Price is What You Pay. Value is What You Get.

One of my favorite Warren Buffett quotes is, "Price is what you pay. Value is what you get." This is an incredibly versatile quote that is applicable to almost every part of our daily lives. One of the top marketing tricks of large companies is to advertise on the basis of 'value.' In other words, they try to convince you that the amount of money that you pay will be vastly lower than the amount of value and utility that a given product will give you. But it often doesn't work out that. Either the company is selling a product that delivers less value than the advertisement promises, or, even if the product is legitimate, it may not be something that you need. Do you really need an electronic hamburger flipper? A flying remote? A talking pool table? Obviously, these examples are fairly ridiculous, but the point remains. Often, the amount of value that you get out of a product is nowhere near the amount of value that you expected when you made the purchase, and this is something to be aware of. As a general rule, if you weren't even considering purchasing a product before you saw an advertisement for it, then you probably don't need to buy it, no matter how good it looks in the commercial. To check out a great article on this topic, be sure to visit Flexo's article at Consumerism Commentary, link here: http://www.consumerismcommentary.com/value-lie/ .

Stocks, Inflation, and Dividend Stocks

Mike at The Dividend Guy Blog wrote a phenomenal article that I can't recommend highly enough. In it, he discusses the invaluable role that dividends play in fighting inflation and riding out market slumps. He does a fantastic job of pointing out the fact that gold itself does not throw off income--it's only worth what someone is willing to pay for it. Dividend paying stocks, meanwhile, earn income and throw off dividends even in recessionary times (hopefully!) and can allow you to buy extra shares when the prices are low. This is truly the secret to steadily building long-term wealth. Especially if a company regularly raises its dividend, you will watch the money get regularly deposited into your accounts while you do nothing and watch the money grow. Not a bad deal--however, it does take a significant amount of money invested for the dividends to substantially change your lifestyle. It takes tens of thousands of dollars invested to regularly throw off hundreds of dollars in come each quarter. While it is a difficult journey, once you reach the point where you are generating income, you will be in much healthier financial shape. If you want to read a great article on the subject, check out Mike's article at The Dividend Guy Blog here: http://www.thedividendguyblog.com/investing-myths-debunked-regarding-inflation/ .