Dave Ramsey Chapter 6 – Flashcards
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Explain why financing a purchase is a bad idea.
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It puts you at financial risk, causes you to pay more than the cost of the item, and prevents you from building wealth
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Why should you always consider the opportunity cost when making a significant purchase?
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It gives you power over purchase and because money spent in one place can't be spent in another
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What are the five steps you should take before making a significant purchase?
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1) wait overnight 2) consider your buying motives 3) make sure you understand what you're buying 4) consider the opportunity cost 5) seek wise counsel
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What effect does inflation have on purchasing power?
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It means that your dollars buy less than they did in the past
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Summarize factors that influence consumer decisions.
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Marketing, peer influence, brand recognition, opportunity cost, advice from others
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Explain why consumer awareness is such an important part of a healthy financial plan.
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So you are able to know what the company is trying to do when they sell you something
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Identify ways companies compete for your money.
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Personal selling, creative financing, repetition and product positioning
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Identify which method companies are using to compete for your money: reputation for holding its value A) personal selling B) financing C) media D) product positiong
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B) financing
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Identify which method companies are using to compete for your money: car salesman A) personal selling B) financing C) media D) product positioning
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A) personal selling
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Identify which method companies are using to compete for your money: tv commercials A) personal selling B) financing C) media D) product positioning
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C) media
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Four common marketing tactics are: A) repetition, buyers remorse, product positioning, significant purchase B) competition, financing, opportunity cost, personal selling C) branding, personal selling, opportunity cost, financing D) personal selling, financing, repetition, product positioning
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D) personal selling, financing, repetition, product positioning
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Dave tells the story of a man who bought his dream car, drove it home, but then returned it the next day after some money calculations. This story is an example of: A) brand recognition B) "Be backs" in the car business C) buyer's remorse D) opportunity cost
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D) opportunity cost
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Which of the following should you consider when making a significant purchase? A) your buying motives B) if you can't pay with cash, don't buy it C) the opportunity cost D) all of the above
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D) all of the above
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Which of the following is not a form of product positioning? A) shelf positioning B) packaging and color C) financing D) brand recognition
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C) financing
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Which is not a "power over purchase" tactic? A) compare your purchase with a friend's B) consider the opportunity cost C) wait overnight D) seek counsel
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A) compare your purchase with a friend's
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Which of the following is not a need? A) housing B) eating out C) utilities D) food
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B) eating out
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The purpose of advertising is to: A) tease the consumer B) inform the consumer C) persuade the consumer D) all of the above
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D) all of the above
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Which of the following is not a common marketing strategy? A) providing finance options B) repetition C) making the customer do product research D) personal selling
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C) making the customer d product research
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When a company placed an ad and offers no interest on your purchase for three years: A) they are not interested in making a profit B) they are showing their appreciation to you by giving you free money C) the cost of the financing built into the price of the item D) all of the above
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C) the cost of financing is built into the price of the item
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Young single adults should find an accountability partner with whom to discuss big purchases A) true B) false
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A) true
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Inflation has no effect on your buying power. A) true B) false
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B) false
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A budget has little effect on person's financial success unless he or she also develops power over purchase A) true B) false
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B) false
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You should never wait overnight before making a big purchase if there is only one item left. A) true B) false
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B) false
