunate response from mainstream political parties has been to make it increasingly difficult to immigrate to Denmark. I see this development as shameful. Because people from all over the world make positive contributions to Danish society. We used to be a more open country. Sadly, this is changing.

Then there’s the urban/rural divide. Politically and socially, Denmark is becoming more divided between people living in large urban centres and those living in small towns. Again, sadly, this divide creates more conflict and tension within our society.

And of course, there is the issue of taxes. While we benefit greatly from free education and health care, we pay an enormous amount of taxes! Our tax system is progressive so the more you earn the more you pay in income tax. The downside here is that, as you earn more and pay more in taxes, the incentive to work harder diminishes, because so much of your earnings will have to be paid in taxes.

Like any country with excessively high rates of taxation, some really talented people opt to leave Denmark to avoid paying high taxes the rest of their life.

And the same goes for successful companies. I mean, what’s the incentive to remain in Denmark if an unfair portion of earnings goes to taxes and not to employees or shareholders? Also, high tax rates make it more difficult for companies to attract talent from outside of Denmark, which of course reduces our global competitiveness.

BM: You mentioned that few Danish residents take on student debt, which is amazing when compared to skyrocketing debt rates among North American college students. What about credit card debt? Is this an issue?

Carl: Credit cards are used somewhat but much less than cash and debit, which is much more common. So to answer your question, owing to limited use of credit cards, there’s not much credit card debt. For me, this is a result of strict financial regulation and a culture of low debt that is ingrained in us from the time we are children.

BM: That’s amazing. And smart. And with no to minimal debt, surely this contributes to Denmark consistently rating as one of the happiness countries in the world. What about bicycling? This I suppose also contributes to happiness?

Carl: When was the last time you rode a bike and did not smile? See what I mean! Yes, we love our bikes. Most everyone owns a bike here and rides it! Think of Denmark as having a bicycle culture, whereas you have a car culture in North America. The whole country is flat as a pancake, and the biking infrastructure in the bigger cities, like Copenhagen, is fantastic with whole streets having been cleared to make for larger bike lanes. Like many Danes, I bike to and from work daily wearing my work gear which, for me, is a suit.

Also, and this ties back to taxes, when you consider the amount of import taxes on cars, I totally understand why people choose to ride bikes instead! For example, a Tesla model S that costs $69,500 (USD) in the USA would cost about $118,000 (USD) in Denmark. As for a bike, there are no additional taxes and I assure you that the initial cost, and maintenance fees, are nowhere near the cost of a car.


Hygge. What’s That?

BM: As you know, one of my recent posts talked about hygge. As you also know, I’m not Danish. Being an authentic Dane, and me being the pretend King of Denmark, I anoint you an automatic expert on this subject. So, please, tell us about hygge.

Carl: Glad to! Hygge is a subject that has been discussed a lot abroad; there are plenty of books about hygge being sold everywhere at the moment. For us in Denmark, it’s part of everyone’s daily life, but we rarely discuss what the concept of hygge means. Everyone just seems to know what it means.

To me, hygge describes a special mood. The closest English word is probably “cozy”, but it is much more than that. I often associate hygge with the picture of being inside during a snowstorm in front of a fireplace with a cup of hot chocolate. It is about the feeling of happiness, trust/safety, fun and relaxation all at once.

We use it mostly as an adjective for different situations. For example, when I describe a nice dinner with some of my friends, I might say that it was ‘hyggeligt’.

BM: Well my new friend, your insights are much appreciated. May your days continue to be filled with hygge!

Carl: Thanks for listening to all my babbling about this tiny country, and may your days be filled with enormous amounts of hygge too!

$1,000 For Apple iPhone 8? Really?

About one year ago, my cell phone contract expired allowing me to upgrade my phone. At the urging of my totally plugged in teenage son, who threatened incessant ridiculing of me for using ancient technology, I upgraded from an iPhone 5c to an iPhone 6. Sure, I had the option of choosing the current model, the iPhone 7, which offered the latest and greatest tech improvements. But I couldn’t fathom one good reason to do so.

The thing is, the 5c was working just fine. It suited my needs, being fast and smart enough (I mean it’s called a ‘smart’ phone for a reason other than being an in your face, silly little marketing ploy, right?). So, just as I had no reason to exchange a 5c for a 7, nor did I have reason to upgrade to an iPhone 6.

