Scandal 6

1. CHAPTER 6

2. Scandal #6

3. �Thanking you for the clothes of your dead people�

4. Scandal #12

5. A What Therapist?! How much does a very busy dog therapist charge for six 1-hour sessions with you and your dog? $250 $500 $1,000 $1,500

6. How Much is Fido Costing You? Speaking of dogs, what is the average yearly cost of owning a dog?* Less than $500 Between $500 and $1,000 Between $1,000 and $1,500 Over $1,500

7. Do Not Forget Taxes For every $2 spent, you must earn more than $3 � maybe up to $4 depending on your income bracket �A Dollar Saved is Two Dollars Earned� From The Wealthy Barber From The Millionaire Next Door

8. Speaking of Millionaires� Spoken by the Senior Vice-President of a trust department of a major bank that had commissioned a focus group interview of twenty first-generation millionaires.

9. Speaking of Millionaires� The median age is 57 years old Most are married and have not divorced More than 80% are first-generation millionaires The median income is $131,000 per year Most invest at least 15% of their income each year 50% have never spent more than $399 for a suit $140 for a pair of shoes $235 for a wrist watch

10. Speaking of Millionaires� Therein lies the paradox: Do you want to be a millionaire or do you want to live like a millionaire? All the people you think are millionaires � fancy cars, flashy clothes � are really just high-income, high-consumption wage earners with 10 credit cards run up to the maximum. The millionaires are the penny-pinchers. Bizarre, huh?

11. Speaking of Millionaires� The media loves to showcase the high net worth, high consumption celebrity figures. The truth is that they constitute only a small percentage of the millionaires in the United States. The media advertisers love them because they encourage the �Little Folk� to over consume.

12. Speaking of Millionaires� Over 60% of the population live on less than $1 per day. About 41% do not have access to clean water. Over 90% of the women over the age of 15 are illiterate. Life expectancy at birth is approximately 44 years.

13. Speaking of Millionaires� What You Have Happiness = ���������������� What You Want

14. Scandal #23

15. Disposable or Rechargeable? Given normal usage, how many alkaline batteries would be replaced by one nickel metal-hydride battery? 25 100 500 750

16. Shopping can be an addiction Many, many people buy things simply trying to fulfill some unmet childhood desire �An addiction is any mood-altering behavior that the participant is no longer in full control of.� John Bradshaw Do not think the advertisers do not know all about this and other psychological phenomena

17. Speaking of Emotions�

18. Does Advertising Really Work?

20. Speaking of Influences� Would someone please tell me why a Roach handbag is worth $600 more than a JCPenney�s handbag?

21. Scandal #73

22. Incandescent or Fluorescent? Given normal usage, how many incandescent bulbs would be replaced by one fluorescent bulb? 2 4 8 11

23. Incandescent or Fluorescent? Over its lifetime, how much money will one fluorescent bulb save you in energy costs at current electricity rates? $25 $45 $65 $110

24. Consumer Purchasing Activities Problem identification Information gathering: costs, options, consequences Sources of attribute assessment Personal contacts and experience of others Business organizations advertising & media Independent testing organizations � Consumer Reports Price analysis: Are quality and price always related? Comparison shopping: Do you take the time to comparison shop?

25. Consumer Purchasing Activities Negotiation may be used on some products Decide on cash or credit Get all acquisition and installation costs and conditions in writing Maintenance and ownership costs may be associated with some purchases Complain if you are not satisfied with a purchase Do you complain if you are not satisfied?

