Bad Word Choice #3: "Investor"

TL;DR

Being an investor means having a long-term commitment to your investments and treating it like supporting a sports team.

Transcript

and here's number three directly related to one and two but it's the word investor the word investor it is a beautiful word it is a a deep word it is frequently misused in common parlance at least by my way of thinking because then it let's talk about the actual etymology of the word so the word comes from the Latin invest Erie and I never did take... Read More

Key Insights

• 🔑 The word "investor" originates from the Latin word meaning "to put on the clothes of," signifying a deep commitment and long-term perspective.
• 🫨 Investing is akin to supporting a sports team, where you wear their shirt and remain loyal during both good and bad times.
• 🍉 Investing is a long-term endeavor, and using the term "investor" for short-term actions is a misuse of the word.
• 🍉 The word "investor" should be distinguished from "trader," with the former focused on long-term commitment and the latter on short-term gains.
• 💄 Everyone is an investor, as every financial decision involves making choices and allocating resources.
• 🫰 Even choosing to invest in an index fund is a self-directed decision, highlighting that all investment decisions are ultimately personal choices.
• 😚 Delaying investments results in an opportunity cost as future net worth erodes due to the lost potential of long-term capital growth.

Questions & Answers

Q: What is the origin of the word "investor"?

The word "investor" comes from the Latin word "invest Erie," which meant to put on the clothes of. It denotes a deep commitment and long-term perspective.

Q: How should we view our investments?

Investments should be seen as supporting a team. Just like wearing the shirt of your favorite sports team, you remain committed even during challenging times.

Q: What distinguishes an investor from a trader?

An investor has a long-term perspective and stays committed to their investments, similar to a dedicated sports fan. In contrast, a trader is characterized by short-term behavior and a focus on momentum stocks.

Q: Is everyone an investor?

Yes, everyone is an investor, not just those who listen to podcasts or actively engage in investing. Every financial decision we make involves investing, even if it's not long-term in nature.

Summary & Key Takeaways

• The word "investor" comes from the Latin word "invest Erie," which meant to put on the clothes of. It implies a deep commitment and long-term perspective.

• Investing should be seen as supporting a team, where you wear their shirt and remain committed even during challenging times.

• Investing is a long-term commitment, and any use of the word "investor" that does not align with a long-term perspective is a misuse of the term.