Economic Impacts of the PhilippinesTyphoon

Look at just how badly the Phillipines, a once thriving, built up area, was ravaged by the typhoon. Perhaps seeing a before an after image will  inspire action. After all, a picture speaks a thousand words.

Look at just how badly the Philippines, a once thriving, built up area, was ravaged by the typhoon. Perhaps seeing a before an after image will inspire action. After all, a picture speaks a thousand words.

About two weeks ago, a Typhoon named Haiyan ripped through the Philippines. While all natural disasters are unfortunate, this catastrophe was particularly destructive; it was deemed one of the worst in history. The death toll keeps rising, currently at an estimated 10,000, and the area is completely ravaged. Last year, when Hurricane Sandy struck, I lived without heat, electricity, and phone reception for a week, and I received the utmost sympathies from friends abroad. Yet this type of suffering is nothing compared to the dire situation of those in the Philippines, where entire communities were ravaged. The effects of this typhoon will impact the state of the Philippines both in the short and long run. While health is clearly the top concern in such a situation, one such important effect is of that on the economy. Businesses and economic markets manifest themselves in all circumstances, and the ruined state of the Philippines is no exception.

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There are many immediate, obvious consequences of a natural disaster. For one, the amount of resources available is heavily diminished, there is less clean water, transportation is halted, and shelter is limited due to the fact that homes are destroyed. Labor is also put on hold not only because of the priority to keep people healthy, but also because there are casualties; fewer people means less manpower.  Thus trade, which benefits both parties involved, comes to a grinding halt.  A better off country does not consider morality, but rather its own best interests, when it donates money and sends volunteers. The sooner the afflicted country recovers, the sooner they can both proceed with trade.

Volunteers witness firsthand the desperation in disaster areas. Often, before help arrives, individuals are so desperate for resources that they loot stores. People who are normally law abiding citizens go to uncharacteristically extreme measures because they feel that their lives are in danger. This has clear financial implications for store owners. Looted inventory means lost profit, and people whose businesses were destroyed must start building from scratch.

The demand for resources such as food and water increases in areas ravaged by the typhoon, as evidenced by  the shift of the Demand curve from D1 to D2. However, the supply curve remains unchanged. As a result, the equilibirirum point, where the supply and demand curve intersect, moves, causing the equilibrium price to increase from P1 to P2.

The demand for resources such as food and water increases in areas ravaged by the typhoon, as evidenced by the shift of the Demand curve from Q1 to Q2. However, the supply curve remains unchanged. As a result, the equilibrium point, where the supply and demand curve intersect, moves, causing the equilibrium price to increase from P1 to P2.

Those who are fortunate enough to have businesses that remain unscathed are in an advantageous position. They have the power to exploit desperate customers by charging inflated prices for goods. The reason for this is economically based: there is a high demand and an unchanging supply. In this situation, the equilibrium price is high; if it were lower, people would clear the shelves, and owners would not profit. High prices acutely affect the poor, who might have a greater need than those who are willing to pay. Therefore, what is arises is an unfair allocation of resources, which an economy focused on equality attempts to avoid. Ultimately, survival of the fittest rules. As Maslow determined in his Hierarchy of Needs, the first need for a human being is a physiological one. People are not concerned with morality or ‘Love thy friend like thyself’ if they do not have enough food to survive another day.

Psychologically, people are affected both in the short and long run. Such devastation impacts citizens’ morale. They can easily suffer from depression, for they have just lost everything. It is an eye opening experience to have everything you cherish suddenly be torn away from you. Life as you know it has changed forever.  How should you go about starting over?

Cranes and construction will be ubiquitous soon, as rebuilding is an inevitable consequence of such a natural disaster

Cranes and construction will soon be ubiquitous in the Philippines, as rebuilding is an inevitable consequence of such a natural disaster.

People’s psyche after this type of freak occurrence impacts the long term economic effects. Individuals wallow in a state of depression, and remain lethargic. However, that would entail living in abject poverty, with no food, resources, or shelter, which is not conducive to the growth of a society. Or, they can be creative and foster their entrepreneurial side. It is an unavoidable reality that, in an area of ruins, rebuilding is necessary. With this type of development, there is a great deal of room for job growth. After Sandy, for example, contractors were in high demand. This rejuvenating spirit is contagious and rejuvenates other job sectors. People building new homes need new furniture, clothing, and light fixtures. Suddenly, a freak occurrence that appeared to stifle any form of progress serves as an impetus for economic growth.

Most people, unlike countries, do not have obvious ulterior motives when helping a country in need; their sympathetic instincts serve as a main motive. Of course, I said main. If you are strapped for cash, but suffering children pull at your heartstrings, here is a piece of advice for you: give anyway. Donating to charity is tax deductible in most cases. Thus, you can relieve your guilty conscious while also relieving some of the burden of your taxes that Uncle Sam seeks every April 15th.

Those currently in the Philippines desperately need your help. I am notoriously frugal, and even I donated half a paycheck. I know a worthy humanitarian cause when I see one. My conclusion from analyzing this situation as a student was that Philippine citizens will be in a difficult situation economically for a long while; however, as a human with emotions, I know that I can potentially ameliorate their suffering.

Published in: on November 18, 2013 at 5:09 pm Comments (0)
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Tweeting in a New Era: Twitter’s IPO

What was once a simple picture of a bird is now a globally recognized symbol for a billion dollar company.

What was once a simple picture of a bird is now a globally recognized symbol for a billion dollar company.

When Twitter announced a few months ago that it would go public, Wall Street and financial investors were abuzz with excitement. Globally, there was also a huge frenzy about this piece of news. What would it be worth? How many stocks would be sold? What would this mean, logistically, for the future of this company, which had hitherto flourished as a privately owned business? After much speculation, Twitter went public on November 7, 2013 with an IPO-initial public offering-of $26 a share.

While 75% of busiensses are sole proprietorships, corporations nonetheless comprise a whopping 88% of the revenue earned. Perhaps that is why so many companies strive to become corporations-they have delusions of grandeur and think that they will be able to achieve such immense wealth-which, realistically, rarely happens to most businesses.

While 75% of businesses are sole proprietorships, corporations nonetheless comprise a whopping 88% of the revenue earned. Perhaps that is why so many companies strive to become corporations-they think that they will be able to achieve such immense wealth, too. Hate to burst their bubble, but the number of such businesses can just about be counted on your fingers and toes.

To understand why Twitter finally decided to become a corporation, it is first necessary to understand the three types of businesses, and their practical differences. Sole proprietorships are owned by one person; partnerships are owned by two ore more people; corporations are legally distinct entities owned by people who have shares in the company. A main difference between the former two and the latter is in regard to liability. Proprietorships and Partnerships have unlimited liability, whereas corporations have limited liability. Consider a company that you at one point invested $10, but unfortunately now has a debt of $100. As a corporation, the maximum amount you can lose is limited to what you invested; you lose $10 and no more, even though the debt is higher. As a proprietorship or partnership however, there is no cap as to how much you must pay. Even if you invested $10, you are liable to pay off the full $100, no matter the means. Though it might seem cruel, creditors are well within their right to go after your personal assets in order to receive their payment.

It is not as if getting taxed once is bad enough, but corporations get taxed twice!  That is sure to make the concept of a corporation much less enticing to the average business owner.

It is not as if getting taxed once is bad enough, but corporations get taxed twice! That is sure to make the concept of a corporation much less enticing to the average business owner.

It seems logical, then, that every company should be a corporation. Not so fast! Corporations may not face the scary reality of unlimited liability, but they are faced with something that every individual loathes, but twofold: double taxation. Not only are they required to pay taxes on revenue, but they then must also pay taxes on income. Thus, the downside to unlimited liability is equal to that of double taxation, thereby preventing one business from having more advantages than the other. An additional detail to note is that the official owners of a corporation are the stockholders. As a result, a publicly held company would lose complete control that it would otherwise have as a proprietorship or partnership.

