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6 Sales Traps You Need To Avoid If You Want To Get Rich

6 Sales Traps You Need To Avoid If You Want To Get Rich

Most of us have an inner desire to develop wealth, primarily because it affords us the type of financial security that makes life easier. There are a number of misconceptions that surround the accumulation of wealth, including the assertion that people can’t get rich simply because they earn too little. This is a consequence rather than a cause, and the fact remains that people struggle to accumulate wealth largely because they spend too much time and money on things that lack value.

A reckless approach to expenditure or a lack of focus will undermine any attempts to generate income, whereas frugality and hard work will drive success. In practical terms, those with a desire to build wealth must avoid prominent sales traps. These schemes are used by companies across multiple sectors to target those with a propensity to spend impulsively, although they rarely offer anything of tangible or long-term value. This is also an issue with short-term investment plans, so you must tread carefully when faced with the following examples:

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1. Marking down a marked up price

When companies or distributors hold sales events, you could be forgiven for thinking that any subsequent purchases represent far greater value than usual. It is not unusual for sales teams to inflate the price of a particular product in the weeks prior to a sale, however, before reducing this drastically and creating the false impression of value. Although huge reductions in excess of 50% are extremely enticing to customers, this means nothing if the original sale price was manipulated to mislead individuals about a particular product’s value. To avoid this, you need to take responsibility as a customer, recognize the dangers and shop around aggressively for the best possible deal. A specific percentage discount does not translate into pure savings, as it simply reduces either the manufacturer’s suggested retail price or the one initially set by the distributor. By comparing prices across the market, you can delve beyond individual deals and achieve value for your hard earned money.

2. The lure of exclusivity

Online price comparison technology has proved extremely challenging to retailers, as it creates an informed and motivated army of customers who are less susceptible to traditional sales techniques. This is where the concept of exclusivity comes into play, as this is a ploy used by stores to justify high price points and deter consumers from shopping around. By marketing goods as part of an “exclusive line” that is not available anywhere else, retailers can drive a far harder bargain and force the hand of impatient customers. This has proven to be a successful scheme, especially when it is aimed at impulsive spenders who are in the market for a specific product. Exclusivity deals are usually restricted to specific regions, meaning that you may be able to find your chosen product elsewhere. These deals are usually signed for a fixed period of time, and once this has passed the product will become available in other stores nationwide. Patience is therefore crucial, while more flexible customers can also shop around for a similar product that serves the same purpose.

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3. Persistence wins the day

The majority of successful salespeople are aggressive self-starters, meaning that they are generally self-reliant and persistent in the pursuit of their goals. This leads us to another common sales trap, through which customers are implored to make a purchase as a way of satisfying a relentless and driven sales effort. Although this is an obvious trap that relies more on direct communication and tenacity than psychology, customers can easily be influenced to buy if they feel pressured by the attentions of a sales representative. In this instance, the key is to remain grounded and communicate authoritatively with salespeople. If you have no need or desire for a specific product or service, remember that this is unlikely to change throughout the course of any dialogue. By focusing on this and communicating your stance clearly to a sales team, you can quickly discourage them from pursuing your custom. Time represents money to salespeople (especially those who rely on commission), so they are unlikely to chase leads where the customer shows a clear and unwavering lack of interest.

4. The art of accessorizing

Have you visited a furniture store recently? If so, you will have probably noticed perfectly standard centerpiece items, such as beds or sofas, adorned with a number of high end and visually engaging accessories. While the store will justify this by claiming that such a practice helps customers to visualize how their property will look in a fully decorated and accessorized room, it actually serves to enhance the appeal of ancillary products that are not included in the sale price of the core product. Not only does this make the core product itself look more enticing, but it also drives additional purchases. Awareness is crucial in this instance, as once you recognize this sales trap you can refocus on your needs as a consumer. The first step is to make a concise list of everything that you need prior to hitting the high street, while also establishing a fixed and viable budget for the trip. In order to ensure that the core product in question meets your needs, you should also look to strip it of any accessories or ancillary items before making a final decision. You could even bring in some of you own accessories from home, as this will present the product in a more realistic light.

