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Save just $5 a day, or $150 a month, for 30 years — earn 10 percent on it — and you'll end up with a nest egg of $342,000. Would that make a difference in your life? (By the way, if you're wondering how the heck you can make 10% on your savings, you can't — at least without risk. It is possible, however: see my stock portfolio.)
The tricky part is saving that $5 without sacrificing your quality of life. And one of many ways of doing that is to pay for name brands only when name brands make a difference. Sound obvious? Take a quick stroll around any grocery store and you'll see that it must not be at all obvious, because the shelves are stuffed with products that cost extra — sometimes a whole lot extra — in exchange for nothing more than a name.
I recently took a camera into a local grocery store and found some amazing price differences between name brand items and their generic equivalents. Check out the video below, then meet me on the other side for more.
As we walked around my local Publix to shoot that video, I jotted down the prices of some of the stuff we were looking at. Check out this list — it's amazing that people will pay this much extra for substantially identical products, presumably simply because some commercial told them to.
1. Pain relievers and other over-the-counter medications
Acetaminophen — the active ingredient in Tylenol — is available in many generic products. Note that the generics aren't similar: they're identical. Why would you ever pay more for an identical product? This also applies to everything from cold medicine to eye drops — virtually every over-the-counter medication. The labels are right there — read them.
Name-Brand Acetaminophen: $10.99
Store-Brand Acetaminophen: $6.99
Difference: $4.00 (57 percent)
Although I should certainly be used to it by now, I can't get over the fact that people go to the store to buy something in a bottle that they could be getting nearly free in their kitchen sink. But even if you can convince me that bottled water is worth the money, you'll have a heck of time convincing me that the gallon jug from Crystal Springs is noticeably better than the one from Publix. And if you're really concerned about water quality and/or taste — why aren't you buying a filter and making your own bottled water? I just don't get this entire concept.
Name-Brand Water: $1.25
Store-Brand Water: $.85
Difference: $.40 (48 percent)
I'm sure there are connoisseurs of moo-juice that could distinguish name-brand milk from store-brand — but I'm not quite sure how they'd do it. Bouquet? Finish? Sounds like a bunch of bull to me.
Name-Brand Milk: $5.45
Store-Brand Milk: $3.39
Difference: $2.06 (60 percent)
It's already a substitute for butter. Is it really going to negatively impact your quality of life to substitute the substitute?
Name-Brand Margarine: $1.79
Store-Brand Margarine: $1.19
Difference: $.60 (50%)
You're taking a cup of chlorine and adding it to gallons of water in your washing machine. How could any TV commercial possibly convince you that a brand name will make your clothes come out better?
Name-Brand Bleach: $2.25
Store-Brand Bleach: $1.67
Difference: $.58 (35 percent)
6. Cleaning Products
Many — if not most — cleaning products are already overpriced substitutes for stuff you already have around the house. Two of the most popular news stories we've ever done were Household Products Vinegar Can Replace and Do-It-Yourself Laundry Detergent. But let's assume that you have a fetish for spray bottles and insist on buying ready-to-use cleaning products: is the name brand getting your counter that much cleaner?
Name-Brand Cleaner with Bleach: $3.29
Store-Brand Cleaner with Bleach: $2.39
Difference: $.90 (38 percent)
Think your job is hard? Imagine if your career entailed convincing the public that your company's salt — the most basic of ingredients — was better than some other company's salt. The whole idea is preposterous. And yet, there they sit, side by side, with nothing but their labels and their prices to set them apart. And where spices are concerned, that's just the beginning — can you tell your oregano from mine?
Name-Brand Oregano: $5.48/oz.
Store-Brand Oregano: $1.24/oz.
Difference: $4.24 (342 percent)
I'm going to stop this exercise here. Not because I couldn't go on — I could turn this into a book — but those are all the specific prices that I wrote down while we were shooting the above story. There are literally hundreds — if not thousands — of examples of people routinely swapping hard-earned cash for something virtually worthless: a name brand. It happens in the grocery store, it happens in the clothing store and it happens at the car dealer. It happens everywhere.
Am I saying that name-brands are never worth the money? Of course not. I can tell the difference between Dunkin Donuts coffee and store-brand — that's why I pay extra for it. But I certainly can't tell the difference between brands of oregano, bleach, orange juice, bananas, cheese, spaghetti, flour, sugar and a plethora of other products.
Paying extra for name brands that don't offer higher quality in return is nothing less than stupid. If you can use that money to instead build a $342,000 nest-egg, you absolutely should. Even if you don't need the money, maybe you should still refuse to do what the commercials tell you and donate the difference to charity. In either case, the world ends up a better place.