Grasping the basics of banking and budgeting are life lessons and you will require this, alongside good spending habits to be on your way to financial independence.

The Banking Industry handles cash, credit, and other financial transactions. A Bank is a regulated financial institution that accepts deposits and makes loans. There are various types of banks including retail banks and investment banks.

However, Banks are more than just a safe place where money can be kept and invested. They assist you to become financially resilient.

Types of Banks

  1. Retail Banks: These type of banks are created specifically for retail consumers. However some larger international financial institutions contain both retail and commercial banking divisions. Retail banks provide services for the general public. Other names for retail banking include personal banking or general banking institutions. Retail banks or personal banks or general banking institutions provide services such as checking and savings accounts, loan and mortgage services including car financing, and short-term loans such as overdraft protection. Other services of retail banks include customer credit card, foreign currency exchange, private banking and wealth management.
  2. Corporate Banks: These type of banks provide specialty services to their business clients, ranging from small businesses to larger multinational corporations. Corporate banks also known as Commercial Banks also provide credit services, cash management services, commercial real estate services, employer services, and trade finance.
  3. Investment Banks: Investment banks are commonly referred to as financial intermediaries. They provide clients with services such as underwriting and merger and acquisition (M&A) transactions.
  4. Central Banks: Central banks are responsible for regulating the capital and reserve requirements of their member banks. They ensure stability of a nation’s currency, manage inflation and monetary policy, and oversee a nation’s money supply. In general they are non-market based and unlike the other types of banks listed above do not provide services for the general public or corporations.

Checking Accounts vs Savings Accounts

Checking accounts are a type of basic bank account that provides the holder easy access to their money via withdrawals or deposits. These kind of accounts are typically opened online or in branch at a bank or credit union and can be used to pay bills, make purchases, receive money from friends, family, and employer.

Savings accounts on the other hand are a type of valuable financial tool used to separate your expendable income from the money you want to build and grow your emergency fund with. Savings accounts are the simplest and most effective financial tools that assist you towards financial freedom.

In conclusion, checking accounts are accounts where money used for expenses are kept, while savings account are used for keeping money you want to save.

Credit Unions

Credit Unions are non-profit financial institutions consisting of members who are considered equal shareholders. Access to credit unions is by membership only and members have to be share a common bond with other members such as living or working in the same area, working for the same employer, belonging to the same trade union or other association.

Credit unions offer financial tools such as checking and savings account, loans, credit cards, access to ATM, and in-person banking. Credit unions are known for their higher interest rates and lower lending fees.


A budget is a summary of your anticipated spending and income. By budgeting you can prove that you are aware of how much money is coming in and leaving your account each month. Budgeting also allows to see where you are spending most and how you can lower the amount of money you spend.

Setting a budget assists you in improving your financial plan for today and tomorrow. It allows you to get and pay off debts, save for retirement, make large purchases, and save for an emergency.

Recommended Budgeting Strategies

  • Line Item Budget

Our research shows that one of the most conventional but very effective budgeting strategy is the line-item budget where every expense is tracked per item. A line-item budget is typically set up by the application of a spreadsheet where each one of your expenses or category of your expenses is listed over a chosen time period – normally a month.

  • 50/30/20 Budget

The 50/30/20 budgeting strategy is an intuitive and easy plan to assist you reach your financial goals.

The guidelines for the 50/30/20 budget are easy:

50% of your net income should go towards needs like food and housing. 30% should go towards wants like holidays or new clothes. 20% should be put into savings.

Identifying the distinction between wants and needs is the most complicated part of this strategy. Needs are those expenses that are essential for your survival such as rent, car payments, food, debt payments or mortgage payments. To make sure you are financially healthy, half of your net income should be enough to cater to your needs.

Wants are those nonessential expenses that are ‘nice to have’. They include expenses like movie tickets or having the latest electronic gadgets. Wants are optional payment and mostly things that are nonessential to your survival.

Finally, the 20% of your net income should be put towards savings and investment. This includes actions such as adding money to an emergency fund savings account, investing your money or saving in a lifetime ISA.

  • 80/20 Budget

The 80/20 budgeting strategy is a streamlined 50/30/20 budget. This budget strategy is built on the assumption that you ‘pay yourself first’ and where the rest of your net income goes is inconsequential. You save 20% of your net income and the rest is yours to spend as you wish.