26. Timing purchases When is the best time to buy Christmas cards? Brand comparison versus impulse buying Store brands can be low-cost alternatives Evaluate warranties and service contracts Price comparison Unit pricing provides a standard of measurement Coupons and rebates (partial refund) More convenience and ready-to-use products mean higher prices (Tightwad Gazette � Potatoes) �Sale� does not always mean saving money In fact�

27. Pretzel Logic �But it�s on sale! Think of how much we will save!� You may spend less, but you never save money whenever you buy something; you always spend money whenever you buy Repeat after me: �Spending is NEVER Saving!� �Spending is NEVER Saving!� �Spending is NEVER Saving!�

28. Pretzel Logic

29. Scandal #118

30. Societal Cost of Meat? How many gallons of fresh water are used to produce one pound of beef? 100 gallons 500 1,000 5,000

31. Societal Cost of Meat? How many people can be fed via grains with the resources needed to feed one person with beef? 5 people 10 20 30

32. The Cost of Convenience

33. World average is 2,700 calories per day

34. Speaking of Food� The total daily caloric intake of the average American has risen by 148 calories per day since 1980. This amount reflects an extra 15 pounds per person each year. -- U.S. Department of Agriculture

35. Speaking of Food�

36. Speaking of Food� According to a recent study sponsored by the USDA, how much of the nation�s food ready to harvest never gets eaten? 2% to 5% 10% to 15% 20% to 30% 40% to 50%

37. Speaking of Food� And the average family of four throws out how many dollars worth of food each year? $50 to $75 $100 to $150 $250 to $300 $575 to $600

38. Scandal #235

40. But It�s Really Not Just Water! How many plastic water bottles make their way into landfills or wind up as litter each year? 5,000,000,000 (5 billion) 12,000,000,000 (12 billion) 22,000,000,000 (22 billion) 28,000,000,000 (28 billion)

41. Steps in ResolvingConsumer Complaints Return to place of purchase Contact the company�s main office via telephone or their web site Obtain assistance from a consumer agency Better Business Bureau web site to file a complaint on line: http://www.bbb.org Local Better Business Bureau State consumer protection office or agency Federal agencies Mediation � parties decide for themselves (non-binding) Arbitration � third-party decides (binding)

42. Steps in Resolving Consumer Complaints Take legal action Small claims court Class-action suits Use a lawyer? (can not use one in small claims) Other legal alternatives Legal aid society Prepaid legal services Research legal questions at www.nolo.com Try mediation or arbitration first

43. Personal Consumer Protection To protect yourself as a consumer� Deal with reputable companies Avoid doing any business with or giving any information to telemarketers / spammers www.donotcall.gov Avoid signing contracts and other documents you do not understand Compare financing through the seller with other sources such as credit unions Avoid rushing to get a good deal Be cautious about offerings that seem too good to be true � they usually are!

44. Scandal #1

45. CHAPTER 6 Appendix

46. First, Some Statistics� Percentages of Short Motor Vehicle Trips� 49% � Three miles or less 40% � Two miles or less 27% � One mile or less

47. Societal Cost of Cars? For every one gallon of gas you burn, how much carbon dioxide do you pump into the atmosphere? 7 pounds 15 pounds 20 pounds 125 pounds

48. Societal Cost of Cars? How much of our oil do we import?* 12% 27% 48% 66%

49. Societal Cost of Cars? And how much, per person per year, do we spend on imported oil? $456 $840 $1,600 $2,240

50. Societal Cost of Cars? Let's see, $1,600 per person per year multiplied by 300,000,000 people � That is approximately... $162,000,000,000 ($162 billion) $292,000,000,000 ($292 billion) $480,000,000,000 ($480 billion) $672,000,000,000 ($672 billion)

51. Societal Cost of Cars? So how many barrels of oil (42 gallons of crude oil) does each person consume in the United States each year? 2.5 barrels 12.8 25.4 112.3

52. Have We Learned Anything Yet? Barrels of Oil Consumed per Person per Year in the United States 1970 � 26.3 barrels 1978 � 31.0 1983 � 23.7 2000 � 26.5

53. New or Used Car? Which do you prefer? Why? What are the pros and cons?

54. Buying a Used Vehicle Sources of used vehicles New-car dealers Used-car dealers Private parties Consult Consumer Reports Yearly Buying Guide � Reliability statistics Consumer protection for used car buyers T�ain�t much!

