Buy low and sell high is unbeatable advice for investing - if you have a way of knowing when a price is low. Because it seems logical that the lowest price is available early in the game, those who sell stocks, real-estate, franchises and other investments are taught to create a sense of urgency when pitching investments to you. However, the need to get in quick rarely applies when you're spending your money as a consumer. In fact, the harder the hype, the less likely it is that there is actually a bargain. In this article, we'll show you the rewards that can come from being a patient shopper. You'll get all of the product perks you want, but with a smaller price tag!

Know When to Hold 'Em
There are items that it virtually never pays to act early on. New consumer products - especially when they are being introduced - fall into this category. It's a marketer's job to create a buzz about new products, such as iPods and BlackBerries - sometimes as much for their early-adopter vanity value as for their utility. Of course, the newest features are attractive, and often do fill real needs for security (GPS and wireless devices), convenience (TIVO) and productivity (voice mail).

The cost of such early adoption, however, can be staggering when you compare the initial prices for such products and services to those a year or two after the products are introduced. Furthermore, our overall impulse to buy any consumer product when we want it rather than at the best time of year to do so is equally damaging to our budgets. To say good bye to these bad buying practices, you must take the time to master the timing tricks employed by shrewd consumers.

Know When to Fold 'Em
Often, the best time to buy a consumer-electronics product is when an enhanced and improved version using the same technology is announced. Soon after the annual January Consumer Electronics Show in Las Vegas, new products unveiled there start hitting the shelves. As a result, retailers must clear space and recognize that consumers will stop paying even close to the going rate for the "old" versions of updated products. Discounts of 25-50% during the holiday season, and even more in the post-holiday clearance, are no longer enough, and some phased-out items can go for as little as a few dimes on the previous summer's dollar. Yet, provided it meets your needs, your product won't become truly obsolete for a couple more years.

We've all seen this happen with personal computers. If you use them for business, or otherwise are highly dependent on them, performance degradation from continued changes in software and internet technology could make waiting unacceptable. But for most people, saving $500 by accepting less storage capacity and somewhat lower resolution could be a worthwhile tradeoff.

Furthermore, waiting offers the benefit of learning early-adopters' experiences, enabling you to make a smarter buying decision regarding quality, function and usability. For example, a recent survey showed that only half those who have high-definition (HDTV) consoles are actually getting HDTV from cable or satellite. So, because these consumers don't know how or found it too much of a hassle to set up or configure their new technology, millions of families are watching regular TV with equipment that they could now buy for considerably less than they paid.

TV technologies also illustrate two other advantages of waiting:

  • Competing Technology: Liquid-plasma big-screen TVs are selling for hundreds in 2007 after selling for thousands in 2005.
  • Cloning: Many major manufacturers sell or license slightly repackaged, non-name-brand versions of their products within a year or two of introduction. These are often sold right next to their original models under the stores' private-brand labels. Competing manufacturers also develop their own cloned versions at much lower prices, which drives down name-brand prices.

Best Big-Stuff Buying: By Season or Other Reason
Waiting also pays in most other product and service categories, but declines in price are often seasonal, rather than a result of obsolescence,

