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How Do you differentiate business finance and personal finance when deciding which to chose?
I want to work in finance but have no idea any other information to decide what specifically
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4 answers
Updated
Daniele’s Answer
Hi Grace,
Deciding between business finance and personal finance depends on your goals, responsibilities, and resources. But you can consider a few things:
Determine whether you're managing finances for your personal needs or for a business entity.
Evaluate the scale and complexity of the financial decisions involved. Business finance typically involves larger sums and more intricate strategies.
Assess your comfort level with financial risks. Business finance often entails higher risks compared to personal finance.
Consider your knowledge and experience in financial management. Business finance may require specialized skills and understanding of corporate finance principles.
Understand the legal and tax implications associated with both personal and business finance to make informed decisions.
Align your financial decisions with your long-term objectives, whether they relate to personal wealth accumulation or business growth.
It may also be beneficial to consult with school advisors or professionals to help you make the best decision based on your individual circumstances and goals.
Best of luck!
Deciding between business finance and personal finance depends on your goals, responsibilities, and resources. But you can consider a few things:
Determine whether you're managing finances for your personal needs or for a business entity.
Evaluate the scale and complexity of the financial decisions involved. Business finance typically involves larger sums and more intricate strategies.
Assess your comfort level with financial risks. Business finance often entails higher risks compared to personal finance.
Consider your knowledge and experience in financial management. Business finance may require specialized skills and understanding of corporate finance principles.
Understand the legal and tax implications associated with both personal and business finance to make informed decisions.
Align your financial decisions with your long-term objectives, whether they relate to personal wealth accumulation or business growth.
It may also be beneficial to consult with school advisors or professionals to help you make the best decision based on your individual circumstances and goals.
Best of luck!
Updated
Terrell’s Answer
You don't have to choose. You can do both even when working with individuals. In the field of investment advisement, you often work with both business and personal finance elements, especially when working with small business owners. For many small business owners, the two areas of finance you mentioned are intertwined but not co-mingled. As an example, a small business owner may want to grow their business so that they have enough funds to retire or even pay themselves a decent salary. If the business owner is a sole practitioner, the net profits from the business may be carried over to their personal income.
So the best solution to your question may be to find careers that align with your desire to work solely with individuals, in the business world, or both.
Best of luck!
So the best solution to your question may be to find careers that align with your desire to work solely with individuals, in the business world, or both.
Best of luck!
Updated
Stephen J (Steve)’s Answer
Hi Grace,
As others who have answered this question have already mentioned, a great deal depends on what you are passionate about and what kind of work you want to do. Business Finance and Personal Finance have some similarities, but also some significant differences.
As far as similarities, both business and personal finance require solid financial skills, and can be very quantitative (quite a bit of math, and understanding of financial concepts). Both also require solid presentation skills; you'll need to be able to communicate well and get your point across.
As far as differences, in business finance, you'll mostly be working with a business to help management understand the financial implications of their decisions, and to help them to make better decisions from a financial perspective. You'll need to understand accounting, and depending on the size of company you work for may specialize in some area of finance, such as tax, or financial planning, or revenue accounting. You'll mostly be doing analysis of results or projects, and making recommendations to leadership as to what decisions they should make.
In personal finance, you'll mostly be working with individual people and families to help them make financial decisions, mostly around investing. While you will need to understand financial markets and investment products, this is also very much a sales related career, and generally you will need to spend a significant amount of time finding clients.
Best wishes in your decision!
As others who have answered this question have already mentioned, a great deal depends on what you are passionate about and what kind of work you want to do. Business Finance and Personal Finance have some similarities, but also some significant differences.
As far as similarities, both business and personal finance require solid financial skills, and can be very quantitative (quite a bit of math, and understanding of financial concepts). Both also require solid presentation skills; you'll need to be able to communicate well and get your point across.
As far as differences, in business finance, you'll mostly be working with a business to help management understand the financial implications of their decisions, and to help them to make better decisions from a financial perspective. You'll need to understand accounting, and depending on the size of company you work for may specialize in some area of finance, such as tax, or financial planning, or revenue accounting. You'll mostly be doing analysis of results or projects, and making recommendations to leadership as to what decisions they should make.
In personal finance, you'll mostly be working with individual people and families to help them make financial decisions, mostly around investing. While you will need to understand financial markets and investment products, this is also very much a sales related career, and generally you will need to spend a significant amount of time finding clients.
Best wishes in your decision!
Updated
Kimberly’s Answer
Grace,
I would suggest prioritizing your passions and goals like Daniele specified above. It is important to know exactly what you are looking for in a long-term profession. From experience, not prioritizing your goals waylays the progress you can make in the first 15 years of your career. I am happy to say I am on track now for those long-term career goals, but lack of prioritization stifled that growth the last 8 years of so.
It is important to know where you passion lies. There are so many facets to finance/accounting careers. Do you want to work directly with the income and outflow of personal finance or a company's profit and loss sheet? Do you want to analyze spending patterns to facilitate conversations between executives and marketing departments? Are you wanting to be in the tax sector helping with personal tax returns or investing people's person finances?
Start by creating a pros and cons list for both corporate and personal finance. Think of characteristics you like and dislike about both.
Do you want to be in the for-profit work or nonprofit world?
Never underestimate the power to lists!
Create a pros and cons list for each professional environment for finance/accounting you are interested in.
Write your immediate, 5-year, 10-year, and career long goals.
I would suggest prioritizing your passions and goals like Daniele specified above. It is important to know exactly what you are looking for in a long-term profession. From experience, not prioritizing your goals waylays the progress you can make in the first 15 years of your career. I am happy to say I am on track now for those long-term career goals, but lack of prioritization stifled that growth the last 8 years of so.
It is important to know where you passion lies. There are so many facets to finance/accounting careers. Do you want to work directly with the income and outflow of personal finance or a company's profit and loss sheet? Do you want to analyze spending patterns to facilitate conversations between executives and marketing departments? Are you wanting to be in the tax sector helping with personal tax returns or investing people's person finances?
Start by creating a pros and cons list for both corporate and personal finance. Think of characteristics you like and dislike about both.
Do you want to be in the for-profit work or nonprofit world?
Never underestimate the power to lists!
Kimberly recommends the following next steps: