Money talks

What's your net worth? 10 financial terms everybody should understand

Some people believe that, unless you work in the world of finance, there is no need to understand financial terms and concepts. Well, nothing could be further from the truth. Finance is a core part of society, and financial literacy is important for everyone. At the same time, some of these terms are thrown around without fully understanding their meaning. What is a principal? Is compound interest different from normal interest? What is a person’s net worth? Here are 10 financial concepts that everyone should know.

Whether you are investing a sum of money or taking a loan, there is an initial sum of money involved. The principal is the initial amount of money that you invest or borrow. It does not include any interest, fees, or future earnings, and it’s used as a base to calculate the interest that will be added to a loan and the returns from an investment.

We commonly understand interest as the cost we pay for borrowing money, often calculated as a percentage of the principal amount. That is ‘simple interest’, but what about ‘compound interest’? Any accumulated interest from previous periods generates its own interest as well, so compound interest is the sum of the interest on the principal amount and the accumulated interest.

We often hear the media discuss the net worth of celebrities, politicians, and other public figures, but can the worth of a person be calculated? When it comes to finance, it can, and it follows a very simple formula: the value of all your assets minus any money you owe. This simple but effective calculation is a good way to check how healthy your finances are at any point in time.

Paying a loan is never as simple as adding interest to the initial amount. In most cases, there are different fees involved, which means that you might owe more than you think. The Annual Percentage Rate or APR will give you the true cost of a loan —initial amount, interest, and any additional fees— represented as a percentage. With the APR, you can also compare loans to see which one offers better options.

If you own shares in a company, you will receive dividends, a portion of the profit made by the company. How do dividends work? Paid regularly, often quarterly, its value is decided by the company’s board of directors, who will determine an amount to be paid per share. The more shares you have, the more dividends you will receive.

When taking out a loan, we are assuming that we will pay it over a period of time. This is called amortization. While the amortization of a loan gives us the possibility of paying a large sum back in regular smaller installments, it also involves interest (both simple and compound) and fees added to the principal amount.

An asset is an item of value, and this includes cash, but also other valuable things such as objects, properties, bonds, shares, etc. Liquidity refers to how quickly an asset can be turned into cash without affecting its value, which in turn tells us how quickly we could access funds to cover any payment or debt.

If you ever looked into buying a home, you might have heard the term ‘escrow’. An escrow is a legal arrangement where a third, neutral party temporarily controls the funds of a transaction, releasing them once the contract’s terms have been fulfilled. This helps prevent fraud, reduce financial risks, guarantee fairness, and ensure that neither party takes advantage of the other.

If you are a financial delinquent, you might be in trouble, but not in the way you imagine. When taking on a loan, you assume a responsibility to pay it back. If you fail to do so, or fall behind in your payments, you become a ‘delinquent’. While delinquency is temporary, it will hurt your credit score and can eventually turn into default, which allows the lender to take action against you.

We often use the word liability to describe a disadvantage or something that could cause difficulties. In its financial sense, liabilities refer to a responsibility or obligation we assume, such as paying back a loan. In this sense, liabilities —money we owe— are opposite to assets —money we possess.

Say it like locals

These are America's most colorful regional expressions and accents

America's regional slang words are as interesting as they are funny. They say a lot about how folks in different corners of the country see the world, and what kind of culture took root there over the years. No accent or phrase is "better" than another; most are just practical, colorful, or a little window into what a community is like. Take "y'all," beloved down South, or "wicked," which New Englanders toss into sentences like seasoning. None of these are used only in the places we mention: they've just made themselves at home there.

This one's everywhere below the Mason-Dixon line, and it's just useful: one word instead of "you guys" or "you all." Southerners use it constantly and unapologetically. Outsiders sometimes mock it as unsophisticated, then quietly start using it themselves within a year of moving South.

Even non-Southern celebrities get caught saying it on camera, then get roasted online, then keep saying it anyway.

"That's wicked good" doesn't mean "evil"; it means "very". Bostonians and their neighbors use it as an all-purpose intensifier. Non-locals find it charming, sometimes exaggeratedly imitating it to poke fun at the accent.

Locals don't care; they'll say "wicked awesome" with total sincerity. It's practically a regional badge of honor, and attempts to phase it out over the decades have, wickedly, failed completely.

Order a "Coke" in Georgia, and you might get asked "what kind?" because down South, "Coke" means any soda. The Midwest says "pop," the coasts say "soda." This sparks genuine, good-natured arguments at family gatherings and road trip stops nationwide. Nobody's ever truly won this debate, and honestly, that's part of the fun.

Both drop their R's, but they don't sound alike: ask any local, and they'll insist theirs is the "normal" one. Bostonians say "cah" for car; New Yorkers say "cawfee" for coffee. Outsiders often can't tell them apart, which mildly offends both sides.

TV and movies love exaggerating these accents, which locals alternately enjoy and find utterly ridiculous.

Life in Michigan's Upper Peninsula produced its own charming dialect, shaped by Finnish immigrants. Locals say "eh" often, eat "pasties" (savory meat pies), and call themselves "Yoopers" with pride.

Downstate Michiganders sometimes tease them as being from the middle of nowhere. Yoopers shrug it off; they've got snow, quiet, and a dialect nobody else can quite replicate.

South Louisiana blends French, Spanish, and African influences into phrases like "making groceries" (grocery shopping) or "lagniappe" (a little something extra). Visitors often find it delightfully musical and confusing in equal measure. Locals wear it proudly, treating their dialect as inseparable from their food, music, and heritage.

Try pronouncing "Natchitoches" correctly on your first attempt; it's a rite of passage.

This is a genuine, full creole language, not just an accent, blending English, Hawaiian, Japanese, and more. Mainlanders visiting sometimes assume it's simply broken English, which locals find both amusing and mildly irritating.

Within Hawaii, pidgin is a point of deep identity and connection. Using it casually, even imperfectly, tends to earn warm smiles rather than criticism.

Texans have a phrase for everything, often laced with dry humor. "Fixin' to" means "about to," while "all hat, no cattle" politely calls someone a fraud. Non-Texans often find these expressions delightfully quotable and borrow them for fun. Texans, meanwhile, consider their vocabulary practically its own dialect, proudly distinct from the rest of the South.

Words like "gnarly," "stoked," and "hang ten" came straight off the beach and into mainstream American vocabulary decades ago. Non-surfers everywhere adopted them, often without knowing the origin. Actual surfers sometimes roll their eyes at overuse by tourists and marketers. Still, it remains one of the most exported regional vocabularies in the whole country.

Philadelphia says "hoagie," New York says "hero," New England says "grinder," and most everywhere else says "sub." Order one by the "wrong" name in the "wrong" city, and you may get a good-natured correction from the person behind the counter. It's a beloved, low-stakes debate—delicious regardless of what you call it.