But I did exactly that for one reason: cost (so sorry, Teenage Son, my Dad coat of armor makes me impervious to your ridicule!). Not only was there no cost for the new phone but I was able to change my phone plan resulting in reduced monthly charges.

At the end of the day, I had lowered monthly expenses, added more money to my pocket, and was the proud owner of a shiny new piece of stainless steel, glass, plastic, etc, that Teenage Son grudgingly accepted as an improvement, though certainly not worthy of any sort of excitement.

‘Excitement? You want me to get excited? You bring home the iPhone 8. Now THAT’s a PHONE to get excited about! said Teenage Son.


Bitten To The Core

From 2009 through 2016, new model iPhones rose in sticker price from an average of $629 to $645; a reasonable increase of 2.5%. Then came 2017.

While the retail price of the least expensive iPhone 7 model was $649, Apple tested the waters for big time price jumps by slapping the 7 plus with a $769 tag, an 18.5% jump from the non-plus 7.

And how did consumers respond? They loved it! Expensive or not, beyond their means or not, the 7 was gobbled up faster than a juicy stuffed turkey at Thanksgiving dinner.

And Apple execs loved it, counting profits hand over fist and watching the company’s share price (NYSE:AAPL) soar more than 60% in the past year, from about $100 to more than $160.

So the boardroom thinking went, ‘if the masses are willing to digest an 18% price increase with barely a burp, well, how about we really rock this world by moving the needle to 4 digits for the new iPhone 8, making it the first $1,000 phone?’


Justified? Reasonable? Or Not?

Oh yes. How exciting. To drop a cool grand on a phone. Who wouldn’t buy in? Who in their financially sensible mind would object to paying a whopping 50% more than the iPhone 7 for a new phone which is substantially the same save for a few new optional, admittedly cutting edge, yet entirely unnecessary features?

Because, let’s face it, this isn’t your father’s 1980s rotary phone (you mean all it did was make phone calls? How quaint. How … how did you survive?), it isn’t the laughable flip phone of the early aughts, and it isn’t even the iPhone 7 for that matter.

Dudes! Dudesses! The iPhone 8 is from the greatest of all tech companies, APPLE, and it’s their new flagship out of this universe cool product that offers infrared facial recognition and wireless charging!

Okay, look, sarcasm aside, here’s the deal: Apple’s making a bet that it can move enough consumers into the luxury phone market. (To be fair, Apple isn’t the only one looking to juice gigantic profits; Samsung, is not far behind. Later this week, Samsung will introduce its Galaxy Note 8, priced at $950). You see, companies in the know understand that if you want to plant your flag in the luxury market, no matter how well built or designed your product, involuntary salivation is triggered in a certain kind of human animal only if product price is moved beyond easy reach of the masses.

Luxury buyers WANT a higher price. I mean, how else would people be able to judge and compare themselves against others? How would they set themselves apart from the riff raff? How would they know who has more money except by what kind of phone you flash to strangers and lovingly kiss good night? (Ooops, sarcasm creeping back in).

So what’s going on? Is Apple gouging? Is this pure corporate greed at play? Is it not enough that Apple is the planet’s most valuable company? That they have more than $260 Billion sitting in the bank (you read that right)? Or … is Apple simply satisfying demand, giving a segment of consumers what they want, and in the process being a good corporate citizen?

Apple’s bet is informed by their belief that consumers will cough up a premium price for a cutting edge product. That increasing price will increase sales. And this thinking is informed by knowing that US consumers spend an average of three hours per day (three hours!!!) on a mobile device, that the Apple name commands a premium, and that consumers will pay to associate with the Apple image.

Because only at its margin is the device a phone. Moreso, it serves as a personal computer, video player, camera, gaming player, GPS system, music player, reader, wallet … and status symbol. And in the minds of tens of millions of people, its become vital to their daily existence. Not only vital, but for some “the iPhone is your dream phone,” according to Satish Meena, analyst at Forrester, a research and advisory firm to big tech corporations.


Dangerous Dreams

Okay I’m totally out of the loop. Who knew that people have dream phones?! Talk about a marketing home run. Apple, Samsung and their competitors are now burrowed in our subconscious, seemingly as essential to life as oxygen. Or so it seems for some.

And for those folks who gasp for breath when their phone isn’t within reach, the dream is often a financial burden. Because too many folks buy these devices owing to the cool factor generated by tech companies in cahoots with fawning media types.

