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TOEFL Tuesday: Money Vocabulary


This Tuesday, we’re talking about everybody’s favorite thing: money. The TOEFL sometimes has lectures or reading on business, and when it does, there are often words that describe the money of those companies or people described in the lecture or text. Business is more common as a lecture topic, not a text topic, but in either case, it’s not very common. Don’t expect more than one or two business-based tasks on your TOEFL.

If you do see a text or hear a lecture about business, money is crucial! And here are some words we can use to describe money, depending on who has the money and what purpose it serves.


“Finance” is a very general word. It alone can mean the world of banking and doing business with money. But it has some other specific uses. If you talk about your personal finances, for example, then you are talking about the money you have in your bank account. It describes all of the money you have and can spend. In this usage, it is plural: finances.

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Business might also talk about finances, meaning much the same thing as personal finances. In fact, because it is a more formal word, you will more likely hear it about a company, not a single person. Usually, during informal conversation, we would just say “my money” or maybe a phrase like “my bank account” to talk about how much money we have. But it is possible to hear in reference to either people or organizations.


You might be able to see words inside “income,” and that’s a good hint as to the meaning. Your income is the money that comes in to your bank account. In other words, it’s the money you make from your job! A personal income is not just a single payment, though. It describes how much money you make in total. Usually, when we talk about income, we talk about how much money a person earns in a full year.


This word is extremely similar to “income,” but it’s not a word people use to talk about their own, personal money. It is almost always used for companies or other organizations. “Revenue” is similar to “profit,” but it includes all money that a company makes, whereas profit is only the money made after all the spent money is subtracted out. We often use this word when we want to talk about money coming from one specific source. Amazon has many sources of revenue, for example, including selling books.


This is another word used specifically for doing business, not for personal finances. Capital refers to finances which will be spent on something specific: usually starting a new business or investing in another business. Generally, capital is money that you spend because you expect to earn more money through spending it. So a company that is just starting needs capital in the beginning to pay for everything—a building, employees, materials, etc.—but that company expects to earn more money later. Spending that capital helps to get revenue, later. So in that way, it is similar to “investment,” but it is a little more general. “Capital” can refer to money before it is invested, for example, and is used to describe any money used at the start, whereas an “investment” comes from another person or business, not your own bank account.


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