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Archive for February, 2009

My MoneySaving Mistake

I’m having one of those days that we all get, where everything feels a struggle and the world seems blue. So instead of staying in MoneySaving Towers, I nipped across to the Westfield shopping centre opposite to treat myself to a tasty, healthy salad for lunch in the foodcourt.

When paying for it the chap serving asked “do you want a drink with that?” and in my tiredness I said “yes, a diet coke please.” Then he handed me a can and I paid without thinking. As I walked to my seat I checked the receipt to find I’d paid £1.50, when very annoyingly there’s a Boots right next door, with cans for roughly half the price. Not a big difference, but frustrating.

Comment and Discuss

MoneySaving Christmas Quiz… Where the real knowledge lies…

Over Christmas we launched a quick quiz to test and train people’s MoneySaving knowledge. Now the full MoneySaving IQ test has replaced it, I thought it’d be interesting to review what people got right and wrong.

When I wrote the questions, I wanted them to be difficult as I don’t believe people would see a benefit if they weren’t. As the average score was five out of ten (nearly 40,000 tried it), it looks like I succeeded.

Spoiler note… there are some similar questions in the IQ test, so do that before reading.

Easiest Question.

The huge majority, 98%,of people got the question

“What gives you the strongest consumer protection if you’re buying goods worth over £100?” correct, answering “paying by credit card”

We’ve been pushing the section 75 guide very hard for months, as it’s one of the most important things to know in the recession. Whether it’s down to that, or people just knew anyway, it’s gratifying to know the message is out there.

For this reason I felt I had to make the section 75 question in the IQ test much more difficult, going into some of the minutiae in the rules.

Shopping Rights Not So Strong.

Yet the majority of people didn’t know the answer to…

“You’ve bought a dress for a friend for Christmas and they don’t like it. When you return it with the receipt a week later, which of these is the retailer legally obliged to do?“

Only 40% correctly answered “Nothing, unless it was bought online” and almost as many incorrectly thought “Offer a credit note” was right.

This is a common confusion; many people think you can return anything because shop policies often allow it, but actually, unless there’s a fault, you simply don’t have a right. The exception is if things are bought online or by mail order, due to distance selling regulations (see the consumer rights guide).

There was similar lack of knowledge on the other consumer rights question in the quiz…

Huge underestimation of the power of downshifting

Perhaps the biggest surprise was how few people knew the real impact of downshifting. Where you drop one brand level lower? The question was phrased as follows…

“Here’s a good New Year’s resolution; try dropping a brand level on everything you buy in the supermarket. How much would someone who spends £100 a week on food save over a year by doing this?”

And here are the results…

    A. £200… 5,771 people
    B. £600… 16,628 people
    C. £1,300… 11,297 people
    D. £1,700… 4,457… people

Actually the correct answer is D. £1,700, as dropping down a level on everything typically saves you a third on your food bill (see the Supermarket Shopping guide). I suspect such huge numbers just aren’t that easy to believe, yet we’ve done a lot of number crunching work on this and it’s remarkably consistent.

Comment and Discuss

Ponzis and pyramids… what’s the difference?

The Madoff scam in the USA is thought to have cost people up to £50 billion, and there’s talk of similar schemes having been operated in the UK.

Yet I’ve read a lot of confusion about what’s happened. Sometimes it’s called a pyramid scheme; other times a Ponzi. So I thought I’d do a quick blog to explain the difference between the two (Madoff is a ponzi not a pyramid).

  • Pyramid Scam. While fundamentally flawed, pyramid schemes are the more honest of the two, as the participants in them know what’s happening.

    Essentially they’re networking schemes: each person who’s recruited is then expected to recruit more people, and as long as that happens people make money.

    For example, you pay £1,000 to join, on the promise that you’ll get £5,000 back, providing you recruit six people yourself (with some money going up the pyramid). You usually don’t get their £1,000s directly, and are distributed some money as your recruits pay up, and some more as the people they recruit pay up… and so on.

    These schemes rely on continued redistribution of income. No new money is being created, it’s just being moved, and is by its nature a zero sum game. The problem is it doesn’t take long before you need to be recruiting the entire world’s population for the thing to continue.

