One of the more interesting tasks I have is, when reading a bunch of articles on financial topics (yes, I really do that, I don’t just make this all up myself) is the constant use of financial jargon (which a lot of folk (including me) are not even sure what the terms means). It’s natural for folks who talk about certain topics to slip back into using jargon, in High Tech the use of TLAs are rampant (Three Letter Acronyms), but many folks either don’t know what the Acronym means, or worse have the wrong understanding of the TLA (sometimes they even jump to FLAs).
Financial writers at times assume a more sophisticated readership, or worse, they are just showing off by using “big words or phrases”. The over use of catch phrases is another topic that drives me spare, and while I realize they can be useful reminders, it doesn’t mean I can’t feel annoyed (as well) reading them.
What do I mean?
- Pay yourself first, yes a wonderful sentiment, I fully comprehend it, but now every time I read this I almost scream, who gets paid before me? I get the money THEN I pay everyone else. The point being made is that you should put your savings first and then pay everyone else, but reading, “pay yourself first” causes me to twitch involuntarily these days. I might end up in jail if I “paid myself first” because the Tax Man wants his money first!
- Good debt, kindly just intercourse off, debt is like the news, it is neither good nor bad, it is, you decide whether it is good or not (by the way, DEBT is BAD)
- Dollar Cost Averaging, this chestnut has been around since I was in short pants, but what does it really mean. One definition I found said:
a system of buying securities at regular intervals, using the same amount of cash for each purchase, over a considerable period of time regardless of the prevailing prices of the securities, resulting in having bought the total at an average cost.
So really what is being said that if you just keep buying at regular intervals, you’ll be OK. Many times this is used as a response to folks who want to “time the market” or “beat the market”, just buy it at regular intervals, and you should be OK.
- Ethical Investing , while the sentiment is lovely, it is about as likely as finding a Filet Mignon on sale at a Vegan restaurant. I must admit I am quite jaded in my old age, but Ethical investing just seems so improbable. It sounds as unbelievable as Church Going Atheists (IMHO).
- Beating the Market, this one astounds me that experts keep using it, but luckily it helps me, so maybe I should stop complaining. All of these experts throwing money around like drunken sailors in a strip club, helps keep the indexes growing, and strangely they don’t beat the market (and if they do, it is for a very short period of time). You know who really beat the market well? Bernie Madoff, he did a great job of beating the market (I hear).
Feel free to call me a hypocrite on this, I know I have used this type of jargon before, but I will try to reform and stop using this Financial Verbal diarrhea.