The blue in this map of New York City represents tweeting activity. The tweeting is being done by tourists, friends and family, and businesses.

The blue in this map of New York City represents tweeting activity. The tweeting is being done by tourists, friends and family, and businesses.

For quite some time, Twitter succeeded as a privately held company. Yet it determined that it would be able to do even better financially as a corporation. A large demand was evident by the vast amount of people who expressed interest in wanting a piece of the company, figuring that Twitter’s ubiquitous popularity would translate into a valuable investment. In benefitting both parties, a symbiotic relationship through the formation of a corporation would likely result.

What would be the basis for the value of something as amorphous as a website-based company? As Twitter learned early on: advertisements. Twitter facilitated businesses’ abilities of reaching out to new customers. It determined that companies would want to place ads, and it began charging them to do so as a simple way of making a lot of money. Indeed, common folk enjoy using Twitter in order to reach out to friends and family. However, businesses especially reap the benefits it offers by exploiting its ability to reach a large audience. Twitter recognizes how invaluable it is to such companies; it even provides a section devoted to business owners as to how to use the website most efficiently so as to reach out to the maximum number of followers. Thus, by serving the needs of businesses, Twitter ensures that it has users that are willing to pay.

Seeing this in the local Stop and Shop reminded me of penny stocks. Penny stocks are shares of small public companies, essentially worth nothing. Of course, if you stock up on thousands of them, the amount you must pay suddenly becomes substantial. On a side note, if you ever encounter such a ludicrous promotion in a store, feel free to laugh and walk away, as others are enticed by the 'reduced price'. There is a fine line between looking for a sale and being a sucker for a sale.

Seeing this in the local Shop Rite reminded me of penny stocks. Penny stocks are shares of small public companies, essentially worth nothing. Of course, if you stock up on thousands of them, the amount you must pay suddenly becomes substantial. On a side note, if you ever encounter such a ludicrous promotion in a store, feel free to laugh and walk away, as others are enticed by the ‘reduced price’. There is a fine line between looking for a sale and being a sucker for a sale.

In the impending days before Twitter went public (an expression meaning that a company becomes a corporation) there was much speculation about the price. People thought that the IPO would be $23-$25, others said $27. The marginal difference of a single dollar may seem petty, but when millions of shares are being sold, these dollars can accumulate. Many felt that for a stock so high in demand, these prices were too conservative. Choosing the right price to start off when selling stocks is critical. If it is too low, the company will not make a lot of money; if it is too high, the company will scare investors away. Determining the ideal price is a complicated science in it of itself, and it requires the Goldilocks principle (not too hot, not too cold, but Just right).

The matter of choosing the right price for a web based company evoked bad memories of the fiasco involving Facebook’s IPO. Facebook overvalued the price of its stock, and for nearly nine consecutive days following its going public, Facebook’s stock price plummeted. An additional problem with its IPO was that there were many technological glitches, causing investors to be unsure if their stock purchases went through (a major cause for concern).

The first day of trading for Facebook was not promising.

The first day of trading for Facebook was not promising. Notice how much lower the price was at the end of the day, than during the beginning.

Fortunately, Twitter’s IPO ran smoothly. Its initial price of $26 a share fared well with investors.  In fact, people were so excited to buy that at the end of the day, prices soared 73% to $44.90 a share. In total, Twitter raised a staggering $2.1 billion in its IPO, making it the 7th largest ever.

The financial implications of Twitter as a corporation are significant. Other privately owned technology companies might note the success of Twitter, Facebook, and even Google, and consequently choose to become corporations. Not only is inundating the market with so many similar businesses a bad idea, but it also might not be in a particular company’s best interest to change its structure. Corporations might hinder its ability to grow, potentially leading to bankruptcy. People who vividly recall the dot com bubble in the early 2000’s, in which people overvalued website based companies, see history repeating itself. While the long-term effects of Twitter’s IPO are unclear, it is obvious that in the short run, similar companies will benefit.

Published in: on November 12, 2013 at 5:37 am Comments (1)
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SAC Scandal

Just to match a face with a name, this is Steven A Cohen, the subject of much of SEC's scrutiny as of late. Read on to find out exactly what he allegedly did.

Just to match a face with a name, this is Steven A Cohen, the subject of much of the SEC’s scrutiny as of late. Read on to find out exactly what he allegedly did.

An important piece of news in the financial world has involved SAC Capital: SAC is being pursued by the SEC on insider trading for $1.2 billion, and the head of SAC, Steven A Cohen, is facing a civil lawsuit for failing to supervise his employees, which could ultimately lead to him being legally forbidden from working in finance ever again, not to mention facing potentially hefty fines and jail time.

Sound complicated? It is. The news has been covering the story for quite some time, so it is rather difficult to understand a random article about the latest development if you have not been following the story from the beginning. My goal is to enlighten you about this important current event so that you will be able to have an opinion on the matter should someone ask you about it, or if you just want to be well-informed. (In my attempts to make this piece informative, accurate, and interesting, I conducted some research regarding the information I will be discussing. While I will not write a works cited page, I do not want to plagiarize. Therefore, I note here that the origin of many important details is Wikipedia.com. Thank you very much, and please continue to provide your services to your large following of students who procrastinate.)

A hedgefund is comprised of many different types of companies, from its finances  to the types of goods and services offered.

A hedge fund is comprised of many different types of companies, from its finances to the types of goods and services offered.

Steven A Cohen founded SAC Capital, a hedge fund, in 1992. (If you cannot tell, the etymology of the company name is his initials, a humble gesture on his part, I’m sure.) A hedge fund is a “pooled investment vehicle.” What does this mean? Two words: making money. People who want to invest buy shares in a company in order to make more money. Putting all your cash in one place, however, is risky. What if the company declares bankruptcy? Then you lose everything! The key to investing wisely is by diversifying. Just like the Queens College students are diverse, so too your investments should show variety. A hedge fund enables you to invest your money in a plethora of companies (that are either different types or have different ways of raising capital), so that the risk of losing money is slim.

Let's just say Steven A Cohen is a tad higher than most of us on the Forbes Top 400 List. Slash he is actually on the list, which speaks volumes about the amount he holds in his bank. account.

Let’s just say Steven A Cohen is a tad higher than most of us on the Forbes Top 400 list. Slash he is actually on the list, which speaks volumes about the amount he holds in his bank account.

So what’s wrong with starting a company that wants to make more money? This is capitalist America, after all! SAC is a relatively young company at 21 years old. In this short amount of time, SAC has grown substantially, to the point where it is now worth $9.3 billion. That is an astronomical value; it is not surprising, then, that Cohen is #43 on the Forbes 400 list of the wealthiest people in America. On the surface, this does not seem to be a problem. Perhaps Cohen has a knack for detecting companies that are valuable, and consequently invested in those. Yet others are more cynical. For example, the SEC, essentially a police force exclusively dedicated to keeping the finance aspect of the business world in check, thinks that something is fishy as to how SAC conducted their investments. Being able to amass such an incredible amount of wealth in such a short time frame is perhaps too good to be true. (Note: do not mix up the SEC and SAC- the former is the prosecutor, and the latter is being prosecuted.)

In 2004, Martha Stewart was famously charged with obstruction of justice and was sentenced to jail. While not explicitly convicted of insider trading, she essentially did so. (Her decision to suddenly sell stocks whose value subsequently plummeted, in addition to other evidence, indicated that she had acted on information that the laymen did not know.

In 2004, Martha Stewart was famously charged with obstruction of justice and was sentenced to jail. While not explicitly convicted of insider trading, she essentially did so. (Her decision to suddenly sell stocks whose value subsequently plummeted, in addition to other evidence, indicated that she had acted on information that the laymen did not know). I personally find it rather shameless that she used this opportunity in the limelight to highlight her crocheting skills; the crocheted poncho immediately became a fashion fad.

