Thinking Rationally, Acting Economically.
I am working on some marketing materials for the Daily Danet store and my graphics expert and I are looking to print. FedExKinkos Online wants about $450 to print 100 color pages on laser cardstock. To understand how ridiculously expensive that is: you can buy a quality color laser printer for about $200 and you can buy the toner cartridges from a reseller for $80 (ignoring the fact that the printer would include toner out of the box) and the cardstock from Staples for $17.
So for what FedExKinkos Online is trying to charge me $450, I could do myself for $300 and at the end of it, I would have a color printer, a year’s worth of toner and 150 sheets of cardstock left over. I called the local FedEx and they quoted me $2.33 per page. That puts the same run at $233, still more than the cost of the color printer. So guess who’s getting a new color laser printer?
This reminded me of something else that’s been bothering me lately. Almost everywhere you look lately some schmuck is trying to sell you gold. Glenn Beck is hawking it on Sirius XM, G. Gordon Liddy and That Guy are pitching it on FNC and elsewhere. I hope people out there are not buying gold now. That’s like buying an extended warranty after your car breaks down.
Gold near an all time high now because of the financial mess. Gold always increases in value when things get bad, but it loses value when the broader economy (businesses, housing, commodities) get better. While it’s true that things could and might get worse, (i) do you really think they will and (ii) are you willing to bet that they are with what little investment money you have left? Buying gold now is a foolish investment, and Glenn Beck and others should be ashamed of pitching it. Buying gold now is buying high; when, exactly do you expect to sell?
As for what makes sense, the same advice that has worked for generations is still the best: buy low, sell high. If you have money to invest, now is the time to invest in the companies that are getting beaten up by the current market, but will (in your opinion) survive the storm. For example, certain banks are better than others. They are well managed, but are taking a beating because they’re colleagues aren’t. Buying the right bank stock now would make you a fortune later. As Warren Buffet says, be cautious when others are greedy, be greedy when others are cautious.
The point of all of this is, other than provinding 500 words in a suitable order for publishing, is engage your brain before your credit card. If someone offers you a service, (or God forbid, an extended warranty) think about what it is that you are really paying for and whether or not it’s worth it. In negotiating, there is a concept known as the best alternative to a negotiated agreement or BATNA. Keep that concept in mind whenever you have your wallet out: what are my other options. You could save yourself some money, or you could wind up with a new color laser printer. Shiny!