Sure, for the true techies out there who live for the next digital advance, new model phones may be a must have. But for most of us casual device users, there is no need to buy a new model every year or two or three assuming the current model its functioning well.

But there’s want. And the want is driven by NEW and SHINY and EXCLUSIVE things that inflate our sense of status (well, really, only delusions are inflated, but too many folks derive feelings of being ‘better’ (empty as the feeling is) than others because they own a THING that’s available to relatively few.

Apple knows all about want. Same with Samsung. Any tech corporation worth its motherboard knows that phenomenal sales happen only when there exists emotional attachment. And this kind of attachment is manufactured through savvy marketing.

As corporations go deeper inside consumers heads, vulnerable consumers suffer. Because they convince themselves of the need for an expensive phone that they can’t afford. So credit cards are used for purchases. And when the full balance owing isn’t paid, the consumer incurs interest charges, adding to the total phone cost.

Or wireless carriers offer financing plans, as if this is an excellent solution. I’m here to tell you: NO, IT’S NOT! When purchases are financed, you’re charged interest and interest adds to indebtedness. And as debt grows, savings are depleted or at least not increased, and the consumer’s financial situation only worsens.

So before you chase the dream, do an inventory check of your wants and needs. Measure any desire for a ridiculously expensive electronic device against your inner values. Consider whether you enjoy being played by a giant corporation with an insatiable appetite for more. Ask your self whether you prefer to add to Apple’s monstrous cash pile or whether you prefer to build your own cash pile, through wise spending, saving and investing.






Fear Not The Bag Lady

I know a woman named Lily. She lays awake nights worrying that her bed will soon be a makeshift cardboard box on the street. This despite financial wealth that would have the 99% salivating.

Lily owns her own home, a comfortably sized condo in a luxury building. She has an investment portfolio worth north of $5 million bucks. Annual revenue generated from investments? A tidy $200,000 before taxes. Oh yeah, as if that weren’t enough, government coffers kick in a yearly $16,000. Part of this bonus dough comes from simply reaching a certain age, and the other part is drawn from society’s pension fund to which we all contribute during our working years.

What does Lily do with all this money? Well, not one to feel that money is burning a hole in her yoga pants pocket, for the most part she’s a prudent consumer. That said, she indulges from time to time in travels around the globe. Sure, travel is pricey, but Lily loves meeting new people, experiencing different cultures, and she can afford it. And because she doesn’t come close to spending what’s remaining after taxes from her $216,000 gross income, she donates a fair bit to her favorite charities.

All in all, Lily has no financial concerns. But this doesn’t stop her suffering from a malady commonly referred to as, ‘What’s The Point Of Having Money If You Worry So Much About Money That Anxiety Stresses You Out, Meddles With Your Peace of Mind, And Jumbles Inner Equilibrium.’


Let Go My Nose

I don’t mean to be glib. Money, and the chance of losing all of her money, is a real concern for Lily.

Frightened of losing her wealth, Lily fixates on the ‘what ifs’. What if my investment portfolio drops in value? And if that happens, what if I can no longer afford condo property taxes and monthly payments? If I have to sell the condo, and I place the proceeds in my bank account, what if someone then steals my identity, gains access to my account and all my money is taken? If I have no money, what will I do? Live on the street? Eat at a soup kitchen? Or if I get sick? What happens if I don’t have enough money to pay for health care? Or, or, or …

Are these real concerns? Sure. Conceivably, any of those scenarios could play out. But let’s step back for a moment, put a lid on fear, and give reason some room to breathe.

Lily is 75 years old. Her health is excellent. She has first rate insurance coverage that would take care of most, if not all, medical related costs. Her portfolio is mostly in high rated bonds and cash. Meaning? The portfolio is minimally exposed to stock market volatility, and risk of loss is highly unlikely. Her financial institution fully insures all customer accounts against losses arising from identity theft. And, if needed or desired, Lily could well afford private nursing care without dipping into her principal.

Still, try telling this to Lily and you hit a wall of fear that blocks reason from taking hold.

That’s the thing with money, our connection to it is intensely emotional, not rational. So, Lily, like too many others, lets money concerns lead her around by the nose.


bmAttachment brings misery. Those who know the joy of peace of mind, whether wealthy or poor, have learned to let go the delight of having money and possessions.

Magic Numbers Are Delusions

The Boston College Center on Wealth and Philanthropy undertook a study titled, The Joys and Dilemmas of Wealth. The joys being obvious, the study focused on dilemmas.

