DEFINITION of 'Grinder'
A grinder is a slang term for a person who works in the investment industry and makes small amounts of money at a time on small investments, over and over again. Grinders are typically hard-working and highly respected investors who value every cent they make off of investments. Grinders who are investment advisors keep in regular contact with their clients.
BREAKING DOWN 'Grinder'
The term grinder, in this case, stands for a person who grinds. To grind is defined as taking a thing and breaking it down into very small pieces. This relates to financial investing as a person who puts in significant work to bring in small amounts or profits in a highly tedious and laborious, but ultimately effective, manner.
Grinder as Used to Identify an Investment Style
A grinder is an informal term used to describe an investor who specializes in small trades. While the term implies a high level of effort to achieve a satisfactory return, a grinder is rarely inclined to work on larger trades for larger yields. In contrast, a grinder focuses on making a large quantity of smaller trades, compensating for the lower returns of each individual trade by conducting them in large volumes.
Example of a Grinder
To produce a return, an investor considered a grinder may conduct 100 transactions each yielding a $50 profit. This results in a total return of $5,000. In contrast, an investor working with larger scale investments may conduct five trades each yielding a $1,000 profit. This also results in a total of $5,000. While both investors achieved the same results, the grinder did so by conducting transactions at a large volume while the other investor did not.
Inherently, the work required to complete 100 transactions is likely to be more involved, in both time and effort, than what is required to complete five. This increase in required effort also applies to the use of the term grinder regardless of the level of success the grinder experiences.
Other Uses of the Terms Grind and Grinder
The term grind can be applied to any tedious yet lengthy endeavor regardless of the industry or circumstances in which it occurs. A college student’s activity of studying at length for an exam can be considered a grind. The term also applies to anyone whose job may be monotonous or simple in nature, yet requires a large amount of effort to complete. In that case, since the large effort yields minimal returns, the position may be considered a grind.