Tag Archive | "social media"

HOW TO: Use social media to find deals and save money

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HOW TO: Use social media to find deals and save money

So I’m really into social media. The guy I carpool to work with always comments that he has no idea how I have enough time to do all that I do and still maintain my social networks online. Thankfully, I have a smartphone to help with that.

One of the advantages that I’ve found to social media is the ability to save money. For example, I saved 15% off my entire American Eagle purchase over the weekend all because of Foursquare. I would have made the purchase either way, so that savings was a nice bonus.

For your ease and convenience, here are just a couple of ways to use social media to find deals and save money. Also, let us know in the comments what social tools you use to save money.

Foursquare Deals

Foursquare Deals

Since I already mentioned it, I might as well start with Foursquare. For the uninitiated, Foursquare is a location based social network. What that means is that I use my GPS coordinates to let my friends know where I am. The cool part is that local businesses can post deals for Foursquare users who check-in (or tell their friends that they are at the business). That’s how I saved 15% at American Eagle. All I had to do was check-in or tell my Foursquare pals that I was at American Eagle. I then showed the deal to the cashier and received the discount.

Foursquare deals can really be great around lunch or dinner time. Just see what deals are being offered by the restaurants in your area before deciding where to go. Some deals require checking in multiple times before receiving the discount. Though, most just require one visit or check-in.

Twitter Lists

Twitter Lists

I’m sure you are very familiar with Twitter. If you are already a Twitter user, then you are probably familiar with Twitter lists. Basically, it’s a way to build a custom or curated list of specific Twitter users that you want to follow. Unsurprisingly, there are Twitter users that are dedicated to just disseminating information about deals and specials (many of them online).

So build a list called “Deals” and add Twitter users such as @JetBlueCheeps or @MomsWhoSave. You can find Twitter accounts for just about anything.

You’ll need a Twitter account to create lists. For more information on building Twitter lists, check out Twitter’s support page about lists.

Twitter Promotions

Twitter Promotions

If you are already going to have a Twitter account in order to make a Deals list, then you might as well take advantage of the many promotions and contests that companies offer via Twitter. The trick is finding deals. I have two recommendations.

  1. If you are planning a large purchase (let’s say over $100), then see if the company has a Twitter account. If so, check the company’s tweeting history to see if they offer promos, and if so, how often.
  2. Use Twitter’s search function to search for specific deals. For example, I’m on Sears.com about to buy an awesome and “much needed” tool. Right before making the purchase, I login to Twitter and just search “sears promo”, “sears discount” or even just “sears” to see if there are any specials running.

If you intend to run a specific search often or even semi-often, then you can save the search in order to easily find it later. Here’s the Twitter support page on saving searches.

Facebook Deals

Facebook Deals

In case you haven’t heard, Facebook recently launched a competitor to Groupon and LivingSocial called Facebook Deals. It’s only in a few cities right now but is very likely to spread rapidly as Facebook users and businesses adopt it. Just like with everything else on Facebook, if a friend “likes” or buys a deal, then you will see it in your News Feed.

What’s great about this is that you don’t have to go looking for deals. Rather, your friends tell you about the deals they like. Presumably, many of your friends have the same tastes and preferences as you. So the deals they like are probably deals that will interest you as well.

So watch for Facebook Deals creeping up in your News Feed.

By using some of the social tools or networks that you use everyday, you can find easy ways to save a few extra bucks each month.

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Are Social Media IPOs and the American Dollar the next bubbles that will burst?

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Are Social Media IPOs and the American Dollar the next bubbles that will burst?

For some reason, we humans seem to repeat some mistakes over and over again. From the sensational growth in the price of tulip bulbs in the 17th century to the dot com boom, we get caught up in the prospect of big returns and forget that the underlying asset hasn’t changed in value, or at least not by that much.

To help explain why you should care about this, I need to provide some foundational information.

Valuing Assets

For the purpose of our discussion, there are two ways to value an asset

  1. Economic Value – The price corresponds to or is correlated to the economic value that the asset provides. For example, a stock price of $100 is based on financial analysis that says earnings are sustainable and warrant such a price.
  2. Emotional Value – The price is a result of what we believe the asset is worth. Basically, I’m willing to pay $100 for a Tickle Me Elmo because we shoppers decided that it’s a must have item.

The Emotional Investment Cycle

I once saw an illustration depicting how many common investors operate. Basically, as a stock price rises, research heavy investors such as large banks invest. The price continues to rise. Common investors then begin to hear about it and jump on the bandwagon. The majority of common investors hear about the now “hot stock” as it is reaching its peak (inflated from everyone jumping on board). You then invest, watch the stock rise momentarily, and then see it fall. You either break-even or take a loss. The reason you made the investment was because of the emotion that surges around a hot stock tip and the hope that you can cash in.

Upon hearing the hot tip, you should have spent time investigating the underlying value of the asset (in this example, the company).

I personally have fallen into this trap, ignored the red flags telling me to dig deeper, and ended up losing money.

Examples of Bubbles

The Housing Bubble: I listened once as a banker described how the housing market grew and crashed. Banks believed that (1) housing prices always rise and (2) Americans will never default on the American dream – owning a home. So banks knowingly overvalued homes and over-lent. Consumers were all too happy to accept the overvaluations and extra cash. There was nothing to indicate that homes were actually worth that much other than the fact that we said so. The result – economic meltdown.

