In simple terms for the lay man finance can be defined as the science of money management. On a broader scale it deals with the matter of investment. Finance is the fabric that binds all things together like food, shelter, clothing, water, electricity, education etc. Without finance will be like living in a desert without water. Finance can be classified into three broader categories. They are public, corporate and personal. Let us now study each in detail:Capital Funding Financial
This is the management of finance by a person or a family. Each one has a budget which is not compulsory as per situation. The budget is meant for saving or for spending depending on the income. In this many things are taken into consideration like short term or long term investment. Planning of personal finances has many heads like saving accounts, credit cards, and consumer loans. Besides this there is private or personal investment in stock markets, bonds, mutual funds and insurance. The insurance is further divided into life, health and disability insurance. Personal finance involves paying for education and also paying for a loan. Let us take up just three key areas of personnel finance planning.
The Planning: The Income tax is the single largest expense in any house. This means one has to pay the tax but when and how much is decided by what salary one earns. Like that the Government gives incentives in the form of tax deduction and credits which in turn can reduce the tax burden on the salaried person. As one’s income grows a higher margin rate of tax has to be paid. Florida hard money loan
Adequate protection: Here one thinks how to protect a household from unforeseen circumstances. This can be divided into death, disability, property, health and long term care. Most of these will require one to purchase an insurance contract. For this one needs to have the knowledge of the market for personal insurance. As insurance enjoys some tax benefits using insurance investment products may be useful in the long run.
Retirement Planning: This is a process of planning that one does so as to understand how much it costs to live after retirement. In the process one comes out with plans to distribute assets to overcome any immediate or unforeseen circumstance.
Public finance is all that is not private as per layman terms. It usually covers a long term strategy regarding investment decisions that affect the public as a whole. These decisions are for a period of five to ten years. The Reserve Bank is the strong player acting as the leader on monetary and credit conditions in the economy.
This deals with the sources of funding and the action that owners take to increase the value of the firm to the shareholders. Corporate finance normally involves balancing possibility and profitability. The balance between the two forms the company’s capital structure. Florida hard money lender