Tuesday, April 19, 2011

You Cannot Spend Your Way to Wealth!

On the get out of debt guy site today is a cheerleading posting for GROUPON and LIVING SOCIAL (a clone of Groupon), which I found odd, as the site is supposed to be about how to get out of debt.  But instead, here we have them touting SPENDING as a means of wealth accumulation.

As I noted before, you can't SPEND your way to wealth, and gimmicks like GROUPON, WOOT!, QUIBIDS, and the like are just going to encourage you to spend, not save, as they present supposed bargains to you, which you then decide to buy - on impulse.  It is not "smart shopping" - and the price comparisons are bogus.

If I tell you that the "list price" on a new Chevy Aveo is $50,000 and that I will knock "50% off" and sell it to you for $25,000 - is that a bargain?  No, it is not.  Because it is a $12,000 car.  Never use in-store price comparisons as a means of determining a bargain - they are false comparisons.

Anyway, here is my response to "Amanda's" posting on that site:

You can't spend your way to wealth, just as you can't eat your way to slimness. Groupon and these other spending sites only encourage consumption, which is how your clients ended up in debt in the first place.

While a $49 dentist visit may sound like a "A Great Savings!" over a $375 Dentist visit, that is a false economy - and typical of the "shopper" mentality. Using phoney or inflated prices as references is NOT sound financial planning.

Instead, find a good dentist, who is reasonable. My Dentist in Ithaca, NY charges $79 for a cleaning, day in, day out, without a "coupon" or Groupon, or whatever. So not only it is cheaper than $375, it is cheaper consistently and over time.

Also note that many Dentists are crooked - and these chain dentistry sites will use come-on pricing or "free exams" to get you in, and then convince you that you need a lot of expensive unnecessary work - financed all on time, of course.

We are talking $5,000 to $10,000 of unnecessary dental work. BEWARE OF ANY DENTIST WHO OFFERS A FREE OR DISCOUNTED EXAM!

There have been examples of people being told to have healthy teeth extracted, or so-called one-visit periodontial treatments, which are bogus. Just walk away from these sort of gimmicks.

Frankly, I am a bit surprised that you are posting this sort of SPAM on a "get out of debt" site. SPEND LESS, NOT MORE, and shopping sites like Groupon encourage spending.'

As the author admits, she is "addicted" to it - time for a 12-step program, Amanda!

The problem with a SHOPPING site like GROUPON, is that they present a bargain and THEN you decide you want it.

This reverses the ordinary process of purchasing, where you decide you want something and then go hunting for the best price and quality.

What you are doing with GROUPON is IMPULSE-BUYING which is how most Americans get into intractable Credit Card debt in the first place.

Turn off the noise of the media and television, Amanda, and think about SAVING money (in the bank) not SPENDING it.

You cannot SHOP your way to WEALTH. Real wealth doesn't come in SPENDING WISELY but in SAVING WISELY.

And sites like GROUPON or LIVING SOCIAL are just going to encourage you to SPEND, period!

And there are no real bargains on such sites. Marking down a joke price by 70% is no bargain - if the resulting price is still above market value.

I certainly hope the rest of the advice on this site is better than this blatant SPAM for GROUPON!



The get out of debt site is monetized, and they do take ads from sponsors in the sidebar.  It would appear they are also putting ads in as articles as well....