Words Have Meaning

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I live in Orange County. I love it here. We have our own way of speaking on the West Coast. Everyone from out of state instantly knows where I’m from when I say, “Take THE 101 North.” Southern Californians love to put the in front of all our freeways. What is “Southern California” to the world is “SoCal” here. We don’t have traffic, we have SigAlerts. What is wicked awesome in Boston is hella dank in L.A. In the South, they might say, “Bless your heart.” On the West Coast we don’t bless anything. People from the industry (Hollywood) take a swig of jo, look at you like you are whack, put you on blast with a grip of four letter words, and accompany their tirade with specific body motions. Fa-sho.

In our last comparison, we see two forms of communication. West Coast communication is express and direct. There is nothing to be misunderstood. Southern communication is considerate and implied. My heart has been repeatedly blessed in the South and I always assumed it to be a term of endearment. My brother informed me that it was an acceptable way of informing me that I was on the short end of the intelligence stick.

The problem comes when we use implied language with express intent. As an advisor, I would argue that my largest obstacle in a new relationship may be aligning my words and my clients’ understanding of my words. It isn’t enough for you to understand my words, our understanding of the words’ meaning must align.

Snack Shack means “small concrete oven with a broken fan and no air conditioning.”

For instance, I give you Little League. The express language states that this is a small league. The implied understanding communicates the league is not only little in numbers, but also the players’ stature is trifling. After participating in Little League, parents come to realization that Little League has its own lexicon. That lexicon is dripping with implied communication. Parent meeting means, “Coach/team parent talks to parents.” Volunteers means, “People compelled, against their will, to work for 4 hours at the Snack Shack.” Snack Shack means “small concrete oven with a broken fan and no air conditioning.” Once a season means, “Twice a season,” (but only when associated with Snack Shack or Volunteers). Donation means, “Blackmail.” If Little League talked expressly, announcements would read, “After the game today, your coach will talk for 30 minutes about the league’s intention to blackmail you into buying raffle tickets you don’t want and compel you to work in a small, un-conditioned concrete box for four hours … twice.” Participation might wane. In lieu of the express language (and in an effort to boost participation) the league states, “Parent meeting after today’s game to discuss your child’s participation in Little League.”

Similarly, when you go to your investment advisor, the advisor might say you are a moderate investor. Conversely, you may tell the advisor that you are a moderate investor. Does your understanding of moderate investor align with the advisor’s definition of moderate investor? If you don’t know, they probably don’t.

“After participating in little league, parents come to realization that little league has its own lexicon.”
I’ve had many families come through my door and tell me they are moderate only to find out they are truly aggressive or conservative. Worse yet, they come through the door, tell me they are moderate, and have a portfolio that is aggressive or all in cash. Consider using a tool like Riskalyze that substitutes numbers for words. The amount of risk you are willing to take is associated with a statistical profile. The more specific you can get with that information, the better chance you have maintaining your investments through a down market.

Words have meanings, but it is important to note that we don’t all attach the same meaning to the same words. Get your communication lined up or you may be trippin’ out in a hella small concrete oven in July, serving boiled dirty dogs to sketchy kids and dusty parents, while making change for a dub.

No one wants that.

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