The Necessity of Finance

The fundamental principles of finance have very simple origins and one can trace their roots to the beginning of human civilization. But as a subject, finance has evolved—particularly in the past fifty years—into an extremely complicated and potentially confusing form. The Necessity of Finance: An Overview of the Science of Management of Wealth for an Individual, a Group, or an Organization seeks to provide a comprehensive and concise orientation for those seeking a more understandable presentation of the complex nature of finance. Using everyday terms and readily grasped concepts, Dr. Anthony M. Criniti IV, a former financial consultant and current university-level finance professor, sets out to detail the necessity of finance; to clarify the definition, purpose, and goals of both finance and economics; to explore financial concepts in a straightforward manner; and to stimulate interest and understanding that will lead to ongoing investigation.

Finance, although highly interrelated with many subjects, is a separate field of study that is often confused with other areas, most notably economics. With world wealth accumulating to its highest point in history, the necessity to understand this subject on its own terms is more crucial than ever. The Necessity of Finance highlights the need to engage with finance as a separate science, clears up the confusion with related subjects, and coins the word "financialists" to identify the scientists in this dynamic field.

Starting with a discussion about the need for finance, and moving forward to establish the definition, purpose, goals, and history of both finance and economics, presenting in the process the basic terminology necessary to understand these subjects, The Necessity of Finance will equip the beginner to intermediate level financial student with vital information and a clear approach for continued study. In addition, its unique perspective will be of value to the advanced student and the practitioner. Topics addressed include: What is the difference between money and wealth? What is the difference between investing and saving? What is risk and return? Major financial questions are also analyzed, including: What kinds of investments exist? What are the different techniques for selecting investments? What role does ethics play in finance?

Finance is not an easy subject for the average student. While The Necessity of Finance does not replace the need for required college textbooks, it will serve as an indispensible supplemental learning tool that may clarify expectations of future financial journeys, whether it’s learning in a university or actively investing in the marketplace. In this extremely useful overview, Dr. Criniti demonstrates that finance is a very promising science that will benefit those who commit themselves to its study and practice.

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From the Preface of The Necessity of Finance (2013) by Dr. Anthony M. Criniti IV:

This book was created to assist many people in understanding the basics of finance, the science of wealth management for an individual, a group, or an organization. As a finance professor and former financial consultant, I have often witnessed the difficulties people have faced in understanding this very complex subject. Although many aspects of finance have very simple origins, the subject has evolved into the extremely complicated form we know today, particularly in the last fifty years. Many people complain that finance is too confusing. An individual’s experience with finance may be better if he or she reads a preliminary book written in everyday terms that can help him or her to understand the subject more clearly before he or she engages in formal study. This book is a reflection of my attempt to demonstrate the complex nature of finance in a more understandable way.

The title of this text reflects a radical view of thinking about the subject of finance, which has simple roots in the beginning of civilization. However, modern finance, as taught in American universities, only began in the 1950s. Although it is taught as a separate subject, and the distinction between finance and economics and other similar subjects may seem obvious, many of the founding fathers of modern finance are self-admitted economists. Also most of the major theories were created by economists, physicists, mathematicians, etc. No wonder finance is often confused with other subjects.  

With world wealth accumulating to its highest point in history, the necessity to understand this subject is more crucial than ever. This book highlights the need to give full respect to finance as a separate science and clears up many of the confusions with related subjects such as economics. It also coins the word “financialists” to identify the scientists in this field.

This book starts with an introduction about the need for finance. Next the definition, purpose, goals, and history of finance and economics are analyzed. This book also explores the basic terminology necessary to understanding finance. For example, what is the difference between money and wealth? What is the difference between investing and saving? What is risk and return? What is the time value of money? Other major financial questions are analyzed as well. For example, what are the different techniques for selecting investments? What are the different branches of finance that currently exist? What kinds of investments exist? What role does ethics play in finance?

Although this book is targeted at beginner to intermediate-level financial students and anyone interested in the subject with or without limited financial experience, it is also relevant for master-level students and beyond. For advanced students and practitioners, this book may serve as a tool to help reflect on and reevaluate the concepts they were taught in finance from a simpler alternative perspective. I believe simplicity, when demonstrated in its purest sense, has a way of transforming a concept or subject into something with a totally different meaning. I hope to have this effect. All I ask is that the advanced students and practitioners read this book with an open mind and deeply reflect on all of the simpler terms we often take for granted.

Finance is a very promising science that can be helpful to all who spend time studying and practicing it. However, I want to be clear that it is not easy for the average student. This book is not a substitute for your required college or university financial textbooks and reading it may not make you a millionaire. However, this book may serve as a supplemental learning tool that may clarify expectations of your future financial journeys, whether it’s learning in a university or investing in the marketplace. 

The information is this book covers a wide variety of topics. Some material may interest you, and some may not. The best way to approach this book is to take your time and reflect on the ideas and concepts. You are encouraged to take notes and review sections that are of interest to you. Later, if you decide to take a finance class, you can always refer back to this book for maximum results.

Finally, I have attempted to write this book as objectively as possible, but from time to time my opinions may appear. However, this should have a very limited effect on the main goals of the book, which are to demonstrate the necessity of finance; to clarify the definition, purpose, and goals of both finance and economics; to explore financial concepts using a simpler approach; and to attract more interest in this field. Happy reading!