    Tier 1: Needs 1 person
    Tier 2: Needs 6 people
    Tier 3: Needs 36 people
    Tier 4: Needs 216 people
    Tier 5: Needs 1,296 people
    Tier 6: Needs 7,776 people
    Tier 7: Needs 46,656 people
    Tier 8: Needs 279,936 people
    Tier 9: Needs 1,679,616 people
    Tier 10: Needs 10,077,696 people
    Tier 11: Needs 60,466,176 people (every adult & child in UK)
    Tier 12: Needs 362,797,066 people
    Tier 13: Needs 2,176,782,336 people
    Tier 14: Needs 13,060,694,016 people (2x every adult & child in the world)

    So a pyramid isn’t innately dishonest, as everyone knows how it works. It is, however, pretty immoral, as it only works out well for the people at the top, and they do it in full knowledge the entire scheme MUST break down at some point, and that’ll happen quite quickly. Yet in the meantime they can make a fortune.

  • Ponzi Scam.

    These are much more dishonest, and much more plausible, hence they can draw in more sophisticated investors. Unlike pyramid schemes, the entire premise is based on a lie, but it’s a plausible one. The best way to explain how it works is to give you an example.

    I’m going to use a gambling Ponzi, which has often been the underlying proposition, though Madoff is being accused of running an investment Ponzi, working in a very similar way.

    Honest Paul is a mate of a mate’s mate. He says he’s got this sure fire gambling system, and if you put money in, he will give you FIVE TIMES it back in just two months. You’re sceptical, but your mate’s done it and got the cash to show for it…. so has his mate.

    So you put £100 in, to dip your toe in the water, and guess what happens… you do get £500 back. The gambling system is WORKING.

    So you get asked to put £2,000 in and to recruit your friends too… who will also get commission. You’re more than happy to do this as you’ve made so much money and now KNOW they system works and have the information three times down the line.

    The problem is, what’s really happening underneath this is a pyramid scheme. Your money (or most of it) isn’t coming from successful gambling (or investing), it’s coming from other new recruits’ pockets.

    And the whole system will only keep working as long as people can keep recruiting. However, here there’s the advantage that as it’s dressed up like a legit investment, so more people are fooled into it, and it carries on going until the whole thing goes kaput. Plus if you lower the returns e.g. the Ponzi-master only says you’ll get 30% on your ‘investment’ then it can keep going longer, as each new recruit can subsidise three people up the tree.

    Yet ultimately this is a zero sum game too. And after a number of levels it stops and everyone loses. And of course the longer its gone on for, the more people are at the bottom step of the pyramid losing.

Comment and Discuss

More searched than Obama… how do you react?

I’ve just been contacted by a newspaper running a story based on Hitwise’s (the web monitoring specialists) press release, which says in Q4 2008, I was the most searched personality in the UK, unbelievably beating Barack Obama by 11%! The story is here – Hitwise blogs.

It’s a bit of a challenge to know how to comment on it. There are a mass of different issues involved (including the fact they’ve used the Valentine’s logo…). I thought it would be useful to write down my feelings and mullings; both for me to read over in years to come when I’m long forgotten, and to try and straighten out my thoughts on it.

How do you do proud without doing arrogant?

First of all, I know that unlike the real celebrities on the list people are searching for my info not my ‘good looks and sparkling wit’, so I shan’t get arrogant about it. Many people use my name as a short cut to get to the articles, e.g. put “balance transfers martin lewis” in Google and you jump straight to that article – it’s quicker than typing MoneySavingExpert.

Furthermore, like most Brits I’ve absolutely no idea how you handle a compliment. Is there a right way? Crow about it and you look like a smug git, pass it off you look ungrateful and caring. Of course, inside I smiled when I heard the news. I smiled again when asked about being an “overnight success”: it’s taken ten years of 70+ hour working weeks, spreadsheets, and hardcore, debilitating stress to become one!

Yet a note like this makes you realise you’ve reached outside your box. I don’t know quite how to get that across (it’s not the same as writing here, to people who know the site). I have to say it does also in truth make me feel a little bit like not wanting to leave the house or work – it’s strange to think when you go outside so many people know who you are.

