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Contrary to Popular Opinion

When it comes to saving money, not everybody's doing it. You gotta' be willing to be different.

Some investors pride themselves as contrarians: They buy stock when most others are selling and sell when others are buying. But they’re not the only ones to whom this term applies. Indeed, anyone can be a contrarian: All you have to do is make a habit of taking a contrary position or attitude. In other words, step out from the Crowd.

The Contrary Shopper

When supply is low and demand is high, prices rise. Just ask any dad who’s tried to buy a popular toy for his kid the week before Christmas. On the other hand, when supply is high and demand is low, prices fall. Which explains why that same dad, willing but unable to buy that toy for even twice the price, bought something else — then came back after a guilt-ridden Christmas only to find that he could pick up two of those hot toys for the price of one.

The contrary shopper buys things after the Crowd demands them, when retailers are slashing prices to unload inventory. After-Christmas sales are a well-known example (though they have now generated a Crowd of their own), but the principle holds true for many other things, too: Buy your swimsuits in the fall, your winter clothes in spring, and just about any consumer good right after a manufacturer announces the release of a newer model. When the Crowd zigs, it’s much cheaper to zag.

Since shopping for gasoline has now become one of life’s more expensive adventures, it pays to avoid the Crowd’s habits here, too. They buy gas when they need it, so they pay the price at the nearest station. If that station happens to be the only one in the area, it can charge more. You can do better: Plan ahead and buy gas when you’re near a “cluster station” — one with other stations nearby: Prices tend to be lower there, since each station must remain competitive with its neighbors. And if you’re taking a road trip, don’t stop for gas at the first or last exit to a town: That’s where the Crowd stops — and pays the higher price inspired by their demand.

Another fact: The Crowd is addicted to all things new. This is good news for the contrarian, who feeds on the great deals offered by those eager to abandon the old for the slick and shiny. For example, the prices of late-model used cars often dip in the fall, just when the new models are released: Those who buy those new models typically trade in their old ones. The dealerships, now swamped with used cars, must lower prices to clear their lots. This forces private sellers to lower their prices to stay competitive.

This effect diminishes with the age of cars: Those of us who feed at the lower end of the used-car food chain — vehicles 5 or more years old — don ‘t see much from this effect. But if you’re shopping for a late-model car, you might do well to shop in the fall.

The Crowd also demands all things perfect. If you can live with imperfection, you’ll spend a lot less. I recently bought a notebook computer direct from the manufacturer for hundreds of dollars less than their own price, simply by ordering it from the “refurbished” department. Its previous owner discovered something wrong with it, so the manufacturer sent out a new replacement, then fixed the old one and sold it to me. It came with the same features, software and warranty as a brand-new machine, and has run flawlessly.

As long as the Crowd seeks perfection, the contrarian will find great deals on the imperfect: Look for items that have been refurbished, returned, scratched or soiled. If the imperfection is immaterial to the item’s purpose, you’ll get “same as new” at a used-goods price. (But beware of warranties — not all deals are as sweet as my computer’s.)

The Contrarian Traveler

First, the obvious: Go off-season. Determine when the Crowd likes to go to a particular vacation destination, then go there before or after they do. Everything from airfares to hotels to rental cars is cheaper in the off-season — sometimes half or a third of the price. Bonus: The locals will treat you better — they too get tired of the Crowd.

Not so obvious: Travel somewhere else. Vienna is enchanting; Budapest is cheaper and more exotic. Hawaii is wonderful; Cabo San Lucas — no tropical slouch itself — is half the price. New England’s fall colors are stunning, but so are New England prices; Wisconsin’s Door County, just a few hours’ drive from Milwaukee and Chicago, offers spectacular fall colors, too — at the Midwest’s more affordable rates.

The “travel elsewhere” rule can work even if you’re trying to get to where the Crowd is going: If you must fly to Denver, check prices to Colorado Springs. For LA, check Ontario, Burbank, Long Beach and Orange County. And remember that any big city between Washington, D.C., and Boston is within a few hours’ train ride of any other, so if you don’t like the airfares to one city, shop around. (Tip: Keep a map handy when you go airfare shopping.)

The Crowd flies direct. The contrarian sometimes takes the scenic route. Not too long ago I had to get to Mobile, Ala.; the cheapest airfare from San Diego was $750. So I flew to New Orleans instead. The ticket ran me $350, the rental car was $25. Add maybe $30 in gas, that much again for some great seafood and a batch of drippy-sweet beignets in New Orleans, and the extra drive was well worth it.

Also watch for when a no-frills airline begins service to a new city. The Crowd flocks to the upstart to take advantage of the low fares. The contrarian watches the full-service airlines to see if they’ll match or beat those low fares just to keep their customers. Last summer I flew from San Diego to Baltimore a few times on Delta, booking just three or four days before each trip and paying around $400 for round-trip tickets that would have cost over $1200 had Delta not been trying to compete with Baltimore newcomer Southwest. I got the upstart’s great fare without having to contend with their “festival” seating and more frequent layovers.

Sometimes the airlines will actually pay you to be a contrarian: A few weeks ago, when my graphic artist showed up at LAX for an overbooked Paris flight, the airline was paying volunteers $1000 in travel vouchers to take a flight the next day. Of course the Crowd needed to get to Paris as planned; but she didn’t: She took the deal … then managed to get herself on a flight leaving two hours later that same day. She’s using the vouchers to take her kids to Hawaii. She gets an “A” in contrariness.

More Contrariness

As you can see, it doesn’t take genius to figure out how to save money as a contrarian. Just look for the Crowd, then head the other way. The prices are lower in that direction, the deals are better. And if nothing else, you’ll beat the Crowd. Leaving you at leisure to dream up other contrary tricks, including some that can help you in non-financial ways. Here are some I’ve found most helpful to me, with which I’ll close:

The cleanest, least crowded bathroom in any public building is up or down some stairs at the end of a long hall.

The least crowded day at many theme parks is Superbowl Sunday.

In countries where people drive on the right side of the road, the left side of a theme park is less crowded in the morning, the right side in the afternoon. (In “Keep Left” countries such as Britain, Australia and Japan, the opposite is true.)

The ad with the most enticing headline has the trickiest fine print.

When the magician is doing something flashy with his right hand, keep your eye on the left one.

When a stranger bumps into your front, guard your wallet.

When the sidewalk ahead of you is littered with useless or offensive leaflets, put your hands in your pockets and keep walking.

At three o’clock, the sunburned and sandy Crowd leaves the beach to the contrarians.

Copyright © 2000 Todd Temple. All rights reserved.

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About the Author

Todd Temple

Todd Temple is the author or co-author of 19 books, including several about money. He also produces video, multimedia and interactive programming for youth conferences through his company 10 TO 20.

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