capital
Wealth in the form of money or assets used to start or expand a business, or to generate further wealth.
Example
“The startup raised $2 million in capital to hire staff and build their product.”
Memory Tip
CAPITAL is the chief money — just like a capital city is the chief city.
Why It Matters
Capital is the foundation of wealth building and business growth. Understanding how to accumulate and deploy capital effectively determines whether you can achieve financial goals like starting a business, investing in real estate, or generating passive income streams.
Common Misconception
Many people believe capital only refers to money, but it actually includes all assets of value such as equipment, property, inventory, and investments. This narrow view prevents people from recognizing the full range of resources available to grow their wealth.
In Practice
An entrepreneur with 50,000 dollars in savings uses 30,000 dollars as capital to buy equipment and inventory for a small bakery business. The remaining 20,000 dollars serves as working capital for operating expenses during the first few months. As the bakery generates profits, that revenue becomes additional capital that can be reinvested to open a second location.
Etymology
From Latin 'caput' meaning 'head' — the head (main) sum of money.
Common Misspellings
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See Also
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