Super Cheap Mistake Airline Fares!

Delta apparently posted some "mistake" fares that a few lucky people snatched up.

Delta is in the news today. Apparently, they posted some mistake fares. Some round trip fares that normally cost about $400 were as cheap as $25. But was it really a mistake?

I remembered another airline doing this, just a few months ago. I looked it up, and yeah, United did the very same thing back in September.

Both airlines have promised to honor the "mistake" fares that were offered. That sure is nice of them, isn't it? Or maybe it isn't. Color me skeptical, but I don't believe these fares were a mistake at all.

Airlines surely have a rigorous process for setting their prices. It would be incredibly easy to, at the very least, set reasonable limits for fares that could not be crossed. Maybe they could make a mistake by dropping a $400 fare to $300. But to $25? I doubt it.

More likely, they are simply offering this gimmick fare to get some free publicity. Well, it's not totally free, but you get the idea. Let a few people get a cheap ticket, and for a few thousand dollars, you get a headline on every newspaper and web site. Set a limit to the number of tickets that can be sold at the gimmick price, and your liability is very limited.

Plus, because they are honoring the fares, they come across as the good guy. 

And because word of mouth spreads so fast about the great deal, tens or even hundreds of thousands of consumers navigate to travel web sites in search of the deal (which they won't find). How much is all that web traffic worth? How many consumers, in search of the gimmick deal, will buy a ticket anyway?

Hmm...millions of eyeballs and some goodwill with the public. Seems like a bargain for Delta - but not consumers.

Marginal Existence

What is a marginal existence? And what does it mean to your financial well being?

I've been thinking about starting this blog for a while. A few years ago I started to get more organized with my finances. Although I've read many other blogs and articles regarding consumer finance, I felt like I was a passive observer, instead of an active contributor. 

Whether or not anybody will read my blog, or appreciate my "contributions" is another matter. But it will still be valuable to me to organize my thoughts and improve my finances. Hopefully, somebody else can benefit from my experiences, the same way I have benefited from others'. And so we begin...

As I was thinking of a name for my blog, the term "marginal existence" popped into my head. What exactly is a marginal existence? It can mean a few things.

A marginal existence could be a life that has little meaning or value. I think we can all identify with this feeling. I sometimes feel my life is meaningless and insignificant. What impact can I have on society? What will be my legacy? For the most part, I think we all feel like we fall short in this regard.

Another definition for marginal existence could be "just eking by." Financially we may just be surviving, not thriving. We may have a lot of obligations (debt) to service, and we may feel like we are running on a hamster wheel - expending a lot of energy but going nowhere.

Despite these common definitions, I would like to offer up another connotation for marginal existence. Let's start with the word "marginal" and go from there.

A margin is an edge or a border. It is a limit. In business, a margin is the difference between the cost of a good or service and the price at which it is sold. The margin is where businesses make their profits. When you have no margin, you are on an unsustainable path. You may sometimes hear that a business is a "marginal business," implying that there is fierce competition in that particular industry, and margins (and profits) are small. Throw the fixed costs in, and it's no wonder so many businesses fail.

And I find increasingly that this is true for my own life. My "business" is marginal. No, I don't actually own a business. What I mean is, my finances feel like a marginal business. 

There are a lot of fixed costs in life. For example, food has a certain fixed cost component. Yes, you could eat Ramen noodles for every meal, but that would not be part of a healthy lifestyle. Nor would it be enjoyable. If you are going to eat normal, healthy food, you will pay for it.

Another example would be housing. If you look around at available housing in your area, you will find that there is a market for housing (renting or buying), and you cannot escape that reality. If a 2 bedroom apartment typically goes for $1000/mo, you won't find one for much less than that. It is largely a fixed cost.

When you calculate all of your expenses, you realize that most of the money you earn is already spoken for. It's gone. Your fixed costs are high. Just like a business, you have to watch your variable costs closely if you want a healthy bottom line.

A marginal existence is the reality in which we all live. We are constrained by the margins in our own finances. We cannot escape this reality. We have to learn to live within the margins if we want to build wealth and become financially independent.

The focus of this blog will be how to navigate those margins, cutting costs and improving financial freedom.