For our purposes, here’s what stood out from the results: despite their enormous financial wealth (study participants had a net worth of $25 million plus), the majority of participants did not see themselves as financially secure. Go on, read that bit again. Now roll your eyes and shake your head because that’s the natural response.

You want nuttier? Here we go: participants stated that, to feel financially secure, they would need about another 25% of their current assets. 25% huh? So, with a net worth of $25m, we’re talking $6m and change. Whoa!

Just for fun, let’s break this down. Say participant ‘A’ has $25m. Presumably, peace of mind comes from being bumped up past $31m. As for participant ‘B’, she has $50m. Well, she needs to hurdle over $62m to bask in the warm and fuzzies.

What’s going on here?! The unfortunate part is that these folks will never feel peace of mind, regardless of how much money they have, because they are tying peace of mind to a dollar figure. The thing is, peace of mind does not suddenly arrive when you hit a magic number.


Bag Lady Syndrome

According to results of a study by Allianz (Allianz SE – OTCMKTS:AZSEY), a giant German based life insurance company, nearly 30% of women between ages 25-75 who earn more than $200,000 annually fear the proverbial dropping of the other shoe that will result in them living on the street, alone and penniless.

And almost 50% of the women, regardless of their age, income, or marital status, fear becoming ‘bag ladies’. And these are women who run the family household and have a solid career, some of whom earn more than their spouse.

Why didn’t Allianz include men in the study? Well, it seems that while women tend to be grounded, willing to acknowledge limitations, and question themselves and others with a view to learning, men are, um, uh, um … different.

How so? Generally speaking, men make for terrible study subjects on this issue because they are prone to self-delusional thinking. Specifically, men the world over are known to inhabit two primary delusions:

  • Men know where they are going, thus never ask for directions.
  • Financial know-how is genetically programmed into their wiring.

My guess is that if someone ventured to study men on this subject, and were able to somehow, magically, tease out the male animal’s delusionary thought processes, there may come into being a condition known as Bag Man Syndrome, in which men exhibit the same money fears as women. Until that day arrives, we’re focused on women.


For those readers who disagree about the nature of men, please write a letter to the editor (that would be me) explaining the basis of your disagreement, providing proof that you are not delusional, and I will be sure not to respond because, you see, a writer needs latitude and I humbly request that you smile and grant me this latitude.

Deconstructing the Mythical Bag Lady

I don’t claim to know precisely why this sense of impending financial doom is prevalent among women. But I’ll do my best to shed some light on the issue. In this regard, consider the following:

  • Travel through history and you’ll see that women were blocked from acquiring wealth, power and freedom. Today, this oppression continues outright in most countries though in subtler forms in Western countries.
  • Sure, women are now empowered like never before but there is still a ways to go. Economic imbalances persist in North America and Europe with women typically paid less than men for the same work.
  • As a result of taking time out from the work force to populate our planet and care for little ones, women earn less thus save less for retirement.

There are many excellent books on this topic, with the most recent one to make a splash written by Sheryl Sandberg, Facebook Chief Operating Officer, and woman extraordinaire, Lean In: Women, Work, and the Will to Lead –

  • We humans become acclimated to our environment. If generation after generation of women are taught that money matters are not their concern, and are not afforded the opportunity to assume authority over financial matters, then over the decades and centuries, this kind of thinking burrows into the subconscious, leading women to internalize a belief that they are limited in their financial ability.

Okay, so if we know how the bag lady myth came about then the question becomes, how is the subconscious rehabilitated and destructive thoughts banished?



Do not allow the words or actions of others to define who you are, especially when those words or actions lead to self-limiting beliefs. Honestly acknowledge these beliefs, then challenge them. If false, discard them and replace with positive self-perception. Changing your thoughts, replacing the negative with positive, leads to confidence and ability.

Reconstructing Your Relation With Money

So if you’ve been plagued by this negative line of thinking, it’s time to stop and investigate why. It’s time to change your relationship with money, open up this particular space, and plant new ideas supportive of financial success and peace of mind such as:

  • There is no mysterious formula to successfully managing money. Read lots, study lots, and go to it, just like any other venture (oh, and staying part of the BuddhaMoney community will seriously increase your odds of success!)
  • Empowering yourself is good for you.
  • Banish fear through planning and saving.
  • If you’re feeling stressed, hire a qualified financial professional to help out.
  • The whole ‘bag lady’ myth and the shoe dropping superstition, let that silly thinking go so you can get on with life and not be dragged down by yourself.

