financial jargon

How to Deal with Financial Jargon

The value of admitting what you don’t know

Much of the confusion around investing has to do with the words the experts, semi-experts, so-called experts, and non-experts use. Most of it is jargon.

Sometimes I think people use all that jargon to confuse us on purpose, either to make themselves sound smarter or to confuse us into buying something we don’t want or really need.

More often than not, we succumb to jargon because we don’t want people to know we don’t know what they’re talking about! Instead of asking them to explain things, we pretend to understand because we don’t want to look stupid. Stop pretending because that’s when you look stupid.

The reality is that the financial world is filled with jargon. It’s a reality that is never going away. So the key is to know how to deal with it so that you can move on and be successful.

When it comes to jargon, the three rules I’ve learned to follow are:

1. Increase your vocabulary every day

Don’t be intimidated, or lazy, when a word is used you don’t understand. If you’re having a conversation and an unfamiliar word is used, ask the person who used it what it means, or write it down and then later go look it up. If you’re reading or watching TV and unknown terminology creeps in, look up the words in a dictionary.

2. Ask questions

Always be curious. Even when you have some knowledge on a subject, keep asking questions. You can always learn more. Two things happen when you ask an expert or semi-expert questions:

  1. You build instant rapport with that person because he or she sees that you really are interested in the subject.
  2. You learn more.

And both of those are immensely valuable.

3. Look stupid whenever possible

Don’t be afraid to say, “I don’t know.” The fastest way to impede your learning is to pretend to know all the answers—to act as if you know what someone is talking about when you don’t. Being afraid to look stupid only makes you stupid.

I truly think one of the advantages we women have today is that most of us have not been educated in the world of money, finance, and investing. So we’re not afraid to say, “I don’t know.” We haven’t been expected to know. We’re not afraid to ask questions. We’re not afraid to admit the fact that even though we appear to be Superwoman ten times over, we actually do not have all the answers.

Don’t allow jargon and confusing words be intimidating or become an obstacle for you. They are only words; every word has a definition that can be looked up.

Instead of being overwhelmed, be excited each time you hear a new financial term. With each new word you learn, you become a much smarter and better investor.

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Original publish date: July 10, 2014