FINANCE - WHAT IS FINANCIAL KNOWLEDGE? | TYPES OF FINANCIAL KNOWLEDGE. 

Let’s not procastinate our knowledge towards finance. What is Finance? And Fallacy of Finance has already been our topic of discussion in our prior blogs so it’s time to level up our knowledge of Finance with blogtansy. 

         Everyone teaches us, “Study Hard to Earn Money and soon You Will Become Rich,” but I never encountered any billionaire faculty of mine. Everyone teaches us “Money is Power'' but I never understood why Anil Ambani failed even after being the richest man of an era. Money is Power, that's just a half told truth. You know what’s more powerful, "Knowledge about Money".

The other day I came across a very amazing fact, 200 Indian Rupees in the year 2010 would be counted as 96 in 2021 as per the inflation rate. What? Really? Yes, You spell every string correctly, it is. The money in hand depreciates with the inflation rate, decreasing the value of it. Let's not be too technical, ask your parents or better, you have experienced early 2000, the stuff that could be bought from a ₹100 note at that time and go out now  ₹100 couldn't manage a sufficient meal for a person at a go. 

Benjamin Franklin once said, “ An Investment In Knowledge Pays The Best Interest ”

School in India teaches us, how to make money, but fails to teach how to make more money from money, chuckle if you want but even we never took a step to learn about it. IF YOU DON’T ASK, THE ANSWER IS ALWAYS NO. We never asked ourselves so we were never answered. 

WHAT IS FINANCIAL KNOWLEDGE?

Financial knowledge is the power to make more money from money in hand. Warren Buffet once said, “If you don't find a way to make money while you sleep, you will work until you die.” So, What are the ways we can invest our money to make more money? But before that starting from the rag, What is investment actually?

           Basically, Investment is holding something for a period of time if it gives profit then called as asset otherwise liability, but generally we hold with a hope to get good returns in future. But what is that something, so that something may be a land, a bond, a fixed deposit, a stock, a mutual fund or a public provident fund the list is simply illustrative. Same as a coin, investments even have two faces, if invested wisely with calculated risk then this turns out to be a biggest boon otherwise not less than a bane to lose whatever you had invested.                                                                                                         What is investment? How much to invest? What are ways to invest? What is risk management? Age-Money relation? And such more questions, comes under financial knowledge. It gives a variety of knowledge about every aspect related to money like bank account, net banking, debit & credit cards, loan, investment, insurance, taxes and many more. All the awareness about the boon and bane side of each. 

WHAT ARE TYPES OF FINANCE?

According to the need of financial knowledge by individual or group , finance has been broadly classified to following subcategories : Personal Finance, Corporate Finance, Public Finance. 

• PERSONAL FINANCE - The word is self-explanatory in itself. Personal finance deals with the financial growth of an individual on the basis of various factors like income, expenditure, age, liabilities, requirements and goals. It varies from person to person, as not everyone is ready to take high risk or not everyone is aiming to buy a house at Bandra. It varies with age, like some in their 20's are high risk takers whereas others in 50’s are planning for retirement. It's about maintaining the growth of your money, by analysing ourselves individually. It deals with family budget, the utilisation of credit cards and other cards, loans, savings, insurance and investments. This type of finance is the main center of focus of my blog.

• CORPORATE FINANCE - This is related to the financial strategies of growth of a private company. All the aspects of the company are taken into consideration and then a strategy of financial gain is formulated. It involves fundraising with the help of angel investors, merger or bonds sometimes. This is usually of no use until we think of some startups. 

• PUBLIC FINANCE - The way the government manages the finance comes under public finance. It includes various aspects like taxing, budgeting, debt-issuance and many more for well functioning of a financially stable government. 

Financial knowledge is simply a depth less ocean, but a basic knowledge of financial knowledge can improve the quality of our life financially. Dear readers, here we are just ensuring a basic A-B-C of finance so that we are not easily fooled by anyone. Let me know in the comments below about your views on the same. 

Regards - BLOGTANSY

 

Share this

KIRTI RATHOR