The Dot Com Era: Small Internet start-ups launched websites that began to generate traffic, though not necessarily revenue. Angel investors funded the start-ups until they were taken public through an IPO. Often, the IPO happened only a short time after the company began (meaning, no proven track record of earnings). Seeing easy money, many Internet companies rushed to the feeding trough. Amazingly, investors bought shares of companies that had no economic model or revenue history. The result – economic meltdown.

Is Social Media the Next Bubble?

A recent article on MediaPost.com related statements from Warren Buffett and Barry Diller warning that social media may become another bubble with many losers.

Buffett said, “Most of them will be overpriced… It’s extremely difficult to value social-networking-site companies.” Diller described the huge valuations of companies like Groupon as, “mathematically insane.”

I’m not an expert. But I do understand that a price based on an emotional valuation will fail. I also take great comfort in the fact that the Oracle of Omaha seems to agree with me. Or maybe it’s me agreeing with him (I don’t want to take too much credit).

As social media companies begin to go public, I can see the headlines alone driving an investment frenzy that will cost many common investors dearly. That is not to say that social media companies can’t or won’t make money for them and investors. My point is that you need to consider the financials of the company and environmental factors (or factors outside of the company) to determine whether or not the investment is a good prospect for inclusion in your portfolio or just another bubble that will burst your nest egg.

Currency ExchangeIs the American Dollar the Next Bubble?

Maybe you wouldn’t typically consider the US dollar a bubble. But it’s certainly traded like any other asset, so why not? Right now, our government is printing dollars at an alarming rate. What’s holding up the value of each one of those dollars? The belief that the government can back it.

So going back to the two valuation models above, is the value of a dollar based on the economic value or the emotional value? Well, Gross Domestic Product (GDP) fell from 2008 to 2009 and yet we added approx. $3.1 trillion in debt over those same two years. So we are printing more and turning out less. That relationship may be manifesting itself in the poor exchange rate between the dollar and other currencies such as the euro.

Basically, the dollar and everything tied to it (e.g. inflation, exchange rates) is subject to the same risks as any other investment if it rides up too high based on emotional value (e.g. exorbitant healthcare bills).

In fact, Standard & Poor’s issued a warning to the U.S. government just yesterday that the government’s triple A rating may be downgraded if the government deficit is not addressed quickly.

If you are concerned about the underlying value of the dollar, then write your representative or just vote a new one into office. Political change is like rebalancing an unbalanced investment portfolio.

Before jumping on the next hot trend…

Stop and ask yourself, “What economic or financial value does this asset create? And will it continue to create that value while I have it or invest in it?”

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Like Foursquare? Hope so, cuz your insurance just went up [Image]

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Like Foursquare? Hope so, cuz your insurance just went up [Image]

Services like Foursquare and Gowalla allow you to tell your friends, family, and social networks where you are at any given time. These services are a marketer’s dream come true. Basically, you are giving them tons of information about your habits and preferences and it feels like it’s just a game. But marketers aren’t the only ones looking and mining that data.

FoursquareI really like social media. In fact, I use Foursquare. So don’t mistake me for a social media fear-monger when I say that Foursquare leads to increased insurance rates. Specifically, geo-location apps and tagging (like on Twitter) leads to increased home insurance rates.

Rising insurance rates are a logical outcome if you stop and think about it for a moment. Sites like PleaseRobMe.com (now shut down) claimed to be raising awareness about this issue, but really they were just adding to it by aggregating tweets of people broadcasting that they weren’t home. The problem is that robbers and fiends check social networks for folks saying, “I’m not home.” Now you may not literally say that, but checking-in through Gowalla or Foursquare says the same thing. Or even just telling everyone on Facebook that you are leaving on vacation is screaming, “I’m not home!”

As crime levels increase, the insurance companies have to adjust their actuarial tables in order to cover the increase in claims. And since they have profit margins to protect, we as customers have to pay more. Don’t believe me? Well, I’m not the first one to talk about this. In fact, the British Association of Insurers believes that insurance rates will increase by as much as 10% as a direct result. You can read more about that report at Media Post.

Social networks are addicting, I know. Adding rewards and badges creates a game-like atmosphere. Someone who checks-in (or says, “I’m at this location”) more than anyone else becomes mayor of that location. I recently lost the mayorship at work to a contractor, which is slightly embarrassing. But I digress.

Now, just in case I’m not being clear enough, let me use some stick figure drawings to get the point across.

Foursquare and Theft

See my point? So before you announce your every movement to the world (FYI, I don’t care that you left your desk to use the restroom), consider who else is seeing that information. Sites like Twitter are public and searchable by anybody. Sites like Facebook allow some level of privacy. So check your privacy settings and be careful about what you share.

The point is folks, don’t be stupid. Just because something is cool and fun doesn’t mean it’s any good for you. Now if you’ll excuse me, I’m trying to regain mayorship here at work and need to check-in.

(Want to share the graphic? Just copy and paste the code from below.)

Posted in Insurance, FeaturedComments (8)

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