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5. When insurance has no purpose

In addition to corporeal items, there are also a number of lucrative insurance products sold on an annual basis. As the ongoing controversy surrounding PPI claims proves, however, not all of these products offer value to the buyer or are sold in an ethical manner. There are two damaging sales traps to be wary of in this instance, as vendors will either sell erroneous policies that offer no discernible value or inadequate coverage that fails to deliver long-term, financial savings. The former policies tend to be sold aggressively by call center operatives, and they usually look to capitalize on client ignorance or gaps in knowledge. How do you avoid the insurance sales trap? The first step is to assume the role of aggressor when communicating with service providers, especially if you are in need of a specific product. More specifically, you will need to set out exactly what you are in the market for, detailing your need, budget and any additional data that helps to reduce risk. If you are contacted directly by a firm offering their products, you should also look to challenge their knowledge and ask them to clearly explain the terms, purpose and salient points of the policy.

6. The quest for high-yield, short-term investments

In the quest to build wealth, you may be tempted by any of a number of investment opportunities. You will need to be cautious, however, as the demand for instant, high returns has triggered a rise in the number of risk-laden schemes and ill-considered investment traps. While some of these investment opportunities may well have the capacity to trigger quick returns, they are primarily aimed at inexperienced investors who fail to understand the relationship between risk, return and long-term gains. To avoid this, you will need to research your chosen market and ensure that there is an opportunity to earn reliable, long-term gains that offer a suitable reward for your investment. The market for sustainable assets and green investment is particularly strong at present, for example, especially when you consider that there are now viable technologies that reduce carbon emissions and consumption in sectors such as fuel, energy, and even data storage. This trend is likely to continue for the future, making this a far more suitable investment option than those that revolve around real estate flipping and pyramid schemes.

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Featured photo credit: Wallet Credit Card Cash Money/Steve PB via pixabay.com

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Published on November 20, 2018

The Best Ways to Save Money Even Impulsive Spenders Can Get Behind

The Best Ways to Save Money Even Impulsive Spenders Can Get Behind

The truth is, there are many “money saving guides” online, but most don’t cover the root issue for not saving.

Once I’d discovered a few key factors that allowed me to save 10k in one year, I realized why most articles couldn’t help me. The problem is that even with the right strategies you can still fail to save money. You need to have the right systems in place and the right mindset.

In this guide, I’ll cover the best ways to save money — practical yet powerful steps you can take to start saving more. It won’t be easy but with hard work, I’m confident you’ll be able to save more money–even if you’re an impulsive spender.

Why Your Past Prevents You from Saving Money

Are you constantly thinking about your financial mistakes?

If so, these thoughts are holding you back from saving.

I get it, you wish you could go back in time to avoid your financial downfalls. But dwelling over your past will only rob you from your future. Instead, reflect on your mistakes and ask yourself what lessons you can learn from them.

It wasn’t easy for me to accept that I had accumulated thousands of dollars in credit card debt. Once I did, I started heading in the right direction. Embrace your past failures and use them as an opportunity to set new financial goals.

For example, after accepting that you’re thousands of dollars in debt create a plan to be debt free in a year or two. This way when you’ll be at peace even when you get negative thoughts about your finances. Now you can focus more time on saving and less on your past financial mistakes.

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How to Effortlessly Track Your Spending

Stop manually tracking your spending.

Leverage powerful analytic tools such as Personal Capital and these money management apps to do the work for you. This tool has worked for me and has kept me motivated to why I’m saving in the first place. Once you login to your Personal Capital dashboard, you’re able to view your net worth.

When I’d first signed up with Personal Capital, I had a negative net worth, but this motivated me to save more. With this tool, you can also view your spending patterns, expenses, and how much money you’re saving.

Use your net worth as your north star to saving more. Whenever you experience financial setbacks, view how far you’ve come along. Saving money is only half the battle, being consistent is the other half.

The Truth on Why You Keep Failing

Saving money isn’t sexy. If it was, wouldn’t everyone be doing it?

Some people are natural savers, but most are impulsive spenders. Instead of denying that you’re an impulsive spender, embrace it.

