Chinese Idioms and Proverbs That May Help with Making Financial Decisions
Every Culture Has a View Towards Money
Welcome to my mid-week post, which is inspired by
‘s recent piece: Bizarre French Expressions: Monthly Recap.One phrase sticks in my mind:
“Vouloir le beurre, l'argent du beurre et le cul de la crémière”
Literal translation: To want the butter, the butter’s money, and the ass of the dairymaid.
Meaning: To want everything without giving anything in return. Sort of similar to the British saying ‘to have your cake and eat it too.’
Example: “Sir, I do believe that after Brexit, we will have the butter, the butter’s money and the ass of the dairymaid.”
Origins: 19th century peasant expression. The butter is a recurrent theme in French common sense sayings.
This phrase was prevalent in the French media during Brexit, lampooning the Brits who wanted to exit the EU and not pay into the Union but still wanted the benefits of a single market.
The phrase shows the prominence of cake among the English and butter for the French.
This reminds me of the many Cantonese (Hong Kong ) idioms/Chinese proverbs I grew up with.
Since this newsletter is mainly about investment and finance, I will share five phrases in my culture about their attitude towards money and how I think they may apply to making (better) investment decisions.
I will translate the phrase (literally), followed by some interpretations.
I hope you find the background stories enlightening!
🤝 I am also curious if you have an equivalent saying in your culture. Please share. 🤝
1—Ghost Covering One’s Eyes (鬼遮眼)
Interpretation: To fail to see something or fall into danger often when the problem is evident.
Origin: It has a mystical origin: in superstition, someone out of luck can be easy prey and be possessed by a ghost, which creates obstacles or illusions in her vision, harming her in the face of imminent dangers.
In investing: Sometimes, we become so convinced we are right about a company or position that we fail to heed all the warning signals and think about what we would do if we were wrong. Other times, we know something is fundamentally wrong with the investment, but we still hang on to it with the false hope things will become better. Hope is not a strategy!
We can always change our minds about investments. As economist and investor John Maynard Keynes said, “When the facts change, I change my mind.”
2—Throwing Money Into Salty Sea (抌錢落鹹水海)
Interpretation: To waste money on something useless or squander money away, like pouring money down the drain. It can generally mean a useless effort, not limited to money matters.
Origin: This Hong Kong idiom originated from an anti-gambling TV commercial by the Hong Kong government in 2005 and has since been frequently used in daily conversation.
In investing: Someone’s objective in investing can be speculation. While we always advise our clients to invest in a mix of globally diversified assets, some investors may want to speculate on something new that can potentially make a lot of money. Nothing’s wrong, but do not risk all your savings on something speculative. Understand if you are investing in a fad, know your capacity, and invest only the portion you can afford to lose.
3—Where Would Such a Big Toad Hopping Around The Street (冇咁大隻蛤乸隨街跳)
Interpretation: It signifies something too good to be true — buyer beware.
Origin: Cantonese people love to use humour and lively phrases to infer or express meaning, and we take pride in our cuisine. Toad leg (when properly prepared) is delicious and is a delicacy in Southern China; frogs are also popular in French gastronomy. Can you find something so precious everywhere? The answer is no.
In investing: Remember Madoff’s Ponzi Scheme, whose investments comprised mainly blue-chip stocks raking a consistent 10% to 20% return year-in-year-out even when the S&P500 was down? If something is too good a deal in investing, it is too good to be true.
“Free Lunch” appeared in American saloons in the 19th century when customers purchased a drink and got a sumptuous free meal. Nothing is truly free in life. While things appear free, there is always some cost paid by someone.
Warren Buffett famously said, “The real cost of any purchase isn’t the actual dollar cost. Rather, it’s the opportunity cost—the value of the investment you didn’t make because you used your funds to buy something else.”
Holding an asset means opportunity loss for another asset, so have a fresh look at your portfolios regularly and ask:
Shall I hold these investment positions today? Whatever happened yesterday was sunk costs.
Are the current positions in line with my long-term goals?
How are the positions working together, and should the weight of each position be adjusted?
In a world where inflation is a two-way risk while cash produces competitive returns to other assets, careful asset selection becomes more pertinent.
4—If You Have Money, You Can Get a Ghost* to Push Mill (有錢使得鬼推磨)
Interpretation: Money can make a person do anything, similar to the English phrase: “money makes the mare go” or “money talks”.
The ghost in the phrase can also refer to a miserable or wicked person who can be bribed by money to do anything.
Origin: The phrase appeared in an ancient Chinese text from the Jin Dynasty (266-420) in the book “Qianshenlun” (錢神論, Debate on the Spirit of Cash) where the author exposed the corruption and vulgarity of commoners.
In investing: Investment frauds — promises to make quick money are common and persistent in finance. They are found in Ponzi schemes, high-yield investment programs, structured notes, promissory notes, internet and social media fraud, phishing emails, etc.
Scammers play with people’s psychology to make quick bucks without work or due diligence.
Ask yourself:
Is the investment product regulated or offered only offshore?
Does the investment have a prospectus?
Who are the investment management company and the people behind it - do they have a management team, legitimate website, and location?
Is the product offering high returns but no risks (big red flag!)
5—An Interval of Time Is Worth an Ounce of Gold, but Gold Cannot Buy Time (一寸光陰一寸金， 寸金難買寸光陰)
Interpretation: Time is gold, but gold can’t buy time. Time is precious, so seize the moments and don’t squander it.
Origin: The first sentence “An interval of time is worth an ounce of gold” is a famous Chinese phrase that came from the Chinese Tang dynasty poet Wang Zhenhai (王貞白) in his writing White Hart Grottoes. White Hart is a beautiful green and serene place, which is perfect for scholars to read and study. Poet Wang was so entrenched in his studies he did not notice Spring had gone and Summer had arrived. Later, others added the second sentence, which conveys similar meanings as time is precious.
In investing: Albert Einstein may have said that “compound interest is the most powerful force in the universe”. Compound interest is interest on interest - the same applies to return on investment and dividends reinvesting. If you make 10% this year on your initial principal, your Year 2 beginning balance will become 110% of your initial principal from which to grow your investments.
My favourite quotes from Warren Buffett and Charlie Munger on compounding are:
“My wealth has come from a combination of living in America, some lucky genes, and compound interest.”
~ Warren Buffett
“The first rule of compounding: Never interrupt it unnecessarily. The elementary mathematics of compound interest is one of the most important models there is on earth.”
~ Charlie Munger
Here’s a powerful chart from The Path showing how much money you need to save and invest each year to become a millionaire by 65 for different ages, assuming a 7% return annually (in the US, state retirement plans have a ~7% investment return assumption).
Closing Thoughts
Family traditions and cultures heavily influence your money attitudes and discipline. Before investing, reflect upon your roots and beliefs and how they may inform your investment behaviour.
With curiosity, experiments, and due diligence work (putting your head into the water and swimming in the sea of markets), your investment philosophy will evolve substantially over time.
I hope you enjoy this post. Do let me know how your culture views money 💰!
*Ghosts reference: you may wonder why the Chinese often reference ghosts in their sayings. It is related to the Buddhist traditions and Chinese superstitions about ghosts and demons so ghost has a negative connotation.
You may get a kick out of this video about ghosts in Chinese slang 👻!!
Thanks for sharing!!! Wise words indeed.
一应俱全