What is Finance?


A practical description of how Finance is used in the business world. This video provides a definition of Finance. Finance is the science of managing money. Every subject area within Finance, whether asset allocations, investing, planning for retirement, etc, it always comes back to the scientific approach of making financial decisions. If the definition of finance is that simple, why is Finance so complicated? This video provides an example of how Finance becomes complicated very quickly. The example describes how to decide the best way to use 10k of savings. The video reviews five different options and discusses a financial approach to evaluate your alternatives. Finance strives to answer the questions: How do you decide between those options? What is the best way to manage your money? It is not as simple as choosing the highest rate of return. Because the level of risk is different for every person, this adds to the complexity and suggests a different answer for each individual. What if you do not have any money? It is not about the amount of money, it is about financial decision making. No matter what you are evaluating, if you can frame your decision in terms of financial impact and risk, then you will get better outcomes. You are putting your assets and liabilities in positions based on your assumptions for the future. Using financial tools and processes will result in better outcomes that are more aligned with your goals.

Neither Zach De Gregorio or Wolves and Finance Inc. shall be liable for any damages related to information in this video. It is recommended you contact a CPA in your area for business advice.