Practice English Speaking&Listening with: Learn essential finance terms & vocabulary - Free English lessons online

Well the US dollars have gone up and the Euros have crashed again. What a waste, right? Hello

welcome my name is Emmelda and today’s lesson is for all those, who feel struggled or who

actually have to struggle to understand or to teach someone some basic financial terms.

If you are one such person relax my child, your prayers have been answered. Because today

we will be learning basic financial vocabulary and of course I would have some people, who

would say, these words, what a big deal. I know these words. Well, you may want to stick

around as I will be showing or teaching, how some of these words are used as idioms in

day to day life, which are not related to finance, so stay tuned and let’s begin.

First word I have for you is Currency. What is a Currency? Currency is a form of money

used in various countries. Now there are six different currencies which are recognized

throughout the world. When I say recognized, I mean that if by any chance, you get hold

of that particular currency, you may wanna go to a bank and they will exchange it for

you, because they will respect that currency and give you a local form of money. So what

are the six forms of currency, which are valued or respected throughout the world or recognized

throughout the world, here they are. The first one is US Dollars popularly known as USD.

Then we have the British Pound and the symbol looks very similar to L. We have Euros from

Eurozoe. We have Japanese Yen. We have Australian Dollars and Canadian Dollars. Now these are

the six forms of currency used recognized throughout the world. Trust me and i know,

you may not believe me, but Chinese Renminbi is coming up fast and actually gaining popularity.

So maybe in couple of years Chinese Renminbi maybe, would be considered as another form

of recognized currency throughout the world. So now when we have currency, obviously I’m

talking about money that you can use to buy or sell an item. So what do you call that

particular amount of money, when you buy or sell your item? You call it price. Again price

has two different forms. The price that you pay to buy an item, that’s called cost price

and the price you give an item for, that’s called the selling price. However people use

different word, people use a different form of word for price. You may come up with a

question or you may hear this question. How much is this item worth for? Or this particular

artefact is worth a million dollar, so price sometimes is used or is replaced with the

word worth. Now if you want to use price in a non financial term, you will hear statements

like, i paid a heavy price for being his or her partner or the freedom fighters of third

world countries paid a heavy price to gain independence, by giving up their life. So

here price is used as an idiom, because they are talking about their sacrifice they have

to make to get something. Now when you do, when you have cost price, selling price that

means, you’re using money to buy and sell an item. But what’s the activity called?

The activity is called sale, now sale has various meaning. I’m sure you would see

this word sale in many shopping areas. And it would say 50% sale, 100% sale or 80% sale.

Well quite hundred percent sale is quite optimistic, yeah i know. Fifty percent or Eighty percent,

but that’s a different meaning. I’m talking about the basic definition of sale, where

it talks about the activity through which you do a transaction or that means you buy

or sell a product. Now if you remember a couple of seconds ago, i said transaction. What is

a transaction? If sale is an activity, transaction is a process. It’s a process through which

this buying and selling of services or products are take place. So transaction is a process,

whereas sale is an activity. Of course what happens in a process? You gain or lose something.

You do something. So what do you get? When you do a sale, when you buy and sell an item.

You may end up having a profit. That means if i buy an item let’s say for ten dollars,

but i sell it for twelve dollars. I made a profit. Agreed right? Different word for profit

is gain. I can say, i made a gain of twelve dollars or two dollars. But if i buy an item

for ten and sell it for eight. I made a loss of two dollars. So any time, if you’re selling

price is above your cost price. You make a profit. If you’re selling price is lower

than your cost price. You make a loss. But there are times when, you buy an item for

ten dollars and you sell an item for ten dollars. What’s that point called? It’s a breakeven

point. That means you’re not making a profit, you’re not making a loss.. It’s very common

term for business people. Why? Because there is a minimum point or there’s this cost

price that they will have set that, you know dude beyond this, if i sell it any lesser.

I’m gonna make a loss. So let’s say, i buy an item for, i buy a book for a thousand

dollars. I read it and then i say, Oh you know what i need to make some corrections,

i need to do this, i need to do that. I beautify the book, i laminate the book. Good job, probably

in thousand rupees i added, in thousand dollars i added another two hundred dollars making

the book look nice. Now i actually invested thousand two hundred dollars. So any time

if a person comes and tells me, Hey dude can you give me that book for like thousand dollars,

no. I can’t because i need a minimum of thousand two hundred dollars to at least not

have a loss, so that point is called a breakeven point. So that’s a very simple term. But

It’s very very effective, because you need to decide what’s your breakeven point or

what’s your breakeven price, when you’re transacting with your wife. No kidding, relax.

That we’ll talk about later. So moving on to the next word i have is Discount. Remember

i talked about sale and i needed told you that, oh sale i know, shopping, shopping,

i know yes. Why? Because discount means a lower price that means maybe a book or a lovely

dress costs me around eighty dollars. But it’s on discount and now it’s costing

me only sixty dollars. That means it has gone lower than the offered price. Again discount

has various words. They say it as offer price or they say as a sale price. Now how do you

use discount in a day to day life? Or not related to finance. You will hear or if you

want to say to someone that, hey don’t discount me or hey don’t discount my effort. It actually

means don’t underestimate me. So that actually the word discount means. You’re underestimating

the value of a product. But some people use it as, hey dude you know what don’t discount

me. I can do better than that. Hey dude you know what don’t discount my effort, i actually

put in a lot of effort to give you what i have. So sometimes people use discount not

related to finance and that means you are underestimating someone. Moving on to the

next word i have is Gross. Yes it’s gross and not gross. It’s gross. A lot of people

confuse this to gross, no. It’s gross, like ewww it’s gross. Its gross, gross means

in totality or total. And you will hear the term or read the term GDP. What’s GDP? GDP

is Gross Domestic Product means total products and services produced in a particular period

of time in a particular place. So that’s gross domestic product or GDP. What’s gross,

it does not have any deduction. It has all the taxes, all the charges it is involved

with and it means in total. Sometimes you will hear people saying, my gross profit was

ten thousand dollars. When they say gross profit and if you go to a shop, they say the

gross price is ten thousand dollars or your gross salary is let’s say five thousand

dollars for a month. It means that they are talking about the salary in total and they

are not talking about taxes. So that’s a killer by the way. So that is your gross,

but if it’s your gross and I’m not talking about your taxes or your deductions and if

i deduct all those things, what you will have is Net. So my dear salaried people or if you’re

going for an interview, you may wanna ask this question. Thank you for this opportunity.

What is my gross salary? They will say perhaps, well if you’re lucky they may say you’re

gross salary is ten thousand dollars. Ooh nice, i love it. But hold on for a second.

You need to ask what is my net salary? Why? Because your net salary will minus away all

your taxes and fees and any other, sorry any other deduction. And guess what for all you

know, your net salary is just two thousand dollars. Ouch, that hurt, yes that hurt . So

if you’re talking about salary, if you’re talking about profit, if you’re talking

about any business transaction. These two words are very very important because these

two words can be a deal breaker. So i hope you learnt these beautiful vocabulary, these

beautiful words and next time perhaps when you open up a financial newspaper or a magazine.

You are little more clear of what these words actually mean. Now I’m sure these words

are not those great words used in financial or you know finance MBA. But these are the

basic words you may wanna start with, I hope this lesson was very useful to you. I will

be back soon with another new lesson. Until then have fun learning English. Stay healthy

and be beautiful. Good Bye.