Posted by: Financial Sith Lord | January 13, 2010

How to save money.. Its right in front of us.. Why do we not see it??

After running all my usual errands with my mother today, we decided to swing by 1 Utama in Bandar Utama. Purpose – just to window shop and have a look at things that may be deemed unnecessary in this economic climate. After browsing through a-fraction of what the shops had to offer, we stumbled upon a bunting that displayed Starbuck’s latest drink product, the Orange zest Ice blended frappuccino .. My mother mentioned to me earlier in the day about Starbuck’s new drink, and here we are, starring intently in front of the subject drink’s bunting.. Since the time was too late for lunch and too early for high tea, we strolled in and ordered the drink. My mum asked for whip-creamless version whilst I wanted to have the full taste of what they’re offering. I queued for a while (there were about 3 folks in front of me, including one shaved head guy, with a mis-matched pink stripe shirt with a checkered sleeveless sweater). I observed that at the entrance floor, there is a huge 1-Card privilege sticker, where you could gain points if you were to present the 1-card upon payment.. ( 1-Card is a privilege card issued by 1-Utama management which entitles you to gain points when you shop in any of its participating stores within the mass complex).

As my turn came up, I ordered what was ordered, and I asked the Baristas (Starbucks calls their service staff, Baristas) if I could get discounts with 1-Card. He replied, I could only get points with it, but with Jusco Card (a membership card issued by Jaya Jusco stores.. owned by AEON (M) Bhd) I can get 10% off from the total bill.. Without much delay, I took out my Jusco Card (thanks to my wife who had pestered me to apply for one years ago!!) and presented it to the Baristas.. True enough.. 10% taken off from my total bill of RM 34.20 (I saved RM3.40!!). I smiled, took my ordered drinks and went to the table where my mum had stationed herself. I explained what happened to her, and gladly demonstrated to her again when she asked for an  Almond Biscotti, which displayed a RM 4.00 price tag. The trusted Jusco Card was presented again, and again, I received 10% from my total bill.. I paid only RM 3.70 for it..

Now, what I’m trying to say here is that, many of us seem to belittle discounts and gift vouchers offered by most retailers. These discounts and gift vouchers could actually translate into huge monetary savings, of which, such saving could be used for investments that could generate income for you. Moneys are spent unwisely by many Malaysians (I noticed that the 3 folks in front of my line didn’t even acknowledge when the Baristas asked them for Jusco Card), and yet many of us grumble over being underpaid etc..

Let’s do a simulation based on the Starbucks case.

Assumptions: Say I frequent Starbucks 3 times a week and I do it year round. For each visit, I spend on an average of RM 30.00. (Basically, it means that I’ve wasted RM 4,320 in meaningless coffee, which could be substituted with home-made Indocafe..). The total amount I’ve spent is RM 4,320, if I did not use the discount offer. But if I take on the discount, I would have saved RM 432.. (more if I made my own Indocafe at home!!)..

RM 432 a year for 5 years would be RM 2,160. Now, lets use some creative leverage here. RM 2,160 could give me a trading margin of RM 10,800 with my stockbroker. With that RM 10,800, say on an average, I could steadily make 10% profits per month on laid-back trading. That means, I will be generating RM 1,080 per month. Now let’s justify this.

RM 1,080 per month x 12 months = RM 12,960. Now divide it with 5 years, I’ll get RM 2,592 per year. Per month, I’ll be getting RM 216… which translate to 50% monthly returns!!

I wonder, why is it that we are so induced into the status of ourselves that we’re willing to sacrifice financially over people’s perception of us? I observed that many of us would not bother about discounts etc, if we’re at a high-end outlet or retailers. But if we’re at a local warong or stall, we would demand for discounts..

My principles in life is that, the best things are often cheap or free.. Rarely can we find an expensive tagged item that justifies its price.

Think about it..


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