FOOL'S EYE VIEW
The Devil's Dictionary Of Money

By Cliff D'Arcy
April 8, 2004

American author and journalist Ambrose Bierce (1842-1914?) is probably best known for his brilliant satirical masterpiece The Devil's Dictionary, in which he provides decent proof that, by and large, people are greedy, mean and selfish!

Although a mere scribbler such as myself could hardly hope to improve on this work of art, here's my fiendish dictionary of finance! (Please note that the definitions in italics are from Bierce.)

Annual management charge, noun. The yearly fee extracted from investors by fund managers. Also known as the 'Ferrari factor'.

APR, noun, abbreviation of Annual Percentage Rate. Finance's most flexible figure: it is horribly low on savings documents, but astronomically high on loan agreements.

Asterisk, noun. A cunning device employed by financial advertisers to indicate that there is lots of nasty stuff hidden away in the small print.

Average, noun. All three kinds of average (mean, median and mode) can be used to disguise the truth.

Balance sheet, noun. What a company owns and owes. Thanks to too little of the former and too much of the latter, many are highly unbalanced.

Bank manager, noun. Someone who will lend an umbrella when it's sunny, only to demand its return when it rains. Don't bank on a helping hand from this person when the chips are down.

Bear, noun. A person who is pessimistic about the outlook for the stock market - and is often in for a hairy time.

Bill, noun. An item destined to distress everyone (except ducks). Usually more painful for the recipient than the sender - unless it goes unpaid.

Bond, noun. In theory, a relatively safe investment. However, think 'bondage' and you're often on the right lines, painwise.

Broker, noun. A person who sells financial products. Although brokers rarely go broke, the same cannot be said of their customers.

Budget, noun. About 110% of one's income. See Mr Micawber.

Bull, noun. A person who is optimistic about the outlook for shares - and, as a result, talks a lot of bull about them.

Capital, noun. What rich people call their cash. To everyone else, the big letter at the start of a sentence.

Car insurance, noun. A legal requirement for UK drivers. Unfortunately, many policyholders also mistakenly believe that they must buy their cover from the same insurer throughout their lives. Be faithful to your spouse, not your motor insurer.

Children's savings account, noun. A device designed to pick the pockets of parents, grandparents and other well-meaning relatives.

City, The, noun. The devil's playground.

Commerce, noun. A kind of transaction in which A plunders from B the goods of C, and for compensation B picks the pocket of D of money belonging to E.

Consumer, noun. A person who is eaten alive by greedy financial companies.

Credit, noun. Bogus word for debt.

Credit card, noun. An innocent-looking piece of plastic that many over-spenders use to cut their throats. A WMD (Weapon of Money Destruction).

Critical illness, noun. What one might develop when one sees how high the premiums are for this sickness protection.

Current account, noun. An account into which one makes a single monthly deposit, followed by hundreds of withdrawals. So named because of the electric shock one feels when viewing one's bank charges.

Debt, noun. An ingenious substitute for the chain and whip of the slave driver.

Economy, noun. Purchasing the barrel of whiskey that you do not need for the price of the cow that you cannot afford.

Endowment, noun. Once thought of as a sure-fire way to paying off one's mortgage and picking up a tidy lump sum. Now the only thing with which one is likely to be endowed is a shortfall. See mis-selling.

Estate agent, noun. One of Lucifer's lesser demons. S/he usually lies on your behalf when you're selling and lies even more outrageously when you're buying.

Finance, noun. The art or science of managing revenues and resources for the best advantage of the manager.

FTSE 100, noun (pronounced 'Footsie'). An index that tracks the value of the UK's one hundred largest listed companies. As well as tracking, the Footsie occasionally gives investors a kicking.

Future, noun. That period of time in which our affairs prosper, our friends are true and our happiness is assured.

Gross, adjective. A payment before deductions. As Errol Flynn once remarked, "My problem is reconciling my gross habits with my net income."

Guaranteed, adjective. A word used to coax cautious investors into losing money. One who believes in guarantees is guaranteed disappointment.

Hedge fund, noun. An unfortunate couple recently lost their home following a lengthy legal dispute with a neighbour about a hedge between their properties. Hedge funds help investors to lose their homes more gradually.

Home insurance, noun. A device designed to protect against fire, which nevertheless burns though plenty of policyholders' money.

House-price index, noun. In theory, a measure used to track the health of the nation's housing. In practice, the greatest work of fiction since War and Peace. The tape measure around the housing bubble.

Income, noun. The natural and rational gauge and measure of respectability, the commonly accepted standards being artificial, arbitrary and fallacious.

Inflation, noun. An excuse to put prices up, thus boosting next year's inflation figure.

Insurance, noun. An ingenious modern game of chance in which the player is permitted to enjoy the comfortable conviction that he is beating the man who keeps the table.