It is important to note that the SEC does not go after lucrative companies (or it is not supposed to) unless they do something illegal. In the case with SAC, the SEC has found evidence of insider trading. (It is not alleged because 6 employees have already pleaded guilty to doing so.) Insider trading means having information that others are not privy to, and consequently acting upon this knowledge. That way, you can invest in something that is currently low in price and that you will reap the monetary benefits when it increases in value; similarly, if you know stocks will decrease in price, you will sell them while they are still valued highly. In short, insider trading is illegal because it is unfair. Despite the dog eat dog nature of business, America tries its best to regulate this unfair type of business behavior.

The insider trading in this case involves a doctor who told SAC investors about a trial for a drug that did not have terrific results. Knowing this information, one would automatically want to sell their shares in the company because it is not doing so well. However, only SAC knew of the unsuccessful results of the trial, and consequently were the only ones to sell their shares in the company, while it was still valued highly. By selling at the perfect time, they avoided losses of $276 million.

The ultimate goal is to catch the top person who orchestrated the insider trading. In building its case, the SEC has slowly been interrogating, and often indicting, different employees of higher and higher ranks, figuring that someone will finally spill the beans and disclose information that proves that Cohen is guilty. The workers,however, have all remained mum on the subject. Cohen has remained adamant in his claim that his employees were the ones who, out of their own volition, acted unethically. By agreeing to pay the SEC about $600 million, he did not admit to being guilty; rather, he wanted to put an end to the SEC’s continuously pursuing the company. After all, knowing that the SEC is determined to bring about your downfall is both extremely burdensome and bad for business.

The SEC theorizes that there is a web of unethical insider trading, all stemming back to Steven A Cohen. It has been desperately trying to find a solid connection back to him in order to piece the puzzle together.

The SEC theorizes that there is a web of unethical insider trading, all stemming back to Steven A Cohen. It has been desperately trying to find a solid connection back to him in order to piece the puzzle together.

The reason the SEC is so adamant to achieve this win against the SAC is because of what happened in the Financial Crash of 2007. In going after large businesses, it is trying to prevent such a widespread economic travesty from happening again. Should SAC concede defeat, SEC would achieve its largest win, in terms of how much the company would be fined: in total, over $1.8 billion. Sometimes, however, it seems that the SEC simply has a vendetta against the success of large businesses. Granted, some arrogant businesses still believe in the mantra that flew around during 2007 of being “too big too fail”; nonetheless, they are well within their rights to try to expand their success. Whatever ultimately happens, this is an important current event to be aware of because it is sure to have many legal and financial consequences as to how businesses will conduct themselves in the future.

Update: Literally as I was putting the finishing touches on this post, I checked NYTimes.com and saw breaking news: “SAC to Plead Guilty and Pay $1.2 Billion for Insider Trading.” While at first I was upset that this happened before I posted, I saw a silver lining for my readers. After reading this piece, you will have a thorough background of the story, and will be able to follow the ensuing legal drama that will take place.

Published in: on November 5, 2013 at 4:15 am Comments (0)
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Scary Good Deals!

Perhaps partly due to an unhealthy obsession and partly due to an empty wallet, Columbia students hoarded Nutella. This was their way of increasing their food supply without spending money.

Perhaps partly due to an unhealthy obsession and partly due to a strict budget, Columbia students hoarded Nutella when the college began providing the popular spread at breakfasts. This was their solution to a prevalent college problem of getting edible food without going broke.

In the eyes of nearly every college student, finding something to eat is tantamount to passing classes. In the beginning, everyone aspires to combat freshman fifteen by hitting the gym everyday (free at Queens College for students and faculty!) and eating healthily. Over time, these quixotic goals transform into a more idealistic one of trying to incorporate a salad into a daily diet of the artery clogging ramen noodles. College students buy the notoriously unhealthy food because of their strict budgets. By paying for their tuition, they do not have much leftover to spend on food. Therefore, the cheapest option is the only option. The cost of snacks in particular can eat away (pun intended!) at students’ wallets, especially in cases where convenience is a major factor. Fortunately, with Halloween right around the corner, you have the opportunity to replenish your shelves, which are by now undoubtedly devoid of any substance that could satisfy your sweet tooth when you are on the go or are in a time of need.

No matter how old you are, the contents of a vending machine are always tempting. Since some of us don't have the willpower to go on a diet so as to deny ourselves from eating such foods, a better alternative is to buy them at a cheaper price.

No matter how old you are, the contents of a vending machine are always tempting. Since some of us don’t have the willpower to go on a diet so as to deny ourselves from eating such foods, a better alternative is to buy them at a cheaper price.

Right now, there are many opportunities during the day in which you can waste your hard earned money by being completely ripped off. The vending machine is by the far the biggest, most nefarious trap. Ubiquitous on campus, it provides the ultimate temptation by enticing those who are contemplating eating something with a wide selection of sweet and satisfying snacks. Most people justify caving in and buying something by rationalizing that it is only a dollar. If you indeed want to save money, then this logic is completely skewed. Hearing people say this truly incites my anger. By looking at the big picture, you can get a better sense of how much you are really spending and wasting. While it costs $1 for a Twix, you could buy a whole box of Twix, or a bag of the bite size kind, for under $4. Not only would you proportionally spend less, but it would also last you longer. (Put in mathematical terms: buying 12 Twix bars from the vending machine would cost $12, whereas the same amount could be bought at Shoprite for 66% less!) Similarly, in the cafeteria, chips are sold at nearly double the price of any regular supermarket.

Despite knowing that they are getting ripped off, people still buy from both places. At first it boggled my mind: how could people be so blind to the brazenly inflated prices? As I contemplated the matter more, I realized that the cafeteria and vending machines both offer something that, at that very moment, no supermarket can provide: convenience. These goods, with their higher prices, are easily attainable since they are right there to be purchased. For example, a student rushing to class needs to simply drop a dollar on the counter and then run off with the bag of chips; there is no need to walk to the car, drive five minutes, go to the snacks aisle, and then wait at the checkout counter. Ultimately, the profit made by selling these items is equal to what buyers deem to be the cost of convenience.

Impulse buys are those small goods located next to the check-out counter. Especially if they are with children, shoppers will impulsively reach for the item because it is only around a buck (and it will silence the incessant, annoying pleas). Impulse buys test the willpower of the shopper, to see if they will yield to one last, ostensibly insignificant purchase. My advice is, as difficult as it might be, to avoid such tempting items. The benefit you gain from them will ultimately be less than the price you pay.

Impulse buys are those small goods located next to the check-out counter.  Shoppers will impulsively reach for these items, especially if  they are with their children, because they are only around a buck each (and doing so will silence the incessant, annoying pleas). Impulse buys test the willpower of all shoppers, to see if they will yield to one last, “financially insignificant” purchase. My advice is, as difficult as it might be, to avoid such tempting items. The benefit you gain from them will ultimately be less than how much you initially think they are worth.

While most people value convenience, I value getting a good deal; if you are on a strict budget, you should too. (Of course, only to a certain extent: driving 30 miles to another store to buy milk that is 50 cents cheaper is actually counter productive because you end up spending more due to the cost of using more gas!) Never buy on impulse; instead, you should buy when prices are advantageous to you, the customer. During specific times in the year, items associated with certain time periods go on sale in their respective seasons. For example, around Halloween time, candy is sold for a discounted price.  There is a surplus of candy in the available inventory due to the anticipation of a higher demand. Supermarkets lower the price so that people keep buying, in order to keep replenishing the shelves.

Just because a top businessman thinks of an idea does not mean that it is good-or, better yet, legal! Bernie Madoff used a Ponzi Scheme to earn money at the expense of many others, which is both ethically wrong and federally a crime.  Stocking up on goods when prices are lower is a creative, legal, and, in my opinion, a commendable way of saving money!

