3 April 2017

Martin Hawes: Teach yourself to speak money

Money has its own language. Few beyond the cognoscenti can speak "money" and, in my view, this is a major reason for people being turned off finance.

Every field requires its own technical language, but you should never let yourself be excluded from a field because of vocabulary.

You should be suspicious of people who want to intimidate with jargon – if they cannot explain something simply, you should run a mile.

Regrettably, "money" is not an easy language to learn. Like English, it is a language where there are many synonyms. Those who are fluent can use different words for the same thing. 

You see this most clearly in investment. Shares are often called stocks, bonds may be called fixed interest or stocks, bank deposits are called cash and property may be called real estate or real assets.

In fact, each different asset class has a word or term that can be used as a substitute according to which country you may live in, or often enough, the speaker's whim at the time.

Sometimes, the language difficulties arise because there is an important concept that is being described.

For example, you would not want to manage your own share portfolio if you did not know what a price:earnings ratio was; nor could you become a successful property investor if you did not understand the idea of a capitalisation rate. 

Both of these ideas are critical to understand and are not simply bits of jargon designed to obfuscate – the concepts may take some learning.

Martin Hawes is a director of Lifetime Retirement Income

Martin Hawes is a director of Lifetime Retirement Income

However, the biggest part of being fluent in "money" is learning the vocabulary.

Unless you get into some of the highly academic stuff, most of the things you need to know to be a successful investor are reasonably simple ideas and not beyond the understanding of the average person who is determined to learn. The problem is, they often hide behind difficult, confusing vocabulary.

The first thing you should decide to do is immerse yourself in the language. Make sure you read or listen to something on the subject each day 

Second, never let a financial term go by without knowing what it means. Look up anything you do not understand (keep Google close at hand). Write down terms as you learn them and build your own glossary.

Third, break it down into small bits and learn the parts of "money" that affect you at the time. For example, if you are buying a house you need to know all you can about home loans and mortgaging. Learn about these and forget the stuff that does not affect you. The time will come to learn about investing, trusts, tax and the other things.

We are all involved in "money" all of the time. You will, therefore, get plenty of practice with the language and eventually speak it like a native. Remember that learning the vocabulary may be the best investment you ever make. 


Martin Hawes is a director of Lifetime Retirement Income.

Martin is an Authorised Financial Adviser and a Disclosure Statements is available from Martin Hawes on request and free of charge at

This article was originally published on on 26 March 2017. Read the original article here.

Martin Hawes is a director of Lifetime Retirement Income

Martin Hawes is a director of Lifetime Retirement Income

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