Finance is a necessary tropic for every person everyone has keep knowledge about finance to manage his wealth and use it properly. 

 The basic element of finance is 

1. Money and capital

2. Investments

3. Risk and Return

4. Inflation

5.  Debt 

6. Stock Markets 

7. Financial Planning’s  and Money management

8. Accounting 

 

 

1. Money and capital

Money is a medium in economy use for primarily exchange the value 

The legal tender of a country for a fixed value controlled by the government 

Money maintains liquidity.  

It’s a medium of exchange.

 

2. Investments 

The process to allocate the money in some business or some growing assets 

To gate some return over the time. It has some high risk investment or low risk investment

  • High risk investment :- when you have some liquidity than some present of your money you can invest in high risk plane like stock market small cap  or lend in high interest 
  • Low risk investments:- Low risk investment is a safest option to invest, like FD , Govt Bond , some endorsement plan  . This type of investments has secured by Government 

3.Risk and Return

At the time of investment you should be properly analysis the risk of this investment and its return

You should calculate your expected return and is has to be profitable after deduct tax, and also know about inflation.

 

4. Inflation

Money has loss its value every year this is called inflation, if you not invest your money in a good place you money was losing the value year by year this is called inflation. 

 

5.Debt

Debt is good thing if you used it properly  if you borrow a certain amount of money and start a proper business and earn profit , than you can pay the loan amount from your business profit and finally a time your debt is clear and you now own the business .

It also have a negative point if you failed to use it properly  than you don’t have profit from this loan and you have to pay the instalment.

 

6.Stock Market

Stock Market is a market where the company list their equity and public can invest in this company 

if company make profit than you also earn good return or other case any reason company pear loss than you also face this loss. 

Do your research properly about the company before investing.

 

7. Financial Planning and Money management

To manage hard earn money and manage expenses and saving properly you should have do financial planning. 

Earning ₹25000

Expenses ₹15000

Saving ₹10000

Saving Divided into 3 parts

Emergency fund        ₹4000 

Low risk investment   ₹3000

High risk investment ₹3000


8. Accounting 

Accounting was done by 2 types professionally or personally

Professional accountant give their service to a company or individual professionally

They use have software and many more knowledge and experiences

And Personal Accounting is very necessary to every person to manage the earn expense and investment and track the