Just because a top businessman thinks of a way to make money does not mean that it is a good idea. Bernie Madoff used a Ponzi Scheme to earn money at the expense of many others, an act that is both ethically wrong and entirely illegal. Stocking up on goods when they are on sale is a creative, legal, and, in my opinion, commendable way of saving money!

Sales are directed toward children, but there is no reason why you cannot take advantage of the deals, too. After all, creativity is the how professionals on Wall Street makes their millions; if you can find a way to save money both honestly and legally, go for it! (Maybe you could also teach some of the crooks who promote themselves as legitimate businessmen how to do so.) By stocking up at a discount, you can always have a sweet treat to carry around.  That way, you can avoid having to pay the astronomical prices that the vending machine charges for as long as your cache lasts. Buying these snacks now is essentially an investment for the future. Think about how much you can save by not buying these expensive options; those mere dollars add up!

In general, an important way of saving money is by first looking at goods and their prices, and then considering the long-term benefits of stocking up. Seeing Halloween sweets on sale might appear to be a nice holiday gesture on the surface. However, if you think on a deeper, economic level, you can figure that investing at such a cheap price will decrease your food bill for the next few months. Now that you know of this financial tip, have fun getting in touch with your inner child!

 

Published in: on October 31, 2013 at 2:38 am Comments (0)
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Midterm Madness

I have yet to ever encounter a student studying for midterms who appears this enthused and uptimistic. Then again, this image seems to be taken in a vacuum, so anything's possible.

I have yet to ever encounter a student studying for midterms who appears this enthusiastic and optimistic. Then again, this image seems to be taken in a vacuum, so anything’s possible.

It feels like boulders have been lifted off of my shoulders (rhyme intentional) now that I’ve completed my midterms. Do you know that feeling? Oh right. For many of you unfortunate souls, midterms will continue this coming week. Or, for some, midterms are just beginning and for those of you, I have the utmost sympathy. It is so much better to just get them out of the way!

Besides for coffee, energy drinks are now embibed by sleep deprived students who need to study more. The energy drink has become an important part of the beverage market over the years, with skyrocketing profits , despite the potential health risks.

Besides for coffee, energy drinks are now imbibed by sleep deprived students who need to study more. The energy drink has become an important part of the beverage market over the years, with skyrocketing profits, despite the potential health risks.

It is an extremely stressful period in which students exploit energy drinks and coffee so as to counter their biological inclination to have a decent amount of sleep. In economics, an important principle is that there is a finite amount of resources, and it is our goal to allocate them efficiently. This idea is most relevant when it comes to midterms week, in which one must decide how to best utilize the 24 hours of the day. There is simply not enough time that allows for both a decent amount of sleep and studying. There is always a trade-off: the more you sleep, the less you study, and vise versa. (For those of you who are math majors, it is an inverse relationship.) Queens College provides free peer tutoring for those who need help in various subjects. I am always a fan of this particular four letter F word, but it is important to note the system’s positives and negatives.

The presence of a free student tutor at one’s disposal is a boon for a struggling student. Tutors often charge arbitrary amounts for their services; finding one that is free is virtually unheard of. The tutor, also a Queens College student, may also be familiar with the professor and his/her teaching and testing methods. In that regard, the service will not just help you grasp the concepts of the course material, but will also enable you to prepare for the test.  Queens College peer tutoring thus gives students a better understanding of the material specifically within the context of that particular course, a service that almost no private tutor can provide.

Now why would people choose to be peer tutors at Queens College when they could undoubtedly make more money if they disseminated their tutelage elsewhere?  Thought they might be knowledgeable in the subject, they might not be experienced enough to be a paid one. Instead, they could develop their teaching skills as well as reinforce their knowledge in this program. The peer tutoring thereby serves as a stepping-stone for greater pay and more exposure. After all, potential clients want to hear about your success stories; the more people who do well after consulting you, the more qualified others deem you to be.

How do you make a Queens College brochure with an image as picturesque as this one even more attractive to potential students? By adding in the details about the high achievements of the students, namely in stellar GPA's.

How do you make a Queens College brochure with an image as picturesque as this one even more attractive to potential students? By adding in the details about the high achievements of the students, namely in stellar GPA’s.

While on the surface it is obvious how students and tutors gain from peer tutoring, Queens College in fact benefits, too. By instituting this program, the college can boast of another amenity it provides, one that especially reaches out to underprivileged students. After all, many people attend Queens College because of its affordability; therefore, they would certainly not have the financial means to hire a private tutor. Additionally, the result of tutoring is an increase in the average test score. Queens College’s reputation rises if its student body appears to be improving scholastically. The college would consequently get more federal grants and monetary donations from alumni and wealthy private citizens who would come to believe that there is much potential for academic greatness in our institution.

Peer tutoring has many positives, but there are also some drawbacks. Free does not entail quality. By not paying, you are not guaranteed to have a helpful tutor. The help they offer might be mediocre at best; after all, you have no way of knowing their credentials or the experiences of others students that they tutored. Furthermore, money plays an important role in encouraging a tutor to prepare and organize a lesson plan. Psychologically, a financial reward serves as an incentive to put in more effort; otherwise, if they do not live up to the person’s expectations, they could be fired. Long-term commitments can result from a paid gig, while peer tutoring at Queens College can be done with various people. It is therefore difficult to foster a relationship with those who peer tutor or for them to pinpoint your strengths and weaknesses.

Racking up good gra1des will help you in the future

Racking up good grades will help you in the future, whether it be in your applications to graduate or medical schools, or simply bragging to your grandchildren about how smart you are!

Whatever the case may be, it is important to take advantage of any and all the resources you have to do well on midterms. If you think tutoring will help you, consult either a paid or free tutor. At the end of the day, graduate schools only see your final grades-there is no asterisk that notes the fact that you received help.

Published in: on October 27, 2013 at 11:33 pm Comments (1)

Main Street Woes

Google maps street view of a busy intersection on Main Street. Already this image is obsolete, as three of the stores on the right are out of business.

A Google maps street view of a busy intersection on Main Street. Already this image is obsolete, as three of the stores on the right are out of business.

Lately, as I have been walking to and from school on Main Street, I noticed something curious: more and more stores have “for rent” signs. First it was a fruit and vegetable store, then a bakery, then a mall supermarket. I felt a wave of nostalgia, remembering the times when I got stuck in the pouring rain and sought refuge from the downpour in some of these stores; I had to engage in awkward banter with the owners in order to pretend as if I was not just exploiting their roofed areas, but rather genuinely interested in hearing their life stories.

The more I thought about the matter, the more concerned I grew. In limiting the variety on Main Street, the market would contract. With fewer options and fewer places to shop, people would be forced to buy goods at higher prices. In fact, a shop selling certain items that no one else does would have a monopoly (exclusive control over the supply of a good). As you can imagine, the store could then boost the price because it is not competing with anyone else. The dearth of stores is an ominous sign for the Kew Garden Hills/Flushing economy.

Darwin was referring to birds' beaks when he discussed survival of the fittest. However, this term applies to other areas besides for biology, such as capitalism.

Darwin was referring to birds’ beaks when he discussed survival of the fittest. However, this term applies to other areas besides for biology, such as capitalism.

I have been told that the rent prices on Main Street are astronomical. Thus, the revenue a small store earns can barely cover overhead expenses. A business’s demise is imminent if it cannot earn a profit. Additionally, it is a sad reality in a capitalistic market that some stores will thrive while others sink. The competition may prove to be too much for a store, in that it loses revenue from a dwindling customer base. Put in Darwinian terms, it is survival of the fittest.

Seeing stores that one grew up with suddenly go out of business is sad, but on a deeper, economic level, it is serious and potentially dangerous. Having many sole proprietorships (companies owned by one individual) brings in a stream of revenue. The area becomes better off because the owners provide jobs to people by hiring necessary staff, and then gain revenue as people buy the goods and services that they need. A portion of the revenue obviously goes to the government in the form of taxes. Thus, all three parties-buyers, sellers, and the government-are better off. (Rarely does this ever happen, where all the parties benefit!) The standard of living consequently rises, and people choose to flock to Queens.

