Idioms are used in personal finance for the same reason they are used in life, to accentuate meaning and draw attention to the nature of things, often within figurative phrases. There are several idioms in personal finance, many of which highlight some of the key principles of managing money effectively as well as hinting at the nature of some financial transactions. Financial idioms also express the creative side of a topic that is very often thought of as dry and bottom line in outlook.
• Why the "dead cat bounced"
In the investing world, there are a lot of idioms that summarize investment scenarios into quick and fast meaning. These phrases serve the useful function of getting to the point both when time is a critical factor, and when there's work to be done managing money. Dead cat bounce is one such phrase that captures the meaning of a financial event that would otherwise take longer to express. A dead cat bounce is when the price of a financial security, or group of securities collapses, and then rises briefly before declining again.
• Which animal is better, the bear or the bull?
Bear and bull markets are part of the business cycle, or so it is believed in convention. The animal that precedes it represents each type of market. In the case of a bear market the business cycle has contracted and liquid assets dry up. This could also be a bad time to "catch a falling knife", as some business may be on their way to insolvency in a bear market. Bull markets are the opposite of bear markets, and demonstrate 'bullish' behavior. Bulls are somewhat aggressive, charge forward and do so in volatile movements. The stock market and other financial markets are thought to behave similarly when an economy is improving.
• Chickens lay eggs, but they don't always hatch
If you've never wondered why money put away is referred to as a "nest egg" it is a figurative way of referring to growing money based on a practice that is believed to encourage hens to lay eggs. Nest egg can also be thought of in another way, specifically the care with which the hen protects the egg; keeping it warm, making sure it develops into something more, watching out for predators as best she can and so on. Thus the process of growing and protecting one's money is a somewhat close to the heart matter in so far as the metaphor works.
Another egg idiom having to do with chickens is "don't count your chickens before they hatch". With variable interest rates, unstable economics, inflation, and investments that don't live up to their expectations, there's not always a guarantee that money planned on will be there despite relative financial security. For example, an insurance company might go bankrupt, an investment might turn sour because of an unforeseen event or a job loss might cause one to use up savings. Keeping in mind the chickens haven't hatched yet might add a healthy does of perspective to a financial plan.
• Greed is good
The phrase is trite, and the implication somewhat lacking in benevolence, but when it comes to managing your money "Greed is good", as Gordon Gecko stated in the 1987 Oliver Stone movie 'Wall Street'. The reason why the phrase is even worth consideration is because commerce is such an integral part of the creation, distribution, and retention of wealth. Greed is both an aspect of human nature and economical thought, after all who is 100% not greedy?
• How there is both "Honor and No honor among thieves"
The phrase "No honor among thieves" is sometimes confused with "honor among thieves". Both these idioms speak volumes or at least pamphlets to the nature of finance. Regardless of which is the original phrase, the two have emerged, both with unique meaning. The phrase no honor among thieves, is a reference to the nature of those who seek "ill gotten gains", or in a wider interpretation, other people's money. In doing so, honor may be lost or replaced with the interest in gain.
Honor among thieves refers to those who seek gain in conjunction with one another. In such case the honor among thieves is there, but lost with everyone else in which case there is both honor among thieves and no honor among thieves depending on who the reference of honor regards. So next time you're wondering where the money you thought was safe went, it might be a good idea to recall these two phrases.
• Why the "dead cat bounced"
In the investing world, there are a lot of idioms that summarize investment scenarios into quick and fast meaning. These phrases serve the useful function of getting to the point both when time is a critical factor, and when there's work to be done managing money. Dead cat bounce is one such phrase that captures the meaning of a financial event that would otherwise take longer to express. A dead cat bounce is when the price of a financial security, or group of securities collapses, and then rises briefly before declining again.
• Which animal is better, the bear or the bull?
Bear and bull markets are part of the business cycle, or so it is believed in convention. The animal that precedes it represents each type of market. In the case of a bear market the business cycle has contracted and liquid assets dry up. This could also be a bad time to "catch a falling knife", as some business may be on their way to insolvency in a bear market. Bull markets are the opposite of bear markets, and demonstrate 'bullish' behavior. Bulls are somewhat aggressive, charge forward and do so in volatile movements. The stock market and other financial markets are thought to behave similarly when an economy is improving.
• Chickens lay eggs, but they don't always hatch
If you've never wondered why money put away is referred to as a "nest egg" it is a figurative way of referring to growing money based on a practice that is believed to encourage hens to lay eggs. Nest egg can also be thought of in another way, specifically the care with which the hen protects the egg; keeping it warm, making sure it develops into something more, watching out for predators as best she can and so on. Thus the process of growing and protecting one's money is a somewhat close to the heart matter in so far as the metaphor works.
Another egg idiom having to do with chickens is "don't count your chickens before they hatch". With variable interest rates, unstable economics, inflation, and investments that don't live up to their expectations, there's not always a guarantee that money planned on will be there despite relative financial security. For example, an insurance company might go bankrupt, an investment might turn sour because of an unforeseen event or a job loss might cause one to use up savings. Keeping in mind the chickens haven't hatched yet might add a healthy does of perspective to a financial plan.
• Greed is good
The phrase is trite, and the implication somewhat lacking in benevolence, but when it comes to managing your money "Greed is good", as Gordon Gecko stated in the 1987 Oliver Stone movie 'Wall Street'. The reason why the phrase is even worth consideration is because commerce is such an integral part of the creation, distribution, and retention of wealth. Greed is both an aspect of human nature and economical thought, after all who is 100% not greedy?
• How there is both "Honor and No honor among thieves"
The phrase "No honor among thieves" is sometimes confused with "honor among thieves". Both these idioms speak volumes or at least pamphlets to the nature of finance. Regardless of which is the original phrase, the two have emerged, both with unique meaning. The phrase no honor among thieves, is a reference to the nature of those who seek "ill gotten gains", or in a wider interpretation, other people's money. In doing so, honor may be lost or replaced with the interest in gain.
Honor among thieves refers to those who seek gain in conjunction with one another. In such case the honor among thieves is there, but lost with everyone else in which case there is both honor among thieves and no honor among thieves depending on who the reference of honor regards. So next time you're wondering where the money you thought was safe went, it might be a good idea to recall these two phrases.
Source: http://www.investopedia.com
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