Irregular Payments

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It’s odd to see a business actively seeking to chase off repeat customers, but I can’t imagine it hurting a company with Walmart’s business model in any real way.

According to Fast Company, they plan on convincing us to buy 100 million compact fluorescent lightbulbs (CFLs) in the next 12 months, an amount equal to every CFLs sold last year from all vendors. 100 million CFLs sounds like a lot of bulbs, but it’s really a drop in the bucket - 2 billion ‘regular’ bulbs were sold last year - so there definitely is quite a lot of potential demand out there.

What I find interesting about the idea is the repurcussions should they succeed and the idea of CFLs finally takes off. The average incandescent lightbulb (with a life of 1,000 hours) at average use (4 hours a day) would need to be replaced every 8 months; a CFL lightbulb (with a life of 10,000 hours) at average use needs to be replaced every 6 years 10 months - 1/10th as often, in other words. And in those almost seven years, you won’t be buying a single replacement bulb, from Walmart or anywhere else. Of course, you will spend a bit more up front for the CFLs. But unless you’re buying incredibly cheap incandescents (with, most likely, incredibly short lifespans) or expensive CFLs, probably not 10 times more. Plus, you get to save a not insignifcant amount on electricty costs; according to the article, they estimate recouping the cost of the bulb in electricity savings in just 5 months!

But what about poor Walmart? After all, they lose all those repeat lightbulb customers. Hey, they’ve got a billion other items for sale - I bet they’re counting on shoppers spending their lightbulb savings on a few of those. And you know what… they’re probably right.

Tagged:
 » lightbulbs, incandescents, compact fluorescents, CFL, walmart, energy efficiency

Homeowners in Florida are seeing the potential equity in their homes falling after average run ups of 30% a year from 2000 through 2005. Over the last year, the price has dropped 1%.

With those facts, what does local housing analyst David Levin suggest? Residents shouldn’t delay in applying for home equity loans before there is even more price erosion!

“It would have been better to get these loans two months ago, but now is better than tomorrow…”

Couldn’t agree more. That’s exactly what your average consumer needs - more variable rate lines of credit in a period of rising interest rates tied to probably their most valuable asset. (By the way, that’s a touch of sarcasm if it wasn’t obvious…)

[Again, a day late and a dollar short: Uncle Jack beat me to the punch on this one... ;)]

Tagged:
 » home equity loan, line of credit, interest, real estate, mortgage, credit, debt, bad advice

I know I probably have a bit of dark sense of humor, but that’s what popped into my head (voiced by the ‘Dell Dude‘) while reading about the train wreck that is about to be Michael and Brittany Abbate’s life. Just seeing how they deal with a vehicle dispute is telling.

Michael’s a spender who, for instance, ‘wants to drive something more in line with how much money I’m making’, a sure sign of someone who will be surprised how hard it is to live in retirement on a tenth of their current income. ‘I want more curb sizzle’, indeed… [As an aside, he works as a financial service rep - wish they'd say who that company is, just as a service for those of us seeking advice on companies whose service we might want to avoid in the future. Someone who spends on rapidly depreciating assets to reflect status certainly fails to meet my ideal of those who should be advising me on my money!]

Brittany, on the other hand, is a saver. She doesn’t want to spend unnecessarily. She’s just fine with her four year old Saturn. As she should be - the first four years they owned it have destroyed most of the realizable cash value in that asset. As long as it serves it’s function of getting from A to B, they may as well drive it into the ground at this point. Those first years of using a vehicle are by far the most expensive ones; those coming up are dirt cheap by comparison. Getting rid of it now to upgrade (and take on those expensive first few years again, rinse, repeat…) is, albeit the common route, just about the dumbest thing we do as Americans.

So, what did they do in the end? Got fleeced into Leased a low-end Volvo. In other words, money dummy won the argument. My guess would be that, in the end, he does a lot.

Now they’ve moved to a new city. Michael’s got himself a new job, at half their earlier combined salary - though of course, he ‘expects to be earning six figures again in a few years’. Brittany’s search for part time work has become complicated by the fact that there is now a child on the way. Here’s hoping that the upcoming child wakes up Mr. Spender & Mrs. Saver to the realization that there’s more to life than today and to work together for the future. But I wouldn’t hold me breath. I see trouble ahead, and unfortunately, trouble is about to include a little child. And that makes me a little sad…

[Michael & Brittany seems to have grabbed a few people's attention: Jane Dough over at Boston Gal's Open Wallet, Cap over at Stop Buying Crap, as well as Frank the Financial Savvy Atheist all seem to have a thought or two to share as well...]

Tagged:
 » spender, saver, lease, cars, volvo, saturn, family, trainwreck, divorce