The upsurge has a sad undercurrent.

I’ve always said MoneySaving is more of a movement than anything else. And while I’m cock-a-hoop to see more MoneySavers on the site, we all know this upsurge is primarily due to the fact the economy has fallen off a cliff & many people are searching because they NEED to, rather than WANT to. While I’m glad that this site and its community has built up a level of trust that makes it the go-to place, I wish it wasn’t caused by such a negative and depressing overall economic picture.

It’s a bit like the constant “you’re the one man benefiting from the credit crunch” line I hear all the time, which makes me want to tear my hair out. Actually I’m hating the recession. We get emails from people who are struggling and in terrible situations, and my media appearances always seem to be responding to crisis fire fighting. In short, much of the fun’s disappeared (I can hardly believe I once did Money comedy characters).

Plus, it’s so much more difficult to find the right solutions, and certainty about them; we have to constantly ask “will the company still survive?” or “will the bank go bust?” – questions which leave potential cracks in the foundations of any info.

As for me work-wise, last year I could fill my week five times over. This year it’s seven times, yet that doesn’t actually make that much difference. I’ve deliberately cut back so I only really do my regulars, far fewer ad hoc appearances.

As for the site, traffic is huge, we’ve nearly 8m users a month (960m hits) and 3.1m getting the weekly e-mail; while we’ve always had similar growth levels, what’s incredible is they’re continuing even at this size. Yet while the site’s traffic is up, the site’s revenue, while highly ethical, comes downstream of people whose revenue comes from advertising; and as everyone know’s that’s been hugely hit (See how this site is financed guide for a full explanation of how it works). The site is still very strong, yet where in the past recruiting new team members and investing in our big tools is something I’ve been able to do without question, this year things are different.

Yet being higher than Obama is amazing

Having said all that, who wouldn’t be awestruck upon seeing their own name’s been searched more than the President of the United States’? Especially one with so much hope, talent, good feeling and expectation behind him? It’s mind numbing! Now excuse me while I go print out the results and put them on my wall – the grandchildren may laugh at it one day.

Comment and Discuss

Is this site a Coronation Street Star?

Thanks to eagle-eyed and eared forumite ‘Nile’ for this. Apparently, Coronation Street’s Kirk is a MoneySaver. According to Nile (who kindly watched the repeat so it could be transcribed) this was in the dialogue, and it’s referring to MoneySavingExpert.com

Rovers Return scene

    Kirk: It’s great this website. All these tips about how to save money. I was thinking about what you were saying before and seeing as how I’m out of work, I’m gonna try and lower our outgoings.

    I’m kicking off by making my own Christmas cards.

    Julie: It’s February!

    Kirk: Well planning ahead is one of the keys, this website says.

On the street, leaving the shop scene

    Kirk: Bicarb: gets dog smells out the carpet a treat and cleans your bog.

Now that does sound almost definitely like the Old Style section of the site, and the charity book Thrifty Ways.

I must say it doesn’t surprise me, in the times I’ve been to an Audience with… I’ve met quite a few of the Corrie cast who do use this site. One (who will remain nameless) even came up to me to say thanks for a big Bank charges reclaim (see this TV stars reclaim blog.)

So fingers crossed after this episode we’ve got fictional users joining the factual.

Comment and Discuss.

Milk Teeth Sprouting at Consumer Focus

I wonder if Consumer Focus read my blog a few weeks ago when British Gas cut prices (Is Consumer Focus in British Gas’ pocket?). Essentially they applauded British Gas’ palty 10% gas price cut; quite ridiculous for a Consumer organisation.

Yet, I’ve just received the following from it.

“Responding to news that EON is to cut electricity prices by 9% from 31 March 09, Audrey Gallacher, energy expert at consumer champion Consumer Focus, said:

This price drop is welcome but it doesn’t go far enough – it will only benefit electricity customers and doesn’t kick in until winter’s over.

We need to be convinced of the relationship between wholesale and retail prices – Ofgem’s market assessment is becoming ever more urgent.

