Finance
Financeis a study which figures out how people, businesses and groups make and use money. It can mean:
- Thinking aboutmoney
- Thinking about how to control money to make profit
- Studying how to take chances in projects that make money
- As a verb, "to finance" is to provide money forbusiness
- Any system that includes circulation of money.
Some simple finance ideas
[change|change source]The process offinanceis learning, how people and groups act in managing their money, and most of all how they manage making money, and making a profit, with spending money, or making a loss.
A group that makes more money than it spends can lend or invest the excess profit. On the other hand, a group that makes less money than it spends can raise money by getting a loan or selling part of its assets or spending less, or making more money.
Abankis where many people borrowing money meet people lending money. A bank gets money from lenders, and paysinterest.The bank then lends this money to borrowers. Banks allow borrowers and lenders of different sizes to meet.
Corporate finance is about things like the sale of stock by a company to the public. Stock is ownership in a company, broken up into pieces. The stock gives whoever owns it part ownership in that company. If someone buys one share of XYZ Inc, and the company has 100 shares available, the buyer is 1/100th owner of that company and owns 1/100th (1%) of the profit.
Finance is used by people, by governments, by businesses, etc., as well as by all kinds of groups.
Personal finance
[change|change source]This is finance for people. It is about:
- How much money will be needed by a person, now and when they get old.
- Where will this money come from (e.g. savings or borrowing)?
- How can people protect themselves against problems with money in their lives?
- How can family money be given to children and grandchildren?
- How do taxes affect money choices?
Business finance
[change|change source]Business finance is about finding money for a company's activities. It studies trying to make more profit than loss and taking good risks for the chance to make more money. That's what business is all about.
Financial economics
[change|change source]Financial economics is the study ofeconomicswhich is important to financial things like changes in price and supply of goods.
It studies how much risk some actions that a company may take will cause, and how the company should spend its money.
Financial math
[change|change source]Financial math is the study of math for financial markets. Financial math studiesmathematics,mainlystatistics.
Other websites
[change|change source]- Wharton Finance Knowledge ProjectArchived2012-01-31 at theWayback Machine- Finance knowledge
- For facts about three areas in finance - company finance, money and investment management, seeProf. Aswath Damodaran
- For links to finance web sites seeWeb Sites for Discerning Finance Students,Prof. John M. Wachowicz-Archived2019-05-11 at theWayback Machine
- For the introductory finance web site at theUniversity of Arizona,studyfinance.com
- For introductory articles on mathematical finance seequant notes
- For introductory articles on behavioral finance see theBF gallery
- For introductory articles on financial analysis seeFinancial AnalysisArchived2012-06-29 at theWayback Machine
- Learn how to practice goodFinancial Planning