The definition of words is not usually something we give a lot of thought to. But when you really think about the meaning of certain words, or the words someone uses and the context in which they use them, it can be quite instructive.
Here is how I define some of the words and phrases you will hear me use frequently:
Customer - someone with whom you exchange money for goods and services.
Client - someone who is under the care and protection of another (props to Jay Abraham for this definition which I immediately made my own).
Capital Appreciation - the money you receive when you sell an asset.
Cash Flow - the money you receive as a result of owning an asset.
Financial Success - the ability to support a reasonable lifestyle, indefinitely into the future, without work or worry.
Financial Advisor - someone who looks at all the products and ideas created by others and says, "How can I sell as much of this as possible, to as many people as possible, with the minimum amount of effort."
Coach - one who instructs or trains; especially one who instructs players in the fundamentals of a competitive sport and directs team strategy (From Merriam-Webster)
Financial Success Coach - one who instructs or trains others in the knowledge, skills, behaviors and strategies necessary to achieve financial success.
Competence - the ability to do something well or effectively. (From FreeDictionary.com)
Expert - the ability to creatively combine existing ideas together in a new way that adds to or improves upon the existing level of knowledge or skills in a particular area.
Investment Method - a complete set of rules about what and when to buy and sell, which is so comprehensive that there is never a time where you do not know exactly what to do.
Snider Investment Method - a long-term approach to investing with the goal of exchanging the long-term 8 to 10% capital appreciation of the stock market for a more immediate 1% per month cash flow or yield.
The definitions of these words create obvious questions. For example, are you a customer or are you a client? Which is a better fit for your investment objective -- capital appreciation or cash flow? Do you want to work with a financial advisor or a coach? Is your advisor merely competent or an expert? Is the way you're investing today systematic or ad hoc?
Words are cool. When used precisely, they convey a lot of meaning. (Cool is not one of those very precise words, is it?) Can you think of any words to add to this list? If so, e-mail them to me at kim at kimsnider.com.
All investments, including the Snider Method, involve risk including possible loss of principal. Please see our Performance Discussion and Owner’s Manual - they are an important part of this discussion. In particular, the yield measurement we use is different than the total return measurement often used by other advisers. These documents will spell out the differences. Information on how an investment has done in the past does not tell you exactly how it will do in the future.