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If You Hear Hoof Beats

I was discussing with someone about misinterpreting data on the weekend and remembered one of my favourite phrases for this type of activity:

If you hear hoof beats, don’t automatically think Zebras

Badly paraphrasing Occam’s Razor

I believe I first heard this one on CSI, but I do like the sentiment. I view it as a result of Occam’s Razor, but I like the idea of simplicity. Complex ideas and theories always worry me, given I am a superficial thinker.

The simple answers in many areas are the correct answers (especially in personal finance). 

Whose hoof beats are these?

Some of the areas where I have had people hear Zebras when they should have thought horses:

Thundering Hoofs
Thundering Hoofs
  • I am in debt because of the credit crunch. No, you are in debt because you spent more than you made, and you had to borrow to deal with this spending. For some it is borrowing money to buy a house, others borrowed money for a car but the majority, is borrowing money to pay for debts they didn’t need to incur. That ain’t no Zebra!
  • It’s too complicated to stop using Credit Cards. This is a rationalization from folks who really are saying, “I like using credit cards and don’t want to give up my current lifestyle“. You can stop using your credit card tomorrow, put them in the freezer in 2 lbs. of hamburger, and they are gone. That wasn’t a buffalo, just a horse.
  • A budget is too complicated to figure out. No, that is the statement, “I don’t want to use a budget because I will have to give up my current lifestyle” (again), a budget can be very simple and living to it can be simple, don’t make it a complicated thing, or you will fail. That wasn’t a gazelle, just a horse.
  • I can’t save money given my current salary. How many times have all of us said this every time we get a raise? I have made that rationalization myself, you can save it just might be hard to do, that’s all. Wasn’t a wildebeest either, just a horse again.

Don’t make financial planning, personal finance or budgeting more complicated. Please keep it simple and listen for horses, not Zebras.

Written back in 2007 and 2009 on the same hoofy topic.

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What’s important?

I have had a few folks comment on how I seem to be obsessed with money.

Let me assure you I only talk about money because it fascinates me.

The most important thing in my life is my family.

Family is the most Important Thing

On a Sunday you should take stock of everything in your life you are thankful for (or Saturday if that is your day of rest).

Debt reduction is important, Family and Friends though, are the most important.

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Entitled or Mistreated Consumers ?

An interesting comment on one of my older posts (the script for customer retention) stated

“…  you’re bottom feeding scum that try to bully everyone for nickels and dimes when you aren’t a top shelf customer to begin with…”.

Comment about negotiating for a better price

I am assuming that if the writer is an actual call center employee, they do not speak for their employers (officially). They could easily have been a troll trying to have a laugh as well.

Throughout that article I stressed the importance of being polite with folks on the phone (my daughter works in a call center and I know how crazy some people can get). Politeness is the key when dealing with service folks. Many times they cannot do anything, but if you are polite they will pass you on to someone who can.

I am glad that this one article keeps getting folks reading, and hopefully getting better deals, but, things are changing out there. My inability to get to the Customer Retention group to get a better deal (Cable and Phone service), I will be trying again, but there is hope.

Media Maven Preet Banerjee says he has had an interesting “deal” proposed to him. He set up Rogers Internet in his new Fortress of Solitude in Downtown Gotham (North), and realized two weeks later that he might need a higher monthly bandwidth limit. Did this cause him to give up? NO! He called and he must have used one of his Jedi mind tricks because they gave him a higher monthly limit and they charged him less for it? (This was not the deal you negotiated).

We Deserve Better Deals

I realize that not all of us have a Fortess of Solitude or Jedi mind tricks to fall back on to get a better deal, but Ellen Roseman wants us to get those better deals (and wants to make sure we don’t get ripped off). If you have a chance to listen to this up beat lady talk, do it! She told some scary consumer stories, but she also gave me hope that we can all get a better deal (if we just stay persistent).

It is your right as a consumer to get the best deal that you can get.

I continue to fight to get better deals. Be polite, but also be firm, if you are a good customer. Why should only new customers get good deals? This is true for all services, not just ISPs, but Banks, and other service providers too. This is a rewrite from many years ago, but still very true.

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Frugal or Cheap ?

I have asked this question before, with a similar photo, but I ask again, is this cheap or just frugal.

Frugal or Cheap ?
Frugal or Cheap ?

Yes, I did buy a special implement, to make sure the transfers went well, but is it frugal? It works very nicely for HP Sauce bottles as well. When I start mixing the cereal (i.e. putting “the bottom” of a box of old cereal into a newer box), then I will know I have become my mother.

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Personal Auditor General

Another blast from the archives from the year 2008 (just before I was laid off), note how critical I was of the government. Do you have your own Financial Auditor General?

The Canadian Government is a mega-business in terms of size and jurisdiction, and to keep this monster organization in line there is the Office of the Auditor General. Yesterday the Office of the Auditor General put out its 2008 Annual Report, and as usual it is full of many interesting issues with the Government specifically in the area of spending. There are some very interesting comments on User Fees in general and how they have been arbitrarily added by many government agencies without a specific accounting of what the “fee” is for. Interesting reading.

The concept of the Auditor General got me thinking about whether I could stand an audit of kind by a 3rd party of my finances. My answer is I don’t really think so, however it might actually be a great idea to force me and my family to explain some of the purchases and financial decisions that have been made over the past little while. Think of having to explain to someone why I held on to my High Tech stocks for so long? Makes me cringe just thinking about this whole idea, but to me it sounds like a good idea.

I have previously written about the Quarterly Financial Review (which we are almost half way through the second financial quarter) and also about your Financial Resume, and these ideas are great concepts to help families communicate with each other about their current financial status (especially once you have a few reviews under your belt so you can actually compare and contrast quarter to quarter), but I am thinking that maybe these ideas aren’t quite enough. If you add more accountability (pardon the pun) to your Personal Financial Life you may be forced to make more informed decisions (i.e. you are less likely to rely on your “gut” or impulses, if you know you have to explain later to someone why you did what you did).

Any ideas where this kind of “Personal Audit” could be implemented are welcome.

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