Finance is defined as the management of money and includes activities such as investing, borrowing, lending, budgeting, saving, and forecasting. There are three main types of finance: (1) personal, (2) corporate, and (3) public/government. This guide will unpack the question: what is finance?


The SIMPLE way to define finance is by providing examples of the activities it includes. There are many different career paths and jobs that perform a wide range of finance activities. Below is a list of the most common examples:

• Investing personal money in stocks, bonds, or guaranteed investment certificates (GICs)
• Borrowing money from institutional investors by issuing bonds on behalf of a public company
• Lending money to people by providing them a mortgage to buy a house with
• Using Excel spreadsheets to build a budget and financial model for a corporation
• Saving personal money in a high-interest savings account
• Developing a forecast for government spending and revenue collection


There is a wide range of topics that people in the financial industry are concerned with. Below is a list of some of the most common topics you should expect to encounter in the industry.

• Interest rates and spreads
• Yield (coupon payments, dividends)
• Financial statements (balance sheet, income statement, cash flow statement)
• Cash flow (free cash flow, other types of cash flow)
• Profit (net income)
• Cost of capital (WACC)
• Rates of return (IRR, ROI, ROA)
• Dividends and return of capital
• Shareholders
• Creating value
• Risk and return
• Behavioral finance


A definition of finance would not be complete without exploring the career options associated with the industry. Below are some of the most popular career paths:

• Commercial banking
• Personal banking (or private banking)
• Investment banking
• Wealth management
• Corporate finance
• Mortgages / lending
• Accounting
• Financial planning
• Treasury
• Audit
• Equity research
• Insurance