Archive for the ‘Spend Page’ Category

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Plunging Prices Follow The Crash

Monday, October 5th, 2009

Times are good for bargain-hunters, but a price-slashing culture could be disastrous for retailers and their employees.

  • Prices around the country are dropping in a retail campaign to win back buyers who put their wallets away when the stock market crashed and thriftiness became the norm.
  • Shoppers are staying away primarily because they’re broke, but also because the consumer culture has changed since 2007: conspicuous consumption just isn’t as okay as it used to be.
  • Because consumers are now holding out for the discounts they know desperate retailers will offer, companies are forced to cut prices even as their profit margins shrink. Lower prices mean lower profits, which often translates to hiring freezes and layoffs. This is the same cycle that affects the Japanese economy, which has been battling deflation for decades.

Facts & Figures

  • 70% of the U.S. economy is made up of consumer spending, but following the stock market crash in 2008, total household wealth decreased by 11% in less than six months.
  • On average, prices have decreased by about 20% in the hotel industry and more than 30% in the real estate market.
  • The Consumer Price Index dropped 1.5% between September 2008 and September 2009 – the largest decrease since 1950.

Best Quote

“This is the new normal. We aren’t going back.” – Donald Keprta, President of Dominick’s (a supermarket chain in the Midwest)

Is it OK to buy stuff online with your credit card?

Monday, October 5th, 2009

Shopping online is wonderful. You can shop in your pajamas, you can compare prices without going all over town, and you have virtually every store to choose from. However, many people are still worried about the safety of buying online. Fortunately, online stores have realized this and taken steps to ensure your credit card information stays safe.

You should never simply trust a website because it is a well-known brand. Check the bottom of the page to see what type of security the website uses. Here are several tips to keep your sensitive information to yourself:

  • Use a credit card instead of a debit card when shopping online. Many credit card companies offer full fraud protection that keep you from being responsible for any fraudulent purchases. There are also pre-paid credit cards that you can get rid of once you’ve used up the balance. These cards aren’t linked to any of your account or personal information, and they make it hard for thieving hackers to steal a lot of money from you.
  • One easy way to check the security of the website is to look closely the URL. When you are entering sensitive information, the URL should always be https:// instead of http:// which ensures it is secure.
  • Lastly, it is important to shop at your own computer and not on a public one. Public computers could be infected with spyware and any information you enter could be captured by hackers.

It is important to constantly keep up to date with latest security features to make sure you are taking the correct precautions when purchasing online but following these tips is a first step to ensuring your sensitive informations stays safe.

What Does It Mean When Multi-Millionaires Choose The Ford Focus Over The Benz?

Friday, October 2nd, 2009
Have they learned from the past, or simply become terrified of risk?
  • As the financial panic turned a year old this September, a surge of ultra-high-net-worth investors have taken to budgeting their money. They’re spending less on luxury goods, they’re cautious and more involved in their investing, and they’re targeting their giving more.
  • The trend illustrates how attitudes about wealth have shifted during the economic crisis, making even the richest of the rich more aware of how they spend, grow, and give their money.
  • What does this mean for the future? It depends on whether this trend means the wealthy are becoming more conscious and thoughtful about managing their money or if they’ve just become scared of losing any more.

Facts & Figures

  • The Boston Consulting Group predicted that worldwide, wealth would not return to pre-2007-crisis levels until 2013.
  • It also found that the number of millionaires was down 18% overall.
  • The report found that across the board, clients of wealth management firms had lost trust in their advisers.

Best Quote

“For many of them, it [the economic crisis] was a loss of confidence in themselves as well as in the markets.” – Nancy Rooney, Head of the Northeast Investment Business for J.P. Morgan Private Wealth Management

Should you buy or lease your car?

Friday, October 2nd, 2009

Everyone who is looking to buy a car asks themselves this question, however there is no one right answer. Examining your particular financial situation will allow you to make the right choice between leasing and buying.

When you lease a car, you’re basically borrowing it for an extended period of time and paying for the change in that car’s value from when you first lease to when you return it to the dealership. Let’s say you lease a brand new Honda Accord which sells for $20,000. You lease it for 36 months and when you return it, it is only worth $13,000. Your monthly payments therefore will reflect the depreciation (or the loss of value) of the car and that $7,000 in depreciation will be paid over the course of those 36 months you lease the car. Lease agreements usually come with warranties that allow you to get your car fixed for free, should there be a problem within the warranty period.

On the other hand, if you were to buy the $20,000 Accord outright, you would pay for the entire cost of the vehicle instead of just the depreciated value. The benefits of buying a car are complete ownership of the vehicle, ability to drive as many miles as you would like, ability to customize your vehicle, and lastly, the ability to easily sell or trade your car.

Ultimately, if you are able to afford higher monthly payments, buying a car is probably the best choice for you. But if you want lower monthly payments and new cars every two or three years, leasing a car may be a better option.

Gucci’s Red And Green Racing Stripes Led It Straight To 1st Place

Friday, September 25th, 2009
Did your favorite designer make the top 5?
  • Nielsen surveyed consumers around the world about their favorite luxury brands. Gucci made first place, followed by Chanel, Calvin Klein, Louis Vuitton, and Christian Dior.
  • The study attributes much of Gucci’s success to CEO Mark Lee. Since he became president in 2004 and then CEO in 2005, sales have soared.
  • Designer goods were found to be most desirable in emerging markets where consumers also hold knock-offs in very low regard. North Americans were found to be more indifferent to authenticity of designer-labeled products.

