The Money Terms Need To Understand Monetary Language
Suppose you have money. You don't know how to invest and how to manage it. It would be very difficult to deal with in future. Someday you are going to earn money so you should understand the general terms that are widely used dealing with the money matters.
The importance of understanding the money terms can be compared with the importance of day to day words that are used while speaking any language.
There are the following terms that you would be using while dealing with the money matters.
Asset and Liability:
An asset can be a car, cash land, bank balance, etc. These things have some value. How to determine the value of the asset? Well, the answer is very simple, the value can be measured in terms of money.
The liability is also valued in terms of money. It is with us in the form of debt. Liability is just opposite to what we have learnt in the asset.
Bonds:
Bond is the money that you grant in most of the cases to the government because the government need money to build roads, bridge etc. In return, you get some extra money along with the money you invested in government projects.
Budget:
Budget is a plan that we make when we want to spend our money. It is generally monthly quarterly or annually. In the houses, it is generally monthly.
After budgeting, you have to make sure that you are left with some savings.
In budgeting, we make the list of things that need to be bought. Of-course the budget doesn't allow to buy all the things that we need. It is based on priorities. The things that are not urgent can be bought later.
Savings Account:
Saving account is a bank account for the money you want to keep for future goals. Up to $250,000 of the money in a savings account is insured by the U.S. government. This means it will be safe if the bank goes out of business.
After budgeting the remaining amount remains in saving the account. Saving account is a bank account we can withdraw our money whenever we need it. The money remains safe in saving the account.
Stocks:
A company can be broken down into thousands and millions of pieces. A single piece is called share or stock. A person can buy the company stocks and become a stockholder. If the company grows the cost of the stock increases. If you sell them at a higher price, you make money.
Investment:
If you buy an asset (land, stock, etc.) to sell at a higher price over some time. The process is called investment.
Taxes:
A small amount of money whenever you buy something a small amount of money goes to the government in the form of tax. The government also take money from people in the form of income tax. The money taken from the public is used for the public only. The road, park, street light, bridges etc, in public places are made from the public fund.
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