20 Oct 2014

Reflections on Finance

What do you actually mean by Finance ? The word "Finance" itself has been evolving as centuries pass by .Even if you look at the definition part it covers a wide range of areas. From mere lending of money it has now evolved into accounting, banking, Financial instruments, Financial markets, Corporate Finance, Public Finance, Finance Regulators, Personal Finance and so on. For everything and anything you can easily relate it to money. Finance has become so popular and unavoidable in each one's life.
History states that in 2000BC lending of money to farmers and traders started in Assyria and Babylonia which got evolved and now we call it as banking. If one looks at evolution of finance or indeed our economy as such we can see that it is becoming more complex .The scope as well as the areas covered under finance branch is expanding. Finance has thus become the crux and epitome of each and every business and indeed the whole economy. The whole economy in one way or another depends upon the financial performance of various industries and sectors. After Globalization, world became small and easy to access but financial aspects became complex .Corporate Finance ,Mergers and acquisitions, Tax Regulations started gaining importance.
Finance can be fun as well. So it’s like a matchstick where it will give light and happiness to you and the entire room in the form of "money" or will burn your finger if you don’t use your money well or if you don’t follow the various rules and regulations that one needs to know .The best example is the Great recession which started in US in the year 2007(Sub -Prime Crisis) , the impact of which is still continuing.
Apart from macro level, finance is also very much important for each and every individual. One needs to have a sound financial knowledge, one needs to know the various financial instruments and the risks associated with it to have a secure future. Financial planning is like building a pyramid, where you have to strategically and tactfully build it so that it won't collapse because after all its your money, your sweat and hardwork and I bet no one wants to lose this one easily ...!!
So in short, one could say that the word finance has become the part and parcel of each one's life whether knowingly or unknowingly and evolution of finance is still continuing.

This Article is written by Rahul Tomy (PGDM 2014-16)

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