Let me start by saying that a lack of research - what we refer to as due diligence in Economics - can be extremely costly. Considering the relative amount of time one should put into research, and the possible costs of not doing so, its a safer bet to just do it. I have personally been on the receiving end of a number of costly decisions that were the result of a lack of research, and while the consequences have never been catastrophic - going back to zero - they've still been enough to cause a pinch.
When You’re The Money Printer
See one of the things I'm realizing is that I'm extremely careless when I have money. I make some really stupid decisions whenever I'm swimming in cashflow. I overpay for stuff I very well know the price for. I buy things I don't need. Wastage. And if by any chance you happen to meet salesmen good at their craft, well lets just say 'Utagongwa mbaya!' Which is precisely what happened to me. I met some people who in hindsight I should not have given the time of day. But due to a lack of research, I needed their help, and therefore was at their mercy.
See, I don't buy clothes too often. I like to push the mileage on the clothes I own as far as I can. Part of it is that it is normally too much hustle getting the stuff that I need and are comfortable wearing. I for one have a problem where finding pants that fit me just right is so hard, that when I do, It'll two years before I find another. I'm also a simple guy, always playing it safe with a simple clean tee and jeans. These factors combined mean that a considerable amount of time passes before i even think of replenishing my wardrobe. But when the time comes, I always end up buying a whole bunch of clothes that I just give away. Give me ten shirts and I'll wear only the best four. The problem here is that I don't do my research, hence the wastage.
I recently went out to buy some clothes without first determining what I was looking for, where to find it, and the costs of the items I was interested in. This was a major mistake. Going into the market, I didn't know where to find what I was looking for. So naturally, I asked, and got directed to two guys who, in their defense, knew the best spots for what I was looking for. The problem is that I think I ended up paying double the cost of these items, with the extra on top going to their pockets. And the worst part is that part of me kind of knew, because even with the realization later, I wasn't mad - or maybe I didn't care. These guys were salesmen. They looked specifically for what I asked for, and made sure it met my expectations. They helped me find a space to try on the clothes. When I went home and found problems with some of the clothes, they helped me replace them swiftly. But I paid double the cost. Was their service worth a premium of 100%? I think not.
How To Avoid This
The wise thing to do in that situation is to say no to the middleman. A definitive no. The middleman will always raise the price to cater for his needs. And they'll come at you like nothing else if they sense money. So shut them out immediately. Make sure you are dealing with the owners of the business always. Always. Also, never ask an idle man for advice. There's nothing more dangerous than that. Make sure when you are looking into something, to ask the people directly involved in that thing. They are the best people to give you pointers and orient you in the right direction. Like the millionaire for the book 'The Millionaire Next Door,' only give your money to a millionaire.
An important aspect of research is to also study the environment very closely. It will tell you the exposures you might face better than any other signal out there. See, as I was buying the clothes, it was unnerving how people sometimes looked at me, like they saw something I wasn't. It was almost like pity, and if I was smart, I should have read it very early. But I didn't, and it only became clear later. This should have been the most obvious sign that something was amiss, but these guys are smart. They bombarded me left right and center. 'Do you want this? How about this one? This one fits you well.' This tactic ensures that you have very little time to actually think through your decisions. This is bad for you, because you will most certainly end up making a decision you regret.
Willingness To Walk Away
But far and most the biggest thing you should be able to do is to walk away when the deal doesn't seem right yo you. Walk away the moment you get second thoughts. WALK AWAY WHEN IN DOUBT! Being able to make this vital decision is the difference between losing money and saving money. The difference between a costly ten year decision and a 10 year period of peace. This is however the hardest thing to do. So learn to shut everything out, and ask yourself whether you are getting a good deal. Most of the times you'll know the answer almost immediately. Follow that first instinct always, and you'll save yourself a lot of pain in life. Do no make decisions on the basis of what is going on around, or what people are saying. Do your research, come to a conclusion on the prices you are willing to pay and the quality you expect. Use these two as levers, but the final decision is never quantitative. It is always a qualitative one. 'Is this a good deal or not?'