The Rules, Part LXIX

Photo Credit: EveryCarListed P || The world is tough, and you must prepare yourself to avoid licit con men

“Don’t buy what someone else wants to sell you. Buy what you have researched that you want to buy.”

David Merkel at Aleph Blog, many times

Poverty is not just a lack of money. It is a lack of knowledge, a lack of intelligent friends who can guide a person through tough decisions. Or, it is pride, thinking you can figure it out on your own when you are truly not capable. Stop it with the positive self-esteem jive. Most people should not have positive self-esteem — they need help, or, they need to spend more time figuring out the right answers to hard questions rather than using the time for leisure pursuits. They need to work harder to be smarter, or at least cultivate smart friends to help them.

The rule above has been mentioned at this blog 16 or so times in different ways. Many of the articles were dealing with penny stocks and other sorts of investment cons. Almost no one is out to do you a favor. The rules that the government puts in place to prevent fraud on a statutory basis will only catch the dumb crooks. Smart crooks can work around them, and convince you that they are your friend. Modern crooks are dressed nicely, speak nicely, and are friendly until the deal completes.

This is why you have to be your own best defender, or have intelligent friends to help you. Can you figure out:

1. Am I getting a good deal on this house my realtor is trying to sell me?
2. Am I getting a good deal on this car that this salesman is trying to sell me?
3. Is the financing that they are offering me to buy the house or car a good deal?
4. Can I reasonably negotiate with an employer for better compensation?
5. Should I buy this life insurance or annuity policy that the salesman is showing me?
6. Am I paying too much for investment services? Does my advisor have talent?
7. Should I buy this complex investment that my broker says can’t lose?
8. Can I ask for a discount on this big ticket item?

The answers to 4, 6a, and 8 are usually yes, and the rest are usually no. But I will tell you that this is the era of the internet. More information is available to the common man than at any time in the past, and better yet, some of that information is even correct. Be skeptical, but not cynical. Weigh arguments. Compare what different parties say, and try to understand who has the better argument. Learn how to negotiate — life is not fair, you don’t get what you deserve, you get what you negotiate.

Beware convenience. The first three letters of convenience are “con.” Spend a little more time analyzing price/quality tradeoffs before you decide to buy something. In the era of Yelp and Google, look at the ratings of those that you might buy from. In the era of Amazon and Google Shopping, use the internet to find the low price.

If you are not willing to put in the work, then don’t complain when you get a bad deal. It is easier now than ever to get information on price and quality. A subscription to Consumer Reports is cheap and worth it. So much pricing data and customer reviews are freely available over the internet.

So do your homework and buy– you will be better off than if you listen to a salesman who is compensated to sell you something that is not what you need.