It's market talk tonight.
You don't play the stock market? Doesn't matter. This post is for every consumer. As long as you spend, you are a consumer. It does not matter where you are too, it's the same concept.
The stock market is just like any other market you buy stuffs from. In the past, you hold a piece of paper that indicates what you bought. Today, it's all transacted online and you don't even have to keep slips of paper.
A simple question:
Will you buy a stock for $1.00 if you know the price will drop to $0.50 in the near future? Unless you are a fool, your answer will be a definite no. Anyone will know that is a 50% loss and that's a whopping loss for anyone, unless perhaps you are Ho Ching. Well however it isn't easy to forecast the price of a stock in the stock market because there are many factors that influence the prices.
That's why a stock picking money can probably do better than Ho Ching on an average day.
 |
| Better. Probably. |
So let's talk about something simple and practical. Still the same question in a different context:
Will you buy a watermelon for $0.88/kg if you know you could get it at $0.38/kg? I'm not sure about you. My answer is no. I'll buy it at a lower price instead. Now the shocker. Most of us have been guilty of doing buying that watermelon at $0.88/kg or higher.
If you think that's the daft example, you're in fact, the daft example. A real life analogy from the vegetable and fruits market I buy stuffs from each weekend.
Just a mere month, prices doubled. That's not funny if you happened to be at the wrong end of the purchase in the stock market. If you take this kind of things seriously in the stock market, you should take it seriously in any market.
Another example to show it wasn't a one-off thing:
See what I mean.
Big deal you say? If a watermelon weighs around 5kg, the most I'll save is $0.50 x 5 = $2.50. Small money? Imagine if you spend $0.50 cents more than me on common items you buy on regular basis such as:
soft drink
a kg of fruit
a kg of vegetable
a kg of meat
a lunch takeaway
etc etc
Say you paid $0.50 more than me for 50 units per week. That's a conservative mere 7 units per day. If you consider a 5kg watermelon may already be 5 units if you buy at peak price, 7 units is not far fetch. So how much money would that habit cost you in 10 years?
$0.50 x 50 units x 52 weeks x 10 years = $13,000.
How much can $13,000 buy for you? Perhaps a full depreciation account of home appliances consisting of an air conditioning unit, a fridge, washing machine etc. You know, these stuff.
Why do people lose money this way? A few reasons that I can think of:
We don't know the market price of regular items we buy well enough
Straight forward. If you don't know what is expensive, you don't know what is cheap.
We don't know where to get stuff at lower price
Fact. But you can find out if you think this thing is convincing enough to make you to.We think that time taken to travel and transportation costs are going to offset savings from purchases so it is not worth the effort
Not if you plan it well logistically. For example, you can buy it if you pass by the location once in a while, or get a friend to do it for you if he is getting something there. It doesn't have to be one location. It could be a couple of items from each aspect of your life. Or you could be saving a straight $10.00 on a single purchase. That is equivalent to 20 units itself. Remember if you save $0.50 on 7 units of purchases per day, how much will that be in 10 years?
We mistaken buying at discount as savings
The biggest consumer trap of all. Maybe you do save but the hard truth is: You save more by not buying anything that you don't need. Such as an air fryer. :D
We do not know the intrinsic value of many consumer items
How do we know if we know? Test yourself: How much will you pay for this bed?
Some may pay thousands of dollars for it. Some will not even part with $1 for this piece of crap.
If you happen to consistently paying incredulous prices for pieces of crap like this, then your valuation skills need to be upgraded.
What if I am losing money from the consumer market the way you are describing?
The hard solution: Act. IF you concur with my observations and find that it is worth increasing awareness towards your spending behavior, that's the choice you can take.
The easy solution: You can feign ignorance. After all ignorance is bliss. Not knowing anything means you aren't losing money right?
Or you can come to Perth and grow your own watermelons on abandoned land sites on sale:
 |
| You spot anything? |
 |
| Can you spot the baby melons? |
My lesson. Just don't buy things that you don't need. You'll be amazed how much you can save.
ReplyDelete+1
Deletehmmm, even in HDB, some people like me, grow some vegetables along the corridor. only thing is the yield is very small since space is limited
ReplyDeletei grow herbs when i was singapore. never tried veg though, except for chilli perhaps
DeleteVery good. You've already gotten one of the key skills as a migrant: understanding ingress and egress of income. You'd do fine (unlike most sinkies)
ReplyDeleteunlike most sinkies? hmm really? i tot all singaporeans are calculative by nature
DeleteNo, they are not. This transgresses nationalities and cultures now. That's why I consider you already "one up" versus a lot more other people, __around_the_world__.
DeleteYou can grow almost anything in Perth. BTW, I think that is a pig melon, a kind of weed in the photo and not edible.
ReplyDeletehttp://www.sharkbay.org/News.aspx?NewsID=46
But, not to worry you can throw a water melon, rock melon or honey dew seed in your garden bed and you will be richly rewarded. My friends here have big sweet navels and mangoes in his backyard every year! Put in a water tank and you will be ok for food and water.
rifleman
Thanks for the info, you're a pro. It's good to learn something every day.
Deletelooks like i cannot harvest the pig melon. no point anyway.
when i have my own place i'll grow my own stuff :)
some good thoughts over how we buy things. i recalled those day when i am a student in Melbourne. i will wait for saturday to come so that i can venture to box hill to buy "leh long" veggies. anyway i enjoy reading your blog about your stay in perth. at least u share ur honest thoughts and views on what one faces during migration process. thus somehow i can identify with u, even as i am making my way back to Melbourne in Apr 11 as a PR with my wife. keep it up mate!
ReplyDeleteThank you.
DeleteThe blog was meant to be honest. It's pointless to bluff because all these info that I put up can be counter-checked.
yes i do go for cheap weekend buys too here in perth
Hi AnonymousFeb @ 19, 2012 06:48 PM
DeleteGlad to hear you are heading to Mel. Drop me a line when u are here. Gd to have more Sings here.
E : I have a ex teacher in Melb now. She's quite demoralised cos she can't find jobs. You interested in contacting her to offer some advice/help or friendship?
DeleteHi asingaporeanson,
DeleteWould be delighted to help. I'll ask my wife to help if she's not comfortable contacting guys.
Whopps, didn't noe how to include my e-mail address. Can use this address: woofie2005@yahoo.com.sg
DeleteHi E, i've sent her your email. Thanks!
Deletetake petrol on on wed.... cos thats the cheapest day of all the whole week!
ReplyDeleteThere are a couple of exceptional kiosks that offers lower on other days. it pays to know all these.
Deletebuy groceries from coles or woolies. Calculate the amount and make it $30 each receipt. Use the 4 cents discount on fuel. Every receipt last for 4 weeks.
ReplyDeleteyeah i do that. it was 8 cents off since i came. back to 4 cents recently only
Deleteim equally thrifty. i dont buy what i need. some might say buy now cos it is cheap, you might need it in the future. but how often after buying it we regret the purchase or worst it is chuck somewhere unreached by sunlight and when you need it , it is not there.
ReplyDelete