Finance is simply the study of the financial markets, financial institutions and how they work in the financial system. It includes the collection and analysis of debts, assets and other financial obligations. Investors and savers both have money on hand that can make the interest or dividends when placed to good use. There are two main factors that influence the supply of finance, interest and inflation. The supply of money may affect the demand for it. When there is too much money in the market, investors and savers are less likely to lend it out, thereby creating less demand.
If you want to invest and make money from finance, the main article in this series will help you understand the basics of how it works. In this series we will cover the basics of private and corporate investing. Private Investing is more personal in nature and usually involves friends, family and acquaintances pooling their resources together to make investments that are less based on the risk of each investment, but more on the potential return. Corporate Investing, on the other hand, is more business oriented. The big banks, brokerage houses and insurance companies own large amounts of government and corporate securities, with the government often acting as a guarantor to make certain these securities are valued at an acceptable price.
If we look at the world of finance as a whole, there are many different areas of focus that help determine the supply of finance. One of these areas of focus is experimental finance. This series of articles will explore some of the ways to finance is used to address some of the issues in modern society. Although experimental finance is not part of the mainstream of finance, it can be an interesting and necessary way to approach some of today’s more pressing financial issues. Some of the subjects covered include:
The first main article in this series looked at public finance. This includes both governmental and private institutions that work to provide services for the public. The primary function of public finance is to support and provide for the needs of the public through taxation. In this main article, the focus was on the role of government agencies as a source of public funds.
The second main article looked at the role of private finances. In this piece we looked at how the wealthy play a role in financing their businesses, how various businesses choose to finance themselves, and how different industries seek to manage their cash flow. Private finances can either come from borrowing or saving. Borrowing occurs when individuals or businesses borrow money that is needed for either investing, growth, and maintenance, or paying off existing debt. Savings occurs when individuals or businesses save for the purpose of investing in the stock market, bonds, mutual funds, real estate, or other types of finance.
The third main article looked at the impact of new technologies on modern day finance. Specifically, we looked at how new computer systems and improved business processes have affected the way businesses operate. Also, we looked at the effect that new information technologies and digital media have had on how consumers access and utilize the information that they need to make important purchasing decisions. This research was helpful in that it brought to light some of the difficulties that face today’s financial markets.