Art of the Down Sale

A few years ago, Money Ning had a good post about how restaurants and businesses try to up sell us - for example, by a waitress suggesting wine with our meal.

Back in 2008, I experienced the opposite - one of those rare cases of a down-sell!

It made me feel good!

We had domestic service with Dish Network, and my wife wanted to add an international channel.

I called up to add it, and the guy told me I had to get a second satellite dish for $56.

Somehow we got disconnected (turned out to be lucky for me) and I called back and spoke to a woman.

She told me that, instead of paying $56 for a second dish, they now have a “super dish” that can take the place of both the international and domestic dishes. I could get my domestic dish swapped for this one for free.

So, now, instead of having to pay $56 and having 2 dishes wired up together on the side of my house, I’ll pay nothing, and have only one dish to worry about!

See how powerful the down sell (suggesting ways to save your customer money) can be! Here, I now had a good experience with Dish Network and I'm telling everybody about it.

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Don't Underestimate Small Flows of Passive Income

Monevator is a motivational blog for armchair investors.

It has a good article on Why a little passive income from a side project is worth a lot more than you think.

If your project "only" makes you $5 a day, that is $1,865 per year. But, at an
interest rate of 3%, this is like having more than $60,000 in the bank!

If you create a "set it and forget it" project, and it only trickles in a little bit of money, don't be discouraged. Just work on setting up more of them.

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San Francisco Bridge and Outsourcing: Is 6% Worth it?

California is replacing the San Francisco - Oakland Bay Bridge. It sounds like the type of large public works project that will provide needed jobs to Americans.

However, it is keeping hundreds of Chinese workers employed. To save money, California outsourced the construction of the bridge to China. The bridge pieces will be shipped to the U.S., and assembled by Americans.

California is risking criticism in three ways:

1. They outsourced jobs.

2. If there are any problems - especially fatal accidents - they will be accused of overlooking China's reputation for poor quality and cutting corners. Not to mention the possibility of damage from overseas shipping and the need to meet strong earthquake standards.

3. According to this New York Times article, in order to not buy American, they gave up federal funds.

Were these risks worth taking? Well, according to this article, the project will cost $7.2 billion, and they expect to save $400 million from having the Chinese do so much work.

That means that the total cost to get the bridge built completely by Americans would have cost $7.6 billion. Thus, California saved about 5.5%

To me, saving only about 6% is not enough compensation for risking quality, safety, earthquake standards, and not employing Americans.

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L-1 Identity Solutions (ID) - Another Real Life "Stock Trading Riches" Trade

On April 23, 2007 (my birthday by coincidence), I bought 101 shares of L-1 Identity Solutions (ID) at $19.61. L-1 makes biometric security products (retinal scanners, etc.) for government agencies, border control, courts, corporations, etc.

On July 25, ID was acquired in an all cash deal for $12/share. Thus, buy and hold yielded -39% for the last 4 years.

However, I managed the position with the Stock Trading Riches system. The formula had me do the following additional transactions:

12/29/2008 buy 230 shares at $6.04

6/4/2009 sell 107 shares at $8.91

12/22/2009 buy 89 shares at $6.40

12/28/2010 sell 145 shares at $11.90

I ended up with a +$18.6% return for 4 years. This is an annualized return of 4.4% - not bad considering that, in hindsight, I bought the stock too high.

This was another example of how my Stock Trading Riches system self-corrects your positions over time.

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How The Debt Ceiling Debate Could Affect Interest Rates

At the end of the day, after they make points with their followers, I believe democrats and republicans will compromise and raise the debt ceiling.

However, all the current arguments, posturing, and waiting until the last minute has not given confidence to either consumers or the debt rating agencies.

The ratings agencies are quick to downgrade these days, because they are on the defensive about their role in the financial crisis. Critics said that they turned a blind eye to risk.

There is a chance that, even with an agreement to avoid default, at least one ratings agency may downgrade U.S. debt.

How would a downgrade affect ordinary people like you or me?

First, the interest rates that the U.S. must pay would go up. This would make interest on the national debt an even higher component of government spending. Secondly, the treasury rates are used to set all other interest rates. If the treasury rate increases, so would all mortgages, car loans, etc.

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How Can Two Unrelated Businesses Cross Promote Each Other?

Internet Marketing expert James Brausch "retired" to South and Central America, but he consulted with some brick and mortar businesses there and he advised two of them - a taco restaurant and a spa - to cross promote each other.

He had the taco restaurant give out, with each purchase, a coupon good for a free 10 minute back massage. He had the spa give out to each paid customer a coupon for a free burrito.

These coupons were not announced before hand, so customers did not know that they would receive them until after purchase. By only giving out coupons to paid customers, he increased the chance that, when the customer used the free coupon, he would be more inclined to purchase from the other business.

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I'm On Fox Business

I was interviewed for a personal finance article on FoxBusiness.com which featured Five Smart Money Lessons From Reality TV. They even mentioned my book "Stock Trading Riches".

They wanted financial experts to describe financial lessons that one can learn from reality TV shows. They used my example of "The Biggest Loser" - where people can learn that, like losing weight, controlling debt and making wise financial choices are skills that improve slowly and steadily. Don't get discouraged if you find it hard to make instant progress.

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