Types of Finance
As we all know, that finance is one of the basic needs to continue the circulation of capital and future planning. So, let’s go through some of the basic types of funding, and how it’s useful in the regular distribution of money.
Varieties of Finance:
- Individual Finance
- Company’s Finance
- Public Finance
As the name itself clarifies, this finance gets used for individuals and people’s usages. Individual Finance is estimated, calculated, and managed by a family or one of the family members. Personal planning requires note down family’s needs, expenditure, savings, etc. A family saves remaining capital after the end of 3 months or six months in a savings account.
Here there is no need to worry about government policies and regulations. It doesn’t affect this finance. It is related to personal or individual finance is mostly designed to focus on small investments, savings, and borrowing, etc. Sometimes people use their capital to invest in the stock market. As a reward, governments give them certificates or some bonds to secure their amounts.
The company’s finance is different from the previous case; it refers to calculate long term financial planning. As per the company and its market values and the size of the company, the plan gets precisely monitored. The company’s financial planning has done for 5 to 10 years, which includes its growth, expansion, sustainable development, etc. The effects of this finance will affect each and everyone associated with the company itself.
Decisions are taken in a board meeting, for investment and development to expand the company. The company’s finance can be affected by the government’s policies and regulations, along with the public. Most of the time, companies invest in other small businesses by buying their shares with the help of low capital, that’s not required by the company itself in a short time. Usually, this amount gets invested in the company’s profit.
This finance is at another level; this is different from the first two cases. Here the government put on a team of experts and economists to prepare funds at a country level. It’s also called as government finance and is always country-level finance.
It starts with one-year planning and ends up to 10 or 20 years of planning. The government decides what to invest where, and they decide how to spend remaining capital on developing the country at the world level. If it has found to be ineffective or if it fails to achieve its targets, the whole country has to go through this effect. Though people shouldn’t be worried about it, because in most cases it doesn’t get failed.
The government uses this capital to help entrepreneurs build their businesses; this capital has used to help other countries. The country’s economic values get calculated using government finance.