Finance is the science that deals with the analysis, creation, management, and accumulation of financial resources. This includes the use of banks, fiscal institutions, and other financial organizations for the purpose of creating, generating, managing, and spending money. A large amount of finance is dealt in the stock market, which is generally focused on the buying and selling of stocks by retail investors and institutional investors. Other areas of finance include the commercial paper market, the government, and the private sectors.
Finance is the most important area of business, where decisions are made on how to invest capital. It also touches on investment banking, bank lending, venture capital, mortgage banking, asset management, the foreign exchange market, commodity markets, insurance, investment management, and the financial systems of other countries. The field of finance has many sub-specialties, including banking, securities financing, commodity markets, personal and group finance, asset management, international finance, global economics, international business, and derivatives.
Finance can be subdivided into two main categories: banking and money management. Banking refers to the process of creating and managing financial assets by means of banks. Money management deals with the methods of investing and creating financial wealth by using banks. Most large banks deal in only one or two types of these areas, while small banks usually operate in all three. The other major category of finance that finance deals with is securities and equities, which include such financial instruments as bonds, mutual funds, and common equity securities.
Finance graduates may obtain a bachelor’s degree in accounting, while those pursuing graduate degrees in business and economics may choose to take a number of different business degrees. Finance students should select a discipline that will allow them to tailor their specialized studies to their specific needs. Finance associates degrees, for instance, are best suited to students who are considering working for a specific company within the industry or working for a firm that provides services directly related to finance. Finance associates degrees typically offer coursework on taxation, savings and lending, portfolio theory, economics, risk management, international business, real estate, securities trading, and banking. Finance associates degrees do not usually offer any special curriculum in business or economics.
A number of different types of finance students may find themselves involved in, or studying for, a number of different roles. Loan officers, who manage the financial portfolio of a bank, perform a number of crucial functions. Loan officers collect monthly payments from customers and distribute their payments to creditors. Many loan officers will also act as accountants, reviewing and evaluating accounts receivable and inventory to ensure that funds are available to pay customers. Some loan officers may also be involved in setting short-term and long-term lending programs, approving or denying new business loans, negotiating sales and lease contracts, and discussing various lending and business strategies. Some banks employ finance clerks as well, who perform clerical and administrative tasks related to financial management.
Finance careers vary widely in scope and responsibilities. Jobs in this field often require hands-on experience in a variety of financial matters. Many managers will begin their careers as loan officers, and will advance to more managerial positions once they have proven themselves to be effective and knowledgeable managers. While these jobs typically require an MBA, many business owners will also prefer to complete courses in finance at community colleges or junior colleges. Many finance degrees can also be completed online, through online universities, or by attending traditional colleges.