Too many people spend money they haven’t earned, to buy things they don’t want, to impress people they don’t like. – Will Smith
At the end of the Second World War, the U.S. government took part in a covert operation, an operation that most Americans are still unaware of today. This operation was known as Operation Paperclip. In the years leading up to World War 2, Germany was one of the most advanced countries in Europe, if not the world. They had revolutionized a number of different technologies, and some of them included the V1 rocket, stealth aircraft, and fast tanks. Indeed, Germany was pushing for the creation of the first atomic weapon while the U.S. was involved in the Manhattan Project. After Germany's defeat at the end of the war, elements within the U.S. Government realized that Nazi scientists were extremely valuable assets. Because they were ahead of American scientists in a number of key areas, the U.S. military could utilize their talents to help the United States catch up. In addition to this, they could not afford to let the scientists fall into Soviet hands. So, despite the fact that international law prohibited it, the U.S. government ordered about 700 scientists to be captured and brought into the United States.
In addition to the technology that the United States discovered when they marched into Germany, they also made a large number of rapid advances once the Nazi scientists were brought to the U.S. Despite the fact that nearly 65 years have passed, many of the technological discoveries made by the Nazi scientists remain classified. As of 2007, the U.S. government refuses to release any core details of Operation Paperclip via the Freedom of Information Act.
Now, those of you who just read the paragraphs above may be wondering what this has to do with saving money on entertainment, miscellaneous expenses, and the finance war in general. Well, be patient and I will explain myself. Based on the information you've read so far in this chapter, it should be clear that the U.S. government is reluctant to release certain technologies to the public. What else could they be hiding? There are many who theorize that the government is holding onto advanced antigravity or alternative energy devices.
While these theories will remain theories until the U.S. government reveals what it has been hiding, all the signs show that they are hiding advanced forms of technology from the public. While we are constantly sold cell phones, gas guzzling automobiles, plasma TVs, and other electronic gizmos, it has become obvious to deep thinkers that our government has a lot more advanced technology than they are willing to reveal to the public.
For example, it is a well established fact that cell phone technology has existed at least since the 1950s, and the super wealthy were using cell phones in the 1980s. Cell phone use was common in Japan during the late 1980s and early 1990s, and Americans didn't fully begin using cell phones until the end of the 1990s and early 2000s. The Internet has existed for practically 30 years, but it wasn't until the mid 1990s that most Americans got access to it. One thing that many of these technologies have in common is that they are "hand me downs."
They are "hand me downs" from the U.S. government and the United States military. Every technology of significance is used by the U.S. military first, and then it may be handed down to corporations if it is determined it can be sold for a profit to the public. This is exactly what happened with cell phones. I always laugh when people brag about the power of their computer, since the U.S. government and corporations are using computers that are at least 10 years ahead of the most expensive computers available to the public.
Because I'm aware of the fact that the U.S. government offers "hand me down"technologies to the general public for outrageous prices, I refuse to pay retail value for them. I know that the government has more advanced toys sitting under the table, and if it’s advanced enough, it may never be given to the masses. I treat electronics much like I treat cars, and you should do the same. The rule behind electronics is that they always depreciate in value. That $250 gadget today will only be worth $50 tomorrow. If you know the price will drop, why not wait for it to do so?
Many people will make excuses for why they buy electronics at retail value. While some have legitimate uses for them, most are simply brainwashed by large corporations who are supposedly offering them the "next big thing." These people often go in debt to buy the gadgets, and a few years down the road, they can't sell the gadgets for anywhere near what they originally paid. The same can also be said for all types of entertainment. I think it is safe to say that entertainment is one of the key factors that put people in debt. Ironically enough, it is expenses like entertainment that we have the most control over.
In earlier chapters, I discussed expenses that are harder to control, and these include shelter, food, and clothing. It is harder to control these expenses because you need them to survive and function. With entertainment, it is the exact opposite. You don't need it to survive and function. You have a great deal of power over how much you pay for entertainment related expenses. The rule that I always follow, the rule that has allowed me to save more than 30 percent of my income, is to never pay retail value for electronics.
Electronics: I enjoy new electronics but I never pay retail prices. When a new mobile phone comes out on the market the people rush to the store and happily shell the $400-$500 for the new iPhone or Blackberry. Many place this new phone on their credit card or spend their hard earned cash on this item that is going to immediately depreciate. What is the rush to buy the new gadget? Can't you see Apple and Blackberry are enormously profitable corporations who keep you running to the store and spending every 6 months. If you were to wait 6 months, you can get that same item for about $100-$200. You have to be patient, you are wasting money to purchase the new phone that comes out or other electronic gadget because these items will depreciate quickly. Also, the major corporations that make these products are already planning to release a faster, better, more advanced product to keep you wasting your money and increasing their profits. All you’re doing is pulling more money out of your pocket to make corporations richer than they already are. There are a number of ways you can buy electronics without having to spend a fortune. One of my favorite places to buy electronics is online through Amazon.com, Ebay.com and Craigslist.com and offline at the pawn shop. Pawn shops are great when you buy products from them, but you should never sell anything at a pawn shop. You will always get ripped off. The pawn shop will offer you the cheapest price for your product, and then they will turn around and sell it at a mark up price. Only losers sell stuff at pawn shops. Winners and people with money buy stuff from pawn shops. Follow this rule, and you will be successful in making your electronics purchases and save money in the process. Now, when you buy an electronic item from a pawn shop, it is important for you to make sure it functions properly. While most do, the pawn shop will sometimes forget to check the item carefully. Always have the item tested before you pay for it.
