21 terms

Dave Ramsey Chapter 5

Consumer Awareness
What does "Caveat Emptor" mean?
buyer beware
Annual Percentage Rate(APR)
cost of borrowing money on an annual basis; takes into account the interest rate and other related fees on a loan
Buyer's Remorse
regretting a purchase soon after making it
Brand Recognition
consumer awareness that a particular brand exist. It is part of product positioning.
to buy an item with credit; paying over time.
having a beginning and an end
Impulse Purchase
to buy an item without thinking about it
Opportunity Cost
the true cost of something in terms of what you have to give up to get the item; the benefits you would have received by taking the other action.
Rule of 78
pre-payment penalty in a financing contract; the portion of a "90 days same as cash" agreement that states that the entire loan amount plus the interest accumulated over the first 90 days becomes due immediately.
Significant Purchase
an amount of money you spend, usually $300 or more, that causes some pain to part with.
What are the five steps you should follow before making a significant purchase?
1. wait overnight
2. consider your buying motives.
3. never buy anything you do not understand.
4. consider the opportunity costs of your money.
5. seek wise counsel.
Companies use every angle to aggressively compete for what?
your money
The average American is exposed to about how many advertisements daily?
around 3,000
What are the four major ways that companies compete for your money?
1. Personal selling
2. advertising as a marketing tool.
3. tv, radio, internet, and other media.
4. product positioning
What is the sign of a well trained salesperson?
They answer your question with another question.
What are product positioning techniques used to get the attention of consumers?
-brand recognition
-shelf position
What percentage of "90 days same-as-cash" contracts convert to payments which are usually at 24% APR with rule of 78's prepayment penalty?
How much is spent on online advertising directed at kids?
$15 billion
True or False;
According to Harvard University, for every hour of tv per week that you watch, you spend an average of $100 extra a year.
False: $200
True or False; Contentment comes from material items.
False; no amount of stuff can equal contentment.
What does the spoiled, red-faced, grocery store kid living inside of us all represent?