How to Save With Cutting-Edge Tech

Believe it or not, new gadgets can actually slash your spending over time

David LaGesse

An economy in the dumps has taught many consumers to live without the extras. And that would seem to include the latest in gadgets: New HDTVs, MP3 players, and game consoles can cost a bundle. But some of the best in fresh tech not only comes cheap; it can even save cash over time. Here’s how savvy buyers can cut their budget and still brag that they’re on the cutting edge:

TRIM THE CABLE.

One of the best ways to save on tech is to trim your monthly cable subscription, which often exceeds $100. Simply cutting out extra movie channels can save consumers as much as $600 a year. A cheaper alternative is to purchase a Netflixsubscription for $9 a month and get as many DVDs as you can watch, one at a time. There’s typically a two-day delay between shipping a disk back and receiving another.

Netflix also offers instant Web streaming of more than 17,000 TV shows and movies. Watching those streams on the living room TV is easy with a Roku box, which starts at $80. Roku owners can also pay a few dollars to stream a movie from an even larger selection at Amazon, and Roku recently added about a dozen “channels” that offer video from other Internet sites.

A variety of Blu-ray players, flat-panel TVs, and other boxes such as Apple TV also can stream Web video to the living room, “but Roku is the simplest out there right now,” says Chicago resident C. J. Chilvers. “It also offers the most diversity.”

Cut the cable completely.

Chilvers lives in a condo that doesn’t have good over-the-air reception. Otherwise, he says, he would have taken the next step of cutting out cable altogether. Digital broadcasts now offer crystal-clear video and audio with an old-fashioned antenna, including what videophiles claim is an HDTV signal that’s sharper than cable or satellite. Cutting the digital tier, or basic cable, altogether can mean the loss of live news and sports that aren’t yet available online. But it can also save consumers another $600 a year.

To truly become rich, you need to stop acting like it

• 86% of all luxury vehicles are driven by people who are not millionaires.
• $16 what most millionaires pay for a haircut (including tip)

There are many words to describe how so many people end up in financial trouble, but one stands out.

Pretenders.

Sure, sometimes bad things happen, and it’s not your fault. But many of you — and you know who you are — are experiencing economic problems because you were pretending to be rich.

Thomas J. Stanley has been examining the truly rich for years. A former university professor, he’s the co-author of one of my all-time favorite personal finance books, “The Millionaire Next Door.” It should have a permanent spot in your home library.

Just before year’s end, Stanley released “Stop Acting Rich . . . and Start Living Like a Real Millionaire” (Wiley, $26.95). I’m recommending this book as the February selection for the Color of Money Book Club.

The credit crisis and recession, Stanley says, have presented us with the opportunity to treat and cure the pretenders.

“But for the treatment to work, you must take a cold hard look at your balance sheet and at your life, and determine if you would be wealthier if you would stop acting rich,” he writes.

In Stanley’s new book, a millionaire is defined as someone with net-value investments of $1 million or more. The investments include cash, stocks, bonds, mutual funds and equity shares in a private business. The author said he eschewed the traditional way people calculate wealth, particularly as it relates to the value of a home. If your net worth was $1.5 million with 85 percent of that from your home, and the value of your home depreciated by 50 percent — which it has for too many people — then your wealth wasn’t real.

Stanley’s research does a great job of proving there’s a big difference between income and net worth. Many pretenders have become very good at generating income and enjoying a high standard of living. But take this Stanley gem to the bank: “Those who are among the least productive in transforming their incomes into wealth are in the higher-status occupations.”

What do we often tell a child who expresses an interest in teaching? “You won’t get rich as a teacher.”

Yet, there are more than 350,000 millionaire educators, working or retired teachers or professors, according to Stanley’s research.

Stanley has one major purpose for this latest installment in examining the lifestyles of the truly rich. He wants to make the case that if people stop acting rich, they can achieve the kind of happiness money can’t buy.

Here are just a few things Stanley found in his research on the wealthy:

– Eighty-six percent of all prestige or luxury makes of motor vehicles are driven by people who are not millionaires.

– Typically, millionaires pay about $16 (including tip) for a haircut.

– Nearly four in 10 millionaires buy wine that costs about $10.

– In the United States, there are nearly three times as many millionaires living in homes with a market value of less than $300,000 than there are living in homes valued at $1 million or more.

– Forget the Manolo Blahnik high-priced shoes. The No. 1 shoe brand worn by millionaire women is Nine West. Their favorite clothing store is Ann Taylor.

Will the recession motivate pretenders to hit the reset button and not just act rich but live modestly like many real millionaires?

Stanley isn’t so sure.

“Time will tell if society and people have really changed,” he says. “My research indicates that people, for generations, have become so accustomed to consuming that it is second nature. And I am fairly certain that they will resume their spendthrift ways once outward symptoms of the financial flu have passed.”

This book reminds me of a wonderful Scripture.

Proverbs 13:7 in the Today’s New International Version Bible reads, “One person pretends to be rich, yet has nothing; another pretends to be poor, yet has great wealth.”

Don’t be a great pretender, pretending you’re doing well when you only look the part. Read this book and find out how to emulate real-deal millionaires.

By Michelle Singletary