Just so you know, I’m not giving up on Lily. I’m working with her. I’m planting seeds. I’m watering the seeds. I’m hopeful that she’ll one day be able to minimize the irrational money fears that grip her way too tight. And when that day arrives, when Lily rejoices in all that she is and all that she has, she’ll know true freedom.

ps. Dear BuddhaMoney members, this article was published back in January, 2017. It’s posting for the second time results from me encountering this issue over and over, and wanting to do what I’m able to empower people to face this issue, do what they can to lessen the grip of negative emotions, and feel that much lighter in the way they relate to money. 



Drive a Bargain, Save Money

Looking to buy an 8 x 10 rug for our family room, I visited a local rug seller. Before doing so, I knew full well that the rug selling business has a bizarre business model: first, rugs are marked up by a ridiculous amount; then the merchant touts a ‘50% off sale’, ‘going out of business sale’, ‘liquidation sale’, ‘time sensitive once in a lifetime sale’ – any promotional tactic the purpose of which is to drum up foot traffic. It’s amusing really; this particular rug store has been ‘going out of business’ for the past four years running.

After finding a rug I liked, taking note of the wink, wink, nudge, nudge list price and ‘sale price’, I asked the owner if he was willing to accept a price 25% lower than the ‘sale price’. Knowing what I do about the rug business, that there are fat profit margins resulting from buying rugs cheap in places like Afghanistan and India (I won’t get into the child labor issues here), and selling to naïve North Americans at hugely inflated prices, I was confident that a lower price could be negotiated.

But I turned out to be wrong. The owner looked at me as if I were from another planet. A hostile planet at that. Who did I think I was?! Daring to ask to pay a price less than what is written on the price tag! By the way he reacted, you’d think asking a question is an unforgivable crime.

Still, I figured he was posturing: this was the owner’s opening volley in negotiations. But after he walked away from me, effectively communicating that our short-lived interaction had ended, I realized I misread the situation.

Here was a guy steeped in North American retail culture. A culture that has effectively trained consumers to pay list price. Likewise, retailers have been trained to expect list price to be paid. And if the consumer doesn’t like the price, then there’s only one option: leave the store and go look for a lower price elsewhere.


Florida Flea Market

I was 17 years old the first time I struck a deal with a merchant. In Florida with my parents, we visited a flea market. One of the stalls was selling brand name knock off watches with minor defects (i.e., the tiny Gucci name was changed to Cucci – who would know the difference?).

I saw a watch I liked and asked how much. Ten bucks I was told. Before I could reach into my pocket for the money, my father pulled me aside.

“Offer him $6,” he said.

“What do you mean? The guy said the price is $10,” I naively responded.

“Listen, he expects you to negotiate. Offer him $6. Haggle with him. See what you can do.”

This was all unfamiliar territory to me. But with my father’s encouragement (and a smile on his face, telling me to relax and have fun), I started the process. After a few minutes of back and forth haggling, the merchant offered the watch for $8. Thinking I was doing well, and that eight bucks was a good deal, I returned to my Dad for guidance. He told me to take $7 out of my pocket and place the money in the merchant’s hand.

“Why?” I asked.

“Because $7 is a fair price, and because when someone is putting money in front of you, in your hand, it’s difficult to resist.”

He was right. The watch was mine for $7. And once the negotiating process was over, I felt both a sense of relief and satisfaction. I mean, after I got over my initial trepidation, I saw bargaining as a game to play. As for the merchant, he still turned a healthy profit as his cost for the watches was a whole lot less than what I paid, so I learned afterward.


Bargaining: The Third Option

Negotiating on price is not limited to Florida flea markets or Middle Eastern bazaars. The option to negotiate presents itself in many situations but we don’t know this unless we ask. And when we ask, and find a willing merchant, well then, say hello to a lower purchase price that translates to savings and more dough in our pocket.

So who can you bargain with? I’ve bartered with big telecom companies (i.e., cell phone), department stores when buying large appliances and mattresses, even the Gap when buying clothes for my kids (they threw in extra discounts and coupons for future purchases). Whatever the store, if I see an opening, I try to drive through.

