Finance And Its Types

Introduction about Finance:- 

Finance is quite a broad term and it's a basic need of every individual. These days finance is a one of the growing sectors. People are taking degrees in finance as a specialization to understand the matters related to the finance industry and grow themselves and their business with respect to this industry.

Why is finance important?

Finance is important to fulfill every aspect of personal life as everything in this world is related to money and how you save it and  invest it. 

Whenever we buy something the most important thing a person needs is money. This famous saying “Nothing comes for free” this quote denotes that for buying anything in life a person needs money.

A rich person have everything is life as he is filthy rich and there is 

No issue of any sort of finances in his/her life. That's the reason everyone wants to have friends and family who are rich.

Few of the basic importance of finance are as follows:-

• It helps in business growth as whenever we need to grow our business the basic thing needed is finance as without finance one cannot buy machinery, land and other assets for the growth of business.
• It helps in living a luxury life: Finance helps in strengthening and growing of business which further helps in living a luxury life.
• It helps in increasing the profit margin: Finance helps in growth of business and therefore, helps in increase of production and also helps in reduction of manufacturing cost which therefore leads to increase in profit margin.

Types of Finances:-

Finance is an area which deals with money related issues which basically deals with need for money or how to borrow money for the individuals, business and government organizations. Finance helps all of these to arrange funds to optimize.

There are three type of finances available for this which are as follows:-

1. Personal Finance: Personal finance is related to an individual personal saving and funding plan such as retirement plan in LIC is a type of personal finance. This plan requires saving for your life in different plans either through mutual funds, Life insurance plans, retirement plans or saving bank accounts during the time of their working for future.
2. Corporate Finance: This is the plan which is being used by big organizations in the corporate sector for raising the funds. This is done by these organizations through investing in bonds, raising funds through stock market or listing their company in stock market and offering their stocks. IPO, shares, debentures are examples of corporate finance.
3. Public Finance: This is a finance plan in which money is borrowed through tax saving plans, borrowing of money through banks as a personal loan, house loan, business loan and so on.

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