The Hindu Business Line : Money comes to those who can speak its language

OXFORD is good, among other things, at dictionaries. And David Bach loves money. So, when they both join, you get a wealthy lexicon of 1001 Financial Words You Need to Know (Oxford University Press, www.oup.com). It is `the ultimate guide to the language of business and finance', as the subtitle puts it, and the author would urge you in the intro, "Money has its own language, and the sooner you learn the basic vocabulary, the better your chance to live and finish rich." Ah, I see, you can't wait to start.

Don't shy away. Who doesn't want more money? Problem is not with that desire, but with ignorance. Sadly, "most people don't like to admit it when they don't understand something." With money, when you go headlong into something without comprehending the fine print, you end up broke. "When you know the words, you can ask better questions," and business programmes on the telly would make sense.

Don't forget the business newspapers, such as the one you are holding now, where reports are couched in the lingo of money.

"Learning about money is fun once you realise that the only thing that made it complicated was a few words you didn't know but now understand completely," entices Bach.

Starting with ABM (automated banking machine, in Canada) and ending with zero-coupon bond (that is, a bond issued at a deep discount to its face value but pays no interest), the book is a handy dictionary you can flip through when idly surfing TV channels, or when a CPE lecture is making you drowsy.

More than that, Bach provides insight, sprinkled throughout the book. For instance, after defining ADR as American Depository Receipt — a route trodden by some of the big companies of India — the author advises the US investors: "Instead of buying shares in foreign-based companies through an overseas market, Americans can use their domestic broker or discount brokerage to buy ADRs."

This avoids currency conversion, additional fees, unfamiliar tax conventions, and cumbersome or unreliable procedures, he would point out.

Between B and C, there is a short chapter titled, "How to determine if you have a credit card problem?" Let Bach do the handholding, starting with getting all your credit cards and statements and putting them on the dining room table. After helping you inventorise the situation, he asks point blank questions such as: Do you have too many cards? Do you feel uncomfortable or uncertain? Are you tired of worrying about bills each month and wondering how you will pay them? Isn't time to go on a credit-card diet?

Similarly, there is discussion on how compounding works, facts about insurance, how to buy a home, and how to plan for retirement. If you were to lay hands on the book, it would be a mistake not to read the list of "top ten money mistakes people make."

Here is a sampler from the `horrendous' and `shocking' top ten: Becoming an investor before you are organised and have specific goals in mind, waiting to buy a house, putting off savings for retirement, speculating with your investment money, paying too much in taxes, buying an investment that is illiquid, and giving it up.

Towards the end of the book there is another top ten — of principles for hiring a financial adviser. Last in that list is this advice: "When you hire a financial adviser, you don't give him the keys to your financial car and say, `Drive me wherever you want.' You have to provide the direction. Your adviser is simply a guide. It's your money, and you are the decision maker."

Also, don't delegate to your deputy the task of reading this book.

BooksOfAccount@TheHindu.co.in