Finance. We hear that word thrown around quite a bit and
used in phrases like in the world of high finance or financing
options are available for those who qualify, but what does
it really mean? It doesnt take an E.F. Hutton or J. Paul
Getty to understand that the term finance and variations
like financial, financing, financier, and such are related
to monetary matters.
You may be surprised, however, just how many people have
no real idea what is meant by finance. In fact, its safe
to say that much of America has a better fix on the goings
on inside the Big Brother house than they do on what happens
at the Federal Reserve! This is sad, but true.
The American Heritage Dictionary of the English Language
offers four definitions for the word finance.
They are:
1. The science of the management of money and other assets.
2. The management of money, banking, investments, and credit.
3. Finances Monetary resources; funds, especially those
of a government or corporate body.
4. The supplying of funds or capital.
The third and fourth definitions are not what were dealing
with here as they indicate the funds and capital belonging
to a person, persons, or business entity (My finances are
in total disarray!) and the act of lending money (I couldnt
buy the new SUV because I didnt qualify for the financing.).
The first and second definitions, however, are right on
the, um, money. This is what theyre talking about on CNN
Financial. This is what concerns economists and financial
analysts. This is what should concern you. The world of
finance in the United States revolves around several things.
These include the stock market because the prices at which
stocks trade are a direct result in most cases of how well
the companies are doing, the actions of the Federal Reserve
which sets interest rates and is responsible for the coining
of money, and the value of the American dollar as compared
to other national currencies.
Many people think that, unless they have significant investments
and considerable assets, financial matters like these do
not concern them. Nothing could be further from the truth.
The unfortunate fact is that, while the wealthy are more
immediately concerned with finance, the common people are
usually the most affected when extreme changes in the financial
world happen. The stock market crash of 1929 is a prime
example of how drastically financial upheavals can effect
everyone in the country.
