Once upon a time, a particular government desired to introduce the potato to its population hoping the cheap and abundant starch would help feed many malnourished. The population didn’t like it.
After several unsuccessful schemes, this particular government found a strategy that worked. This government began to place signs in the potato fields stating the potatoes were only for the royalty of the nation.
Immediately, potatoes began to be missing from the fields. After a period the government announced that the general population would be allowed to consume potatoes, but only for a short while.
This new strategy also worked wonders, and soon the potato was a staple of the nation’s diet.
This story demonstrates two powerful marketing techniques. If you can make people believe that only a select few can have something or make people think that something is fleeting, they will rush to buy.
These two techniques are used well in the financial services industry, and you would do well to spot them when they are tested on you.
Sales associates in the financial services industry love to tell you that rich people use a particular product or strategy.
Telling someone they can have access to something only the rich are doing fills a mind with all sorts of nonsensical ideas.
Many in the general populace think that rich people know financial secrets that have enabled their wealth creation. I have spent much time studying the wealthy, and many know little about finance and investing.
Some high net worth individuals have either inherited money or have become wealthy by learning and specializing in providing a valuable service extremely well. Don’t be baited into an investment with the idea that you have tapped into a secret only a select few know.
We also see this strategy used by telling people that certain successful investors are using their product or strategy. I have heard the name Warren Buffett invoked many times to sell a product that Mr. Buffett most certainly does not use.
Many investments are marketed by telling hopeful investors that intelligent people have discovered a trick that no one else knows. I have seen marketers throw around names like MIT and Harvard hoping to fool a few people into thinking they have an edge.
Making buyers believe that something will only be available for a short period is another useful trick that is usually unfounded.
Some opportunities can be fleeting, but that is usually market-driven and not product-driven.
If you feel pressure to act immediately on a soon-to-expire particular investment opportunity, you may want to wave it goodbye.
I learned the potato story in a college marketing class, presented as a truthful story that occurred in a Russian town.
I could never find proof the story was true, but I believe the story illustrates well the types of manipulation of which we should be aware.