Who’s Running the Store?

Who’s Running the Store? The Private 401(k) System Under Attack….Again

by Charlie Epstein (comments: 0)  |  

If you own a business today, you know just how difficult it is to raise prices for your products and services. A global economy that has become even more inter-dependent makes it so.

Technology and innovation which drives up efficiency and drives down prices makes it so.

Wal-Mart makes it so.

So, if you read my last post about your Oil Dividend (if not, go read it now) let's play out the oil dividend on the supply side of the economic equation.

Food Prices:
Everyone knows food prices just keep going up. The price of meat, eggs, and dairy products. Up.

Now let's say you are a farmer. Suddenly your oil costs have been cut by 60-70%, which means your cost to produce your tomatoes, corn, and cattle has gone down.

What are you going to do with your oil dividend?

You can either save it or pay down debt...
You can spend it....or
You can invest it.

If you are interested in growing your business and it costs you less to produce what you produce, you could either try to create a better tomato, that could sell at a higher price (tough to do), or you could lower your prices to try and capture more market share. And as soon as you lower your prices, guess what? Yup, your competitors will, too! Bad for you...but good for King Consumer.

Or let's say you are the airline industry.
Heck, fuel costs alone make up 60-70% of your overhead. You are now saving millions at the pump (forget my $96 weekly savings!).
What will you do with your millions?

You can either save it, or pay down debt...
You can spend it....or
You can invest it.... (right now as I type I am taxing down the runway on Southwest's newest Airbus- and she is a beauty! It seems Southwest is investing part of their dividend!)

Let's say you are United Airways.

Smart executives want to grab more market share. They have brilliantly decided, “Enough of treating our coach passengers so poorly. We need to do better with our service model.” So, they recently announced that they are going to serve “free peanuts” in coach! (You can' t make this stuff up )

Southwest replies by saying- "Free peanuts, hell, we have been doing that since ....well....we've ALWAYS been doing that! We are going to spend our oil dividend on our customers by lowering prices." And the next thing you know, United and every other airline will follow suit, so they won't loose market share.

Who wins again- The Consumer King!

I promise you, that you can carry these scenarios out in almost every industry and the result will be the same:

You, the Consumer, are King!
And not just for a day... but for a lifetime.

Why? Because technology, innovation and, yes, lower energy costs are here to stay!!
Enjoy your throne, Kings!

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Charlie Epstein

Meet Charlie

Charlie believes the cornerstone of creating success with your finances and your life, is to act like an entrepreneur! Eliminating an "entitlement mentality" and taking control of your life's choices and personal finances are the first steps to igniting and aligning your passions with your finances.

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