Finance

“Finance” is crucial for you, an ESL learner, when navigating new lives abroad or even in your home countries. Understanding finance, and the vocabulary associated with it, can help you manage everyday expenses effectively, plan for the future, and avoid financial pitfalls. Whether it's opening a bank account or saving for a home, financial fluency is the key to unlocking financial stability and security. Today's vocabulary will equip you to communicate more effectively on all things "finance.” Let’s jump right in!

In today’s lesson, you’re going to have:

• 5 advanced English vocabulary words about Finance.

• 15 examples of phrases that you can use on a daily basis.

• Eye-catching images will help you learn and retain the vocabulary.

1. Depreciation

📚 DEFINITION

The decrease in the value of an asset over time due to wear and tear or obsolescence.

📄 Example Sentences:

1. The company factors in depreciation when calculating the value of its machinery.

2. Owning a car comes with the inevitable depreciation of its value.

3. Accelerated depreciation allows businesses to deduct a larger portion of an asset's cost in the early years of ownership.

2. Solvency

📚 DEFINITION

The ability of a company or individual to meet its financial obligations.

📄 Example Sentences:

1. Investors assess a company's solvency to determine its financial health.

2. Maintaining good credit history is crucial for demonstrating your solvency to lenders.

3. A company facing financial difficulties might struggle to maintain its solvency.

3. Liquidity

📚 DEFINITION

The ease with which an asset can be converted into cash.

📄 Example Sentences:

1. The company is prioritizing investments with high liquidity to ensure they can access cash quickly if needed.

2. In times of economic uncertainty, investors often seek assets with high liquidity, such as government bonds, to easily adjust their portfolios.

3. Liquidity is a key consideration when choosing a savings account, as some accounts may restrict withdrawals for a certain period.

4. Diversification

📚 DEFINITION

The strategy of spreading investments across different asset classes to reduce risk.

📄 Example Sentences:

1. Diversification is a key principle of sound investment management.

2. Investors can achieve diversification by investing in stocks, bonds, and real estate.

3. While investing in a single company can offer high potential returns, achieving true diversification through a mix of asset classes helps to spread risk and provide a more balanced portfolio.

5. Dividend

📚 DEFINITION

A portion of a company's profit that is distributed to its shareholders.

📄 Example Sentences:

1. Some companies pay regular dividends to their shareholders.

2. Investors who hold dividend-paying stocks receive a portion of the company's profits.

3. Considering a company's dividend history can be part of an investment strategy.

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