Interest, noun. Something that starts off small, but compounds to become a big benefit (problem) over time. When it comes to saving, the lower the interest rate, the less interested we become.

Intestacy, noun. Dying without a Will. The cost of sorting out this mess will make beneficiaries wish they'd been kicked in the testacies instead.

Investment, noun. Placing money at arm's length in the vain hope that it won't slip out of one's fingers.

ISA, noun, abbreviation of Individual Savings Account. A rather attractive little tax-efficient savings product. However, many people in Britain believe that an ISA is an energy drink.

Junk mail, noun. The entire output of the financial services industry.

Legacy, noun. A gift from one who is legging it out of this vale of tears.

Life insurance, noun. A policy designed to expire about two weeks before its owner.

Liquidity, adjective. A measure of how easy it is to trade a particular share. Alternatively, what happens to investors' bladders when they receive their yearly investment statements.

Listed company, noun. A company in which one can invest. Not to be confused with a listing company, i.e. one in need of shoring up.

Loan, noun. A product designed to enrich banks and almost - but not quite - bankrupt borrowers. The higher the interest rate, the lower we feel.

Money, noun. A blessing that is of no advantage to us excepting when we part with it. An evidence of culture and a passport to polite society. Supportable property.

Monthly saver, noun. A person who mistakenly believes that saving £10 a month will one day lead to untold wealth.

Mortgage, noun. A millstone or burden. From the French words for 'death' and 'promise'.

Net profit, noun. A fisherman's income.

Owe, verb. To have (and to hold) a debt. The word formerly signified not indebtedness, but possession; it meant "own," and in the minds of debtors there is still a good deal of confusion between assets and liabilities.

OEIC, noun, abbreviation of Open-Ended Investment Company. Pronounced oik and, more than likely, managed by an oik who drives a Ferrari (see Annual Management Charge).

Overdraft, noun. Something that gives borrowers goosebumps, as in being 'over a draught'.

Payment protection, noun. In theory, protection against death, accident, sickness and unemployment. In practice, a protection racket worthy of Al Capone himself.

Pension, noun. A small B&B in France, which costs more than most workers will be able to afford when they retire.

Percentage, noun. A marvellous way to bamboozle customers in order to make them part with more money. Why use 'a sixth' when '16.67%' sounds so much more impressive?

PEP, noun, abbreviation of Personal Equity Plan. A wrapper used to shelter investments from tax, which loses a lot of its pep during stock-market falls.

Portfolio, noun. A jumble of investments created as an alternative to losing all one's money backing a single horse.

Price, noun. Value, plus a reasonable sum for the wear and tear of conscience in demanding it.

Rainy-day money, noun. A sum considerably less than one needs when an unforeseen monsoon arrives.

Redemption penalty, noun. A savage beating dished out by mortgage lenders to borrowers who decide to pay off their home loans early.

Rich, adjective. A description frequently applied to certain foods, but rarely to oneself. A measure of wealth.

Risk, noun. Something investors believe they have under control, right up until the moment something goes unexpectedly - and drastically - wrong.

Savings, noun. A small pot of money amassed by the cautious in the vain hope that it will keep the wolves from their doors.

Share, noun. Part-ownership of a company. Ill-informed investors usually share more of the losses than the gains.

Short, noun. A bet that a share price will fall. Get it wrong and you'll be left short of cash.

SIPP, noun. An amount smaller than a gulpp. Also a Self-Invested Personal Pension.

Spread bet, noun. A device to spread the money of greedy or unwary punters across the balance sheets of shrewder bookmakers.

Stamp duty, noun. A tax paid by buyers of shares or property. Investors stamp and scream when they see how much duty is taken out of their pockets.

Stock market, noun. One of the rooms in the world's largest casino.

Taxman, noun. A representative of the Inland Revenue, often depicted wearing a bowler hat, although a highwayman's mask might be more appropriate.

Term, noun. The length of time that savers agree to tie up their money - usually about one month beyond the date that they most need it.

TESSA, noun, abbreviation of Tax-Exempt Special Savings Account. Despite her Sloane Ranger-style name, TESSA was a bit dull and, sadly, she passed away on 5 April 2004. Her son, TOISA (pronunciation as in Toys 'R' Us) is made of tougher stuff.

Tip, noun. Something that is on the tip of every stock-market commentator's tongue, but should be at the bottom of every investor's list.

Travel insurance, noun. Travel cover, the cost of which deters many travellers from leaving home altogether.

Unit trust, noun. A collective investment. An investor would have to be a complete 'unit' to trust the managers of these funds.

Up to, adjective. Considerably more than you'll actually get.

Volatility, adjective. Swings in the price of shares - and of investors' pulses.

Wall Street, noun. A thoroughfare where millions of investors have gone 'to the wall'.

Wealth, noun. Several times more money than one possesses.

Yield, verb. What customers do after several hours of sales blather from financial advisers.

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