- published: 24 Nov 2013
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Finance is the study of how investors allocate their assets over time under conditions of certainty and uncertainty. A key point in finance, which affects decisions, is the time value of money, which states that a unit of currency today is worth more than a unit of currency tomorrow. Finance measures the risks vs. profits and gives an indication of whether the investment is good or not. Finance can be broken into three different sub categories: public finance, corporate finance and personal finance.
Questions in personal finance revolve around
Personal financial decisions may involve paying for education, financing durable goods such as real estate and cars, buying insurance, e.g. health and property insurance, investing and saving for retirement.
Personal financial decisions may also involve paying for a loan, or debt obligations. The six key areas of personal financial planning, as suggested by the Financial Planning Standards Board, are:
Achieving these goals requires projecting what they will cost, and when you need to withdraw funds. A major risk to the household in achieving their accumulation goal is the rate of price increases over time, or inflation. Using net present value calculators, the financial planner will suggest a combination of asset earmarking and regular savings to be invested in a variety of investments. In order to overcome the rate of inflation, the investment portfolio has to get a higher rate of return, which typically will subject the portfolio to a number of risks. Managing these portfolio risks is most often accomplished using asset allocation, which seeks to diversify investment risk and opportunity. This asset allocation will prescribe a percentage allocation to be invested in stocks, bonds, cash and alternative investments. The allocation should also take into consideration the personal risk profile of every investor, since risk attitudes vary from person to person.
Anthony "Tony" Robbins (born February 29, 1960) is an American self-help author and motivational speaker. He became well known through his infomercials and self-help books, Unlimited Power: The New Science Of Personal Achievement and Awaken The Giant Within. Robbins writes about subjects such as health and energy, overcoming fears, persuasive communication, and enhancing relationships. Robbins began his career learning from many different motivational speakers, and promoted seminars for his personal mentor, Jim Rohn. He is deeply influenced by neuro-linguistic programming and a variety of philosophies.
Robbins's work has been featured in major media including Time, Newsweek, Fortune, Forbes, Life, GQ, Vanity Fair, Business Week, Tycoon and Success magazines, the CBS Evening News, NBC News, ABC's Prime Time Live, Fox News, CNN and A&E as well as newspapers, radio programs, and Internet media worldwide. Robbins has been mentioned or featured in 15 major motion pictures, including a cameo role a romantic comedy film Shallow Hal, starring Gwyneth Paltrow, Jack Black, and Jason Alexander. In 2007, he was named to Forbes magazine's "Celebrity 100" list.