In simple words, finance is studying and managing money, earning, investment, spending and other related instruments to achieve financial independence and create wealth.
It involves how people earn, spend, save and how they look at money to achieve their financial goals.
Finance can be categorized as-
A. Personal finance
B. Public finance
C. Corporate finance
A. Personal finance:It is related to individual or household.
B. Public fiance: It is related to government. It studies revenue and tax collection, government consumption expenditure, public debt servicing, subsidies, balance of payments and trade deficit, etc
C. Corporate finance: It is related to companies and organisations. e.g. sourcing funds for operations, raising capital, investing in growth, managing sustainable profits, company’s financial strategy, cost efficiency etc.
As we are specialised in personal finance we will learn it further in other articles.
How does finance work?
Finance works through money flow in and out of an individual’s pocket. Following are some aspects of personal finance which are dealt with while learning it in daily life.
- Money is earned: mostly from jobs or businesses.
- Money is managed: budgeting is done at individual level to control spending and cut excessive spendings.
- Money is tracked: income and expenses are tracked for efficient financial management.
- Money is infested: it is put to work into different instruments such as term deposits with banks, stocks, bonds, policies, real estate and commoditieslike gold for it to increase in value over time and sometimes just to beat inflation.
- Risk assessment: risk associated with money or investments is assessed and then balanced with returns.
Each and every aspect of finance can teach you something so precious that will lead you toward your fiancial success and create wealth for you to retire early and enjoy life.
So join us to begin your financial journey with us
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