Sometimes it's obvious, but most of the time it's not. What am I talking about? I'm talking about how we, as humans, are comforted by following the pack or making decisions that everyone around us is making. For example:- We like buying Google stock because it helps us find things (there are alternatives) and the media loves Sergey and Larry.
- We like buying SUVs because they are safe (not really) and Bob has one in his driveway.
- We like buying Green because it helps the environment (not all the time).
- We like not saving much because easy credit is (once was) available.
- We like buying our own home because there's a tax savings (doesn't off set initial investment) and because we're told every American is entitled to one (not true).
Most of the "like items" above are, or once were, things that most people liked doing (or felt compelled to do) mostly because the behavior is/was rampant or popular. "Doing" the above items may be good or bad, but what I do want to point out is that doing something because it goes with the flow or is in fashion is not a good thing. In fact, I'd like to argue that it should be everyone's priority to find a different angle and go against the flow, when it makes sense. Here are some specific examples:
- If you have the money (real cash) and need a car, buy a car now (there are great deals available on any every category of vehicle on the market). Moreover, don't buy a hybrid but rather buy a vehicle that has a new modern diesel engine (it's gets better fuel economy than a hybrid, as well as better performance and reliability; see the 2009 Volkswagen Jetta TDI).
- If you're invested in the stock market and have additional cash handy, buy more blue chip, individual, stocks or low cost index funds (like the ones offered by Vanguard), given the hugely undervalued companies and sectors in the market today.
- If you want to help the environment, don't buy environmentally friendly products, rather consume less altogether (e.g., make do with the TV you have and don't get a flat screen, walk instead of drive when you can, and shut off your lights when you don't need them) and use the products you have in your house as replacements for the latest green products (e.g., don't buy the latest eco-friendly Windex
My general point is that it's comforting to do what we see people around us doing, but it's hard to think differently. The real opportunities in life are centered on ideas, products, behavior, etc. that have not yet been commercialized or popularized (if you're an entrepreneur, do you really want to build the next great web site or focus on mobile devices and building the next great user interface for portable screens?).
Beyond business opportunities, living a practical life and saving money can sometimes be realized by simply tuning out the mass media and your next door neighbor and just doing common sense things, like purchasing a car just for transportation (do you need an SUV and leather seats?) and moving into a house that is cozy and just right (do you need 6 bedrooms and 2 acres of land?). So, the next time you need to make a decision (a big one or a little one) stop and try NOT to do what you see everyone else doing (it's good for you, I swear!).
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