Tumbleweeds in the middle of a dynamic place like Queens? Never! Although, it sometimes feels a little empty with the lack of new stores replacing the old ones.

Tumbleweeds in the middle of a dynamic place like Queens? Never! Although, it sometimes feels a little empty with the lack of new stores replacing the old ones.

With so many empty stores, however, Main Street will start to look like a ghost town. There is less for people to buy and consequently, less money pours in. The worst case scenario is that with so many abandoned shops, crime will increase. An empty place almost begs for drug dealers and gang members to come inside and use the space for their insidious activities.

In my home state of New Jersey, we have a stretch similar to Main Street, called Cedar Lane. It too has a variety of stores; it even offers a space for people to sit and relax. While Main Street has a problem of vacancies, here we have the problem of corporate takeovers. Our mayor had said that he would rather there be more sole proprietorships in order to benefit the people first. Unfortunately, there are now two CVS’s, and a Walgreens is about

The businesses shown are all privately owned, and contribute to the quaint feel for which Cedar Lane is renowned.

The businesses shown are all privately owned, and contribute to the quaint feel for which Cedar Lane is renowned.

to open up, despite the fact that there are already two Walgreens nearby. Not only does this limit the variety of stores, but it also cripples the flow of traffic because a double yellow line prevents drivers from entering from both directions. The beauty of Cedar Lane used to be that it provided everything and was therefore a source of convenience for shoppers. It also fostered a sense of entrepreneurialism for proprietors as well as unity within the community. Now unfortunately, with the emergence of corporate stores, people do not get as much as variety as they once did. They lose the intimacy of the customer-owner bond that manifests itself most visibly in sole proprietorships. What was once a place that provided a relaxed shopping experience will now become an area marked by strict business transactions.

Vital streets such as Main Street and Cedar Lane both reflect their respective areas’ communities, culturally and economically. Growth and innovation are crucial for the inhabitants as well as the longevity of the stores. People should not be afraid to harness their entrepreneurial side and start businesses or, at the very least, support up and coming ones-for their good, the city’s good, and ultimately, the future’s good.

Published in: on October 20, 2013 at 1:13 am Comments (1)

Me in the Finance World: An Observation after Seeing it Live for Myself

What comes up on a map image when one Googles "banks in Manhattan". Manhattan is densely populated with a variety of financial institutions and I was therefore overwelmed, having no clue as to where to start my search for a potential interviewee who both fit the bill and had time to see me.

What comes up on a map image when one Googles “banks in Manhattan”. Manhattan is densely populated with a variety of financial institutions and I was therefore overwhelmed, having no clue as to where to start my search for a potential interviewee who both fit the bill and had time to see me.

In one of my classes for my minor of BALA (Business and Liberal Arts), we are required to conduct an interview with a person in a position that we aspire to hold. The project entails much more than simply interviewing and it is a major to-do. I was stressed, not about the five page reflective essay about what I gleaned from the experience, but at the prospect of finding someone who would be willing to be interviewed by me, an unimpressive sophomore from a CUNY school; after all, people in this field are stereotypically arrogant. Many hours of Google research later, I sent out email requests to a multitude of people in finance related positions who worked in NYC (which, as you can imagine, is a lot. Finding their names was the easy part; tracking down their emails and contact information, on the other hand, was a nightmare.) After much waiting, I eventually received a reply from two individuals at vastly different institutions that for privacy purposes I will from here on out refer to as X and Y. X is a prestigious financial firm located amidst other wealthy institutions. Y is at a less central address and is a not-for-profit (exactly what it sounds like-they do not make a profit. A profit is the amount left over after you subtract expenses from revenue.)

While the assignment required one interview, I decided to conduct an interview with both people since they would each provide unique insights. In addition to being exhausted by the end of the week from commuting from Queens to Manhattan and back two days in a row after my classes, I came out being more informed about the diverse nature that exists in the finance world.

I know it's not professional, but I could not resist taking a selfie before my interview with X. In my defense, I almost never take such painfully narcissitic photographs. Also, I thought that it would give this blog a personal touch. Dressed to the nines, I was both excited and nervous for this special opportunity.

I know it’s not professional, but I could not resist taking a selfie before my interview with X. In my defense, I almost never take such painfully narcissistic photographs. Also, I thought that it would give this blog a personal touch. Dressed to the nines, I was both excited and nervous for this special opportunity.

Coming to X, I was extremely nervous. While I do not wish to publicly say what company it was, I will say that it was a renowned institution with someone whose professional opinion is often sought by the media. I was told to dress smartly, and that I did: I donned a sweater shirt and black pencil skirt (both from Banana Republic, together costing no more than $20), a classic blazer (it was rather pricy, but I have worn it so many times that it was a worthwhile investment) and of course a pair of fancy heels. I thought I looked like a million bucks! When I looked around, I was both relieved and surprised that I fit right in. Everyone else was wearing essentially identical suits, each with a unique silk tie as a minute reflection of his personality.

I say this because for the most part, there were only men walking in and out of the building. I was appalled. For all that is done to prevent a certain field from being dominated by one gender, the ratio I calculated of women to men was around 1:8.  Whenever I read the business section of the newspaper, the person discussed is almost always a male. I nonetheless had a glimmer of hope when I came to the building that the reality would be the opposite- that women would have an equally important role.  Instead, as the revolving door turned, more and more men walked in and out, preparing for a meeting or taking a quick smoking break.

The amount of smokers around the building was astronomical. All the current attempts to rid smoking from society are surely negated by the incessant puffing I witnessed.  The instant they left the building, they lit up their cigarettes. While I understand the unfortunate reality that some smokers are so addicted that they physically cannot stop, I find it rather ironic that financial advisors who help clients save and earn money are wasting their own on something that is so detrimental to their health.

Those who were not smoking were frantically checking their phones. At first I thought maybe they were playing an intense game of Candy Crush, but I later realized that many of them were still attending to business matters. As I soon learned from my interview, in prestigious financial institutions, one is always on the job.

The best way to depict the way opportunity costs work is through PPF's-production possibility frontiers. The Y axis represents the quantity of one good, the X axis represents the quantity of another good. I won't get into the nitty-gritty, but here is the basic thing to note: Whether on a linear graph or a curved graph, as Y gets smaller, X gets bigger (called an inverse relationship). If you think about it without looking at the graph, it makes sense: as you have less of one thing, you can have more of another. While we often apply this concept to tangible goods, you can apply it here, too: the more work you have, the less leisure time you have. The curved graph is special because it shows a relationship where the more you increase one good, you exponentially lose more of another. For example: in a linear graph, every additional hour you spend at work means losing exactly one hour with your family. In a curved graph, one hour of work means one less hour with the family; another hour of the former means two hours less of the latter.

The best way to depict the way opportunity costs work is through PPF’s-production possibility frontiers. The Y axis represents the quantity of one good, the X axis represents the quantity of another good. I won’t get into the nitty-gritty, but here is the basic thing to note: Whether on a linear graph or a curved graph, as Y gets smaller, X gets bigger (called an inverse relationship). If you think about it without looking at the graph, it makes sense: as you have less of one thing, you can have more of another. While we often apply this concept to tangible goods, you can apply it here, too: the more work you have, the less leisure time you have. The curved graph is special because it shows a relationship where the more you increase one good, you exponentially lose more of another. For example: in a linear graph, every additional hour you spend at work means losing exactly one hour with your family. In a curved graph, one hour of work means one less hour with the family; another hour of the former means two hours less of the latter.

