Bob Dylan, Columbia Records, And The Abuse Of The Scarcity Principle

Yes, you can ruin a sound economic principle by taking it too far.

One of the basic underpinnings of Economics 101 is this: the creation/illusion of scarcity is good for the provider because it (artificially) stimulates demand, giving the owner of the good the option to make a tidy profit either due to increased volume and/or the ability to raise prices.

A company that demonstrates a sound understanding of this economic principle is McDonalds Corp. They regularly roll out the Monopoly challenge for “a limited time only”, increasing demand among fast food customers weighing their options about where to eat by convincing them to go to McDonalds because those Monopoly pieces will only be around for a couple weeks (if the promotion ran year-round, the novelty would wear off to the point where it provided the company no additional edge).

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Why You Should Follow James Altucher At The Altucher Confidential

There’s about fifteen or so writers in the personal finance realm that I make a point of following regularly. I’ve highlighted some of them—Mr. Money Mustache, Jason Fieber at Dividend Mantra, and Greg McFarlane at Control Your Cash—in previous posts already mentioned on this site. The next writer I wanted to highlight is James Altucher who runs “The Altucher Confidential” at www.jamesaltucher.com.

The one common thread that links every finance writer I admire is that they almost all regard money as a tool that can allow them to reach a particular goal in life (whether they want a sweet beach house in Foley Beach, the accompaniment of a gorgeous woman, or the ability to say cyanora to a soul-sucking job, etc.) and they often document the psychological aspects of the journey. Almost all good finance writing focuses as much on psychology as mechanics. We all know the key to a good body is eating better and exercising more. We all know a successful financial life is some variation of living below our means and doing something intelligent with the difference. The best finance writers tackle the mental barriers that can prevent us from bridging the gap between who we are and who we can be (hint: it’s almost always due to some combination of pride and fear).

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