Surgery this Week!

Readers,

I will be going into my very first surgery (back surgery) this week, ever. In fact, the only time that I've ever been in a hospital room (outside of checkups) was to see others who've been through surgery. So, I'm preparing for that. I don't know how long I'll be in recovery--maybe it will be a week, maybe 2. Either way, I will be unable to post until perhaps the second week of November. However, please check the Hotbox Newsreader over to the upper right (facebookers click through to the site).

Take Care,

Charles

Our Scary Future? Not so much.

Halloween is nearing, and if you take a look around the world, on the surface things appear pretty gloomy—especially for those who plan to invest in the stock or housing market. Check out this scary quote:

US FED CHIEF WARNS WALL STREET

The weakness in the U.S. housing market "is likely to be a significant drag on growth in the current quarter and through early next year," U.S. Federal Reserve Chairman Ben Bernanke warned.

Source: http://www.cnn.com/2007/BUSINESS/10/16/bernanke.speech/

Ooo..scary.

That is, until you read, the very next few sentences:

But he hinted that it may not get that much worse and that investors and lenders may have learned from their mistakes.

"Rather than becoming more crisis-prone, the financial system is likely to emerge from this episode healthier and more stable than before," he said in a speech to the New York Economic Club Monday night.

Reading that, I know what you're thinking—who goes to economic club meetings? Nah, more likely I hope you realize that the Fed Chair says our dire situation won't last much longer. He hints towards refraining from a rate cut, and I think it's all to the good that he takes that path of action. You see, constantly tinkering with our economy every time it corrects itself does nothing but slows the correction process.

Today's society goes through great length to protect your from risks—toilet gaskets, scares from China, and yes, the Fed will try to interject to save investors from making poor decisions. However, great risk brings great reward—and sometime great failure. However, you are designed to rise from failure, not be destroyed by it. Failure makes you battle-tested—and when people jump through hoops to insulate you from failure, then it hurts even more down the road.

Another hyped craze is the alleged Housing Market craze. (Yes, I know, I've been sucked in myself). However, it's sometimes better to focus on the bigger picture. About 90% of all mortgages are being paid on time an actual homeownership is relatively stable.

All You Need to Know

Look, I'm not saying the road won't get bumpy from sometimes. It doesn't mean however, that you should stop driving altogether. It doesn't mean you start looking for someone to bail you out of your decisions either. All you need to know is to focus on the long-term future and to ignore the weekly scares blasted to you on the news shows every week.

Can You Haggle?

We do it for houses, cars, and even airline tickets. Some call it negotiation, others call it "being cheap." But does the art of haggling, or "negotiating" for lower prices on other consumer goods and services really work? Here are some excerpts from a New York Post article that commented on a personal finance study:

"According to a new study by Consumer Reports, the ancient art of haggling is a lot more useful these days than most people realize, and can lead to bargains in surprising places.
The magazine surveyed 2,167 Americans and found that up to two-thirds of people have had success in getting lower prices by negotiating for products."

And what are consumers getting discounts on these days?

"Consumer Reports also found that people could get lower prices on cellphone plans, jewelry, appliances, electronics and collectibles if they showed they were willing to walk away.
Furniture had the most successful rate of negotiations, with some 94 percent of people who haggled for things like beds and couches saying they got a lower price..."

Looks as if you can get some discounts on goods that are quite popular! However, although the opportunity exists, many people refrain from taking such a discount on goods because they fear looking cheap or foolish in front of the salesman. (I don't understand this, however). The article closes with some good tips on how to do a better job "closing the deal" on price negotiation:

* Work with the salesman - don't issue "take-it-or-leave-it" ultimatums.
* Be discreet, and refrain from telling everyone in the store about the deal you are trying to get.
* Make sure you are talking to a person with the power to negotiate.
* Try to make an offer at a time when a seller wants to unload a product, such as when it has been sitting around unsold for months.

The article even talks about how haggling is "not allowed" in big chain retailers, but I don't see why this is true. Just because a retailer has "Circuit City" written on the outside of their building doesn't mean that prices are final--especially if there is no sale prices on the particular item you seek.

I encourage you to give it the old college try when you walk into the store next time to purchase a "big-ticket" item, especially electronics and furniture. Speak with confidence. Show your interest (if you are indeed interested) and use a line like "How much will you take for this...?" Who knows, you'd be surprised what discounts you can get. I know I'll be trying it in the future.

Worth of Stuff, Part III: Shop Wisely. Shop Privately.

Last week we analyzed the importance of looking past marketing tricks common in the food and grocery industry. People are sometimes fiercely loyal to products they "grew up with" and often skip private (store-brand) products because they feel they are "inferior" in quality. Sometimes they are, but many times they're not. Click here to review last week's article.

My guess is that it extends beyond just groceries. People are thoroughly convinced that their name brand clothing, cleaners, and personal-care products are far and above their national counterparts. Historically, that may have been true; there was a time where store brand were just not good at all--just a cheap imitation of the leading brand. However, as many grocery stores and drug stores sought to improve their margins, they invested in their own products, and they can choose their own shelf space and don't have to market it. Often, distributors would make the same brand and quality of product and distribute it to private labels! Bottom line--private labels no longer equal substandard quality if you know what to look for.

So, How to Tell a Bargain from a Cheapo?
Generally, the more common a product is (the easier to produce), the better the chance you have of buying a great product. For instance, I have a friend who used to work in the beer industry and he explained to me the difference between "cheap" beer and the seemingly better-tasting brand. Essentially what happens is that the beer company produced their "quality" product from a more advanced fermenting process and took more time to produce. The cheapo beer was made from the remnants of said beer product. There is a clear-cut quality difference here.

However, what about when it comes to more common products like milk/eggs/butter or products that require a specific makeup (like ibuprofen) you can definitely find ways to choose a better bargain by going to the right private labels. First, study the information provided. If its medicine, check to see if the concentrations of medicine are the same. If you are still unconvinced, ask the pharmacist!

As to other goods (as far as groceries concerned), I encourage you to just try private labels one at a time. When I was down South I frequented Kroger and tried their products one at a time--I tried their brand of Cheerios (a good move), their brand of garlic bread (another good move), and their brand of Ranch salad dressing (bzzzt). So you should try a little trial and error and see where it leads. You'll be surprised not only how much money you can save by shopping a little wiser (and more privately). And you won't be alone. National brands are losing their grip on many products because private labels are simply investing more into their products, and they don't have to advertise.

If you have taken the Private Label Challenge, let us know what brands you buy from around your way. I see that we're getting national and international visitors, and would like to see what you guys are buying and if name brands work for you.

I will be out next week, so make sure to check out our Newsreader hotbox over to the upper right. Take Care.