Finance is the study, management and participation in activities related to money. The finance industry is massive, extending to multiple areas of corporate, federal and personal existence, including organizations involved in banking, lending, forecasting, investing and more. Finance covers a very wide breadth, basically encompassing all operations in which money changes hands.
What are the four types of finance?
- The four types of finance include personal finance, public finance, corporate finance and private finance.
Finance is divided into three primary categories based on what kind of entity owns the financial assets being analyzed or traded. These four categories include personal finance, public finance and corporate finance. A fourth category, private finance, is a sub-category related to corporate finance.
- Personal finance involves anything related to individual or familial financial planning, including borrowing for a mortgage, estate planning, retirement planning, day-to-day banking and budgeting.
- Corporate finance involves the financial operations of businesses and large enterprises, including spending, investments and shareholder value, as well as all departmental functions of the company’s finance department.
- Public finance includes governmental funding usage, including how funds are used to benefit public interests, all public expenditures, national and local debt, and regulations on trade.
- Private finance is an additional method of funding that utilizes private firms to provide capital and management for projects in the public or private sector.