A few nights ago, I couldn’t fall asleep.  So, I got out of bed and did a little ‘channel surfing’.

Between reruns of Sports Center and The Andy Griffith Show, I spent a few hours watching a couple of ‘television shopping networks’.

Now, I’m hooked.  Not on the products - but on the way that the products are presented and promoted.

Here’s what I have learned -

Every product was presented as a ’special value’ or ‘amazing deal’.

As each host introduced a new product, a little box, with product details, would appear on the left-hand side of the screen.  And, inevitably, the text would state - ’special value’ or ‘first time offer’ or something similar.

Each product was promoted by a product specific ‘host’ and a product-specific ‘guest’.

It was amazing.  As a new product was introduced, a special ‘guest’ would appear to talk about and promote the product.  The host and the guest would interact and exclaim how ’special’ or ‘nice’ or ‘breathtaking’ or ‘unique’ each product was.

Callers would call in - and want to talk to the host, like they were old friends.

Callers called in and spoke to either the host or the guest, or both.  And, inevitably, the caller would say something nice - really nice - about the PERSON to whom they were talking.  Yes, the caller would mention the product - and how they ‘loved it’ - but, the key to the whole ‘call in’ segment appeared to be the callers’ desires to talk to the various hosts.  It was amazing.

Products were always available ‘at a special price’ or ‘via flex pay’.

No matter what the product was - a set of pillow cases, a pair of earrings, a power tool - the host would mention that it was on ’sale’.  And, sure enough, on the graphic, the ‘original price’ would have a ’strike through’ and the ‘value price’ would be highlighted.  On top of that, most items were available on ‘flex pay’ - where they charge your credit card for 1/2 or 1/3 of the payment, two or three months in a row.  Again, callers ‘loved!” this feature - and many remarked how ‘easy this made it for me to purchase’.

The setting for each product was custom-designed to evoke a specific mood and reaction.

I noticed, for instance, that when they sold a particular toilet cleaning product, the entire ’stage’ became a well-lit, beautifully decorated bathroom.  When they were selling clothing, each item was shown on a different size model.  In fact, ‘plus size’ models were featured.  The entire production evoked a sense of ‘connection’ between the customer and the product.

Each host had her / his own way of promoting the product, but all of them knew how to steer the conversation back to the ‘wonderful product’.

Again, no matter what the ‘guest’ or ‘caller’ might say, the host had an uncanny ability to promote the product.  Over and over and over again, the product was ‘my favorite’ or ‘the third one I’ve owned’ or ‘my mom’s perfect gift’.  Not only did they sell the product, they sold their ‘love’ for the product.

Every item was ‘almost sold out’ or ‘available in limited supply’.

No matter the item, the color, the size, or the quantity - Near the end of each segment, it would be ‘nearly sold out’.  And, as the host talked to the ‘producer’ - she’d be informed that those who ‘called right now’ could be assured that the product would be available, but they needed to call ‘right now’.

Some thoughts -

I have never purchased anything from a ‘home shopping network’.

I find it fascinating (perplexing, and a bit sad) that the callers seemed to consider the hosts to be their ‘friends’.

I wish that I could promote ‘debt reduction’ with the same fervor that these folks promote ‘products’.

I find it odd that after years of selling products via television, these networks still ‘run out’ of items to sell.

Surely, they really are running out?  Right?  They wouldn’t, you know, lie to us?  Would they?

Put the card away, be thankful for the stuff you already own, and call your real friends -

Tell THEM how wonderful THEY are.

You’ll save money, you won’t have to make payments, and you’ll be talking to someone who really wants to hear from YOU!

And, late at night, when you can’t sleep, come back here and read through the No Credit Needed archives!

But, hurry!

Supplies are limited!

• 5 Comments

As you move away from financial irresponsibility and towards financial stability, you will find yourself becoming aware of certain new realities. First and foremost, you will note that the vast majority of Americans live without much regard for their own financial futures. Supported by a massive government that believes in handouts and bailouts, many folks have forgotten the idea of personal responsibility. Living well beyond their actual means, most have succumb to the pressure to have more, get more, and use more.

Ironically, instead of supporting those individuals who wish to save, our government promotes consumption. Instead of urging people to save for down payments (and thus prove financial maturity), our government promotes even-lower mortgage rates, swelling the supply of money and lowering the value of the dollar. Instead of honoring its budget, our government grows ever larger, competing with private enterprise, entrenching itself in every area of our lives.

We live in strange times, where people have ceded their liberty for (so-called) security. We have abandoned the ideas of frugality, simplicity, and prudence and replaced them with greed, consumption, and excess. I feel that we are moving towards a day of reckoning - A day when the spinning-plates of an ill-advised war, a convoluted tax structure, and a pseudo-stimulated economy shall come crashing down.

I wish that I knew all of the answers - but I’m just beginning to understand the questions. But, I do know this - Things feel uneasy. I talk to folks all the time - good, honest, hard working folks - and they are worried. Many (most?) are living paycheck-to-paycheck. Husbands and wives are working to provide for their families, but they feel overwhelmed. Burdened with the desire to provide bigger and better things for themselves and their children, but unaware of the methods for bringing about true prosperity, many are one misstep, one illness, one lost paycheck away from financial ruin. And so, they depend on credit and the promises of government, instead of their own ingenuity and abilities.

We must gather ourselves - and move in a different direction. We should demand fiscal responsibility - from our politicians, from the people with whom we invest our money, from the companies with which we do business - and from ourselves.

All true change begins at home. We must learn to live within our means. We must seek for opportunities to increase our income. We must teach out children about financial matters and we must talk with our spouses about money. And, above all, we must take personal responsibility for the financial decisions we make. Reversing our course may be difficult - but we must being to turn the wheel.

