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Learn essential finance terms & vocabulary - Free English lessons online - YouTube
Channel: Learn English with Let's Talk - Free English Lessons
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Well the US dollars have gone up and the Euros
have crashed again. What a waste, right? Hello
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welcome my name is Emmelda and today鈥檚 lesson
is for all those, who feel struggled or who
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actually have to struggle to understand or
to teach someone some basic financial terms.
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If you are one such person relax my child,
your prayers have been answered. Because today
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we will be learning basic financial vocabulary
and of course I would have some people, who
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would say, these words, what a big deal. I
know these words. Well, you may want to stick
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around as I will be showing or teaching, how
some of these words are used as idioms in
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day to day life, which are not related to
finance, so stay tuned and let鈥檚 begin.
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First word I have for you is Currency. What
is a Currency? Currency is a form of money
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used in various countries. Now there are six
different currencies which are recognized
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throughout the world. When I say recognized,
I mean that if by any chance, you get hold
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of that particular currency, you may wanna
go to a bank and they will exchange it for
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you, because they will respect that currency
and give you a local form of money. So what
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are the six forms of currency, which are valued
or respected throughout the world or recognized
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throughout the world, here they are. The first
one is US Dollars popularly known as USD.
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Then we have the British Pound and the symbol
looks very similar to L. We have Euros from
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Eurozoe. We have Japanese Yen. We have Australian
Dollars and Canadian Dollars. Now these are
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the six forms of currency used recognized
throughout the world. Trust me and i know,
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you may not believe me, but Chinese Renminbi
is coming up fast and actually gaining popularity.
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So maybe in couple of years Chinese Renminbi
maybe, would be considered as another form
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of recognized currency throughout the world.
So now when we have currency, obviously I鈥檓
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talking about money that you can use to buy
or sell an item. So what do you call that
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particular amount of money, when you buy or
sell your item? You call it price. Again price
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has two different forms. The price that you
pay to buy an item, that鈥檚 called cost price
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and the price you give an item for, that鈥檚
called the selling price. However people use
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different word, people use a different form
of word for price. You may come up with a
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question or you may hear this question. How
much is this item worth for? Or this particular
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artefact is worth a million dollar, so price
sometimes is used or is replaced with the
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word worth. Now if you want to use price in
a non financial term, you will hear statements
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like, i paid a heavy price for being his or
her partner or the freedom fighters of third
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world countries paid a heavy price to gain
independence, by giving up their life. So
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here price is used as an idiom, because they
are talking about their sacrifice they have
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to make to get something. Now when you do,
when you have cost price, selling price that
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means, you鈥檙e using money to buy and sell
an item. But what鈥檚 the activity called?
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The activity is called sale, now sale has
various meaning. I鈥檓 sure you would see
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this word sale in many shopping areas. And
it would say 50% sale, 100% sale or 80% sale.
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Well quite hundred percent sale is quite optimistic,
yeah i know. Fifty percent or Eighty percent,
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but that鈥檚 a different meaning. I鈥檓 talking
about the basic definition of sale, where
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it talks about the activity through which
you do a transaction or that means you buy
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or sell a product. Now if you remember a couple
of seconds ago, i said transaction. What is
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a transaction? If sale is an activity, transaction
is a process. It鈥檚 a process through which
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this buying and selling of services or products
are take place. So transaction is a process,
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whereas sale is an activity. Of course what
happens in a process? You gain or lose something.
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You do something. So what do you get? When
you do a sale, when you buy and sell an item.
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You may end up having a profit. That means
if i buy an item let鈥檚 say for ten dollars,
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but i sell it for twelve dollars. I made a
profit. Agreed right? Different word for profit
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is gain. I can say, i made a gain of twelve
dollars or two dollars. But if i buy an item
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for ten and sell it for eight. I made a loss
of two dollars. So any time, if you鈥檙e selling
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price is above your cost price. You make a
profit. If you鈥檙e selling price is lower
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than your cost price. You make a loss. But
there are times when, you buy an item for
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ten dollars and you sell an item for ten dollars.
What鈥檚 that point called? It鈥檚 a breakeven
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point. That means you鈥檙e not making a profit,
you鈥檙e not making a loss.. It鈥檚 very common
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term for business people. Why? Because there
is a minimum point or there鈥檚 this cost
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price that they will have set that, you know
dude beyond this, if i sell it any lesser.
