Forget Stocks – Vanity is on Sale!

November 10, 2008 by  
Filed under Money and Behavior

Today brought yet more news on how the downturns in the economy and stock market are affecting American workers and consumers.  Two stories in particular expose and highlight some of the ignorance and carelessness among U.S. investors and consumers in matters of personal finance.

First, our local paper interviewed workers who had recently stopped contributing to their retirement plans.  The reason?  Their retirement accounts had lost value.  Ameritrade reports recent survey results showing that only 54% of eligible Americans are contributing to their retirement plans.

U.S. consumers are famous for their mall crawls to buy clothes and gadgets they don’t need.  The only impulse needed for these purchases is that they are “on sale.”  Many of those same frequent shoppers (such as those who have stopped contributing to their retirement plans) simply cannot mentally process the concept that stocks are now on sale.  

Maybe we need to build an “investment mall” that looks like a regular mall.  Inside the mall, the storefronts will have hip designs reminiscent of Abercrombie, the Gap and Victoria’s Secret.  The stores themselves will be occupied by 401(k) plan managers, mutual fund companies, and stock brokers.  The “investment mall” will display large and colorful signs with messages such as

“stocks marked down 40%”

“mutual funds on sale  – lowest prices in ten years”

“buy now – our loss can be your gain.” 

Do you think these messages will trigger an excited, pulse-pounding “I have to buy this – it’s on sale” reaction in consumers and investors who stroll through?  I’m no psychologist but trying to connect this way with investors who are also experienced mall shoppers might actually work.   The primary obstacle may be that investment mall shoppers will not be able to use their credit cards.  Oh-oh.

Also today, the New York Times reported on marketing efforts by plastic surgeons and dermatologists to keep patients interested in expensive treatments and procedures that cater to their personal vanity.  So now we have clinics promoting “botox Fridays” when you can save 30% on smoothing facial wrinkles.  My favorite is a “two for one” promotion that extends a special discount to patients requesting multiple cosmetic procedures at once.  Super savings for the super vain!  

The Times article confirms that these promotions are in response to data showing that many plastic surgeons have experienced a decline in cosmetic procedures over the past six months.  I suppose that’s a good sign that at least some consumers are cutting back on non-essential purchases.  On the other hand, surgeons are reporting having success with these new discount promotions.  

The drug companies that supply some of the products to the vanity surgeons joined in.  The manufacturer of Restylane, a cosmetic “face filler” material, uses this tag line:  “The Economy May Not Be Looking its Best, But You Can!”  (No, I am not making this up – see for yourself.)

Don’t you love it?  Mr. ToughMoneyLove has another suggested tag line:  “Who Cares if You’re Broke if You’re Beautiful!”   

Or, if they want to specifically target those who have stopped contributing to their retirement plans, how about:  “Don’t Buy Stocks – Botox Rocks!”

Ok, I concede that my suggestions are on the lame side but I hope you see my point.  Maybe some of these vanity surgeons should shift their focus a little to providing more essential medical services.  At the same time, consumers should suppress their vanity and if they have some extra coin, buy what’s really on sale:  stocks.

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6 Responses to “Forget Stocks – Vanity is on Sale!”
  1. Hi Mr. ToughMoneyLove,

    This was a real Critical Thinker Whammer!! 😉 Wow!

    Found the Investment Mall, hilarious!!

    The “investment mall” will display large and colorful signs with messages such as

    “stocks marked down 40%”

    “mutual funds on sale – lowest prices in ten years”

    “buy now – our loss can be your gain.”

    Well, others are welcome, but I consider ‘Stock’ Exchanges to be a very slick Willy Form of Ponzi Schemes…

    If or where I have a bit of spare money, I invest it in Gold Coins; I would not invest one penny of my money in the Stock Market… Not even if you put a gun to my head. No Thank You!!

    I never had a health care plan, nor a life insurance plan. I have travelled with a backpack around the world for 14 years, eating whatever was available or not, and I never caught so much as the flu.

    I got some spare food and seeds for times that are tough… and before I buy something I usually think long and hard: DO I NEED THIS?

    To me the most beautiful people in the world, have nothing to do with their outer beauty, but with their inner beauty; their ability to increase my awareness (like Patch Adams did to get people’s attention); their ability to be true to themselves, to be Jonathan Livingston Seagulls; even if I may disagree with them on some issues; just their courage to say what others are often scared to even think; let alone to be willing to consider it a serious opinions..;

    Those to me are the most beautiful people in the world — not Hollywood stars, or so. They may be physically beautiful, but to me there is much more to a person than outer beauty…

    Anyway, thats just my views.


  2. Miranda says:

    In our consumer culture, this doesn’t really surprise me. But it is kinda depressing nonetheless. Too bad about the investments, though. Personally, I’ve upped my contributions. But I do have a longer timeframe…

  3. Lara: Interesting thoughts and interesting lifestyle. For those of us with families to support, not all of that will work. I certainly agree with the concept of inner beauty.

    Miranda: Glad you are on board. I think the “longer timeframe” concept is misunderstood by many. Even a 65 year old has a 15 – 30 year timeframe for needing investments that provide inflation protection, e.g., equities.

  4. Perfect reasoning why companies like Allergan (maker of BoTox) are perfect “sin stocks”.

    Toss in a cigarette maker, an alcohol distiller, and a defense company, and you’ve got a portfolio the morally conscious objectors would love to hate.

  5. Matt: While Botox does have some therapeutic value (e.g., it’s being used to treat migraine patients who do not respond to other therapies), I agree with you that it generally falls into the sin stock category. Allergan, on the other hand, makes lots of stuff of genuine value so don’t judge it solely on Botox.

  6. @ TML

    Yes I know – I was being somewhat facetious in my comment on BoTox and Allergan. I used to work with BoTox on the research side of the equation, and it’s somewhat disheartening to see progress on disorders like epilepsy linger while it was pushed through plastic surgeons offices with little to no problem.

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