Finance is a really broad subject area. Finance is the science of managing money. No matter what you talking about in finance it always comes back to this central idea. So if you talking about asset allocation, or planning for your retirement you are always coming back to what is the scientific approach I am going to take to make that decision and what is the best way to manage my money. Now you have really unlimited options, I talk about some potential options for investment such as education, home renovations, car, stock market, money in mattress for safekeeping.
So here is the question how do decide between those five options, what is the best way to manage your money. So you might be tempted at this point to say each of those options have a certain rate of return, we want to put our money to work, we want to earn a little bit of money in the process. So I am just going to pick the highest rate of return, it is not really that simple, each of these options has a rate of return but also has risks to it. A level of uncertainty.
Here are some common examples of finance activities investing personal money whether that for yourself or others in stocks, bonds, or other investments, borrowing money from institutional investors like mutual funds by issuing bonds on behalf of a public company, lending money to people by providing them a mortgage to buy a house, using excel spreadsheets to build a budget or financial model for a corporation, saving personal money in a high-interest savings account or developing a forecast for government spending and revenue and tax collection.