You would have met people that try to use the longest and most complicated sentences to make them sound superior in your company, while not wishing to check whether you understand the flow of the conversation or not.
When it comes to important financial matters, some people try to impress you with a constant stream of complex financial jargons.
The good news is that you don’t have to be worried, and here’s why.
Learning about financial jargon isn’t difficult. If you think back to the first day when you started to learn English grammar, you may not have known the difference between verbs, nouns and infinitives.
Those strange names, from the past, became much easier to understand as you were taught and educated by your teachers. Financial jargon is the same.
Across the course of your lifetime you will be involved in a number of investment openings. You might be purchasing your first home; saving funds for your children’s education; seeking an opportunity to begin a business or looking towards your pension planning.
You will need to begin your investment journey by locating a professional financial adviser that can guide you through your first investment involvements. A friend or relative who has invested successfully is a good introduction to an advisor. Alternatively, your bank is likely to have an expert or be able to recommend one.
Your initial target is to find out about all of the products that are available in the marketplace and after close assessment, decide which are available to you and then which are right for your investment planning at that time.
You will need to give your financial advisor sufficient information about your current and future circumstances, so they can adapt to a plan that will help you choose the best investments for your needs.
Over time, these needs may well change and once you have built up an education and knowledge about investment planning, you will be in a position to know which products and services will serve you best.
There is a great deal of difference between saving money to buy land over the next two years against planning your retirement which might be 20, 30 or 40 years away. One will need a short-term focus and the other a much longer viewpoint.
You should always ask your financial advisor whether they are receiving commission from a company they are introducing to you or whether you must pay a management fee for their knowledge and investment advice. This will affect, or lower, the overall return on your investment and is a very important question to ask at an early stage.
There is absolutely no reason to be afraid of financial jargons. Every industry has its own jargon that people use every day.
You will no doubt confuse your financial advisor when you talk about your own industry and use general jargon when you perhaps don’t even realise you are using it.
The more knowledgeable you become, the better your chances are to make a higher return on your investments, so don’t miss the opportunity to gain the knowledge.
Samuel Rosenberg is the founder and CEO of Axcel Finance Ltd., the leading regional microfinance institution. Share your thoughts and email your questions to [email protected]