HTML inside __() or _e() language translation string

There is a second argument in the __() function. It should be set to the domain you are are using for your plugin or theme. In the examples below I use 'text_domain'. Your domain string should be unique. It should not match any other domain string. Not using a text domain argument defaults to 'default' the WordPress domain name. See the link for more details.

Always use the string ('text_domain'). Never use a variable, function or constant with the string in it. Most (all?) translation programs will not see it without the string there.

Your code:

echo __( 'Hello ' . $first . ' you own me money.' );

Do not include variables in the string.

A better way:

echo sprintf( __( 'Hello %s you own me money.', 'text_domain' ), $first );

Or just:

printf( __( 'Hello %s you own me money.', 'text_domain' ), $first );

The %s placeholder tells the human translator that a string is going in there. Use %d for numbers. There are also other placeholders.

(This sentence is grammatically incorrect English. Use either 'Hello %s, you owe me money.' or 'Hello %s, you own my money.' depending on the meaning you were intending.)

Your code:

$html="<div><p>Top: " . $t_margin . '</p>' . <p>Bottom: ' . $b_margin . '</p></div>';

Don’t translate HTML. It is the same in any language.

A better way:

$html = sprintf( '<div><p>%s</p><p>%s</p></div>', __( 'Top: ', 'text_domain' ) .  $t_margin, __( 'Bottom: ', 'text_domain' ) . $b_margin );

Or break it into multiple lines:

$html = sprintf(
    '<div><p>%s</p><p>%s</p></div>',
    __( 'Top: ', 'text_domain' ) .  $t_margin,
    __( 'Bottom: ', 'text_domain' ) . $b_margin
);

If it is not apparent what Top and Bottom are you might use the _x() to explain the context of these terms.

You can find other translation cases here: Internationalization: You’re probably doing it wrong