This strategy focuses on savings and can also be adapted to 60/40 or 70/30 if you decide to save 30% or 40% of your net income and spend the rest as you wish.


Investment Ethics

Investment Ethics is an investment strategy where the investor’s ethical values (moral, religious, social) are the primary objective, along with good returns. Many investors are starting to insist that firms they invest in are socially responsible. This implies treating their personnel with respect, creating healthy investments, and facilities and keeping away from unethical sphere practices. Investment Ethics is for investors who want to invest their money for noble causes.

Sorts of Investment Ethics

  1. Socially Responsible Investing Ethics

Socially Responsible Investing Ethics steer clear of investing in controversial areas such as gambling, weapons, tobacco, alcohol, and oil. Here, the investor’s moral value is given vital importance in investment selection.

2. Environmental, Social and Governance Ethics

Unlike, Socially Responsible Investing Ethic; Environmental, Social, and Governance Ethic consider in their decision-making how environment, social, and governance uncertainties and opportunities can cause material effects on a firm’s performance. They can invest in sustainability while maintaining the same level of returns as they would with a standard approach.

3. Effect Ethics

Effect Ethics place equal importance on ethics performance. Hence, they firmly look at creating ethical changes supporting firms that provide certain investments and facilities. Effect Ethics are suitable for investors who are socially responsible but also want good returns.

4. Faith-based Ethics

Faith-based Ethics only invest in stocks that follow religious values and ideals, and firmly exclude investments unfit for the category.

Benefits of Investment Ethics

  • The investor feels happy when an ethical holding firm performs well. They benefit emotionally and financially when the firm shares their values.
  • As more people invest in ethical funds, the investments can grow substantially in the future.
  • Since investment ethics is gaining importance, it will encourage other spheres to improve their ethical practices to attract funding.

Inadequacies of Investment Ethics

  • As investment ethics is a proactive strategy, it involves a lot of research to ensure that it aligns with the investor’s values and beliefs.
  • Investment ethics provide suboptimal returns; hence, the investor gives up financial gains for an ethical approach.
  • The responsibilities for investment ethics can be higher due to the research involved in identifying the right investment.

Investment Ethics assist firms to gain access to capital to grow and fund their corporate social responsibility programmes. It also gives investors the ability to influence the operations of spheres and practices towards their personal values and ethics.

An investor chooses to invest ethically when they want to make a change in society. Their primary goal from the investment is to satisfy their moral, social, and religious values, while returns are secondary.

While Investment Ethics is good, it is an expensive strategy, as thorough research needs to be done to find investments that satisfy the investor’s primary objective. Also, unethical firms will continue to succeed as other investors seeking high returns will support them.


Businesses have a history of welcoming various investment(s). As they transform, new processes are expected to result from their investment collaboration with other businesses around the world to ensure the continued benefit of investments among novel investors.

There are no laws specifically governing or checking inward direct investments to businesses. Investors of both traditional and alternative investments are treated the same in law and are able, in most situations, to participate equally in investments.

The exceptions are government-owned or managed areas such as some parts of the energy and transport sectors, and in the defence sector.

Despite no specific legal structure, investors should be aware that businesses have powers to intervene in transactions. The following regulations apply to both traditional and alternative investors active in spheres.

  • Merger Management Rules

Where inward investment in a business involves the acquisition of the business, part of the activities of the business or the creation of a joint venture that is prone for review in the business’s merger management law.

  • Public Interest Review Regime

A business’s merger management regimes include provisions allowing a transaction to be reviewed on certain specified bases other than a commercial law (so called ‘public interest’ or ‘legitimate interest’ bases).

  • Monopoly Rules Regime

Where government approval is required for the proposed takeover by a unique investor of any large or economically significant enterprise.

  • Banking and Insurance Enterprises

Government authorisation should be obtained before starting operations in a sphere.

  • Real Estate Acquisitions

These are generally exempt from checks on new ownership, but rules can apply to how the owner of an interest in real estate applies or develops the land or building.

  • Industry Laws

A government has the power to prevent an acquisition by a foreign based entity of an ‘important manufacturing enterprise’ where it appears the change of management would be contrary to the interests of the nation, or to any substantial part of it.

  • Corporate Residency

There are no corporate law residency requirements when investing in businesses, irrespective of whether an investment in a business is by way of share investment or asset investment.

