Planning with proverbs

Breaking down financial concepts so they are easily understood is often the hallmark of successful advisors. For clients with a limited command of the English language, this can be difficult. A finance professor recognized for outstanding teaching recommends using proverbs as a way to bridge the communication gap.

Ernest Biktimirov, an associate professor of finance at Brock University in St. Catharines, has been awarded Ontario’s Leadership in Faculty Teaching, partly due to his success in using proverbs to introduce financial concepts. He has written research articles on how he was able to use proverbs to enhance his students’ understanding of financial concepts.

Originally from Uzbekistan, Biktimirov says he was turned on to using English proverbs to teach Canadian students after reading the phrase “Nothing ventured, nothing gained” in an English-language newspaper article.

“If you want a higher return, you should be looking at higher risk; there is no other way around this. I realized this simple proverb was able to communicate a main idea of finance so nicely and so easily,” he says. “I bought a couple of books on English proverbs, and I started to learn these proverbs. The more I read, the more I realized how many proverbs could be used to explain financial concepts.”

Math is universally understood, but communicating the underlying concepts can be difficult. So, Biktimirov says, he compiled a list of 36 proverbs he could use to introduce the key logical reasoning behind fundamental financial concepts. He says the tactic has met with great success. His using common proverbs resulted in students being able to understand the financial concepts because they related them to previous knowledge. As well, the proverbs’ simplicity lent themselves to being remembered.

For example, when he teaches about portfolio diversification, he uses the well-known “Don’t put all your eggs in one basket.”

“Often the advisor will say we have to create a diversified portfolio. If the client is not familiar with financial terminology, their response will likely be ‘Diversified what?’ The financial advisor can easily respond that we shouldn’t put all the eggs in one basket,” he explains.

When Biktimirov noticed that increasing proportions of his classes were international students from China who had difficulty integrating into the classroom particularly because of language barriers, he wondered if he could use the same technique to bridge an even wider communication gap.

“The English proverbs were so successful with the English-speaking students, but I couldn’t use them for Chinese students. So I thought, why don’t I try to use Chinese proverbs to explain financial concepts to students,” he says. “I bought several dictionaries of Chinese proverbs. I found there were Chinese equivalents for almost all of the proverbs I use to teach my English students.”

According to Biktimirov, proverbs are an integral part of Chinese languages and culture, so he found that the reaction from Chinese students was even more profound. The proverbs created a common frame of reference, and as a result, his Chinese students became much more comfortable in the classroom setting and more engaged in classroom discussions of material.

“The impact was actually greater with the Chinese students because they didn’t expect an English-speaking instructor to know Chinese proverbs,” he explains.

Now when he introduces financial concepts in his lectures, he displays one of his original 36 English proverbs, as well as the Chinese proverb equivalent in both English and original Mandarin characters.

For example, when Biktimirov explains the dangers of cyclical returns, he uses the English proverb “The bigger they are, the harder they fall” and a translation of a well-known Chinese proverb that says, “Hasty climbers have sudden falls.”

Biktimirov says there are numerous examples of familiar Chinese proverbs available in books with English translations that financial planners can use to facilitate communication with Chinese immigrant clients.

For instance, when explaining how greater risk equals greater reward, Biktimirov uses the English proverb “Nothing ventured, nothing gained” and a translation of the Chinese proverb “One who is not willing to risk his child will not catch the wolf” or “If one does not dare to enter the tiger’s lair, how can one obtain tiger cubs?”

Conversely, when explaining risk tolerance, he’ll use a Chinese proverb — “If you are afraid of tigers and wolves, don’t live in the mountains” — which is similar to the English saying “If you can’t stand the heat, get out of the kitchen.”

On explaining the need for different investment vehicles, he uses the Chinese proverb “Different locks must be opened with different keys.”

Biktimirov also notes there are some Chinese proverbs that are essentially the same as English ones, such as “Don’t count your chickens before they hatch” or “One man’s loss is another man’s gain.”

Filed by Mark Noble, Advisor.ca, mark.noble@advisor.rogers.com

(12/05/07)

Mark Noble