I saved $2,500 by buying 2 items abroad. Is that un-American?

August 3 78 Comments latest by ben

My post on why we’re all hypocrites about our weddings was one of my most popular.

So since one of my friends just got engaged, I thought you’d find this interesting. When I had dinner with him last night, I asked him how the wedding planning was going. He told me that to save money, he’s flying in a wedding photographer from the Philippines. Even with the flight and accommodations, he’ll save $4,000.

This mirrors my own experiences:

• In New Delhi, I had a custom suit made for $200. Money saved: About $2,000
• In Mumbai a few months ago, I bought lenses/frames for $45. Amount saved: $500
• A friend had crowns and other dental work done in India for $400. Amount saved: About $3,500. (More about medical tourism.)

And that’s just India. There’s Vietnam, China, countries in Africa, and many other countries where I’ve heard friends get amazing prices. It’s getting to the point where, if you want anything expensive, it can be cheaper to fly to another country and buy it there.

This is particularly true for health care. There are serious questions about risk and liability, but the difference in price is impossible to ignore. From this Washington Post article:

…heart bypass in the United States costs $130,000, but just $10,000 in India and $11,000 in Thailand. A hip replacement in the United States would cost $43,000 but just $12,000 in Thailand or Singapore. Hysterectomy costs are about $20,000 here but $3,000 in India.

For less-risky items, like buying a custom suit, rugs, or pieces of furniture, the savings can be significant enough to make the trip without worrying about quality. After all, if it breaks, just get it repaired — or, a la Wal Mart, it may be so cheap that it’s simply disposable.

This is a political firestorm. What about labor practices and environmental impact? In fact, in last week’s Friday Entrepreneur post about Shannon from Payloadz, there’s a raging discussion in a post last week about using offshore workers: One commenter accuses others of using “CFL (Cheap Foreign Labor),” and others jump on him for ignoring globalization.

What do you think? Have you traveled abroad specifically to buy something cheaper? Have you ever had surgery abroad? Is that un-American?

(23 votes, average: 4.52 out of 5)

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78 Comments latest by ben

The article everyone is talking about today

July 21 54 Comments latest by reader

…is the phenomenal New York Times article written about how a woman named Diane McLeod got into thousands of dollars of debt. It’s remarkable because it includes a rich set of multimedia features that let you understand how many of us get into so much debt — and also allow you to compare yourself to others. They include:

• An overview article: Given a Shovel, Americans Dig Deeper Into Debt
• A timeline of debt from the 1920s until now
• A haunting video of Diane McLeod. Just watch her attitude and how her debt affects her.
• 700+ comments from people (I suggest sorting by Readers’ Recommendations). The condemnation is both enlightening and saddening. We seem to take pleasure in seeing other people’s pain (”She could have made better choices…Idon’t buy all that crap”) and yet, some of it is very true. I agree with most of the comments about the evilness of credit-card companies, and yet, we do have choices.
• A tool that lets you compare how much debt you have with others like you

Want to watch it all? Click here to start.

Here’s my take: On one hand, we all know people like Diane, who make poor financial decisions, never take the time to get educated about money, and sink into a hole of financial quicksand. These people are easy to judge because they have all the visible signs of financial stupidity: New cars every two years, expensive high-definition TVs, vacations, houses they can’t afford. And yet, on the other hand, financial institutions, advertising, and social influence have all coordinated an attack on us to spend more. In fact, we’ve been told for decades that owning a house is the single-best financial decision we can make. It’s not.

Is education the answer? Maybe, but it’s not a panacea.

Should we just stop spending so much? Of course we should, but that’s like saying we should all lose weight by making better choices. Easy to say, extremely difficult to do. I’m hopeful that the current environment calls for a restructuring of our priorities. I hope that we get conscious about our spending and start prioritizing saving over spending. With extended hardship, this will become more likely. We all need to be conscious of our finances, but we’re playing in a world with the deck stacked against us.

I’m tired of demonizing people for making poor spending decisions. It might make you feel good about yourself, but it doesn’t actually change behavior.

And fundamentally, that’s what this site is about. It’s not about making people feel better about themselves by looking down at other people. It’s about getting behavioral change. In that vein, the 557 examples of changes people have made as a result of reading this site are probably my biggest success.

I fully expect lots of commenters to brag about how you got out of debt by making hard choices (just as they annoyingly bragged about their inexpensive weddings in the comments of this post). That’s great. But I’m sick of those comments that tell people to “just spend less.” Not everyone can stop spending 30% of their money on going out, because a lot of people don’t have that extra money.

There’s nuance to these arguments that’s missed by idiots who blather about how we should all “make better choices” and “start being responsible.” Of course we should, and if you’re reading this blog, you’re already doing this. But there are details that are missed by such superficial statements.

Here’s what I suggest: Read the New York Times article. Then, read the 152 comments from other iwillteachyoutoberich readers about how they got into debt. That’s 67 pages of startlingly honest stories, most of them having to do with educational loans. Then, I would encourage you to carve out some time for two resources to understand some of the nuances of why many people — especially poor people — can’t get ahead. Here are two resources I fully recommend:

Also, check out 30 Days of Working Minimum Wage, a video in which Morgan Spurlock (who brought you Super Size Me) and his girlfriend work minimum wage. Sure, it’s gimmicky, but it’s a truly eye-opening movie that provides insights on why it’s nearly impossible to get ahead if you’re earning a certain income.

I’d love to hear your comments.

(9 votes, average: 4.67 out of 5)

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54 Comments latest by reader

I Will Teach You To Be Rich featured in US News & World Report online

October 5 13 Comments latest by AuntEm

I’m featured in US News & World Report’s Alpha Consumer blog today. (New US News readers, please click here for an easy-to-use introduction to this blog.) Kimberly Palmer, a US News reporter, asked me these questions (and a few more):

• “There are so many books out there on young people and money…what’s different about your advice?”
• “What kind of stories do you hear from your readers who are frustrated with their financial experiences?”
• “Name three things young people can do to improve their financial situation.”

In my responses, I discuss why personal-finance advice is usually boring, give some quick tips for getting started, and threaten to commit suicide if I read another column about not spending money on lattes.

Click to see my answers.

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13 Comments latest by AuntEm

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