Finances are the activities related to exchange of various goods of equity between the individuals or companies and the uncertainty and the risk that these activities entail. It is also considered as one of the branches of the economy. It is dedicated to the study of raising capital for investment in production and investment decisions of savers goods. It is related to the transactions and the management of money. In this context the collection and management of funds is studied by a company, an individual, or the state itself; in other words, Finance is concerned with the collection and management of money and other securities or money substitutes, as are the titles, the bonds, etc.
The academic study of finance is mainly divided into two branches, which reflect the positions of anyone who needs funds or money to make an investment, called corporate finance, and who wants to invest their money giving it to someone who want to use to invest called asset valuation. The Corporate Finance studies an investor can get money in the best manner, for example, if selling shares, borrowing from a bank or selling debt in the market. The area of asset valuation relates to buying shares, paying / buying debt, or accumulated cash.
These two branches of finance are further classified into more branches. Some of the most popular in the study of finance areas are:
- Financial Intermediation,
- Behavioral Finance,
- Microstructure of Financial Markets,
- Financial Development,
- International Finance and Consumer Finance
A newly created discipline is the Neurofinance, branch the Neuro, responsible for the study of the biases related to the management of the economy.
Personal finance is the application of finance and its principles of a person or family in their desire to conduct their activities with the best distribution of money for it. So, it should recognize how to occupy their income on education, health, food, clothing, insurance, luxury, transportation, etc. They should take into account the income, expenditure, savings and always setting the risks and future events. Some parts of personal finance are the checks, savings accounts, credit cards, loans, investments in the stock market, retirement plans, taxes, etc.
The economy can be framed within the group of social sciences as it is dedicated to the study of production processes and exchange, and analysis of the consumption of goods (products) and services. The word comes from Greek and means “management of a household or family. The role of economics is to provide rational criteria for allocation of resources as efficiently as possible.
There are a number of definitions provided by different economists and one of the prominent economist is Karl Marx. For the German Karl Marx, the economy is the scientific discipline that analyzes the production relations that exist within society. Based on historical materialism, Marx studies the concept of value we hypothesize that value has its objective origin, according to the amount of work required to obtain a good. It should be noted that there a number of schools of thoughts in the economics and we have given a view of only Karl Marx.