Mind your language

The language we use is not only responsible for shaping our perception of the world; instead, it too has a significant impact on our financial habits.

Nonnie Canham CFP®

Nonnie Canham CFP®

Private Wealth Manager

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Mind your language

If you watched The Matrix, you know that there is no reality - there is only perception. What we don’t all know, however, is the fact that the language we use shapes our perception of the world as well our behaviour/actions in reaction to that perception.

Tomáš Garrigue Masaryk once said: "As many languages you know, as many times you are a human being".

I’m Ndebele. That’s the first language I spoke. I then learnt English in preschool. In high school, I learnt French. Due to an interest in a boy, I learnt a smattering of Tswana. While I studied law, I learnt enough Latin to do well in my exams. I learnt that many English words are rooted in French and Latin ("He who knows no foreign language, knows nothing of his own." – Johann Wolfgang von Goethe). Because of the people I’ve worked with, I also learnt enough Afrikaans to participate in meetings, and I’m now fluent in Xhosa. With this broad exposure to languages, I knew I had a communication advantage but recently found it interesting to learn that it also gave me a "thinking" advantage.

...we approach financial and economic issues differently depending on the language we use.

Edward Sapir and Benjamin Lee Whorf introduced the theory of linguistic relativism. According to their theory, language, apart from being a communication tool, also determines our perception of reality and even influences our behaviour. Simply put, the theory states that the way people think of the world is influenced directly by the language that they use to talk about that world.

In a Ted Talk I happened across on LinkedIn, Professor Lera Boroditsky (a cognitive scientist) spoke of the Kuuk Thaayorre people. In their language, instead of referring to left and right, everything is referred to in terms of the cardinal directions on a compass. They refer to "your south-west leg", or they would ask you to "move slightly to the north-north-east". As a result, they have a strong sense of direction and stay oriented better than humans were thought capable of, purely because their language has trained them to be.

Language influences our perception ("Learning another language is not only learning different words for the same things, but learning another way to think about things."– Flora Lewis). Where in one language it would be normal to say, "I broke my arm"; in another language that sentence would be absurd, as it would imply that a person actively and intentionally took part in breaking their own arm. The correct construction would be, "my arm broke". In the second language, the difference is the removal of perceived blame and the guilt that comes with it.

In French, I was introduced to the concept of objects having a gender. I had to learn the French word for a table and also learn whether it was a boy or a girl. I was fascinated. A study was conducted where both German and Spanish speakers were asked to describe a bridge. The Spanish speakers referred to the bridge as tall, powerful, and long (in Spanish, a bridge is male). The German speakers used adjectives such as slender, elegant, and pretty (in German, a bridge is female). The gender assigned to the bridge in the speaker’s language affected how they saw it.

Bearing all this in mind, how is your language affecting your finances?

Keith Chen, an expert in behavioural economics, discovered that we approach financial and economic issues differently depending on the language we use. In German, it is possible to speak of the future in the present tense: "It rains tomorrow". A language like English demands a future marker such as "will" or "is going to", thereby making the sentence "It will rain tomorrow". English forces its speakers to habitually divide time between the present and future. Chen found that languages that are specific about time (past, present, future) can make the future seem too far away to plan for. People who speak these languages will less naturally put aside their surplus for a distant future that may never come, especially since saving involves current costs and sacrifice for future rewards. He says that being required to speak distinctly about future events leads speakers to disassociate the future from the present, leading them to take fewer future-oriented actions. Mr Chen says that people who speak "timeless" languages, like Mandarin or German, are more likely to save. He found that this was true on many levels: from an individual’s propensity to save, to long-term effects on retirement wealth, and in national savings rates (where the countries in which those languages are spoken were managing to save 6% per annum more of their GDP). Their languages naturally equate the present and future, making the future appear closer and thus easier to willingly sacrifice for (whether it’s through saving for retirement, exercising or abstaining from smoking).

Speakers of those languages that do not require a strong distinction between the present and the future were found to be 31% more likely to have saved in any given year, had accumulated 39% more wealth by retirement, were 24% less likely to smoke, were 29% more likely to be physically active, and were 13% less likely to be medically obese.

Where does that leave us - the ones reading this article in English right now?

All is not lost. While speakers of languages with weak future-time references have a natural advantage when it comes to successfully saving for the future, all skills can be acquired or learnt - inherent disadvantages notwithstanding. In the same way that behavioural finance makes us aware of our investment biases so that we can manage them rather than be limited by them, understanding the effect our language has on how we unwittingly perceive the world does not need to be an impediment. Instead, it can be another lens through which we weigh our decision making and, in that way, become more "rational" beings, and possibly better investors.

As we overcome the propensity for instant gratification and start to be pointedly more future-oriented in our actions, I paraphrase Langston Hughes: We, too, can sing "savings".

Speak to an NFB advisor to get you firmly on the right path and heading in the right direction.



This article was written exclusively for Finweek Magazine. It was published in the
8 October 2021 edition. You can access the original print coverage in English and in Afrikaans.

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