Financial and Business Terms You Must Understand Before You’re 10 Years Old

I want to believe that this article is not for you. Though no one will read it anyways since only 13 years and above are legally allowed to browse through content on this website.

The idea is to show you some things might have missed several years ago and how you can place your feet on track. In addition, learn to teach them to your younger siblings.

Okay, let me rename the topic. Here are some financial and business terms you must understand today to survive in the harsh financial market.

1. Entrepreneur

A person who organizes and operates a business venture and assumes much of the associated risk. They are usually the richest ones in the world.

2. Entrepreneurship

This is the art or science of innovation and risk-taking for profit in business. One key thing is innovation. Entrepreneurship involves being creative and exploring better options for doing things.

3. Business

This is a specific commercial enterprise, venture or establishment to make a profit. A typical example is a lawn mowing business where you help people to mow their lawns for a specific amount of money.

4. Money

Money is many things. It is first a currency or hard cash maintained by the government. This makes it a generally accepted means of exchange and measure of value.
Money can also be a legally or socially binding conceptual contract of entitlement to wealth, void of intrinsic value, payable for all debts and taxes, and regulated in supply. In simple terms, the worth of a person or thing.

5. Cash

Money is not usually cash. It is money in the form of notes or bills and coins. It can also be regarded as Liquid assets. That is an asset such as money or cash in hand, or an asset which can be quickly converted into cash without losing much value.

6. Assets

Assets are property or objects of value that one possesses, usually considered as applicable to the payment of one’s debts. These are in summary, your valuables like cars, houses, diamond rings, gold necklaces, farms, businesses etc. Most debts are made possible because of the availability of assets.

7. Liabilities

Liabilities are the opposite of assets. While assets are what you own, liabilities are what is owed to someone and has to be paid in the future, such as tax, debt, interest, and mortgage payments.
This definition is incomplete. You should know that anything that takes money from you is a liability.

8. Liquidity

Liquidity is the degree to which something is in high supply and demand, making it easily convertible to cash.
Liquidity is time-based and usually doesn’t affect the value of a conversion. A typical example is cash in a bank account. It can be accessed quickly and easily, via a bank transfer or an ATM withdrawal.

9. Bond

Bond as it sounds is like a marriage. It is a documentary obligation to pay a sum or to perform a contract; a debenture. In a slightly different definition, a bond is a document granting lenders a charge over a borrower’s physical assets, giving them a means to collect a debt, as part of a secured loan.

9. Grants

Grants are transfers of property by deed or writing; especially, an appropriation or conveyance made by the government. In simple terms, it is free money or assets from the government.

10. Royalty

Royalty can be two folds. It can be seen as the payment received by an owner of real property for the exploitation of mineral rights in the property.
In general, it is the payment made to a writer, composer, inventor etc for the sale or use of intellectual property, invention etc.

11. Executive

The executive is an administrator, especially someone who can make significant decisions on their authority.
They can also be seen as those having the responsibility for the day-to-day running of an organisation or business.

13. Job

A job is simply an economic role for which a person is paid. An economic role is that in which you are in as you work with others in an organization to achieve a particular goal.

14. Layoffs

This is a dismissal of employees from their jobs because of tightened budgetary constraints or work shortages. This is not usually due to poor performance or misconduct.

15. Labour

Labour is that which requires hard work for its accomplishment. Labour is when you wash a car and you are paid for the task.

16. Salary

Salary is a fixed amount of money paid to a worker, usually calculated on a monthly or annual basis. This implies a degree of professionalism and/or autonomy.

17. Wages

A wage is an amount of money paid to a worker for a specified quantity of work, usually calculated on an hourly basis and expressed in an amount of money per hour.

18. Bonus

A bonus is an extra sum given as a premium, e.g. the added amount given to an employee at the end of a month or year.

19. Brand

A brand is a symbolic identity, represented by a name and/or a logo, which indicates a certain product or service to the public. It can also be a specific product, service, or provider so distinguished

20. Innovation

This is something introduced that is new and contrary to established customs, manners, or rites. This is what helps the newest business outshine their older competitors

21. Leadership

Leadership is the capacity of someone to lead others. This is the ability to guide or conduct a group or persons in a certain course.

22. Marketing

Marketing is the promotion, distribution and selling of a product or service; the work of a marketer; includes market research and advertising.

23. Capital

This in business, finance and insurance terms is money and wealth. It is the means to acquire goods and services, especially in a non-barter system. In simple terms, capital is the money available to start a business venture.

24. Investment

This is the placement of capital in expectation of deriving income or profit from its use or appreciation. Whatsoever you put money in and expect a return is called an investment.

25. Equity

This is the ownership, especially in terms of the net monetary value of some business or interest in a company as determined by subtracting liabilities from assets.

26. Loan

This is the sum of money or other property that a natural or legal person borrows from another with the condition that it be returned or repaid over time or at a later date (sometimes with interest). There is no simple definition than this.

27. Employee

An employee is an individual who provides labour to a company or another person. This is the worker in a company of business.

28. Employer

An employer on the other hand is a person, firm or other entity which pays for or hires the services of another person. They provided jobs for job seekers.

29. Tax

Tax is the money paid to the government other than for transaction-specific goods and services. They have completed agreements between a buyer and a seller to exchange goods, services, or financial assets in return for money.
An example of these goods and services included selling your old TV set to a friend.

30. Dividend

A dividend is the cash payment of money by a company to its shareholders, usually made periodically like quarterly or annually. When a company earns a profit (aka surplus), it can pay a portion of the profit as a dividend to shareholders.

31. Board

A board is a committee that manages the business of a business or an organization. An example is the board of directors.

32. Stakeholders

A person or organisation with a legitimate interest in a given situation, action or enterprise. The stakeholders in the most organization include employees, customers, shareholders, suppliers, communities, and governments.

33. Shares

A share is a unit of equity ownership in the capital stock of an organization. This can also refer to units of mutual funds. In simple terms, it is a financial instrument that shows that one owns a part of a company.

There you have it.

These are a couple of terms I feel that you should know. Feel free to drop your comments or remarks in the comment section.