Name: English Vocabulary for Personal Finances – assets, equity, collateral...
Uploaded: 2025-06-17T18:25:12.000Z
Duration: 16 min 7 s
Description: Thousands of YouTube videos with English-Chinese subtitles! Now you can learn to understand native speakers, expand your vocabulary, and improve your pronunciation...

The imperative

Hi, welcome back to www.engvid.com, I'm Adam.

To-infinitive

In today's video, I want to help you basically take care of your money, okay, very, very important topic today.

Future simple

So, what we're going to look at are some things, some terms and some expressions that you need to understand before you speak to a financial advisor, okay?

And that's what we're going to look at here.

A financial advisor is a person who supposedly knows how you should spend your money, save your money, invest your money, basically how to keep yourself comfortable and safe for the long term, in the future, okay?

Because it's becoming more and more expensive to live in big cities, especially, and you need to know how far you can stretch your dollar.

Stretch your dollar basically means how much value you can get out of every dollar that you earn, okay?

Now, again, just a quick warning, all I'm doing here is giving you some vocabulary, but it's up to you to do the research and to know your personal situation very well so that you know how to basically take care of your money and take care of your future, okay?

So, the main focus here is what we want to do is we want to avoid bankruptcy.

Bankruptcy, when you file for bankruptcy, file for bankruptcy, means you're telling the government or you're telling the bank or you're telling the people that you owe money to that you don't have any money, okay?

Now, a lot of people use bankruptcy as a last resort, as a last option when they just can't make payments on their bills.

Bankruptcy is a very bad thing to have on your financial history because companies or banks won't lend you money, they won't sell you a house, they won't sell you a car unless you pay the full amount.

So, you want to try to avoid bankruptcy as much as possible.

So, the DG just sounds like a J, budget, and the E sounds like an I.

So, what you're doing with a budget is you're taking your fixed income, this is the amount of money that you're going to get every week or every month, and it's not going to change.

For example, if you work at a company and that's the only income you have, then every month your income will be exactly the same.

So, you take this fixed income and you have to cut it into pieces of how you're going to spend it.

You're going to pay taxes, you're going to pay your insurance bill, you're going to pay your rent if you're renting, or your mortgage payments if you bought a house.

You're going to pay all your bills, and then when you're finished paying all the things that you have to pay, what is left for you to spend on food, or entertainment, or travel is called your disposable income.

It's not necessary for you to pay anybody or anything with it, right?

Your savings come from disposable income, but it's up to you how you spend it.

What you want to avoid is an impulse buy or impulse shopping.

Impulse shopping is, for example, you go into a store and you didn't plan on buying anything that day, but you see something, oh, that's really nice.

You see a watch, you see a shirt, something that you don't need, you didn't think to buy, but you saw it and suddenly you decide, okay, I want that, and you go and you buy it.

Impulse shopping or impulse buys are the things that most people get themselves into financial trouble with, okay?

A lot of your debt is going to come from impulse shopping, so avoid that, but debt is a big issue.

Now, notice I don't pronounce the B, it's not debt, debt, D-E-T sound, debt.

Your debt is part of your consideration when you're making your budget.

You have to think about paying all your bills, and your bills include the money that you owe, your debts.

Maybe you took out a loan, actually that's took out or take out a loan, and you have to pay that back.

Not only do you have to pay back the money that you borrowed, you also have to pay back interest, and I'll talk more about that when I talk about mortgage.

When you did your tax return, okay, in Canada and in most countries every year, you have to file, and again, we're using file, your tax return with the government.

Now, if you paid too much taxes, the government will give you money back.

If you didn't pay enough, you have to pay them at the end of the year, however much you owe them, so that's another part of debt.

What you want to make sure you avoid is defaulting on any debt, defaulting on any loan or payment.

If you default, it means that you missed a payment, you missed the deadline to pay back, and then you have to pay penalties, and penalties just take away more of your money, okay?

So, you want to avoid defaulting, and essentially bankruptcy is when you've basically defaulted on everything, and you can't pay back your bills, and you have to claim bankruptcy.

Now, another thing you have to consider are your assets and your liabilities.

Your assets are all the things that have value.

Anything that brings you money or is worth money is an asset.

Liabilities are anything that costs you money or might cost you money in the future.

So, anything that has a risk of costing you money is a liability.

So, any loan, any payments you have to make, any interest you have to pay, these are all liabilities.

So, let's say, for example, you bought a car.

The car itself is worth something, so the car itself is an asset, but you bought the car with financing.

It means you're paying back the dealership, and you're paying interest.

That interest is a liability, and all the things...

All the money that you still owe are liabilities.

So, risk management is a very important part of financial planning or personal finances, okay?

So, you have to keep these things in mind.

Now, a lot of people, and as you get older, this becomes more and more relevant, you should have an investment portfolio.

Your portfolio essentially is your collection of investments.

You can invest in the stock market if you know what you're doing, because it can be very risky.

A term deposit means you give your money to the bank, and you tell the bank, okay, you can hold this money for five years, and the bank pays you interest.

But again, these days, it doesn't really make much sense to leave your money in the bank, because the interest you receive is very little, and it's less than the inflation.

So, you're actually still losing money if you do that, so be careful about that.

Now, another...  Another investment that's very popular still is gold.

If you want to buy gold and hope it goes up in value, that's one thing.

Every time you invest in something, and you either make money or you lose money, that amount that you gained or the amount that you lost is called a capital gain or a capital loss.

If you make gains, if your investment went up in value, the difference between what you invested and what the value is today, that capital gains, you have to pay tax on.

So, keep in mind, if you made $10,000 in gains, you don't actually keep $10,000, you have to give some to the government, so take that into consideration as well.

Now, everybody, and again, as you get older, this becomes more and more relevant, retiring...

Like, retirement is a very expensive part of life, because there's no more income coming in, only expenses going out.

So, make sure you have retirement savings plan.

You have some sort of plan to have money when you retire, when you're no longer working.

In Canada, we have something called an RRSP.

This is an account you have at the bank, and every year, you can put a certain amount of money into that account, and you don't pay taxes on it that year.

When you're older, when you're 65 or older, and you start taking money out of this account, then you pay income tax on that money.

So, you're not making other income, you're only making this income, so it's a little bit less tax, so it makes sense.

You don't have to do it, not everybody does it, but it's probably a good idea.

I don't know the exact details, because I'm Canadian, so I know the RSPs, but I think it's more or less the same idea.

So, if you're thinking about retirement, the younger you start, the more you'll save for retirement.

Now, another part of assets, or another part of building financial wealth, or at least financial stability.

Stability means you're not worried, everything is okay, it's safe, you have...

You know how much money you're going to have each month, each year, so you're comfortable.

But what you want to do is you want to start building equity.

If you own a house, the value of that house is part of your equity.

The more equity you have, the more money, essentially, that you have.

And it's not only going to be cash, it's not only going to be your paycheck, it's also the things you invested in, it's all part of your equity.

What you also want to do, if you ever want to get a loan, you want to have collateral.

Collateral is something that you can put as a side, something that guarantees the loan.

So, if I want to buy a condominium, and I already own a house, any bank will be very happy to give me a mortgage on the condominium, because they know that if I can't pay back my bills for the condominium, they just take my house and pay for it that way.

So, it's good to have collateral in order to get more loans.