Another great place to buy electronic goods is Craig’s List. Www.craigslist.org is an online website that allows users to list their products or services in classified ads. You can post your ads in most sections free of charge. There are sections for people selling electronics and computers. Many of these devices are high in quality, and the owners are often anxious to get rid of them so they can pay their bills or other expenses. You can get some great deals on TVs, computers, sound devices, audio devices, and just about anything else you're looking for. It is also a great place to sell stuff as well. The website can be found at http://www.craigslist.org/.
If you're the type of person that just has to have brand new gadgets whenever they come out, my advice to you is simple, Don't do it! Think about what you are buying that device for anyway. Often times it comes down not to the usefulness of the device but the desire to have something your friends and others don't have. Remember to never use a credit card to buy electronics and if you don't have enough money for it, save your money until you are able to purchase the item. The same rule goes for the purchase of movies and other items. I want to sum up everything I've discussed so far with one rule:
It is best to always buy electronic goods after they have been released for several months achieving wholesale rather than retail prices.
Take advantage of pawn shops, Craig list, and other sources that will allow you to buy products that have depreciated in value.
All electronics goods will lose their value over time.
Losers sell their stuff at pawn shops. Winners buy their stuff from pawn shops.
If you decide to buy brand new, make sure it is always done with cash, and it should not take up more than 5 percent of your net worth.
If you follow the rule above, you will be able to save money on every electronic product you purchase. While other people buy electronics on their credit cards, allowing the corporations and credit card companies to extract interest and profits from them, you will always come out on top. I next want to spend some time talking about vacations. If you follow the strategies I've discussed in the book so far, you'll have plenty of money to travel and relax. Below are some pointers that can help you save money on your trip.
Vacations: Of all the expenses you'll incur on your trip, the flight or the hotel accommodations often times will be the most costly. The general rule of vacation flights is this: Flights to less developed countries will always be expensive, while flights to developed countries will generally be less expensive. While there may be exceptions to this rule, it generally remains the same. The first step in saving on your vacation is to plan in advance. Again, generally speaking the more advance notice you have, the cheaper your flight will be when you're ready to travel. People who choose to wait until the last minute will find that they will always have to pay more. You should also avoid flying during peak tourist seasons. The local businesses in various countries have the habit of increasing prices during peak tourist seasons and holidays. It is a logical business move on their part. However, it is also logical for you to not travel when prices are at their highest, since you will maximize the amount of money that is pulled out of your account. Once you have decided which country you want to travel to, you will then need to decide what season is the cheapest. Not only will you get cheap hotel prices, but you will also get cheaper flights as well.
Another way to save money on flights is to use charter airline companies. These companies are known for giving discount prices to their passengers that are much lower than mainstream airlines. At the same time, many of these companies are less than reliable. Your flight could be canceled at the last minute, and you may not get your money back. To avoid this, only choose charter airlines that have a reputation for quality service or are backed by a major airline. It is important to research on these companies before you pay for a ticket. Saving money on a vacation is relatively easy. Unlike many expenses, you can plan ahead and cut your costs in a number of different ways.
Weak Technology vs. Strong Technology: The next thing I want to talk about is strong technology versus weak technology, and the effect they have on your ability to save money. Understanding the difference between weak and strong technology is crucially important, and I want to explain the two concepts in detail. Strong technology is defined as technology which can change the world on a dramatic scale. Some examples of strong technology include the Internet, biotech, and nanotech. The impact of these technologies is so strong that they will radically change the world in which we live. Weak technology is defined as technologies that have little impact on the world as a whole. They are trinkets and "hand me downs" that large corporations sell to the public, and they have very little long term value. The corporation takes the profits they earn from these "hand me down" technologies and uses it to invest in strong technologies.
Some examples of weak technologies include cell phones, audio devices, video game consoles, and any other technology that doesn't transform the world to a large degree. While it could be argued that cell phones are a strong technology, the only thing they allowed is for people to talk while they are out and about. Have they increased communication capacity? Yes. Have they transformed the world in the same way computers, planes, and the Internet has? Absolutely not.
There are a number of additional differences between weak and strong technology as well. Large corporations are quick to sell overpriced weak technologies, but strong technologies tend to be much more expensive and elusive. While weak technologies tend to depreciate in value rapidly, strong technologies do not. One of the philosophies of saving is to never pay retail on weak technology. Always wait for them to depreciate in value, and then buy it for wholesale and drastically reduced prices. Save the bulk of your money for strong technologies, the cutting edge stuff that will be in demand in the future. Some technologies that you will want to save for include nanotech, biotech, robotics, and genetic engineering. These technologies will mature in the next 30 years, and those who have the money for them will thrive, while those who waste their money on the weak technologies of today will fail, and perhaps end up in poverty. The Internet and computers is a great example of what I'm talking about. In the mid 1990s, virtually no family had access to computers and the Internet.
Everyone had cars, televisions, beepers, and other weak technologies, but no one thought to buy a computer to get Internet access. Those who did buy computers and get Internet access in the 1990s were ahead of the general population. They saw what the Internet would become, and some were prudent enough to build websites and start online companies. Today, it is not uncommon to see websites built in the 1990s sell for tens, hundreds, and millions of dollars. Those who took the time to learn HTML in the 1990s also became wealthy. The rule can be comprised in this one statement:
Avoid spending excessive amounts of money on weak technology.
Weak technology is defined as technology that is spoon fed to you by large corporations, technologies that have no real practical value in the world.
Save the bulk of your money for strong technologies, technologies that can truly change the world, empower your life, and build wealth.
Always spend the least amount of money possible on weak technologies.