After I finished high school I decided to take a break from the world of academia before going on to University. I ended up taking a job in a stereo store as a salesperson. If you're wondering how far back this was, well the place sold quite a few items that hardly exist now. Stereo receivers, amplifiers, tape decks and turntables were some of the products, along with televisions and a relatively new invention called the microwave oven.
One day while I was still relatively new a young couple walked in, they were right around my age, maybe 17 or 18. They had just moved in together and were looking to buy a TV Set. There was one problem, they didn't have any money, and were attracted to the store I worked at by a sign that promised easy financing.
After settling on a TV that cost two or three hundred dollars I had them fill out a credit application with one of those lending institutions that specialized in that type of loan. A short phone call later and they were approved. They would be paying something like $15 or $20 per month for the next two or three years.
All seemed well and good, a sale....hot dog.
Then my manager Winston stepped in and asked me: "How much are they good for"? I didn't know what he meant, so he took me back to the phone and said: "Watch". He proceeded to call the financing company and found out that they were approved for up to $500 or thereabouts. The next thing he said was: "Watch this".
Winston walked over and grabbed a random VCR costing somewhere around $200. He walked up to the couple and said: "Look what I'm gonna do for you". He explained that for just $10 more per month they could have both the TV and a VCR.
The guy lit up like a Christmas tree, probably envisioning watching XXX videos with his girlfriend. But as is so often the case, his girlfriend looked worried. She asked Winston if they could talk to me. My manager retired behind the counter and the young couple and I went into a corner of the store. She was worried, I had explained to her that the interest rate was high, but that it was a small purchase that would help establish a good credit rating. That was when it was just a TV.
Sensing her concern I advised them to buy the TV, and to stick a a few bucks aside each month and then to come back in a few months and pay cash for the VCR.
Winston took it all right, I explained to him that with rent, gas for the car, insurance, phone and all the other expenses that come with independent living, that the girlfriend was worried about them overextending themselves, and she had good reason to be concerned.
Marketing and sales people love to break things down to a low monthly payment, some will break it down to "just pennies a day". But those small monthly expenses add up, $5 here, $25 there, an extra $10 for this and another $30 for that, before you know it you're spending and additional $200 or more per month and putting nothing aside for savings.
What's the point of this little bit of personal history? None really....its just life experience. But whether its TVs and VCR, or stocks and other financial instruments....most sales and marketing people only care about the sale and the commission that goes with it.
Peace :-)
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