  • Furniture: For higher-end items, plan to shop at a manufacturer's outlet shortly before and after the twice-yearly InternationalHomeFurnishingsCenter show in High Point, N.C .(around April 1 and October 1). Outlets vigorously discount current inventory to create space for the new lines. For maximum savings, travel to North Carolina just before those dates and buy the clearance stock directly from the show room for discounts of up to 75 %. If you're from out of town, the price of shipping will cost 5-10%. For middle-market furniture at retailers, shop during slower buying times in January (post-holiday). The savings will extend to other home items, including beds and linens. Also look in July, when shoppers are scarce due to vacations and are preparing to move out of homes, rather than looking for furniture for new homes.
  • Comfort Systems: It stands to reason that you look for heating systems when it's hottest out and cooling systems when it's coldest. However, because installation is part of the price, that's not quite true: technicians are tied up with that season's installation and maintenance work. So, look to buy and install air conditioning in late winter and early fall, and furnaces in late summer or early spring.
  • Large Appliances: Shop the early-fall appliance sales that precede the new models that come out in mid-fall. However, consider the total cost of operation, because you might not be getting such a great bargain if newer models are significantly more energy efficient. Of course, you can't use this timing if you're shopping because an appliance broke, so expect microwaves, water heaters, garbage disposals, trash compactors and air conditioners to last from eight to 12 years; refrigerators, dishwashers, washers and dryers to last 10 to 15 years, and kitchen ranges to last only a few additional years past 15. Plan to replace your current appliances sooner rather than later in their expected life spans and you'll be getting more efficiency and giving yourself more time to shop around for deals. You can always try to sell an older appliance if it is still in good working condition. (To learn how to save money on your appliance purchase, see Extended Warranties: Should You Take The Bait?)
  • Home Improvements/Maintenance: During the peak of hot housing markets, it's hard to find any bargains on quality work by experienced professionals. But in most years, you can get better prices by avoiding the get-ready-for-holidays peak period for indoor work in mid October through mid December, and mid spring through late summer for outdoor work. Look for real bargains when the economy cools because of glutted wood/materials inventories and contractors scrambling to fill their work calendars. (To learn more, see Fix It And Flip It: The Value of Remodeling.)
  • Vacations: You might want to be away when that remodeling sawdust is flying - and you can by grabbing a travel bargain to Asia in January or February. In general, look for the lowest prices to particular global destinations during their off ("shoulder") seasons, which occur between "high season" and "low season" periods. Home improvement costs might still be attractive in April, when you can get great bargain packages to Mexico and Caribbean destinations. Or forget home improvement and go for mood improvement in Europe at its cheapest, which is generally in the fall.
  • Automobiles: The new car smell will have faded by the time you make your first monthly payment, and so will about 10% of the car's value. Buying used cars of about two, three or even five years old is often the way to go - provided you do your research on prices and your due diligence by having the car checked out by a professional mechanic. If you must buy new, however, choose a car that ranks high in reliability, plan to keep it until it's ready for the junk yard and shop in late summer for a leftover model that should sell for close to the price of a year-old car. (Keep reading about this subject in Wheels Of A Future Fortune.)
  • Real Estate: "Now" is the answer to first question on the real-estate license examination: "When should one buy?" But despite the regional pops in the national real-estate bubble, prices are likely to continue rising over the long run in any area with a healthy local economy, a solid, diversified tax base, and an education and services support base for both young and mature families. It pays to own a home sooner rather than later when you know you're going to be at a place for at least five years, it's the right home for you and you're financially stable (not just mortgage-qualified). But being patient and selective in the housing market is well worth any possible appreciation loss - and you certainly want to avoid shopping when most people are out looking. So go for the quieter periods from late summer through winter, or look for smaller areas that are just beginning their growth seasons. (Find out more about real estate purchases in Investing In Real Estate, Exploring Real Estate Investments and Downsize Your Home To Downsize Expenses.)

Shop Smart on the Small Items
Finally, don't forget that smart shopping for food, clothing, household goods and similar items might add up to total savings on par with big-ticket bargains, so consider these strategies:

  • Sales: Big retailers generally run one legitimate sale a month - either for holidays or at the end of any month without a holiday. To make sure you're getting good deals - and not just huge markdowns from artificial big markups - "screen shop" (or check online prices at various retailers) in advance to determine true retail prices. Most retailers also have annual anniversary or inventory sales and end-of-season clearance sales. Many states also have an annual "sales-tax-holiday" long weekend that retailers augment with selective discounting. (To read more about this subject, see Choosing The Winners In The Click-And-Mortar Game.)
  • Buying Clubs: If you use them diligently to buy bulk amounts of household staples, such as toilet paper, diapers and beverages, the membership fee will be negligible compared to your savings. But watch out for all the attractive purchases you didn't intend to make: Costco's business model works so well because of them.
  • Coupons: Between newspapers, mailings, store circulars, store websites and online sites, such as http://www.coupons.com/, you can find substantial legitimate discounts on staple items, such as pain relievers, toothpaste and cereal that augment any that discounts stores might offer - especially on double-coupon days. It's a pain to go through it all and keep track, but the savings could be well worth it - and could mean the difference between you buying a new big ticket item when you need it and not being able to afford it

Conclusion
Although a quick entry is sometimes beneficial in investing, it rarely pays when you're spending your money as a consumer. Take the trouble to buy the items that you need at the lowest possible price. You may find that you'll have more money left over at the end of the month to spend any way you want.