Facts & Figures

  • 1/3 of consumers in the United Arab Emirates and Hong Kong buy designer brands, compared to only 7% of North Americans.
  • On North Americans’ lack of interest in luxury brands, 35% said they wouldn’t want to buy designer goods even if cost were not an issue.
  • More than ¼ of North Americans said they were fine with fakes while only 8% of Asians were comfortable with the idea.

Best Quote

“That red and green stripe is some of the most iconic luxury branding ever created, and people want a piece of it.” – Michael Macko, Fashion Director at Saks Fifth Avenue, on Gucci

Will Cheaper iPhones Create Converts?

Friday, September 25th, 2009

Even a company as glitzy and popular as Apple needs to cut prices to compete in this economy – nobody can escape basic economic relationships between price and demand.

  • Hoping to sustain the momentum for its trendy smart phone in the middle of the recession and among increasingly prominent competitors, Apple decreased the price of its entry-level iPhone 3G from $199 to $99.
  • Main competitors include Palm Inc. and Research in Motion Ltd. (creator of the BlackBerry line of devices).
  • Apple also decreased the price of some of its other products, including the MacBook Pro, the MacBook Air, and the Mac OS X Snow Leopard operating system.

Facts & Figures

  • Apple has sold more than 20 million iPhones so far.
  • The new $99 iPhone 3G could increase iPhone demand by as much as 50%.

Best Quote

“These are very aggressive prices.” — Richard Doherty, Analyst with Envisioneering Group (a technology consultancy)

Who Let The Dogs Out?

Friday, September 25th, 2009

Pet Airways services a niche carved out by the recent social phenomenon of large expenditures for our furry friends.

  • Pet Airways was launched after an increase in the number of deaths of pets flying in the cargo hold of commercial airliners.
  • Pet Airways believes pets are not simply passengers but “pawsengers” and even allows you to track your pet along his or her flight with a feature on their website called the “Pet Tracker.”
  • The process is simple: you drop your pet off at the “Pet Lounge” and an attendant tends to your pet throughout the flight. After landing, your pet is shuttled to another Pet Lounge where you can pick it up.

Facts & Figures

  • Flights will be pet-only; no owners are allowed on board.
  • Pets can fly to and from New York, Chicago, Denver, Los Angeles, and Washington DC.
  • Airfare starts at $149 each way.

Best Quote

“Currently, most pets traveling by air are transported in the cargo hold and are handled as baggage. The experience is frightening to the pets, and can cause severe emotional and physical harm, even death. This is not what most pet owners want to subject their pets to, but they had no choice, until now.” – Dan Wiesel, President and CEO of Pet Airways

Can a check float?

Friday, September 25th, 2009

While checks do have to obey the laws of gravity, they’re in suspended animation in another sense. A check is basically an IOU. You write someone a check, he or she redeems that check later for cash, and the payment is taken out of your account. Credit cards work in much the same way – you pay for a purchase with your card, and the bill is charged to your account and paid later on.

“Float” is that period of time when a check or credit card charge is in limbo. It’s the time between the moment you write the check and the moment payment is actually received or the moment when a purchase is first charged to your credit card to the moment you pay that bill. During float, the check or credit card charge is, in a sense, suspended. It’s not really performing a function at the moment, but its existence represents a transaction that will have to happen sooner or later. Some people float checks in order to buy time until sufficient money to cover the check appears in their bank account. If this actually happens, great. But if not, the check will bounce and some nasty fees (from the bank and often from the recipient of the check) will start to pile up.

Condé Nast Won’t Cut The Car Service

Thursday, September 24th, 2009
To keep up its image, Condé Nast might choose to cut a few salaries rather than cancel a party or let executives go without their town-cars.
  • McKinsey & Co. recently finished a project assessing the ways publishing powerhouse Condé Nast must cut costs, a touchy subject for a company known for its culture of lavish spending.
  • Condé Nast does not take to cost-cutting tactics as do other publishers – it seems it would rather cut or renegotiate contracts with consultants such as photographers, writers, and stylists than get rid of employee perks like car services and parties.
  • Some believe the company released information about McKinsey’s report in order to shift the blame for budget cuts onto the consultants.

Facts & Figures

  • McKinsey advised that Condé Nast cut about 25% from several magazines’ budgets.
  • Typical perks at the company include: on-call drivers for top editors and publishers, staff reimbursements for $15 a day lunches they order in, and hotel stays at places like the W for freelance writers on assignment.
  • The publisher’s newsstands sales brought in $2 million less in the first six months of this year than they did a year ago.

Spend Money, Be An Activist?

Thursday, September 24th, 2009

You can affect change in all sorts of ways. But lately, people are using their wallets to make their voices heard.

  • In larger numbers than ever before, consumers are considering the environmental and social aspects of the things they buy – not just the price.
  • Consumer demand has been driving a transformation by traditional companies to become more sustainable, and often more profitable, in the way their operate their businesses.
  • Even though much progress has been made, transparent and authentic sustainable business practices are still not the norm. Increasingly vocal demand by consumers for sustainable products will continue to drive this “revolution” into all areas of business.

Facts & Figures

  • In a TIME poll, 40% of people reported buying a product because of its social or environmental benefits.
  • Socially responsible investment (SRI) funds have increased in number from 55 in 1995 to 260 today – they manage 11% of all money invested in US markets.
  • In 2007, a Goldman Sachs report found that companies that emphasized sustainability would outperform the financial market.

Best Quote

“We have always known that heedless self-interest was bad morals, we know now that it is bad economics.” – President Franklin D. Roosevelt

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