Work at one of these high ranking financial firms entails a tremendous amount of diligence and drive. It is a high pressure environment, and unless you are truly passionate about your work and motivated to work yourself to the bone, you will not succeed. It is a cutthroat environment that is not meant for the weak of heart. If you do not put in 110%, someone else will put in 115% and beat you; the finance field thus functions as a microcosm for a dog eat dog world.  The financial benefits are incredible, but receiving them ultimately comes at a price. In economics, we call this an opportunity cost– what will you give up in order to receive something else. When working in this pressurized work environment, you may get a terrific paycheck, but at a cost of not spending any time with your loved ones. Sacrifice and compromising your personal life is inherently part of this  type of work. The person I interviewed, through his personal experiences and opinions, truly shed light on the significant highlights and lowlights that exist for those who work in the top firms.

For this interview, I donned a more casual outfit that showed a bit of creativity, instead of a boring black suit . The outfit fit the personality of the company to a T. As you can see from this selfie (I swear, my last one ever!) I was noticeably less nervous for this interview because the atmosphere was significantly less tense. Nonetheless, both were interviews were at institutions that were prestigious in their own right, and I learned a tremendous amount from both.

For this interview, I donned a more casual outfit that showed a bit of creativity, instead of a boring black suit. The outfit fit the personality of the company to a T. As you can see from this selfie (I swear, my last one ever!) I was noticeably less nervous for this interview because the atmosphere was significantly less tense. Nonetheless, both interviews were at institutions that were prestigious in their own right, and I learned a tremendous amount from both.

What I witnessed at Y, the not-for-profit, was so different than X that I had to stifle a laugh. The ambience in the office space of this company was extremely modern and casual. Unlike the sterile, serious environment in X, Y was filled with bright colors in addition to workers who all clearly had their own unique identity; no one was wearing formal business attire, but rather garb that was interesting and creative. To call this area an office space is almost a misnomer because such a word connotes serious, silent working. Here, employees were indeed working, but in a setting that did not feel nearly as tense as in X. The people were friendly, an important quality considering the importance of teamwork for many tasks in Y; in X, independence and getting the job done on one’s own was of the utmost importance. Overall, the mood was not nearly as stressful as that in X. Y was also an important company with goals to achieve and deadlines to meet, but it employed a vastly different corporate culture than that of X.

My original goal was just to glean insights about the finance world from one interview. But by conducting not one, but two interviews at institutions that are polar opposites, I thoroughly achieved the mission of this project. People may attribute certain stereotypes to the finance field, but in reality, it is extremely broad. It is possible to work in a cutthroat environment where all of the work must be done on your own. Long hours and no fun, in the end, are justified by two types of people: those who are genuinely passionate about finance, and those who value rewarding paychecks above everything else (I interviewed the former type, which made for a terrific experience). On the other hand, it is possible to be involved with finance while still having a relatively stress-free time. It might entail a smaller paycheck, but peace of mind for many outweighs the debilitating stress that can come with huge companies. A place like Y also allows for learning and training-the person who I interviewed had majored in political science and communications (so she had no formal education in business). In X , however, you are thrown into the water and must fend for yourself. It is therefore crucial to know yourself and your limits. When you think of people who work in this field, know that in fact a broad range of people can work in finance.

 

Published in: on October 13, 2013 at 8:06 am Comments (1)
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Operation: Government. SHUTDOWN.

Sorry for not posting in a while. I have been inundated with work-I’m sure you all can relate. All of you, that is, except Congress. Since October 1, there has been a government shutdown. Its cause is rather complex, and I am humble enough to admit that many of the details go way past me. Basically, what happened is as follows: The House of Representatives has the ‘power of the purse’, meaning that it has the ability to fund laws. Because it is comprised of a majority of Republicans, the House of Representatives is overall strongly opposed to The Affordable Care Act/ Obamacare. (They are exactly the same thing!) They wrote a proposal with a list of laws to be funded, but conspicuously excluded

There is a government shutdown because in the end, neither the Democrats (symbolized by donkeys) nor the Republicans (symbolized by elephants) were willing to compromise and reach an agreement. This cartoon, by depicting animals fighting, emphasizes the ridiculous nature of the chaos in Congress. Sadly, the real fighting that is going on is not much different.

There is a government shutdown because in the end, neither the Democrats (symbolized by donkeys) nor the Republicans (symbolized by elephants) were willing to compromise and reach an agreement. This cartoon, by depicting animals fighting, emphasizes the ridiculous nature of the chaos in Congress. Sadly, the real fighting that is going on is not much different.

Obamacare. They sent this proposal to the Senate for passage, but the Senate, comprised of a majority of Democrats who support Obamacare, swiftly rejected it, saying that only a proposal including funding for Obamacare would be passed. The House of Representatives refused to do so, and the Senate insisted on standing their ground. (I think this is the perfect way of saying what happened by not choosing sides, and instead placing an equal amount of guilt on both parties). Such an impasse resulted in a government shutdown, a term that I personally think is ominous and evokes images of Armageddon- although with the way House of Representatives and the Senate are battling it out, this metaphor is not so far off. While Americans had a certain F-word on their tongues upon witnessing Congressional incompetency at its finest, the federal government had a different F-word on its mind: furloughs (a nice word for a leave of absence or being laid off for a period of time).

Thankfully, the federal government is smart enough to realize that the Secret Service is essential to the existence of the United States. It is more controversial, however, whether the jobs deemed non-essential are in fact not necessary.

Thankfully, the federal government is smart enough to realize that the Secret Service is essential to the existence of the United States. It is more controversial, however, whether the jobs deemed non-essential are in fact not necessary.

Now that you know why it happened, it is important to understand what this government shutdown entails. Technically, it is considered a partial government shutdown because only those considered non-essential are not working, such as NASA TV employees and food inspectors. Those that are considered essential, such as the Secret Service, are (fortunately) still working. Despite not being a full-fledged shutdown, the number of people who are not working is staggering: 800,000 people who work at federally owned and operated locations are suddenly without a job. Having so many people stop working on such short notice is sure to impact America’s economy.

Economists differ as to what the ultimate economic ramifications of the shutdown will be. Some say that the impact will barely be noticeable. They look back to the shutdown of 1995 as proof, when the economy improved in what was historically the longest one, at 21 days. Others claim that it will have a negative impact, with the results of a decrease in economic growth during the shutdown of 1976 to bolster their arguments. No matter how much support they can gather for their respective opinions, their conclusions will still be rather tenuous because every government shutdown is different due to unique circumstances.

My personal opinion is that the latter will occur. In essence, this is a sudden wave of unemployment, just with a more professional sounding name. Those furloughed had no way of

Over the past few decades, the level of the GDP (gross domestic product)-an indicator of how well the overall economy has been doing-has been rising. I anticipate that once the GDP for this year is calculated, there will be a slight drop in this graph because less spending will occur due to the government shutdown.

Over the past few decades, the level of the GDP (gross domestic product)-an indicator of how well the overall economy has been doing-has been rising. I anticipate that once the GDP for this year is calculated, there will be a slight drop in this graph because less spending will occur due to the government shutdown.

predicting or planning this outcome. The scariest part is that they have no way of knowing how long this will last. When will they start to earn income? By looking at the big picture, it is easy to see how a downturn in the economy seems inevitable. Suddenly, 800,000 people are spending less money in the market because they are making less money; the longer the shutdown, the longer they will be spending more conservatively. The fact that nearly a million people are pouring less money into the economy therefore leads me to believe that if they do not start working soon, there will be negative effects that are severe and long lasting. Especially with our fragile economy, still healing from wounds inflicted by the Great Recession (the name for the financial crash of 2007), we cannot afford any more damage.