Related Articles
  1. Home & Auto

    Don't Be the Victim of Auto Loan Rip-Offs

    Subprime auto loans – and 60-day delinquencies – are up. These 4 signs of predatory auto loans can tip you off before you're caught in one.
  2. Stock Analysis

    JCPenney's Path To Profitability (JCP)

    Learn about what J.C. Penney's management team has been doing to profitably grow its business as the company recovers from years of revenue declines.
  3. Home & Auto

    The Latest Airbag Recalls: What to Do

    The latest warnings are from Honda/Acura and Dodge. How to look up your car – and what to do if you find it on the recall list.
  4. Retirement

    5 Reasons Millennials Lead in Saving for Retirement

    Say what you want to about millennials but the one thing they are doing better than any other generation is saving for retirement. Here's why.
  5. Economics

    What is a Complement?

    A good or service that’s used in conjunction with another good or service is a complement.
  6. Budgeting

    Bespoke Post Review: Is It Worth It?

    Find out if Bespoke Post, the fast-growing, e-commerce subscription service for men's lifestyle and grooming products, is worth all of the hype in this review.
  7. Investing

    3 Small Steps to Maximize Your Investing Goals

    Instead of starting the New Year with ambitious resolutions, why not taking smaller manageable steps that can have a real impact.
  8. Stock Analysis

    The Biggest Risks of Investing in Costco Stock (COST)

    Read about some of the biggest risks of investing in Costco stock. Gain a better understanding of its business model before buying in.
  9. Investing

    7 Creative Ways to Save for an Early Retirement

    Take note of these out of the box steps you can take towards securing yourself an earlier, more comfortable retirement.
  10. Retirement

    Ipsy Review: Is It Worth It?

    Discover the history of ipsy, how much packages cost, options available for membership, major competition and what the future looks like for the company.
RELATED FAQS
  1. How does a cost-of-living adjustment (COLA) affect my salary?

    Some companies build salary adjustments into their compensation structures to offset the effects of inflation on their employees. ... Read Full Answer >>
  2. Does QVC accept debit cards?

    QVC accepts debit card payments as one of its many payment options. The company, which is the world’s leading video and e-commerce ... Read Full Answer >>
  3. Where can you buy NetSpend reload packs?

    You can only purchase NetSpend reload packs at Giant Eagle, Albertsons, Roundy's and Pathmark supermarkets. NetSpend cards ... Read Full Answer >>
  4. Does QVC charge sales tax?

    QVC, an American TV network, is registered with states to collect sales or use tax on taxable items. QVC is also required ... Read Full Answer >>
  5. Can you pay off a Walmart credit card in store? (WMT)

    Wal-Mart Stores, Inc. (NYSE: WMT) allows multiple payment options for its credit cards, including in-store payments. The ... Read Full Answer >>
  6. Does Walmart take international credit cards?

    Foreign visitors to Walmart locations in the United States can use their credit cards issued by banks outside of the U.S. ... Read Full Answer >>
Hot Definitions
  1. Inverted Yield Curve

    An interest rate environment in which long-term debt instruments have a lower yield than short-term debt instruments of the ...
  2. Socially Responsible Investment - SRI

    An investment that is considered socially responsible because of the nature of the business the company conducts. Common ...
  3. Presidential Election Cycle (Theory)

    A theory developed by Yale Hirsch that states that U.S. stock markets are weakest in the year following the election of a ...
  4. Super Bowl Indicator

    An indicator based on the belief that a Super Bowl win for a team from the old AFL (AFC division) foretells a decline in ...
  5. Flight To Quality

    The action of investors moving their capital away from riskier investments to the safest possible investment vehicles. This ...
Trading Center