Finance is a very board term and there is a lot that falls under it. It is just like online pokies australia real money games, there is not one game that can actually define what it really is. That is why today, we want to look at a few of the basics that make up finance as whole. With these basic terms you may be able to summarize what finance is all about.
What is Finance?
Before we get to the basic of finance, it seems only fair to come up with some sort of definition that can summarize what finance is. Basically, when we talk about finance we are talking about money management, and by so doing, this includes activities like investing borrowing lending, budgeting, saving as well as furcating. When dealing with finance, you will also come across two main sectors and these are personal finance as well as corporate finance.
Basic Principles of Finance
There are six basic principles of finance and these are:
- Principles of risk and return
- Time value of money
- Cash flow principle
- Profit and liquidity
- Principles of diversity
- Hedging principle
Principles of Money Management
- When it comes to money management, you need to know what you make as well as how much you spend. This is because, it will be impossible for you to plan your finances well until you know what you are doing with your money.
Types of Finance
- There are two main types of finance that you will come across. These are debt finance that deals with the money borrowed from external sources like the bank for instance. And then we have what is called equity finance, this del with you investing your own money from other stakeholders in exchange for partial ownership. Most people believe that online casinos for real money are still best option for investing.
Rules of Wealth Building
- There are three rules that you can use to accumulate your wealth or rather to build your wealth and these are:
- Spend less than you earn
- Invest your surplus wisely
- Leave it so that it can grow.