Straight Talk from Al Jacobs

 

WHAT WE BUY – AND WHY

 

Do you lease a fancy motor vehicle, wear the latest name brand clothing, and regularly eat meals in the more exquisite restaurants? If so, welcome to the world of the upwardly aspiring.  A person's possessions speak volumes on what that individual regards as important. The advertising industry, devoted to identifying what the citizen considers significant, manipulates the market to create those choices. With massive sums to be spent, the competition is as fierce as it is grotesque.

 

What brand of watch do you wear? Whether it’s a top-of-the-line Rolex, a fashionable Cartier, a respectable Bulova, or an economy Timex, recognize that all keep excellent time. The day of the mechanical Swiss movement is a thing of the past. The current battery operated models all do a better job than the "precision" pocket watch your Uncle Elmo carried as an engineer on the Lackawanna Railroad. The only justification for a high-priced model is self-image and –  let's face it – the illusion of prosperity.

 

What can be said about wristwatches is equally true about other highly promoted products. These include magazine offerings, timeshare projects, $300 per ounce bottles of perfume, Las Vegas weekend getaways, $1,800 ballpoint pens, and the purchase of lottery tickets, to name just a few. As a rule of thumb, the more overpriced the merchandise, the more innovative its promotion. Perhaps there’s a connection, if only because moderately priced items that reflect honest value incur less sales resistance, so need not be touted with such vigor. Reflect, for a moment, on the recognizable voices and faces that make the outrageous claims. If there’s a benefit to this, perhaps it’s that the association of certain marketing celebrities with a product of any sort saves you the effort of analyzing the offering; you may reject it out of hand.

 

In short, how you conduct your affairs as a consumer relates to what’s important in life. As a person with limited resources, but aspirations for the future, embrace thrift and discipline. As the years pass and your net worth increases, then modify your conduct accordingly, but keep in mind that these be deliberate choices. Don’t let advertising pressures or market manipulators preempt your decisions. And as a last word, remember this: If a vendor must buy a dozen pages of advertising to say how wonderful its product is, it can’t be.

  

Al Jacobs, a professional investor for nearly a half-

century, issues weekly financial articles in which he

shares his financial knowledge and experience.

You may view them on http://www.roadwaytoprosperity.com