What bothers me even more than the fact that there are so many people not earning any income is that congressman are. All of the people responsible for the shutdown and the subsequent furloughs of federal officials are constitutionally entitled to get paid. That’s right, check Amendment #27: “No law, varying the compensation for the services of the Senators and Representatives, shall take effect, until an election of Representatives shall have intervened.”  This means that their salary cannot be altered now, despite the fact that they are not doing anything, except perhaps causing economic issues for us in the future. I find it troubling that while Congressmen are also employed

There are a select few in Congress who promise to refuse or donate their paychecks from the time of the Government Shutdown. Most, however, make no mention of such altruism, and are instead keeping the income-without a hint of a guilty conscience- while nearly a million other people do not get paid.

There are a select few in Congress who promise to refuse or donate their paychecks from the time of the Government Shutdown. Most, however, make no mention of such altruism, and are instead keeping the income-without a hint of a guilty conscience- while nearly a million other people do not get paid.

elsewhere (for many, being a congressman is a second job), those that are federally employed do not have the leisure to fall back on another job. Their livelihood is dependent on their employment by the federal government. It is not only unfair that the wrong people are getting paid, but also inefficient. The government cannot afford to waste money, and yet here it is, paying those who are the root of the whole problem.

 

And yet the problems for the United States federal government do not end there. No, they are just beginning. On October 17, the government is set to reach the debt ceiling. What does that mean? The debt ceiling is a limit imposed by Congress on the absolute maximum amount of debt the United States can legally acquire, and no more (unless, of course, the amount is raised). And yet, as America spends more and more, it accumulates more debt. Once the amount exceeds the debt, the government will legally be forced to default on its loans-meaning that it cannot pay them back. It is important to note that the American government is so far behind on paying back its debts, mostly to China, that the default is not actually about paying the loan off on time-but rather paying back the interest on the loan (You don’t think other countries to just lend us money and not expect anything in return, did you?) If America cannot pay back the money, America’s future will not look good. People will lose confidence in the American economy, causing the Stock Market to crash, even more sharply than in 2007. Also, people would be hesitant to invest in the future, causing America to lose out on the opportunity to conduct business with wealthy investors.

There will be another heated debate as the debt ceiling limit looms closer and closer. My hope is that the Democrats and Republicans act more maturely when dealing with that issue, because the possible negative ramifications are severe.

There will be another heated debate as the debt ceiling limit looms closer and closer. My hope is that the Democrats and Republicans act more maturely when dealing with that issue, because the possible negative ramifications are severe.

I don’t want to scare you, but it is important to know about the government shutdown and the looming debt ceiling. Both play a crucial role in the business world and have a major impact globally. I hope this crash course gave you a solid foundation in what has been happening over the last week, especially if any of you have felt overwhelmed by the sudden deluge of reporting that was sometimes difficult to comprehend.

Published in: on October 6, 2013 at 4:16 pm Comments (3)
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Free Birthday Swag

Hopefully, this blog, by explaining ways of getting free gifts,  is a gift in and of itself. #giftception?

Hopefully, this blog, by explaining ways of getting free gifts, is a gift in and of itself. #giftception?

When it comes to birthdays, the part that excites most people is the prospect of getting presents. Doesn’t everyone like knowing that someone thought about them on their special day and, in order to contribute to the festivities, got them something? Besides receiving gifts from others, you might feel inclined to splurge on yourself; your birthday comes only once a year, so why not? Unbeknownst to most people, companies want to spoil you, too. Instead of spending your hard earned money, you can receive many free gifts from a variety of places. Granted, the companies have ulterior motives. Nevertheless, you might as well take advantage of the incredible deals by signing up for them online with your name and birthday-after all, finding businesses that give away free goods is quite the rarity.

Admit it-you want to feel special on your special day. And doesn't a happy heart start with a full stomach?

Admit it-you want to feel special on your special day. And doesn’t a happy heart start with a full stomach?

The most common gift you can get from stores involves food. When you were younger, adults always wanted to fatten you up; nowadays, corporate companies want to do likewise. Almost all large food chains offer have a free/discounted meal or a complementary desert. You have large selection from which to choose. Do you want to dine on Mexican food to celebrate a spicy birthday, or have free pancakes from IHOP to symbolize a sweet celebration? Sadly, most people are unaware of their eligibility because they do not sign up beforehand. It is therefore imperative to do so before your birthday rolls around the corner.

If you want to splurge calorically on a birthday related dessert, head off to an ice cream store. Ben & Jerry’s and Baskin Robbins both offer a free scoop of ice cream on your birthday. These places also offer a coupon for $3 off a birthday cake, but I find it rather depressing to buy a birthday cake for myself. Call me selfish, but I like the old fashioned cake, made from scratch and frosted to perfection by my mother. If you feel parched after your complimentary meal and ice cream, you can head over to Dunkin Donuts. There, you can redeem a voucher you receive in the mail for a free medium sized beverage of any kind. It can be a Coolata or a coffee; it’s your birthday, so it’s your choice!

Now that you’ve gained about ten pounds from all of that food, it’s time to go shopping. Many clothing and shoe stores provide special deals for your birthday. For example, DSW sends a $5 gift certificate in the mail. While that amount will not instantly make any of the regular price shoes dirt cheap, it is still $5 off. Or, you can apply it to a clearance item (as I taught you in the Coupon Craze blog) and get a really great deal! Or, if you are looking to shop for more affordable shoes, you can go to Payless with a 20% off birthday coupon.

Clothing stores that give out birthday promotions include Old Navy, Banana Republic, Kohl’s and Gap; depending on their policy, they might provide a freebie or a substantial discount. If you want an entirely new look, including a fresh face, Sephora gives out a random makeup sample- the downside being that it is often trial size.  With all the food and clothing, you will feel like a different person by the end of your birthday, both inside and out.

 

When businesses see you enter the store, they don't see a Birthday Boy, but a Man with Money.

No matter the occasion  when you enter a store, you are one giant dollar sign. Even on your birthday. (Although nice employees sometimes will sing you a birthday ditty-I say this from experience!!)

Why do businesses provide you with all of these free products? Companies are, by nature, selfish and motivated by desire to increase their profits. In fact, these promotions and discounts are simply a psychological business ploy. They want you to think that they care about you, the customer, by contributing to your birthday celebration. In reality, they foster an artificial bond with the consumers, done primarily to gain your loyalty. If you think they treat you as a special person, you will be more inclined to seek out their goods and services in the future. Additionally, by coming in for your gift, you might browse the store and find something that you end up buying-something that, had you not entered the shop due to the promotion, you might not have seen and consequently bought. Businesses use the birthday gift as a loss leader in such an instance, as they lose money through the birthday item but earn money when you pay for something else. Suddenly, the businesses’ not so innocent tactic of attracting the naïve customer comes to light.

Businesses that provide birthday promotions are almost exclusively large companies. They can afford to take the hit by giving away a small item in order to gain a new customer. Small shops, on the other hand, do not have nearly as much financial leeway and must therefore be more careful. That is why Dunkin’ Donuts can give away a free medium sized beverage, while the quaint, privately owned café down the block cannot.

No need to be cynical about these deals. The business' claims of wanting to celebrate with you may be questionable, but your claim to their birthday gift, once you fill out the 100% safe form, is entirely legitimate.

No need to be cynical about these deals. The business’ claims of wanting to celebrate with you may be questionable, but your claim to their birthday gift, once you fill out the 100% safe form, is entirely legitimate.

I hope that knowing about all of these secret ways to get many birthday presents will help you celebrate your birthday. While the logic behind it is corporate greed, there is no reason as to why you should not take advantage of these deals businesses offer. After all, they are ultimately trying to take advantage of you. Two can play at that game! So remember: if your family and friends forget to buy you a present-or, if you forget to get your friends and family a present-fret not. There is always a store down the block with an available gift-whether you realize it or not!

Published in: on September 24, 2013 at 11:58 pm Comments (1)

Coupon Craze

Most couponers are not so anal that they require a binder to organize.

Most couponers are not so anal that they require a binder to organize.

