AN INTRODUCTION TO FINANCE

finance1What is finance?

Finance is closely related to accounting. It deals with assets allocation and all liabilities under the conditions of uncertainty and the certainty. At some level it also accepts the theory of economics. It can be defined as money management also. Time value of money is the key of the finance. It fixes a goal of price at their risk and rate of return is expected. It can be differentiate into three categories-
• personal finance
• public finance
• Corporate finance.

Personal finance:

Paying for education, real estate, buying insurance, cars, property insurance, health insurance, saving for retirement these involve personal finance. It also involve debt obligation, paying for a loan.

Financial position:

It mainly examined by net worth and household cash flow of the loan taker. The balance sheet of the person’s is called as the net worth. It is mainly calculated by the adding all assets which are under that person. Next all liabilities of the household should be minus at the point of time. The household cash is all kind of sources of incomes is added of one year and the minus of all expenses from the same year. From all this the financial planner can get one idea what time the goals can be accomplished.

Tax planning:

The income tax is the largest expense of the household. If we pay the tax at the correct time and the correct amount then it is not a big deal to manage. We can manage it very easily.

Adequate protection:

It is the ability to protect a household from risks is seen. It is mainly divided into property, disability, health, liability, death and long term care. Some of them are self insurable.
Accumulation goals and investment:
It is the Plan for making large amount of money for future investment like car purchase and other life events. It includes opening a business, education expenses, purchasing cars and house loans and saving for the requirements. The main problem of this plan is the price increment after a certain time. It is totally a risk. When we are planning to save the money, that time price we use to calculate. But after a certain time it increases. Then the problem rises. So it is better when we are planning for something in future we should increment the price level about 10 percent.

Retirement planning:

It is cost estimation about how much we need after our retirement to live our life and coming up with the plan to distribute the assets for any side income. This is called the retirement plans.

Estate planning:
It is about after death the assets repositioning. One can leave one’s assets to family, friends or any charitable groups.
This is all about the personal finance.

Public finance:

Public finance is the sub national entities, agencies, related public entities like; provinces, municipalities, counties, school districts etc.
It is mainly concerned with budgeting process, the entity of public sector and the expenditure requirement, municipal bonds for the projects. In public finance some of the banks are very strong like United States, Federal Reverse System, United Kingdom, and Bank of England. They are very strong in credit conditions in economy.

Corporate finance:

Dealing with sources of funding and the capital of corporation; this is called the corporate finance. It mainly involves in profitability and balancing risk. It includes stock investing, scope business valuation, investment management. It overlaps with the accounting profession which is the financial function. It is the allocation of capital resources to increase a firm value to the shareholders. The corporate finance is totally depends on the risk management.

Need of personal finance:

finance (1)Money is one of the most important requirements of everyone. Everyone wants to have an income that’s stable and this is evident as everyone needs money to fulfill their dreams and also to sustain their livelihood. This is the reason why in countries like UK and US personal finance is quite popular as this provides help to everyone who needs any kind of financial assistance. For availing personal finance a contract needs to be signed between the borrower and the financer regarding how the borrower should pay the loan and for how many days. Moreover, business people are greatly benefitted from this type of finance scheme. This personal finance can be divided into Secured Finance and Unsecured Finance.

Need of Finance advisor for you:

Taxes and budgets are not the whole story when it comes to the umbrella of finances. There’re so many areas and lots of words associated with the financial world. Hence the best option is to hire a financial expert for consulting your financial needs.

Making financial decisions have become very difficult with many choices which make an average person more confusing. A financial advisor can actually guide one through the process of investments, savings plans, strategies to reduce debts faster, etc. Besides hiring any finance advice specialist, one can also buy a reputable book or rather sign up to some reputable website which offer courses in financial management for any individuals.

PERSONAL FINANCE

financeMoney is one of the most important requirements of everyone. Everyone wants to have an income that’s stable and this is evident as everyone needs money to fulfill their dreams and also to sustain their livelihood. This is the reason why in countries like UK and US personal finance is quite popular as this provides help to everyone who needs any kind of financial assistance. For availing personal finance a contract needs to be signed between the borrower and the financer regarding how the borrower should pay the loan and for how many days. Moreover, business people are greatly benefitted from this type of finance scheme. This personal finance can be divided into Secured Finance and Unsecured Finance, which are described below.

Secure Personal Finance:

This is a way where a borrower will provide collateral to the lender as a security which can be any of his assets. These can be the borrower’s machinery or his car. The borrower can even provide his home as a security as the home is also his property. But one thing should be kept in mind that the properties that is to be made as collateral should be at least equal the amount of the borrowed amount.

Unsecured Personal Finance:

Here unlike the secured scheme, the borrower doesn’t have to provide any such collateral as an obligation to the lender. Instead the borrower has to pay a higher rate of interest. This rate of interest is to cover for the risk factor by the lender. The amount will however be lower than the secured scheme. People usually opt to go with this kind of finance when they need money to finance child education, renovate their home, finance a business and cover everyday expenses. This financing is known in all parts of the world. In fact, several businesses adapt this kind of financing style so that they are able to keep up the expenses.

Finance

financeFinance:

Finance deals with assets allocation and all liabilities under the conditions of uncertainty and the certainty. At some level it also accepts the theory of economics. Time value of money is the key of the finance. It can be differentiate into three categories

Corporate finance:

Dealing with sources of funding and the capital of corporation, is called the corporate finance. It mainly involves in profitability and balancing risk. It includes stock investing, scope business valuation, investment management. It overlaps with the accounting profession which is the financial function. The corporate finance is totally depends on the risk management.

Public finance:

Public finance is the sub national entities, agencies, related public entities like; provinces, municipalities, counties, school districts etc.
It is mainly concerned with budgeting process, the entity of public sector and the expenditure requirement, municipal bonds for the projects.
Personal finance:
Paying for education, real estate, buying insurance, cars, property insurance, health insurance, saving for retirement these involve personal finance.

• Financial position:
The balance sheet of the person’s is called as the net worth. It mainly examined by net worth and household cash flow of the loan taker. It is mainly calculated by the adding all assets which are under that person. Next all liabilities of the household should be minus at the point of time. The household cash is all kind of sources of incomes is added of one year and the minus of all expenses from the same year.
• Tax planning:
The income tax is the largest expense of the household. If we pay the tax at the correct time and the correct amount then it is not a big deal to manage. We can manage it very easily.
• Adequate protection:
It is the ability to protect a household from risks is seen. It is mainly divided into property, disability, health, liability, death.
• Accumulation goals and investment:
It is the Plan for making large amount of money for future investment like car purchase and other life events. It includes opening a business, education expenses, purchasing cars. It is totally a risk. When we are planning to save the money, that time price we use to calculate. But after a certain time it increases. Then the problem rises.
• Retirement planning:
It is cost estimation about how much we need after our retirement to live our life and coming up with the plan to distribute the assets for any side income.
• Estate planning:
It is about after death the assets repositioning. One can leave one’s assets to family, friends or any charitable groups.