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.