3 Major Finance Types

   To be financially strong and independent, understanding finance is very important. Finance is a broad term that deals with money management. To understand finance and its types, we must first understand finance.

What is Finance All About?

Finance is all about managing and allocating money. At a basic level, the problem arises with how to allocate the money. Choices are many: Money can be lent, borrowed, or saved, or it can be invested in projects or the market itself. Finance also includes budgeting and forecasting. Finance is about how best to decide what to do with your money.

Since Finance is a broad term, it is majorly divided into 3 different types:

  • Personal Finance
  • Corporate Finance
  • Public Finance

Let's discuss them in brief.

Personal Finance

Explanation: 

Personal Finance is an approach to managing individual and family finances. It is mostly about realizing one's financial goals and then saving or allocating money to attain them.
Personal finance includes budgeting, investments, banking, insurance, tax, expenses after retirement, etc. It majorly includes the industry that helps individuals manage their money and plan for the future. 

Personal finance includes investments in education, real estate, health expenses, and many more. Personal finance helps an individual prepare for retirement, paying for a loan or debt, Investments and wealth accumulation goals, etc.

Example:  

Investing money in the market or buying insurance or a house, etc.

Corporate Finance

Explanation: 

Corporate finance deals with an organization's finances. It is important in every business. It includes the financial decisions of a corporation, such as raising funds, investments, capital structuring, accounting, and distributing dividends among the shareholders. These decisions aim to maximize shareholder value. Corporate finance also includes the study of the financial market, financial institutions, and how they interact with each other.

Example: 

A Company decides whether to invest in a new factory or equipment. Another example is a company deciding to raise its capital by issuing and selling stock shares to the public through an (IPO).

Public Finance

Explanation: 

Public finance is the study of managing a country's economy. It is a branch of economics that deals with the government's expenditures and income and how they affect the economy and society as a whole. It includes the government's budget, public debt, taxation, and other public policy issues. The country's revenue comes from its various ROI, taxes, and other revenue streams. 

Public finance is concerned with how the government spends the revenue they had generated on things like infrastructure, social programs, and public goods and services. 

Example: 

The government decided to increase tobacco product taxes to discourage smoking and generate revenue to fund public health programs.

Additionally, there are some other types of finance, such as social and behavioural finance. But on a basic level, these three are the major types of finances.

Comments

Post a Comment

Popular posts from this blog

The Immunity Boosting Elixir: Mullen Tea

Image
  What is Mullein Tea? Mullein tea is an herbal and flavorful beverage  that has  been  used  for its medicinal properties for centuries. It is used to treat various respiratory disorders like Asthma, cough, and cold. The tea is made from the leaves and flowers of the mullein plant, scientifically known as Verbascum thapsus. It is native to Asia, Africa, and Europe, but now  it can be found  in different parts of the world, including America and Canada. This tea is rich in nutrients like calcium, magnesium, and vitamin A. The Benefits of Mullein Tea Mullein tea has many health benefits, some of which include the following: Respiratory Health:  Mullein tea is known to reduce respiratory issues. It helps to deal with breathing difficulty and soothe respiratory problems. It’s an excellent choice for people suffering from Asthma, bronchitis, cough, common cold, tuberculosis, tonsillitis and pneumonia. It is expectorant( meaning it helps to expel excess mucous out of the body) and demulcent
Read more

PESTLE ANALYSIS ON ZARA

Image
            W hen it comes to fast fashion brands, Zara is the first brand that comes to mind. Zara is a retail, fast-fashion brand founded in 1975 in Spain by Amancio Ortega and Rosalia Mera. It is a multinational clothing brand that specializes in selling clothing, shoes, accessories, perfumes, and beauty products. Zara has more than ten thousand stores worldwide. PESTLE analysis of the brand analysis business tactics and various external factors directly or indirectly impact the business. 1. The Political Factor Zara is linked to the European Union and has a well-established framework of trade which allows the import and export of raw materials and finished products respectively.  As the European Union is the UK's largest export market for textiles and clothing, it helps Zara export its products all across the world at a low cost and with little effort. 74% of the exports of the European Union are made by Zara alone, which helps it boost its sales. A significant factor affecting
Read more

Merging Mind And Machine: Inspect The For And Against Of Brain-Computer Interfaces And Neural Implants

Image
  What if you could control a device or computer with your brain, create music or art Without moving, and analyse your real-time brain activity? All this could be possible with Brain-Computer Interfaces (BCIs) and neural implants. BCIs allow people to control computers and other devices with their thoughts. The machine reads the electronic signals that the brain transmits and performs an activity based on the movement. A neural implant is a device placed in the brain to analyse and stimulate brain activity. It can help treat various conditions like Parkinson's disease, epilepsy, and depression. It is also believed that it can help improve memory and learning and create new forms of communication and entertainment. The Benefits of Brain-Computer Interfaces and Neural Implants Enhanced Communication and Control for People with Disabilities: BCIs and neural implants help disabled people to communicate and take control of their environment. For instance, BCIs help people with quadripl
Read more