What are the three types of finance? | David Gene Neugart

David Gene Neugart is from California which is based in the USA. David Neugart is IRS Enrolled Agent and represents Businesses & Individuals in Tax preparation & Audit representation, with extensive experience handling California Real Estate Brokers, California Insurance Property & Casualty.

Finance is a broad term that describes activities associated with banking, leverage or debt, credit, capital markets, money, and investments. Basically, finance represents money management and the process of acquiring needed funds. Finance also encompasses the oversight, creation, and study of money, banking, credit, investments, assets, and liabilities that make up financial systems.

Many of the basic concepts in finance come from the theory of micro and macroeconomics. One of the most fundamental theories is the time value of money, which basically states that the dollar today is worth more than a dollar in the future.

Since individuals, businesses, and government agencies all funding needs to operate, the financial sector includes three main sub-categories: personal finance, corporate finance, and public (government) finances.

Personal Finance

Financial planning involves analyzing the current financial position of the individual to formulate a strategy for the future needs of financial limitations. personal financial situation and activities specific to each individual; Therefore, the financial strategy depends on a person's income, living requirements, goals, and desires.

For example, individuals should save for retirement, which requires saving or investing enough money during their working lives to fund their long-term plans. Types of financial management decisions are under personal finance.

personal finance including the purchase of financial products such as credit cards, insurance, mortgages, and different types of investments. Banking is also considered as a component of personal finances, including checking and savings accounts and online or mobile payment services like PayPal and Venmo.

Public Finance

Public finance including tax policy, spending, budgeting, and debt issues that affect how the government pays for the services provided to the public.

The federal government helps prevent market failure to oversee the allocation of resources, income distribution, and economic stability. Routine funds secured largely through taxes. Borrowing from banks, insurance companies, and other countries also expenditure financial government assistance.

In addition to managing money in daily operations, government agencies also have social and fiscal responsibility. A government is expected to ensure social programs are adequate for the citizens to pay taxes and to maintain a stable economy so that people can save and the money they would be safe.

Corporate Finance

corporate finance refers to financial activities related to running a company, usually with the division or department set up to oversee financial activities.

For example, a large company may have to decide whether to raise additional funds through the issuance of bonds or stock offerings. Investment banks may advise the company on the consideration and help them market their securities.

Startups may receive capital from angel investors or venture capitalists in exchange for a percentage of ownership. If a thrives company and decided to go public, it will issue shares on the stock exchange through an initial public offering (IPO) to raise cash.