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Before you read the first chapter of Smart Money Decisions, kick yourself. Hard. Then do it again, just for good measure. Because no matter how hard you're able to pummel yourself, it won't match the impact you'll feel when you realize how much you overpaid for your house and your car, how badly you bungled your last job change, how you were suckered into buying an extended warranty because of a fearful scenario that a veteran salesperson planted in your head. Max H. Bazerman is a professor of negotiation at Northwestern University. Unlike many of today's investment gurus, he's applied statistical models to numerous situations in which the price of a purchase was in flux. And he has concluded, beyond any doubt, that certain tactics will almost certainly save you money, while others put the power in someone else's corner, dooming you to pay a higher price than you might have otherwise. Now, you may already know that there's a mere 10 percent chance you'll use an extended warranty, and thus pass it up; about 60 percent of purchasers are able to resist. But you may not know that you should never let a real estate agent know the highest price you are willing to pay for a property. In fact, you're best off if the agent knows only how low the seller is willing to go. With a knowledge only of the floor and no idea what the ceiling is, guess where the price winds up? Right: hovering just over the carpet. There's more to this book than negotiation, though. One chapter persuades you to keep the value of your time in mind when making a purchase. For example, if you research and shop for 20 hours in order to save $120 on a purchase, you've set the value of your time at $6 an hour. (Would you like fries with that big-screen TV?) Like the best investment books, Smart Money Decisions should have a permanent place on your shelves. You may need it only a few times a year, but you're virtually guaranteed to have more money at the end of the year. --Lou SchulerPraise for Smart Money Decisions "If you need to negotiate anything . . . from a pay increase to buying or selling a house-this book covers all the bases. [Bazerman] has taught, tested, and proven his theories with thousands of executives and MBA students."-Donald P. Jacobs, Dean, J. L. Kellogg Graduate School of Management, Northwestern University "Max Bazerman provides a fascinating, easy-to-understand look at how we make money decisions and offers sound advice that will help you increase your net worth."-Roger E. Stricker, PhD, Vice President, Intellectual Property, Lucent Technologies "By holding a mirror up to our faces, Max Bazerman allows us to see all those dumb money mistakes each of us had no idea we were making."-Bill Bresnan, Financial Talk Show Host/Author When it comes to money matters, even the smartest of us make some pretty dumb decisions. This groundbreaking book gives you the necessary tools to think through financial issues practically and avoid costly blunders. A renowned expert in the field of decision-making and negotiation, Max Bazerman illustrates both how and why we make the decisions we do. He provides the essential understanding you need to identify your own approach to finances, recognize any inherent problems in your reasoning, and determine ways to overcome them. Packed with sound advice and expert recommendations, Smart Money Decisions is essential reading for anyone who has made the same mistake twice.
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