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They seem so small and harmless: words. Yet words can create great beauty and wonderful works while at the same time destroy relationships, ruin happiness, disrupt wealth, even bring down empires. Words are a means to communicate. The accuracy of our words makes the difference between building great things and fantastic disasters. NASA’s Mars Climate Orbiter failed in 1999 because engineers did not convert English measurements to metric. A word left unsaid wasted $125 million and countless hours of work.
Words are just as important in your personal and business life. A miscommunicated word with an investment advisor or when setting up an investment account can have catastrophic consequences. Imagine forgetting to add a beneficiary. A miscommunication could have dire consequences for your heirs. An awesome passive income opportunity is lost when the wrong words are used.
I am writing this after the Father’s Day weekend. My interest in ‘everything’ caused me to take on too many projects recently so I was tired from the long hours. Saturday night my oldest daughter mentioned she needed help replacing her bike tire. It sat with me wrong. I was so tired I heard something totally different. I took it as an accusation I was not working enough when I was wore out from work. I was grumpy the whole weekend. Only on Monday did I start talking out my feelings and join the family again.
Successful relationships survive because they know when to back off when the wrong button is pushed. Saturday night the wrong button was pushed at the wrong time and it changed my mood. It seems little things like that can do the greatest damage. Instead of backing away from the comment, Mrs. Accountant defended our daughter. It was not meant as an insult by any means. She only pointed out it was not an insinuation I was not working enough.
Sometimes words have a minor effect. Other times a simple misunderstood word can cause great pain. Wars start over a wrong or misunderstood word. My Father’s Day weekend was not happy for me. I felt disrespected. Words do that. A wrong or unsaid word can destroy a space craft or injure a relationship. Only decades of deposits to the emotional savings bank of our marriage allowed us to put the events behind us relatively unscathed.
Relationships grow stronger with the right words. Physical acts, enjoyable as they are, do not create a better relationship. The consistent reminder of “I love you” goes much further. A hug and a kiss with the words enhance the power of the words. How many relationships have died because all parties involved assumed the other person knew they loved them? Even if you love, you need to express it in words.
Back in the 1990s I had a securities license. The stock market was on a holy terror. Investor expectations were sky high. A young man set an appointment with me. When he arrived we talked in the conference room so I could ‘know my client’ before making any recommendations.
One of the first things the young man said to me was that he expected a return well above 20%. He said 20% is a gimmie any idiot can achieve. He wanted to know if I was the guy who could provide returns greater than 20%. I shook his hand and showed him the door. It was not long before the stock market reverted to the mean. His words ended a relationship before it began, a relationship that would have preserved massive amounts of his wealth.
The right words can build a team atmosphere. The young man above never allowed the relationship to begin. His expectations were unrealistic. The words he used in his self-talk created a false confidence in his mind. He was unwilling to listen to reality. Missed words can lead to painful results. An intelligent plan for his investment portfolio would have allowed him reasonable returns even in a difficult investing climate.
Business transactions frequently involve legal counsel. A landlord rents to a tenant with a lease, spelling out the terms and expectations. Attorneys are careful with the words they use for good reason. A misspoken or written word can cause years of pain in a legal dispute.
Buying or selling a business also requires careful choice of words. I find my greatest challenges when I can’t find the right words to communicate what I am thinking to my team of employees. Over the years clients and employees have been lost because of words. An employee expecting a certain level of compensation may quit after all the training is completed because words were not used effectively. A client may feel unsatisfied when the wrong words are used.
Words unsaid are as important and what is said. The silence between the words are the most powerful of all. I speak at about 268 words a minute with wind gusts up to 904. It is easy for me to forget the most powerful part of verbal communication. The silence between words can enhance and amplify the meaning. We all know someone who talks in an endless drone. They cannot convey their thoughts effectively because they forget to include the silence as part of their communication.
Working with clients, spending time with family, enjoying the company of friends are all acts requiring effective words. By listening we improve the value of our own words. I know how hard this is to do. All too often we anticipate rather than listen. We are planning our next words rather than listening to those speaking to and around us. It is okay for a brief period of silence to exist between the exchanges of conversation.
Investing, Early Retirement, and Financial Independence
Can you imagine the bedlam if you invested based upon faulty information? Learning the value of words and the nomenclature of the industry are required before you make investing decisions. The word ‘option’ means something different in investing than it does in a grocery store. The word ‘index’ as meant by the list of names, places, etcetera in alphabetical order at the back of a book as opposed to an index mutual fund are important distinctions.
Many investment advisors try to dazzle their clients with fancy words. I think this is bad practice. When I work with clients I take a complex subject, tax law, and try to make it understandable by normal people. (Tax professionals are not normal people. The code is not normal either.) If you do not understand an investment you should walk away. Better to miss an opportunity than have your head handed to you. Losses happen easy enough the way it is. Why encourage disaster?
Early retirement (or retirement at any age) and financial independence requires understanding the words in multiple investments over time. You will need to understand your 401(k) (or similar retirement plan) at work. IRAs and bank accounts require understanding before opening the account. Mutual funds, index funds, money markets, individual stocks, bonds, and on and on the list goes. Understanding the words will determine your success.
When money is involved there are always people trying to separate you from yours. It is easy to lie while telling the truth. Vague words are meant to confuse or lead you to a false conclusion on an investment. I am not an annuity fan, but over the years I have recommended them a few times. Annuities are not bad in and of themselves. Annuities are usually used incorrectly. Too many people own annuities as an investment vehicle when other better options exist. The words used to sell annuities are a prime example of how words are used to confuse the facts. When the sales guy tells you the guaranteed rate of return on an annuity, go to the back of the policy and run the numbers through a financial calculator. Now you know why I don’t recommend annuities that often. The numbers don’t add up. If you dig deep enough you can figure out why the numbers are different. I think an annuity should give a straight answer to what the rate of return will be. But you sell more annuities when you dazzle them with your bullshit. Your net worth will not be as impressed, however.
Words are more powerful than we expect. The wrong word can turn Father’s Day a bit gloomy; words can get a landlord sued; words can cause a businessman to buy a bad product or service; words can help you reach retirement at an early age or turn retirement into a nightmare. Choose those sounds that come out of your mouth or from your pen wisely. The spaces between the words on this page are as important as the silence between the words in your speech. Be mindful. Words can hurt; they can also heal. When you use a wrong word, back-peddle fast. Regroup. Find the right word. How you view the world and your relationship to it will be enhanced by your mindful choice of words.
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