55. Inspecting a Used Car Outside the car Inside the car The engine Mechanic�s inspection Odometer fraud & crashed, salvage vehicles Check carfax.com The road test

56. Used Car Price Negotiation Price information sources Edmund�s Used Car Prices or edmunds.com NADA Official Used Car Guide Kelly Blue Book kbb.com Consult a friend who is a car enthusiast! Better yet, have him or her come with you when you shop

57. Buying a New Vehicle Over half of all new vehicle purchases now involve some Internet interaction From gathering information to actual purchasing Average cost of a new vehicle now exceeds $28,400 � Ouch! (source: http://www.ftc.gov/bcp/edu/pubs/consumer/autos/aut11.shtm ) Do not be swayed by advertising Check Consumer Reports 20% Gone! What?!

58. Selecting Options Mechanical devices Engine size Cruise control Comfort and convenience options Air conditioning Stereo systems Aesthetic features Special paint Mag wheels Service contract � Do Not Fall For This! Unless the car you want has a less than stellar repair record (Check Consumer Reports)

59. Negotiating the Price Sticker price (a.k.a. suggested retail price) It includes the base price plus the accessories Invoice price � dealer�s cost Know the dealer�s cost by consulting... Consumer Reports consumerreports.org Edmund�s New Car Prices edmunds.com When is the dealer�s cost not the dealer�s cost? When the factory�s monthly incentive check comes in at the end of the month!

60. Price bargaining Set-price dealers Car buying services Also called an auto broker Online car buying The sales agreement � Read it! Consumer protection for new-car buyers Each state has its own lemon laws

61. Financing an Automobile Purchase Financing sources Banks, credit unions, finance companies, or dealer financing Many lenders will preapprove a certain amount Consider the length of the loan Upside-down equity means that your car is worth less that what you still owe on the car loan (a.k.a. negative equity)

62. Leasing a Vehicle Closed-end versus Open-end lease Advantages Small cash outflow Lower monthly payments than buying Lease provides detailed records Disadvantages No ownership interests Must meet requirements May have additional costs Especially for any extra miles!

63. Leasing a Vehicle However, the large number of recent leases has created an excellent opportunity for used-car buyers Example: 3-year lease of a $45,000 Sport Utility Tank Expected residual value (a.k.a. lease-end value) of $32,000 Lessee politely sez, �No, Thanks.� You pick up the vehicle from the leasing company for around $20,000 Better yet, buy an econo-box for $15,000

64. What Kind of Vehicle? According to our authoritative and detailed scientific research, we have found that the larger the motor vehicle, The smaller the IQ of the driver The more fragile the ego of the driver The greater the sense of powerlessness within and anger toward the society around them The more microscopic the reproductive organ All of the above

65. Costs of Operating a Car Fixed Costs Depreciation � 65% after 5 years (average) That $28,000 car will be worth $9,000 in five years Finance charge � Interest on loan Insurance License, registration & taxes Variable Costs Gas and oil Tires Maintenance & repairs Parking and tolls

66. According to the AAA, what is the average cost per mile to own and operate a new car in 2011? 12.5� per mile 25.8� 40.9� 58.5� Costs of Operating a Car

67. Costs of Operating a Car Average of over $8,588* per year per car (58.5�/mi) Many families have two cars 40 years * $17,176 per year = $687,040! Jonathon Pond�s study � 1980�s Buying a new car every 4 years, versus Buying a new car every 10 years and investing the savings (including the cost of maintenance) At the end of 40 years, you would have $350,000 And those were 1980�s dollars � double it for now

68. Servicing Your Car Follow the maintenance schedule in the manual (?) Vehicle servicing services Car dealers Automobile repair shops Service stations Discount stores Specialty shops Jiffy Lube (?) Midas

69. Bottom Line on Cars Get a bicycle! scooter! motorcycle! (Get training) I have >56,000 miles on my commuting bicycles At 58.5� per mile, I have saved over $32,000 in vehicle costs Plus I have saved a tremendous amount in health care costs Before I started riding again, I was a paunchy 30-something male suffering from Sedentary Lifestyle Disease (Now I am just paunchy�) Do not forget the savings to the environment Difficult to estimate but nevertheless do exist Besides, it is fun to ride past people stuck in traffic in their cars as they are driving to the gym! And it is only going to get worse