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This is the first of what I hope will be monthly(ish) newsletters in which I share an idea or challenge from my work on integrated capital, and invite you to offer your feedback and perspective.

This is the first of what I hope will be monthly(ish) newsletters in which I share an idea or challenge from my work on integrated capital, and invite you to offer your feedback and perspective.

Language Matters

Words have connotations and implications that may or may not be consistent with their intended meanings. Sometimes the way we use a word contorts its basic definition, and sometimes we forget why we are using a particular term and not others. Through routine use of accepted terminology, these less conscious, unintentional meanings can influence our expectations and beliefs in important ways.

The language we use to describe money and investing is no different. For example, when I enter into a financial investment, I might be described in today’s vernacular as “doing a deal”. Along with its definition as a mutually agreed-upon contract or arrangement, “deal” also refers to trading and card playing, both of which evoke speculation and gambling. There is also a sense of insider-ness that can be jarring to those who are excluded. And the term does not give an impression of thoughtfulness and deliberation, which I would prefer.

Many of the terms we use in finance are misleading and imprecise, and yet there is a kind of uber-agreement that “we know what we mean”. The trouble is that “what we mean” is not necessarily what we want or aspire to. If we are to radically transform the financial system in service of well-being for all, I suspect it will be vastly easier if we use language that reflects our intentions. The power of language has always been a key aspect of major social movements. During my lifetime, I have become a Ms. rather than a Miss or Mrs. I remember the identity empowerment as I began to sign my name and introduce myself as Ms. Leslie Christian. I am me, not my marital status.  

As a part of the writing that I’m doing — and in response to requests from clients and others — I am compiling a list of common investing and financial terms, presenting the meanings that are generally attributed to them as well as the connotations that I experience, and then proposing alternatives that I believe are more reflective of reality. Below is a sample of my list.

I think each of us should use language that works for us, even if it is at the expense of “the field” or the “movement”. Insisting on common language is overrated. It’s more important to use authentic language and then engage in conversation as to what that means for each of us. I say this in recognition that all change begins with a revolution from within (to quote Gloria Steinem and many others) and that all we can really change is ourselves — and our own language!

So what language matters most to you? What do you think about the terms on my list below, and what other terms do you think ought to be examined?

Share your thoughts here! If I get enough responses I'll do a follow up post with some aggregate/anonymous feedback.


Sincerely,

Leslie


Sample Reflections on Key Financial Terms

1. Impact Investing

Connotations and Implications
The definition of “impact” includes force and causal relationships.  When we attempt to measure impact, we are implicitly assuming not only cause and effect but that results and outcomes can or should be measurable.  We ignore complexity and non-quantifiable conditions, and we attribute causality to relationships that are more likely reciprocal, thereby claiming power and control instead of mutuality.

Alternatives
I cannot count the number of times people say “impact investing” and then immediately add the caveat that they don’t really like the term.  Here are a few alternatives:

  • Inclusive Investing

  • Connected Investing

  • Systems-based Investing

  • Regenerative Investing

  • Creative Investing

  • Reciprocal Investing

  • Mutual Investing

  • Direct Investing

  • Community Investing

2. Investing 

Connotations and Implications
Finding a definition of investing is like trying to touch a cloud.  We think we know what it is, and yet upon close inspection it’s impossible to differentiate it from the air around it.  

The term “invest” has its roots in vesting and vestment having to do with garments, robes, and changing the appearance.  

Keynes spoke of investing as the output of capital with the expectation of earning income.  To paraphrase Benjamin Graham after reading his rationale for short selling, investing is anything you do to make money on money as long as you’ve researched it.

These definitions are vague and imprecise and can include even the proverbial kitchen sink.  Investing can be a one-second turnaround on a publicly traded stock or the construction of a bridge built to last hundreds of years.  Not very helpful for discerning people.

Alternatives
My suggestion is that those who engage in “investing” take the time upfront to define for themselves what they mean--beyond the vague idea of making money on money. Here are some ways to differentiate financial activities commonly lumped together as investments:

  • Primary or Secondary: Is your money going to a company or enterprise or are you buying a “used” stock or bond that is trading in the market?

  • Direct or Intermediated (for Primary Investments): How many layers of advisors and managers are there between you and the ultimate recipient of your money?

  • Public or Private: Is there a public, transparent marketplace for trading and pricing, or is it a private activity?

  • Long Term or Short Term: What is the expected holding period or life of the underlying investment?  Not the strategy or the manager, but the underlying holdings or activities (in public markets, this is referred to as turnover; in private placements, it may be referred to as “exit”)

3. Deals and Deal Flow 

Connotations and Implications
These terms are impersonal and mechanistic.  For me, there are hints of back room bargains, smoke and mirrors, and gambling.

Alternatives
We could consciously remember and refer to the people who are part of every investment activity.  At a minimum, a “deal” could be an investment or an investment opportunity.  Even better, it could be a collaborative financial arrangement. From my point of view, it’s preferable to be personal and specific.

4. Traditional

Connotations and Implications
Sounds like something that has been around a really really long time. How long exactly? Certainly longer than just the past 70-ish years. 

Alternatives
"Conventional" is a more accurate way of describing behavior of the post-World War II Western world as it relates to investing and finance.

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Still reading? If you've made it this far, please share your feedback! All responses will only be shared in aggregate and anonymous form.

From the Blog

It's About Time – Paying attention to women on matters of money and the economy.
Uniquely Himself – On the passing of Philip Seymour Hoffman.
Putting Money In Its Place – A rising choir for more integrated economic perspectives.
In Nature There Are No Plutocrats – Grappling with the social constructs that link money and power.
 

Out and About

Jun 6 Slow Money Regional Gathering.  Vancouver BC
Jun 11-13 BALLE Conference.  Oakland, CA
Aug 6-8 Leaders as Warriors for the Human SpiritCape Cod, MA
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