Don’t try to save 60 to 70% of your income if this means you’ll live a miserable life. Saving money isn’t a race but a marathon. You’re saving for retirement and for large purchases.

If you’re currently having a hard time saving, start spending more money on nice things. This may sound counterintuitive but hear me out. Wouldn’t it be better to save $200 each month for 12 months instead of $500 for 3 months?

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Most people run into trouble because they create budgets that set them up for failure. This system won’t work for those who are frugal, but chances are they don’t need help saving. This system is for those who can’t save money and need to be rewarded for their hard work.

Only because you’re buying nice things doesn’t mean that you’ll save less. Here are some rules you should have in place:

  1. Save more than 50% of your available money (after expenses)
  2. Only buy nice things after saving
  3. Automate your savings with automatic bank transfers

These are the same rules that helped me save thousands each year while buying the latest iPhone. Focus only on items that are important to you. Remember, you can afford anything but not everything.

How to Foolproof Yourself out of Debt

Personal finance is a game. On one end, you’re earning money; and on the to other, you’re saving. But what ends up counting in the end isn’t how much you earn but how much you save. Research shows that about 60% of Americans spend more than they save.[1]

So how can you separate yourself from the 60%?

By not accumulating more debt. This way you’ll have more money to save and avoid having more financial obligations. A great way to stop accumulating debt is using cash to pay for all your transactions.

This will be challenging, depending on how reliant you are with your credit card, but it’s worth the effort. Not only will you stop accruing debt, but you’ll also be more conscious with what you buy.

For example, you’ll think twice about purchasing a new $200 headphone despite having the cash to buy them. According to a poll conducted by The CreditCards.com, 5 out of 6 Americans are impulsive spenders.[2]

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Telling yourself that you’ll have the discipline to not buy things won’t cut it. This is equal to having junk food in your fridge while trying to eat healthy–it’s only a matter of time before you slip. By using cash to make your purchases, you’ll spend less and save more.

A Proven Formula to Skyrocket Your Savings

Having proven systems in place to help you save more is important, but they’re not the best way to save money.

You can search for dozens of ways to save money, but there’ll always be a limit. Instead of spending the majority of your effort saving, look for ways to increase your income. The truth is that once you have the right systems in place, saving is easy.

What’s challenging is earning more money. There are many routes you can take to achieve this. For example, you can work long and hard at your current job to earn a raise. But there’s one problem–you’re depending on someone else to give you a raise.

Your company will have to have the budget, and you’ll have to know how to toot your own horn to get this raise. This isn’t to say that earning a raise is impossible, but things are better when you’re in control right? That’s why building a side-hustle is the best way to increase your income.

Think of your side-hustle as a part-time job doing something you enjoy. You can sell items on eBay for a profit, or design websites for small businesses. Building a side-hustle will be on the hardest things you’ll do, be too stubborn to quit.

During the early stages, you won’t be making money and that’s okay. Since you already have a source of income, you won’t be dependent on your side-hustle to pay for your expenses. Depending on how much time you invest in your side-hustle, it can one day replace your current income.

Whatever route you take, focus more on earning and save as much as possible. You have more control than you give yourself credit for.

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Transform Yourself into a Saving Money Machine

Saving money isn’t complicated but it’s one of the hardest things you’ll do.

By learning from your mistakes and rewarding yourself after saving you’ll save more. What would you do with an extra $200 or $500 each month? To some, this is life-changing money that can improve the quality of their lives.

The truth is saving money is an art. Save too much and you’ll quit, but save too little and you’ll pay for the consequences in the future. Saving money takes effort and having the right systems in place.

Imagine if you’d started saving an extra $100 this next month? Or, saved $20K in one year? Although it’s hard to imagine, this can be your reality if you follow the principles covered in this guide.

Take a moment to brainstorm which goals you’d be able to reach if you had extra money each month. Use these goals as motivation to help you stay on track on your journey to saving more. If I was able to save thousands of dollars with little guidance, imagine what you’ll be able to do.

What are you waiting for? Go and start saving money, the sky is your limit.

Featured photo credit: rawpixel via unsplash.com

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