Introducing Finance

Reasons to Study Finance

Finance is relevant to all business functions, the macro economy, and personal finances. The study of finance often feels much narrower than it really is. There is a lot of talk of issuing bonds or pricing projects, which belies how relevant finance is to everyday life, regardless of whether or not you desire to work in finance.

Understanding the Economic Environment

Finance plays an involved role in the health of the overall economy, which impacts everyone, regardless of whether or not they have studied finance. The field of finance explains why the 2008 recession occurred, why people care about how the stock market is doing each day, and why businesses and governments make some of their decisions.

Random Walk Stock market cannot be predicted.

Finance is involved in many of the stories in the news every day, which means that those who understand finance have a better grasp of how the events of the world affect them.

Personal Finances

Each person will also have to manage his or her own personal finances. Like corporations, individuals are faced with investment and financing decisions. To invest, individuals must be able to do the same projections and valuations as companies to determine the best investment for their needs. Individuals cannot sell equity-like corporations, but they can choose to either dip into their savings or take out loans. Many take on debt in the form of student loans, mortgages, or credit cards; being able to properly compare options to leverage is just as important for individuals as it is for companies.

Application to Business

Of course, finance is an important field of study for those who desire to work in finance or accounting. Finance is heavily used in jobs ranging from investment banker to CFO to venture capitalist.

However, finance is not a separate function from other functions in business. Every job, from marketing to engineering, has to be able to manage a budget and make a business case that it should get funding for a project.

This is especially true higher up in the organizational hierarchy: managers, directors, and vice presidents need to be able to articulate why their departments should get financial support from the company.

Finance is a field that requires both hard analytical skills and personal judgment. There are set processes and theories for determining which financial option is best, but in the real world, it is rare to have all the information needed to be absolutely certain about what to do. Finance develops strong analytical skills and the degree of finesse required to operate in an environment of uncertainty.

Silver Bid Chart Finance helps explain what trends in silver bids mean, but more importantly, why people care about them (even those not trading silver).