With consumers facing tough times, the prices they pay should fully reflect the cuts in the wholesale market.

Quite right. Though I must admit if I were E.ON I’d be a little annoyed, after all, why is British Gas’ 10% gas cut good news, but E.ON’s 9% electricity cut not enough? OK, British Gas’ cut hits earlier, but less people use gas than electiricity.

Either way, that’s not my concern, the main news is I’m glad to see the new consumer watchdog starting to find its teeth, even if they’re still milk ones.

Comment and Discuss

Just been to see the Queen.

I’ve just arrived back at MSE Towers from the Buckingham Palace relaunch of www.royal.gov.uk. While not much of a Royalist generally, I couldn’t resist the chance to glimpse inside and see what it was all about. Though it did involve having to put a suit on, not something I do often, or with relish.

It’s a little scary to go there.

On arrival, I felt a little apprehensive; there’s something quite imposing about walking through the large palace gates, into normally forbidden territory, alone. Yet the policeman checking my ID instantly said “don’t worry, I know who you are anyway” which helped. Then I walked through the car park, and instantly regretted not driving; the chance to park in the red tarmacked quadrangle is something I shouldn’t have missed.

Once checked in, having hung my coat up in the cloakroom and got my badge, it was time to walk up the red carpeted staircase (replete with gold embossed banisters). On the way up the footman gave me a smile, told me he loves the site and had saved a fortune off Bank charges and the credit card shuffle. So while I suspect the Queen isn’t a MoneySaver herself, it’s good to know someone in the Royal household is.

Trying to find someone I knew in the reception.

Once into the pre-reception room, I looked around for any face I recognised. The only one I saw was Spencer Kelly from BBC Click. While I’ve never met him, he’s a friend of a friend, so I decided that was the safest route and went to say hello.

He was talking to a couple of other people, including the founder of parkatmyhouse (linked to in the boost your income guide, and apparently gets a good deal of traffic through from it) and Ian, who is head of digital online for Number 10 (and the man who twitters for it).

Then there was a sudden hush, a little movement, grand doors opened, and we were ushered into the next room and asked to hand invites over. It was only at this point I noticed the slightly short, white haired, immaculate dressed lady in a green conservative outfit and realised it was HM the Queen. We were all ushered through the line with a quick handshake, then into the next, rather opulent and grand reception room, which had a big screen on the far side.

Offically opened with a remote control.

Soon after, Tim Berners Lee – the founder of the web – made a speech about the new site, which includes hi-res 360 degree views of various royal buildings. Then in a most surreal moment, the Queen was handed a remote control to “officially open” the new site, whereupon she, like the rest of us, looked rather bemused, and a little bubble of laughter pumped up.

After that, quails’ eggs, pastries, and sausages were offered round and the 100 or so people there congregated in groups. I stayed in my original four and we were joined by Rory Cellan-Jones, the BBC’s technology correspondent, when we were again introduced to the Queen, this time for a conversation.

Do you use the web, maam?

It’s rather strange working out what you actually have to say. I felt we were collectively tag-teaming to keep a dialogue going, even though our group included three professional broadcasters. I couldn’t resist asking “I hope this isn’t cheeky, but do you ever use the internet?” The answer was, “Not personally no, but the entire palace seems to run on it these days”.

The dialogue then moved on to how young people use the web as a matter of course, and discussing whether two year-olds using a mouse was a bit like under-10s absorbing languages with ease.

After that and a few more brief chats with various people it was time to get my coat and go. As I was walking out of the palace gates, a policeman came up to me and said “I think you should know you’ve got the price sticker on the sole of your shoe and you can see it as you walk.” I was wearing new-ish shoes to go with the suit, then with a knowing nod he added, “so is it a mistake or just to prove you bought them in the sales?”

Comment and Discuss

Monster Slippers In a Bar… Stress Down Day

As you’ll have read in the weekly e-mail, last Friday was Samaritans Stress Down day, and we were giving away 50 pairs of Samaritans green monster stress-free slippers to celebrate.

As such, and because I was one of the campaign’s supporters, I thought I’d better support the cause, so on Friday afternoon, I put and kept them on, wherever I went (I didn’t do it in the morning as I was at ITV doing the voiceover for Tonight!).