As for retailers who look at you as if asking for a lower price is somehow not playing fair, or as if you’re speaking a language known only to Klingons … that’s their issue. If they’re willing to lose a sale, lose a customer because their ego is bruised, so be it. It’s a competitive landscape out there and you, the consumer, may always take your business to the competitor most willing to meet your terms.


Big Ticket Item No. 1: Automobile

You absolutely need to know that bargaining is expected when shopping for an automobile.

Car dealers typically shoot for a 10% profit. Meaning, there is 10% wiggle room, with most dealers willing to accept a 3-4% profit. But they’re not going to just give it to you! The dealer’s starting position is that you pay list price (Manufacturer’s Suggested Retail Price – MSRP). And if you don’t ask for less, if you don’t even try to bargain, then that’s what you’ll pay.

If you’re willing to give bargaining a go (highly recommended) when purchasing a vehicle, start by grinding down price, with your opening offer being 10% lower than MSRP. The dealer won’t accept such a low offer because they wouldn’t make any profit. But setting your opening bid low gives you room to move up in price and the dealer room to move down to meet you somewhere around 5% less than MSRP.

If you’re not getting as much of a price reduction as you want, lean on the dealer to throw in cash rebates or other incentives. When I bought my last car, and I wasn’t entirely satisfied with the price being offered, I caved to the dealer’s price in exchange for a few goodies, including car mats, trailer hitch, roof rack cross bars and a car box.

And keep this in mind: you always have the option to walk away. Don’t underestimate this option. It’s powerful. It’s a tough business, car sales. Salespeople want your business, and they’ll usually do whatever is reasonable to close a sale.


Big Ticket Item No. 2: Home

After my recent post about buying a home, I received a comment from a reader saying that people need to know, in a buyers market or balanced market, how much under the list price do you initially offer.

Unfortunately, unlike autos, there’s no one size fits all answer. That said, here’s a few pointers:

  • Upper Limit. Know what you can afford to pay and do not exceed that number, no matter how excited you are about fulfilling your home buying dream (because if you exceed your limit, you’ll dig your self into too much debt, and the dream morphs into a nightmare, or at least undue stress).
  • Do Your Homework. With the upper limit number in mind, as well as the list price, have your real estate agent give you the stats, i.e., sale price of similar homes in same neighbourhood during the past few months, and all other available research relevant to home price and current market activity. And do your best possible sleuthing to try to find out the seller’s situation.

For example, if the seller has already bought another home, and that transaction closes in two months, then you know seller is feeling the heat because they need money from this home to fund their future home. Otherwise they’ll be carrying all the expenses of two homes. Under a time crunch, seller may be more willing to accept a lower offer.

  • Don’t Be Reasonable. Right. Not something you hear everyday. But in negotiating, your job is not to look out for the other person. Your job is not to be liked, not to be thought of as a good guy/gal by the seller or their agent. Nope. Your job is to get the lowest price possible. It’s up to the seller and their agent to look out for themselves.

So start with a low ball offer. And don’t fret that an unreasonable offer equates to showing disrespect. It’s not. You can show kindness and consideration to the seller AND make a low offer. One does not cancel out the other.

Then wait for the seller’s reaction. If they ignore the offer, then you increase the bid by a small amount if you’re serious about purchasing. If they counter-offer, then you know you have a seller who wants to get a deal done, even though the lowball bid won’t fly.

Here’s a concrete example. A friend of mine (HomeBuyer) was looking to purchase a home for him self and his family. They found what appeared to be the perfect fit. The home was listed for $595,000. After four months on the market, the seller dropped the price to $505,000. Clearly, a sign that they wanted to sell.

Armed with detailed market research, knowing there were no other offers and the seller was ‘motivated’ (as they say in the trade) HomeBuyer offered $460,000. Seller balked, saying that Homebuyer’s bid was a slap in the face.

Homebuyer tried again, increasing his offer to $480,000. Though Seller wasn’t thrilled with the revised offer, they saw that HomeBuyer was for real and countered at $495,000. Homebuyer, asking to split the difference, made a third offer of $487,500. Seller refused, saying they were already taking a bath if they sold at this price. Still, they gave a little more, reducing the ask price to $492,500. HomeBuyer, believing it wasn’t wise to push any further, accepted and moved into his new home a few months later.

Now remember, Seller could have exited negotiations at any time. But they didn’t. Likely because they were able to alter their perspective, i.e., the home’s value may have been $595,000 to them but in 4+ months, no buyer had agreed with that valuation. So they had a choice: wait for a higher offer or take what was on the table.