I am known for my uncanny ability to save money, so here is my first blog teaching you how to do so. One of the best ways I have found to not spend a lot is through couponing. For some unknown reason, there seems to be a stigma attached to this practice. When people think of couponing, the first thought that comes to mind is that of a boring old woman who stays at home all day, clipping out of magazines in order to conserve every last penny. However, this stereotype is completely inaccurate. Exciting, fun, and easy, couponing can be done by anyone through a variety of mediums. It is no longer just considered a hobby, but often a lifestyle-one that has helped many an individual in dire financial straits stay afloat.

While this may look like a regular manufacturers' coupon, it is indeed a coupon for Nabisco that is exclusively issued by Shoprite, and can therefore only be used in Shoprite stores. (Also note: you can go online to Shoprite stores and download such exclusive coupons to your Shoprite savings card. You cannot print them; this is Shoprite's way of reaching out to the savviest of couponers, like you and me)

While this may look like a regular manufacturers’ coupon, it is indeed a coupon for Nabisco that is exclusively issued by Shoprite, and can therefore only be used in Shoprite stores. (Also note: you can go online to Shoprite stores and download such exclusive coupons to your Shoprite savings card. You cannot print them; this is Shoprite’s way of reaching out to the savviest of couponers, like you and me).

A coupon is a general term for the voucher that enables you to decrease your purchase price. When it comes to specific circumstances, however, there are many different types of coupons that can be used. One such kind is a grocery coupon.  Even that category can be broken down further, for they can be issued by either manufacturers or by stores.  The difference between these types is reflected by where the coupons can be used: manufacturers’ are issued by the specific brand for its goods and can therefore be used in any shop, while stores’ are also for specific goods, but valid only in that particular shop. (For example, a coupon I find for $1 off orange juice issued by Tropicana can be used in all supermarkets; the same type of voucher issued by Shoprite can only be redeemed in a Shoprite store.) The practical difference between the two kinds is that the manufacturers’ is issued with the intent to attract customers in every store to buy their brand, while stores use it as a loss leader-they are willing to lose a bit of profit on one product so as to entice shoppers into their store and buy more, especially now that they have saved elsewhere.

A quick google search of "Kohl's coupon" will yield you this valuable coupon. Never go to Kohl's without having coming with a similar 15% coupon-there is no excuse why you should spend more!

A quick google search of “Kohl’s coupon” will yield you this valuable coupon. Never go to Kohl’s without having coming with a similar 15% coupon-there is no excuse why you should spend more!

Another type of coupon is a retail clothing store coupon. Food is a necessity and will always be purchased, no matter the price; clothing shopping, on the other hand, is considered a leisurely activity and consumers might show more restraint depending on the prices.  Retailers have different approaches to issuing coupons and if you want to never pay full price, it is imperative that you familiarize yourself with their policies. For example, Kohl’s almost always has a 15% off coupon online that you can print. Do not be fooled into thinking that you must take advantage of their “special” of $10 off every $50 you spend; unless you were previously planning on revamping your wardrobe and therefore spending a lot, this coupon is only there to trick customers into spending far more than they intended, in order to get what they perceive to be a good deal. Other retail stores that frequently issue coupons are Macy’s and Lord and Taylor. People are often hesitant to shop at Lord and Taylor because it promotes itself as a high class and expensive shop that is unaffordable to the masses; in reality, if you use their coupons at the right time, you can get phenomenal deals there.

Oil changes are necessary for prolonging the life of your car. So why not do something you will inevitably be doing, but for less?

Oil changes are necessary for prolonging the life of your car. So why not do something you will inevitably be doing, but for less?

I put the last major type of coupon under the broad category of miscellaneous. There are coupons that can be redeemed for random services, ranging from discounts on haircuts to $10 off oil checks. There are also vouchers issued by local stores, such as pizzerias. Ever wonder why they have a deal like “Tasty Tuesday” or “Wacky Wednesday” which offers a pizza pie at half price on those particular days? The reason is because in general, these days are the least busy days. Wanting to still generate revenue, the stores are willing to cut the price so as to attract customers who might not otherwise have wanted to have pizza that day. In fact, that is the main principle behind issuing coupons: to entice buyers to spend, specifically targeting those who otherwise would not have done so.

In order to attract these customers, companies put coupons in a variety of places. Nowadays, with the prevalence of the Internet and smartphones, one has even more options than a decade ago as to where to look. There are the classic resources, such as in newspapers and magazines; the former has retailers coupons in the special inserts, such as Smart Source and Redplum, and store coupons in the actual paper, while the latter-especially ones published by cities and counties-has coupons for local stores. The Internet, however, is by far the most invaluable resource. Unlike old-fashioned couponing, where the coupon comes to you, tech-age couponing enables you to seek out a coupon you want for a specific good or store. Internet couponing goes way farther than a simple Google search. You could visit a company website, check its Facebook page, or get emails for new promotions directly from it. In all of these ways, you can get special deals that are not advertised elsewhere. If you want to take advantage of technological deals while avoiding the paper clutter, you may opt to receive text updates about the deals. Do not worry about being bombarded by texts: once in a while, you receive a text deal. You simply show it to the cashier, who applies the discount code as if it is a tangible coupon. A final place to get coupons that is relatively unknown is from your transactions. You know how sometimes the cashier gives you something in addition to your receipt? Catalinas are special coupons that print next to your receipt; they represent special deals  that you won’t find anywhere else. Getting a catalina is contingent upon buying a certain, often arbitrarily chosen item. You could easily be qualified to receive a catalina without realizing it! (For example, if you happened to buy a Glade product, you could get a catalina that is valid for $5 off your next Johnson & Johnson purchase.)

To use coupons most efficiently, it is imperative that you know their respective policies in addition to the most auspicious time to redeem them. First and foremost, you must heed the expiration date; once the date has passed, the coupon is completely worthless. To me, not using a coupon for a good that you planned to buy is tantamount to throwing money down the drain. Another important thing to note about coupons is that often the potential savings can exceed the value listed. Stores have unique policies that can increase, double, or, in rare circumstances, triple the value of your coupon. For example, my local Shoprite will double up to a dollar- meaning that $0.20 off is now $0.40 off, $0.75 off is now $1 off. Pathmark, on the other hand, fully doubles coupon values.

Clearance of 80% is good. Combining that discount with an additional 20% off the remaining balance:even better. Lord and Taylor is known for posting coupons in addition generous discounts on sales.

Clearance of 80% is good. Combining that discount with an additional 20% off the remaining balance is even better. Lord and Taylor is known for posting coupons in addition generous discounts on sales.

Getting the best deal on an item does not only require knowing how the coupons work, but also when to use them. To maximize savings, you must use coupons when a store has a sale or, better yet, a clearance sale. In that way, you can reduce already lowered prices in order to pay the least possible amount. This is where knowing coupon policies comes in handy: while it might be tempting to use coupons in stores that truly double, it might be more financially worthwhile to use them in combination with a sale.

Stocking up when you can buy a good for dirt-cheap is also a good idea. Serious couponers are notorious for their stockpiles Of course, it is necessary to show some restraint by not being gluttonous. On the television show Extreme Couponers, there is an episode where, having found a way to get Aleve for free, a shopper clears the shelves entirely. In economics, there is a constant debate between efficiency and equality. While I will not delve into those issues here, I do find it morally reprehensible to take all of the medication and leave none for others who might be sick, simply because “Why not? It’s free”.

Couponing is a great way to save money. I can personally attest to the rush you get when, instead of paying full price, you pay next to nothing. While stealing is illegal, using coupons is perfectly allowed; I often say couponing is the legal form of stealing! I have heard many an excuse, ranging from logical (inconvenient to find them) to entirely absurd (they takes up too much space), as to why people refuse to use coupons. Yes, I acknowledge the fact that for some items, such as eggs, coupons are impossible to find because there is a constant demand from consumers. But if you are careful to use them for other things, I guarantee you will start accumulating immense savings!

Published in: on September 22, 2013 at 4:45 am Comments (2)

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