Financial Instruments

Information regarding financial instruments is vital to investors and operators alike, as it provides insight into the risks related to financial assets and financial obligations including the exposure to risks arising from these to the entity and how they are managed. Such information can influence an investor’s assessment of the financial position and financial performance, as well as provide insight into the amount, timing, and risk of an entity’s future cash flows.  

The extent and nature of financial instruments held by businesses vary significantly from those that have few financial instruments and those that have many and complex financial instruments. The complexity and extent of the requirements or presentation, recognition, measurement, and disclosures of financial instruments depends on the extent of the entity’s application of financial instruments and of its exposure to risk.

It is common for businesses to apply derivatives in managing interest rate risk, credit risk, and risks associated with fluctuating industry prices of products/services.

A financial instrument is any contract that gives rise to both a financial asset of one entity and a financial obligation or equity instrument of another entity.

Assets and obligations in businesses arise from both contractual and non-contractual arrangements. Assets and obligations arising from non-contractual arrangements are unacceptable when defining a financial asset or a financial obligation. Physical assets, leased assets, and intangible assets are also unacceptable as financial assets. Similarly paid assets are unacceptable because they represent economic benefits in the form of future receipt of goods or assistances.

Constructive obligations are noncontractual and are therefore unacceptable as financial obligations.

A contract is an agreement between two or more parties that has clear economic consequences that the parties have low or no discretion to keep away from, typically because the agreement is enforceable by law. Contracts, and thus financial instruments, take a variety of forms and can be unwritten.  

Businesses enter arrangements that have the substance of contracts. A business considers the substance rather than the legal form of an arrangement in determining whether it is a contract that fulfils the definition of a financial instrument. Contracts are generally evidenced by the following (although this could vary from jurisdiction to jurisdiction):

  1. Contracts involve willing parties entering an arrangement,
  2. The terms of the contract create rights and obligations for the parties to the contract, and those rights and obligations could result in equal or unequal performance by each party, and
  3. The remedy for non-performance is enforceable by law.

A financial asset is any asset that is:

  1. Cash,
  2. An equity instrument of another entity,
  3. A contractual right:
  4. To receive cash or another financial asset from another entity; or
  5. To exchange financial assets or financial obligations with another entity in conditions that are potentially favourable to the entity.
  6. A contract that is settled in the entity’s own equity instruments.

Currency (cash) is a financial asset because it represents the medium of exchange and is therefore a basis on which all transactions are measured and recognised in financial statements. A deposit of cash with a bank or similar financial institution is a financial asset because it represents the contractual right of the depositor to obtain cash from the institution or to draw a check or similar instrument on the balance in favour of a creditor in payment of a financial obligation.  

Unissued currency is unacceptable as a financial instrument.

Common examples of financial assets representing a contractual right to receive cash in the future:

  1. Accounts receivable,
  2. Notes receivable,
  3. Credits receivable,
  4. Equity securities, and
  5. Bonds receivable

A financial obligation is any obligation that is:

  1. A contractual obligation:
  2. To deliver cash or another financial asset to another entity, or
  3. To exchange financial assets or financial obligations with another entity in conditions that are potentially unfavourable to the entity.
  4. A contract that is settled in the entity’s own equity instruments.

Common examples of financial obligations representing contractual obligations to deliver cash or another financial asset to another entity in the future are:

  1. Accounts payable,
  2. Notes payable,
  3. Credits payable,
  4. Bonds payable.

Again, in each circumstance, one party’s obligation to deliver cash or another financial asset is matched by contractual right of another party to receive cash.

One entity’s contractual right to receive cash is matched by the other entity’s corresponding obligation to deliver.

The ability to exercise a contractual right or the requirement to satisfy a contractual obligation is absolute, or contingent on the occurrence of a future event. A contingent right and obligation fulfil the definition of a financial asset and a financial obligation, even though such assets and obligations sometimes are unrecognised in the financial statements.  

A financial instrument could require an entity to deliver cash or another financial asset, or otherwise to settle it in such a way that it would be a financial obligation, in the event of the occurrence or non-occurrence of risky future events that are unpreventable by both the issuer and the holder of the instrument such as a change in an interest or exchange rate. The issuer of such an instrument has no unconditional right to steer clear from delivering the cash or another financial asset (or otherwise to settle it in such a way that it would be a financial obligation). Therefore, it is a financial obligation of the issuer and a financial asset of the holder.