When You Try, Sometimes You Get The Price You Want

You won’t ‘win’ every time you step up to negotiate. That said, you’ll never get a price reduction if you don’t even try. So try. See what happens. Experience the thrill (is it just me?), the fun, of bargaining, and odds are you’ll be saving yourself money.



The Seattle Project

There was an amazing response to my last post about Hygge (pronounced “Hoo-gah”). So I’m following up by continuing the discussion, focusing in on this thing we call happiness. Exploring why happiness matters, and how to bring more hunky-dory feelings into our day-to-day living.

Not just because happiness is a worthwhile goal, although mellowing in blissful mental states is most definitely high on the list. But also because when we’re clear-eyed, feeling the groove, and our mind is in a good place, then we’re driven by positive, constructive thoughts, and we make healthier decisions all around.

This includes money related decisions, i.e., better investment choices, increasing savings and reducing debt. In short, happiness is good for the head, the heart, and the wallet.


Gross National Product … Rejection!

If you read the business pages, you’ve no doubt come across the term, Gross Domestic Product (GDP).

Technically, GDP is defined as the value of all goods and services made by a country’s residents and businesses. In essence, GDP refers to measurement of an economy’s output or production. And it’s used to gauge the health of a country’s economy.

GDP plays a large role in driving government policy and Central Bank interest rates, both of which aim for strong, sustainable GDP growth. Because the thinking goes that more economic growth means more employment, more people making and spending money, and a more prosperous nation.

And, so says conventional wisdom, when people have money to burn, they are happier. Governments like happy, content people because they’re less likely to agitate for change, less likely to ‘throw the bums out’ at the next election. Thus continues the relentless focus on GDP.

The government of Bhutan doesn’t buy it. Bhutan (bordered by Tibet and India; human population less than one million) rejects the idea that prosperity is measured strictly in economic terms. Instead, the Bhutanese people measure prosperity through Gross National Happiness, i.e., ‘well-being’ takes preference over material growth.

But let me be clear here: Bhutan is not saying that GDP doesn’t matter. Not at all, because economic output, growth, has tremendous potential benefits for individuals and all of society. But Bhutan’s question is … growth at what cost? 


The Happiness Alliance

There’s a non-profit organization based in Seattle, Washington, called The Happiness Alliance (HA). Inspired by Bhutan, these forward thinking folks assume a holistic view of life that expands the concept of prosperity beyond how much dough you can jingle jangle in your pocket.

Here’s the jist of what HA has to say:

  • The purpose of government is to secure equitable opportunities for all people’s happiness.
  • The purpose of the economy is for human happiness and planetary sustainability.
  • The point of life is to be happy.
  • You are the happiness movement.

Radical notions? That instead of going to battle every day for our share of the pie, accumulating as much stuff as we’re able and keeping it to our self, well, we’re all in it together, cooperating, compromising, accepting shared responsibility, breathing life into the notion of ‘common good’.

And we can do so if we understand that,

“You are the happiness movement.”

Really, I love this! The idea that it’s up to each of us to shape our own perspective, to choose to let the light in … or not. Now, I’m not here to tell you what that means, to let the light in. That’s personal, it’s for you to figure out.

But I will reveal my own hand in saying that when enough people see the purpose of government as being to secure equitable opportunities for all peoples happiness, then you get a society like Denmark (see The Danish Way of Wealth) that repeatedly scores at or near the top of the World Happiness Report.

Denmark. Derided by some as a ‘welfare’ state. Praised by others for adopting a balanced approach to life. Not pursuing growth at all costs yet enjoying a high standard of living. Compassionate toward its people. All of its people. Not just those fortunate enough to afford a middle class, or higher, lifestyle.


What Does Wealth Mean To You

That’s the question we all have to ask. What is wealth? How do our values inform our definition of wealth? And does monetary wealth affect our values?

Is wealth only about accumulating assets? Or is there more to being wealthy? Is it about finding contentment? Does contentment lead to the warm and fuzzies? Some would say that contentment is our greatest wealth.

Enter Buddha


The cause of suffering is craving. When one is filled with intense drive to acquire, the drive in itself causes suffering, causes much anxiety, and little satisfaction even once the desired object is attained.

Do not confuse quality of life with a quantitative ‘standard of living’. Quantity does not lead to happiness.