at 4:30 AM

Why should you study "Finance"?


(This is reproduction of Author's response to a Question on Quora similar to the title question)

Let's start by saying this - You should do everything and anything you love to do (Unless it is Illegal, immoral or involves listening to Justin Bieber, kidding ;))

Now, that being said lets get to the point - Why Study (read "love") Finance -

  • Finance is one of the most oldest and vital stream of studies -
    Think about this for a moment, one of the oldest problems in the history of mankind is either lack of money or lack of planning to use the excess money in hand, and; what is the solution : Study of Financial Concepts to put idle money to work and plan and/or prioritize the use of scarce funds
  • Finance is everywhere -
    Every person needs to manage his financial resources, plan for children education, put adequate amount on the paper for planning retirement; in a nutshell that is "Personal Finance" for you.
    Now replace an individual by an organisation, think about M&As, Raising Capital, Equities, Debtor Management, Loans and Advances, Expansion/Contraction of business, that is "Corporate Finance" more or less. You notice the pattern, you do anything it will more or less would already have or will have intervention of Finance

  • Finance can teach you a lot about life in general -
    At the risk of sounding extremely philosophical and a godman wannabe, I would like to draw your attention towards the astonishing similarities between life and finance; Compounding/Discounting, Opportunity Rate of Interest, Arbitrage.. the list goes on, you can google and find very interesting articles discussing the application of these concepts of finance to situations in life.
    I would like to mention the example of concept of "Valuation" here. Finance draws a clear cut line between "Value" and "Price" of something. There is a whole sub-stream under finance dedicated to distinguishing "Price" of an asset(i.e. What it is selling at/quoted at in Market) and the "Value" of an asset (i.e. How much it is worth, what is its intrinsic self). It ponders that you can benefit if you part ways with an asset which is overvalued(read hyped/overrated) and invest in something which is undervalued( read underdog). Let's throw a quote by Oscar Wilde here to illustrate the difference between valuation and pricing in life (and to make the answer a bit fancy and for just the sake of quoting Mr. Wilde)

    Now, isn't it a magnificent exercise which we should adopt in our lives also?
    Oscar Wilde said it on the basis of his blissful literary intellect. It seems like Mr. Buffet also agrees with the same on the basis of his blissful knowledge of finance

  • It is very interesting and (still)evolving field of studies -
    It's entirely your choice to study and exercise the laid down concepts, trading techniques and theories, or; go ahead and tread in the unexplored sea of research and finding new stuff, patterns and observations
  • Like many other fields out there, it pays well. You can earn well if you learn well.

Irrespective of every specific reason, almost all streams will cater to someone's curiosity and interest, land you in a comfortable job and offer you something new to learn, and, you can have "n" number of reasons to do a thing or not, BUT; do what makes you happy, study what you find interesting, because at the end of the day, that is the wisest thing you can do :)

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