The Latest is Not Always the Greatest

We live in a time of constant change. As a result of this and effective marketing, some companies get people to buy things they don’t really need. What do I mean by that?

Some Examples

Consider cell phones. Whenever a new model comes out, particularly from certain manufacturers, there is a marketing campaign that typically started long before the actual release of the new model. By the time of the release a large number of people are already primed to buy. For some of them, even if it could clearly be demonstrated that the latest is not always the greatest and that was the case here, they have already mentally and more importantly emotionally committed to making the purchase. It is this same mentality that causes some people to buy a new car every year or two, though the cost of this and improved reliability has somewhat reduced this tendency. But think about the phone situation for a moment. Let’s assume that the biggest change from the preceding model is that there is more memory and a faster processor in the new model. SO WHAT? If you really don’t need that then why do you feel compelled to buy the new? People spend inordinate amounts trying to keep up with others socially. However, I’ve noticed something over the years.

What I’ve Noticed

I’ve made it one of my purposes to see just how financially successful people spend. While it is not an across the board observation, I have learned by watching and via conversations that many of these people others think always have the latest and the greatest actually are thrifty shoppers. While there are certainly some things that they splurged on, they also tend to bargain shop and shop in what might be considered second-tier stores on even buy used. For example, they may be using a cell phone that was two or three generations old when they bought it. Likely, I know some who regularly shop in discount stores and even consignment stores and second hand stores for things like cloths or furniture. Why do they do that? Simply, they know that the latest is not always the greatest and even if it is at some point they can get it for a lot less. Don’t you think this is one of the reasons they are financially successful?

How Does this Relate to Business?

In business, adopting this mindset can also be helpful in controlling expenses and improving the bottom line. In the blog Think Used I discussed this in regards to buying business equipment. For example, if a used $250 desk is in good condition and will accomplish the same thing as a $1,000 new one, why buy the new one other than for vanity? I don’t know about you, but I have no interest in paying $750 for vanity.

When it comes to business we are not just talking about used versus new. No, in fact, when we do need to buy new do we really need the top of the line. Perhaps that $100 inkjet printer that is last year’s model will serve your purposes just fine. Does it do what you need to get done? If it saves you $50, a $100 or more, why pay extra?

In addition to buying for less, we also should question whether we need to buy at all. On the personal level how many items of clothing hanging in your closet are never or seldom worn? At your business, what pieces of furniture or equipment are sitting around seldom or never used? How many boxes of supplies are in storage that will take months or years to use? While I want everyone to have a job, as a business owner you owe it to yourself and your business to periodically consider if certain positions are redundant and no longer needed.

The Main Point

Remember that the latest is not always the greatest before you spend. Even after you have spent see if there are things that no longer make sense to own. Not only can this save you money, it can also reduce the clutter and that will help you to be more efficient.

If you want to know more, contact AimCFO – Contact

As always, your comments are welcomed.

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