why do you want to study finance essay

why do you want to study finance essay

The Importance of Studying Finance

1. The Role of Finance in Society

Finally, the approach to investments deals with the decision-making of individuals or companies about the application of resources in different risk/return conditions. Financial risk management is a core subject in investments. From the point of view of information management, finance studies several aspects related to risk and return, determining if operational and financial earnings are appropriate for good performance and if capital structure leverages are compatible with the risk assumed by managers.

Financial markets have a great focus on securities markets, but they also address the market for derivative instruments, commodities and foreign exchange, while the focus of institutions is on issues related to financial institutions and are companies that have as their main object activities admitting deposits and granting financial intermediation services.

Corporate finance has a focus on the decision-making of private companies or governmental and non-governmental entities, related to assessing the risks of the entity and, based on its risks and the challenges that it may present, it aims to seek wealth maximization.

Personal finance addresses issues such as getting money, administering it intelligently, protecting savings, accumulating wealth and generating income, as well as good planning and management of household goods.

The finance takes on the strategic role of being the art and science that is responsible for providing the information of economic character necessary for decision-making. The role of finance is in areas such as personal finance, corporate finance, financial markets, financial institutions, investments, among others.

2. Advantages of a Finance Education

The study about finance is a must nowadays because globalization affected the industrial scenario. It made the business and investment quite complicated. Managing finances has become a great problem in the industrial sector. When an asset is saved, it is said to be performing financial investment. A guarantee is necessary in order to protect the money of investors from an investor’s point of view. An asset is said to be performing a financial investment. Thus, the importance of finance is increasing day by day and the students are given insights about the subject. Finances have become an integral part of every individual. It is not necessary that finance is needed only for the industrial sector. It is also needed in small organizations, medium-sized industries, and also in the service sector.

The importance of studying finance. The term finance is generally associated with money management, which involves investment, lending, or credit. It refers to the entire system of money management and the financial cycle. Finance is a field that deals with wealth. It is a science of managing money. With continuous increase in the amount of money, the importance of its management is also increasing. It helps in cataclysmic or deracinating approach of money. Finance is the most important factor in any industry. Management of the finance is a major task where a company can become successful in the future. It is considered to be significant for trading of goods and services. The other regulators of the financial system are demand and supply.

3. Career Opportunities in Finance

A budget analyst helps public and private corporations organize their finances by forecasting their needs with a keen focus on how their money needs to be allocated. This function is often found in large companies, organizations, and governments that need to allocate significant existing and future resources to one cohesive organized strategy. A bachelor’s degree in finance is also required, with the need for analytical skills and experience in any other related fields such as bookkeeping.

A stockbroker is an individual or a company that is an agent who buys and sells stocks and other securities for clients. These brokers also make recommendations of company shares, collectively known as stocks. Licenses are required for this type of work and include the Series 7 (General Securities Representative Series 7 exam) and the Series 63 (Uniform Securities Agent State Law Examination). As a job candidate for the Series 7 and 63 exams, you’ll need to have a solid career in finance, often in another sector such as investor relations or portfolio management, and you might need to consider taking a comprehensive exam prep course with a training provider prior to taking the test. Some brokerages will handle this for their candidates.

Financial analysis is the gathering, analyzing, and keeping track of financial data and details by using the latest technologies. You will be using this information to keep companies informed and in a good position to make the best economic decisions for future growth and stability. Job opportunities exist with the government at the local, state, and federal levels.

Finance careers are extremely attractive for so many people because of the flexible work options that can be found in this industry. This is one of the biggest reasons why you should consider studying finance since it will give you access to roles that suit your preferences, whether you are looking for a completely independent work setting, can adapt to a traditional workplace lifestyle, or just want something in between. Let’s take a look at some of the job opportunities that you can find in the finance industry.

4. Developing Financial Literacy

Making sound decisions is also an integral part of financial planning. Doing so will help you develop a deep appreciation for how money is required to earn more money. You will realize the effects of compound interest and its significance in investing over the long term. Knowing how to invest your money so that it grows over a specific period of time and into a desired amount will also assist you in making responsible investment decisions. Developing financial literacy is also a part of financial capability. Financial capability was introduced by the first President of South Africa, Nelson Mandela, in 2004. Financial capability is the ability to employ knowledge, understanding, skills, and techniques to manage and control personal finances, make informed choices, negotiate, carry out, and understand entry-level financial functions to meet the needs and goals of an individual or household. The skills you will acquire by studying finance will assist you in achieving the above definition of financial capability.

Studying finance can improve your understanding of financial matters, which will ultimately help you make better decisions. An informed investor will have a clear understanding of both the benefits and risks of investing. They will also be knowledgeable about interest rates and taxes, and the implications of these on their investment choices. Furthermore, an informed investor will carefully read and understand financial statements, research firms thoroughly, and make the appropriate investment decisions that will ultimately help them achieve long-term financial goals. Additionally, an informed investor is one who knows when to seek advice and where to look for it. Understanding financial matters will also help you understand quality and risk in choosing personal insurance, savings, and retirement plans. By studying finance, you will be able to understand (and thus explain to others) exactly why you are investing, what you intend to achieve, and how you are going to do it.

5. The Impact of Finance on Personal and Global Economy

Therefore, in this regard, can a company make proper decisions without financial information? The importance of finance is not only obvious in the operations of any financial organization or businesses in general but in the provision of services in manufacturing and operations, in the health sector (for example, in screening and management of chronic diseases), in the agricultural sector, in space commerce (as the space tourism industry is worth an actual 500 million dollars and forecasts point to a 7 million annual growth rate), etc. The impact of finance is indelible from practically all things businesses are involved in due to its integration into most areas in the modern economy. This also demonstrates the interconnectedness of business operations at all stages, from the production of a good to value for both the firm (and all investors therein) and the consumers.

Finance has an enormous impact on both personal and global economies. Everything we do has a financial implication in some way, and very few areas of our lives do not have a practical application in finance. TV shows and even the energy industry, or news graphics highlighting interest rates, exchange rates, stock prices, and the like are normal fare. The financial services sector (banks, financial planners, insurance companies, etc.) is a large part of the economy, but the related sectors of the economy are increasingly becoming dependent on judicious financial management, such that finance is really part of every part of our lives. For businesses – public and private, big and small, service and goods-producing – finance professionals are entirely necessary and involved with forecasting, investment, and financing decisions. These economic assessments are carried out practically on a daily basis.