Dave Ramsey---That's Not Good Enough!--- (Class 8 of 13)

Dave Ramsey loves stuff. He loves cars, boats, tools, power equipment, and electronic gadgets. But even more than stuff, Dave Ramsey loves the great game. You hear it from time to time in many of the classes. Nothing pleases him more than a really big bargain. In this class, Dave teaches his way to buying the things you need or just want at the best possible price. Actually, it is easier to follow in outline form than in narrative, as he imbeds lists (which are the meat of the class) inside of keys which are little more than headers. The First Key consumed about two thirds of the class. Dave ripped through the Third Key in a matter of minutes.

1.0 The First Key; Every Price is Negotiable

Dave’s starting premise is every purchase is a negotiation. There is no such thing as retail. At some price, quantity, or delivery time everything is negotiable and boy does Dave like to negotiate.

1.1 The “Lucky Seven” Basic Rules of Negotiation

1.1.1 Always tell the truth.
Never lie in your negotiations. If you lie and are discovered, it is likely this will at least make the negotiation more difficult or completely destroy the relationship.

1.1.2 Use the power of cash.
Dave always uses cash (as in hundred dollar bills) when making even very major purchases. The sight of 10 or 50 one hundred dollar bills has a tremendous emotional impact. He recommends taking advantage of this fact. Consider in the TV show Pawn Stars, every purchase made by the employees at the pawn shop involves cash money. It is a factor in those negotiations. I will give you such and such an amount of cash—today.

1.1.3 Understand and use walk away power.
Do not become married to something you want to buy. The salesman will read it in your body language. If that happens you are cooked. Anything, except for perhaps an original Rembrandt, can be purchased at more than one store.

1.1.4 Know when to shut up.
Silence is one of Dave’s favorite negotiation techniques. Salesmen are not trained to deal with silence. Even if they ask a question sometimes it is best to just smile and nod your head. The salesmen will feel obliged to keep the conversation moving. He just might provide you with a key to a better deal.

1.1.5 That’s Not Good Enough!
This idea came from Henry Kissinger’s book on negotiations. When the salesman is going for the close say, “That’s not good enough.” Let him try and answer that one.

1.1.6 Good Cop Bad Cop
A variation on this theme is used constantly in the automotive business. The salesman is your friend, but he has to get the approval of the sales manager, a one eyed monster with bloody fangs they have to keep chained in a dudgeon. Husband and wife can turn this around. “Oh, my husband would never let me pay that much for this car.” In fact, because women are viewed as victims by some salesmen, it is often recommended they take along a man when buying a car. The man can point out all the car’s shortcomings, as she negotiates with the salesman.

1.1.7 The If I Take Away Technique
I could give you $100,000 for this house today, but at that price you would have to throw in that bass boat and trailer (probably worth $40,000). After the homeowner regains consciousness and states that offer is dead on arrival. The say, “Well if I take away the boat, then you are going to have to come down on that price.” Used frequently by real estate investors.

2.0 The Second Key; Patience

This is pretty much the same thing as understanding walk away power. In every negotiation time is somebody’s friend and somebody’s enemy. In the NFL players’ strike the owners’ tactics indicate they believe time is on their side. They have deep pockets and believe they can outlast the players who have an average three year window to make their name and fortune playing the game.

3.0 The Third Key; Know Where to Find Deals

3.1 Negotiations Are More Than Money.
Don’t be afraid to barter goods and services. Cash does not have to change hands to complete a successful negotiation.

3.2 Know Where to Look for Big Bargains

3.2.1 Individuals
Many times individuals just want to get rid of something for some reason. If that is the case, the price will be much lower than retail.

3.2.2 Estate Sales

3.2.3 Public Auctions
Watch out for auction buying fever.

3.2.4 Couponing
Only use coupons to buy what you would buy anyway.

3.2.5 Garage Sales

3.2.6 Repo Lots
Repo Lots and online auctions can be the source of great bargains and great disappointments.

3.2.7 Flea Markets

3.2.8 Refunding
Those annoying $50.00 debit cards that come six months after completing numerous forms on the Internet.

3.2.9 Foreclosures
Dave recommends this for professionals only. In spite of what the infomercials may say, there are too many traps for the unwary in buying properties at foreclosures.

3.2.10 Pawn Shops

3.2.11 Online Auctions (EBAY)

3.2.12 Classified Ads
Really the same thing as buying from individuals

3.2.13 Consignment Shops
Many women are discovering that perfectly good and sometimes even clothing with the tags still attached can be purchased for a fraction of the original price at consignment shops.

3.2.14 Conventions
Never heard of this one before, but Dave has learned that exhibitors at conventions frequently do not want to pay to ship merchandise back home when the convention ends. Hang out on the last day of the convention and make them an offer they can’t refuse.