As you can see from the picture below….

Stressin Down

they’re pretty obtrusive. So when I went to the cafe/bar at the centre of the office complex where MSE Towers is located, I got more than a few strange looks and bizarre enquiries.

It also meant I had to do something for the MSE Team. Sadly, as saving money – not stress – is my area of expertise, I left it too late (I had tried to book a masseuse for the office but couldn’t get one) due to my busy morning.

So on the way back I stopped off at the supermarket and bought enough satsumas, kiwis, and grapes to fill all stomachs, and brought those in instead – after all, good nutrition helps relieve stress. Then an e-mail round to say we’d all finish 45min early and table football and a drink in the bar.

Now I’m just blocking my ears from calls to do it every week…

Comment and Discuss

Wayne Rooney you’re my hero

Ok, a little bit of an exaggeration, but when reading this story in the News of the World about how Wayne & Colleen had been to a restaurant and paid with a voucher I thought “HOORAH”.

Over the last year or so it’s wonderful to see the stigma of using voucher has faded into nothingness. The daily updated Restaurant Vouchers page on this site is often read over 100,000 times a day. It’s become de rigeur – even footballers wives are happy with it! So well done the Rooneys for showing it ain’t about the cash you’ve got, it’s getting good value thats counts.

Comment and Discuss

I’m looking forward to watching… Savers in trouble: ITV1 Tonight 8pm.

It may sound strange to say that about a programme I’m presenting, but the truth is I haven’t seen it yet. It’s been done on a tight deadline, and the producer Bob and his team have done well to get so much material out in time. As part of the speedy process, quite a few chunks are filmed without me.

People tend to underestimate the team effort that goes into something like this. Of course, in my ‘savings makeover slots’ or pieces to camera then that’s me doing m’thing; but in producing a current affairs programme that’s well rounded other ideas need to come in, plus strong visuals (as I suspect the “Lions Den” and “Gold” sections will be).

The final process is all done at speed. I got the final script last night at 7.30 and “Martinified it”, adapting it to my language and phrasing; then sent it back by 9pm. After that it goes back to the producer and the lawyers to be checked through again.

Tonight has two offices, one in London and one in Manchester. This programme’s out of the Manchester office, yet I did the voiceover in London this morning, using a full transcript of what’s in the programme; I can’t see the pictures until later.

So when it’s on tonight, a little bit of me will be a touch nervous, waiting to see what’s in it!

Comment and Discuss.

MAMMOTH Comedy Star at tiny venue…

I’ve blogged before about the Chuckle Club, a fantastic MoneySaving central London comedy venue. While the entry price is around a tenner, the key is it’s in a student bar, though it’s not a student club, which means you can order a round and get change from a fiver.

As I mentioned last time (see Never, ever heckle when you’re known), it’s based at the LSE in Holborn, and I was involved in bringing the club to the Uni when I was students’ union president, and even performed there during my mercifully short-lived stand-up comedy stint. As such I’m still on friendly terms with ‘Eugene Cheese’ who runs the club. So now you can understand why the following happened…

Come along, we’ve a REALLY big name…

Last November, out of the blue Eugene called to say “you have to come tonight, we’ve a massive massive act on but I cant tell you who.” It sounded intriguing and there’d been some good names on in the past, but the MSF and I were going to a friend’s birthday so couldn’t go.

On Saturday, I found out who it was, and my jaw dropped. Seems I wasn’t the only one surprised though, on the night, a group of five people had been outside debating whether to come in, and people told them there were rumours of a really big act on… possibly “Steve Coogan” or even “Robin Williams”.

Persuaded to come in, but more than sceptical, they sat down, ridiculing the concept either would play the club. Two minutes later, as Robin Williams sat down next to them, on the only empty seat in the place, they changed their tune, he was there doing an hour long warm up for a big charity set….

This Saturday, no Robin Williams, but Andy Parsons from Mock the Week did pop-in as a surprise guest, to test out his new set too… much cheaper than going to see his Arena tour.

Comment and Discuss.

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