As any marketer knows, words have a power beyond their literal meaning. No one knows this more than political marketers, who create campaigns that usurp specific words and ensure their meaning is replaced with some sort of thought the’d like to embed in the public consciousness. This effect isn’t only thrust upon us by marketers; we use words to frame our own actions in ways that minimize any negative aspects.
One specific example of this is the use of the word “invest.” The literal definition of this word is “to put money into (a thing).” There is, however, a connotation or sense that in most cases, “invest” means “to put money into (a thing) with the hope of financial gain.” That’s a more specific, more positive sense, that people who use the word “invest” want to convey.
If you apply for a student loan, you, the lenders, and the schools rationalize going into debt by framing it as an investment in your future earning power. Future income is not the only reason people earn college degrees, but financial people want to express the benefit of an education in financial terms.
When you buy your first house, you will call it, or you likely have called it, an investment, particularly if the purchase costs more than you can handle. With the hope that house prices will rise, considering it an investment convinces others, but more importantly, convinces yourself, that the choice will pay off in the long run.
Car salespeople know this, and will often use the word “invest” when they want to make a sale. There is close to no chance of financial gain when buying a car, but they will use this word because of its positive connotations. If you feel like your making an investment rather than spending money now and committing yourself to spending more money over the next three, five, ten, or more years, you’ll be more likely to part with your money.
It’s more fascinating how we use the word ourselves, though. Rather than buying clothing, one might say “investing in a wardrobe.” There may be some logic to this, if having nicer clothes is a prerequisite to earning more money in your position. In order to advance in your career you should, among other things, dress more like those whose jobs you’d like to have. The idea of “investing in a wardrobe” is used by people who have no such ambitions. For those who do think a set of new suits will be the deciding factor for a promotion, keep in mind spending more than you can afford on clothing is not a guarantee.
There’s always a case for buying quality rather than choosing the most inexpensive option. That’s not the point here; the word “invest” is often used when people spend more than they know they should and want to convince others as well as themselves that they made the right decision from a financial standpoint.
Here are some other items people “invest” in rather than buy when they want to spend more than they should:
- “Good” furniture. Not too long ago (when considering the age of modern civilization), furniture was built to last generations. Families were less mobile and could easily pass well-built furniture to children for several cycles. It is possible to invest in furniture that could last over a hundred years, suiting the needs of future generations, but that’s unlikely. Most furniture built today will be replaced within the initial owner’s lifetime. The concept of “investing in furniture” no longer applies.
- Electronics (computers, home theater systems, etc.) Buying the latest and greatest electronics may be a way to invest in your continued relevance within your social circle; if you want to hold the Superbowl parties, you’ll need the biggest, highest-definition, most-dimensional television. That’s as far as you can take investing when a product’s life cycle is only a few years before becoming hopelessly obsolete.
- Home business scams. Be wary of any product that promises you the ability to earn money on your own — but only if you buy an introductory home business kit, e-book, or some other limited-value item. This will always be framed as an investment but few people earn enough to cover their initial outlay.
See past the marketing and be aware of any self-delusions. Words are powerful, and using the word “invest” instead of “buy” often masks a dangerous financial choice.
Published or updated October 18, 2010.