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I鈥檓 gonna make a loss. So let鈥檚 say, i
buy an item for, i buy a book for a thousand
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dollars. I read it and then i say, Oh you
know what i need to make some corrections,
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i need to do this, i need to do that. I beautify
the book, i laminate the book. Good job, probably
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in thousand rupees i added, in thousand dollars
i added another two hundred dollars making
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the book look nice. Now i actually invested
thousand two hundred dollars. So any time
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if a person comes and tells me, Hey dude can
you give me that book for like thousand dollars,
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no. I can鈥檛 because i need a minimum of
thousand two hundred dollars to at least not
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have a loss, so that point is called a breakeven
point. So that鈥檚 a very simple term. But
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It鈥檚 very very effective, because you need
to decide what鈥檚 your breakeven point or
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what鈥檚 your breakeven price, when you鈥檙e
transacting with your wife. No kidding, relax.
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That we鈥檒l talk about later. So moving on
to the next word i have is Discount. Remember
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i talked about sale and i needed told you
that, oh sale i know, shopping, shopping,
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i know yes. Why? Because discount means a
lower price that means maybe a book or a lovely
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dress costs me around eighty dollars. But
it鈥檚 on discount and now it鈥檚 costing
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me only sixty dollars. That means it has gone
lower than the offered price. Again discount
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has various words. They say it as offer price
or they say as a sale price. Now how do you
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use discount in a day to day life? Or not
related to finance. You will hear or if you
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want to say to someone that, hey don鈥檛 discount
me or hey don鈥檛 discount my effort. It actually
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means don鈥檛 underestimate me. So that actually
the word discount means. You鈥檙e underestimating
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the value of a product. But some people use
it as, hey dude you know what don鈥檛 discount
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me. I can do better than that. Hey dude you
know what don鈥檛 discount my effort, i actually
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put in a lot of effort to give you what i
have. So sometimes people use discount not
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related to finance and that means you are
underestimating someone. Moving on to the
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next word i have is Gross. Yes it鈥檚 gross
and not gross. It鈥檚 gross. A lot of people
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confuse this to gross, no. It鈥檚 gross, like
ewww it鈥檚 gross. Its gross, gross means
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in totality or total. And you will hear the
term or read the term GDP. What鈥檚 GDP? GDP
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is Gross Domestic Product means total products
and services produced in a particular period
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of time in a particular place. So that鈥檚
gross domestic product or GDP. What鈥檚 gross,
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it does not have any deduction. It has all
the taxes, all the charges it is involved
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with and it means in total. Sometimes you
will hear people saying, my gross profit was
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ten thousand dollars. When they say gross
profit and if you go to a shop, they say the
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gross price is ten thousand dollars or your
gross salary is let鈥檚 say five thousand
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dollars for a month. It means that they are
talking about the salary in total and they
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are not talking about taxes. So that鈥檚 a
killer by the way. So that is your gross,
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but if it鈥檚 your gross and I鈥檓 not talking
about your taxes or your deductions and if
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i deduct all those things, what you will have
is Net. So my dear salaried people or if you鈥檙e
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going for an interview, you may wanna ask
this question. Thank you for this opportunity.
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What is my gross salary? They will say perhaps,
well if you鈥檙e lucky they may say you鈥檙e
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gross salary is ten thousand dollars. Ooh
nice, i love it. But hold on for a second.
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You need to ask what is my net salary? Why?
Because your net salary will minus away all
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your taxes and fees and any other, sorry any
other deduction. And guess what for all you
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know, your net salary is just two thousand
dollars. Ouch, that hurt, yes that hurt . So
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if you鈥檙e talking about salary, if you鈥檙e
talking about profit, if you鈥檙e talking
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about any business transaction. These two
words are very very important because these
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two words can be a deal breaker. So i hope
you learnt these beautiful vocabulary, these
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beautiful words and next time perhaps when
you open up a financial newspaper or a magazine.
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You are little more clear of what these words
actually mean. Now I鈥檓 sure these words
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are not those great words used in financial
or you know finance MBA. But these are the
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basic words you may wanna start with, I hope
this lesson was very useful to you. I will
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be back soon with another new lesson. Until
then have fun learning English. Stay healthy
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and be beautiful. Good Bye.
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