We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.

Instead of blaming the rich, we should learn from them. Instead of criticizing profitable businesses, we should thank them for the jobs they provide. Instead of supporting failing policies and practices, we should encourage ingenuity and enterprise. Instead of borrowing from our enemies, we should trade with our friends. Instead of glorifying the excess of celebrity, we should applaud the wisdom of the millionaire-next-door. Instead of promoting laziness, we should reward hard work. Instead of doing what we’ve been doing - we should do something else.

• 18 Comments

I’ve been a fan of the Dave Ramsey Show for more than four years. I’ve listened to Dave’s advice, read Dave’s books,attended Dave’s “live event”, and called Dave’s show. Readers of my blog can tell that I’ve been heavily influenced by Dave’s ideas about credit, debt, money, investing, and budgeting. I love the concept of the “Baby Steps” and I strongly agree when he says that personal finance is more about behavior and less about math. I agree that debts should be paid, smallest-balance first. I agree that people should buy used, not new, cars. I agree that term-life is better than whole-life. But, I have found a few instances where I, yes, good old NCN, disagree with Dave.

Dave suggests that you postpone 401k/403b contributions until you are debt-free, including amounts that would be matched by your employer. (I’ve actually hear Dave say this, at a live event I attended in Atlanta.)

I reduced my 403b contributions to a bare minimum while I was getting out of debt, but I wasn’t about to forfeit an employer-match. If I found myself in a situation where I was missing payments or falling behind, then I’d consider canceling all retirement contributions. But, as long as I could reduce my debt AND fund my retirement so that I could receive the match, that’s what I would do. I’m all for getting out of debt, but leaving matching funds “on the table” strikes me as unreasonable. If your company matches 50% of the first $2000 you contribute, that’s an automatic 50% return on your investment! I don’t care how high your credit card rates are, giving up a 50% return would be ridiculous. Please don’t misunderstand. I fully agree that, while reducing debt, retirement contributions should be temporarily lowered, but not below the amount an employer will match.

Dave suggests that you sell your car, unless you can pay it off in 18 months, even if this means that you have to borrow the difference between the amount for which you sell it and the amount you owed for it, and buy a cheaper, used car.

I’ve run the numbers, over and over, and there are times when simply taking a few extra months to pay off the car makes more since than selling it, financing the difference, and buying a junker. Personally, I was able to payoff my car note in less than 10 months, but I know, for a fact, if it had taken me more than 18 months, my wife would NEVER have gone along with the idea of getting rid of her car and replacing it with another, especially if it meant getting another loan for the “difference”. This is one of those ideas that turn people off to Dave and his message. I realize, trust me, that Dave, like me, is excited about helping people get out of debt. Instead of a hard and fast “rule”, may I suggest that you analyze the “total cost” of owning the automobile that you are buying and make an informed, rational decision about whether or not to sell it? In some cases, you should sell the automobile “you cannot afford”. In other cases, you might be better off paying for the car you already have and driving it until the “wheels fall off”.

After completing your emergency fund, Dave suggest putting 15% of your income into retirement. Dave always uses 12% when calculating anticipated returns.

I’m just not a fan of using “percentages”. Instead, I like to focus on the concepts of “fully-funding” or “maxing out”. But, the single, biggest problem I have with Dave is that he assumes a 12% return on retirement investments. I’ve heard Dave’s rational for using the “12%” figure, but, there are SO many factors that go into determining exactly how much an investment will return, that I think it’s somewhat “reckless” to assume that “everyone” can depend on a 12% return. Trust me, I know very, very little about investing, but I DO know that markets fluctuate, meaning that they go up AND down. I’m a big-time proponent of investing for the long-term over a long-time, but I worry about using such, in my opinion, an aggressive percentage. Call me pessimistic, but I always use 8% when I calculate anticipated returns and then HOPE that I’m off by 4%.

Whew. This has been a difficult post to write, but I’ve been thinking about these things for more than two years. I don’t believe in “throwing the baby out with the bathwater” so I’ll continue to listen to Dave’s show and read his books, but on these issues, I’ll have to “disagree” with Dave.

Check out these posts over at My Two Dollars and The Simple Dollar and All Financial Matters and Five Cent Nickel.
They’ve written articles about various aspects of investing, saving, and debt reduction.

• 27 Comments

Lots of bits and pieces.

I was able to send in another 200 bucks to ING. That makes my new total of 6300. Yes! You can check out my new chart over at the NCN Network.

As for the podcast, I have recorded Episode 11, but the server at Ourmedia is being a bit sloooow today. Hopefully it will be up sometime later this afternoon.

Clearly I am enjoying putting money into our savings account. March has been a very strange month, and we seemed to have fewer expenses than normal. Some of it has to do with the fact that we are back on the “envelope” system, and we are not writing any checks and are barely using our debit cards. (Next month, we go CASH ONLY, baby!)

I read this book, The Number , and while it is a decent read, I was less than impressed. The author talks and talks and talks about specifics and how each of us is different, and then fails to tell you EXACTLY how to find “your number.” You might want to check it out anyway…

A much BETTER read? The Total Money Makeover by Dave Ramsey. Great book, great author, great advice!

• 0 Comments

Ah, the conflict between reason and desire. Mankind’s age old quest to do what he should while still having what he wants. To save or not to save, that is the question. How do I answer? Well, I gather up all of my lose change, hit Ebay, and buy the Sansa M230 that I wanted! I searched our home and gathered over 60 dollars in “silver” change (my daughter keeps all the pennies for learning to count) and then I went on Ebay, and purchased a brand new M230 MP3 Player for 54.95. Hey, I can take my extra 5 bucks and go buy a sandwich. Yeehaw!

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