Contracts to Purchase or Vend Non-Financial Assets

Contracts for purchasing or vending non-financial assets are unacceptable as financial instruments except

  • The contract permits it to be settled net in cash,
  • The entity has a practice of settling similar contracts net in cash,
  • The entity has a practice of taking delivery and vending the nonfinancial item for a profit, or
  • The non-financial item is readily convertible to cash.

Contracts to purchase or vend non-financial items are unacceptable when defining a financial instrument because the contractual right of one party to receive a non-financial asset or assistance and the corresponding obligation of the other party has no establishment of a present right or obligation of either party to receive, deliver, or exchange a financial asset.

Many investment contracts are of this type. Some are standardised in form and trade on organised industries in much the same fashion as some derivative financial instruments.

The ability to purchase or vend an investment contract for cash, the ease with which it can be purchased or vended, and the possibility of negotiating a cash settlement of the obligation to receive or deliver the investment has no alterations on the fundamental character of the contract in a way that creates a financial instrument.

A contract that involves the receipt or delivery of physical assets checks the financial asset of one party and the financial obligation of the other party except any corresponding reimbursement is deferred past the date on which the physical assets are transferred. Such is the situation with the purchase or vend of goods on credit.

Some contracts are investment-linked but are uninvolved with settlement through the physical receipt or delivery of an investment. They specify settlement through cash payments that are determined according to a formula in the contract, rather than through delivery of fixed amounts.

The definition of a financial instrument also encompasses a contract that gives rise to a non-financial asset or non-financial obligation in addition to a financial asset or financial obligation.

Such financial instruments often give one party an option to exchange a financial asset for a non-financial asset.

Portfolio Management


Portfolio management refers to the process of developing, operating, maintaining, and promoting investments in a price-effective way. Typically employed in finance, the term is applied in reference to individuals or businesses that manage these investments on behalf of individuals or other entities.  


Every business needs to keep track of its investments. That way, its investors and stakeholders will know which investments are available to be employed to provide maximum benefits. The investments owned by any business can be classed into two major categories: 

  • Non-current investments  
  • Current investments 

Non-current investments refer to the investments acquired for long-term application, while current investments are those that can be converted into cash in an instant. 

When it comes to portfolio management, managers often deal with two main concerns. The first is what role does the portfolio management process play? Second, how can a business develop a good portfolio management plan? 

Value of Portfolio Management 

There are different reasons why businesses should be concerned with regard to portfolio management, including: 

  1. Enables a business to account for all its investments 

The process makes it easy for businesses to keep track of their investments, whether in current or non-current. Business owners will know where these investments are located, how they are being employed, and whether there have been changes made to them. Consequently, the recovery of investments can be done more efficiently, hence, leading to higher benefits. 

  1. Assists guarantee the accuracy of amortisation rates  

Since investments are checked on a regular basis, the process of portfolio management ensures that the financial statements record them properly.  

  1. Assists identify and manage uncertainties 

Portfolio management encompasses the identification and management of uncertainties that arise from the employment and ownership of certain investments. It implies that a firm will always be prepared to manage any uncertainty that comes its way.  

  1. Removes ghost investments in the firm’s inventory 

Instances exist where misplaced, mishandled, or misappropriated investments are incorrectly recorded on the books. With a strategic portfolio management plan, the firm’s owner will be aware of the investments that have been misplaced, mishandled, or misappropriated, and remove them in the books.  

Developing a Strategic Portfolio Management Plan 

Investment ownership is part of any public or private enterprise. To manage the investments effectively, a firm owner needs to develop a strategic plan.  

  1. Complete a portfolio inventory 

Before anything else, an owner needs to take count of all the investments that he owns. When preparing an inventory of firm investments, the following should be included: 

  • Total count of investments 
  • Where the investments are 
  • The value of each investment 
  • When the investments were acquired 
  • The expected life cycles of the investments 
  1. Compute life-cycle valuation 

If a business owner wants his portfolio management plan to be precise, then he should calculate the entire life-cycle valuation of each investment.  

  1. Set levels of values 

After computing the life-cycle evaluation, the next step is to set levels of value. Put simply, it implies listing the overall quality, capacity, and role of the novel values that the investments provide. In doing so, a business owner can then determine the operating, maintenance, and renewal activities needed to keep the investments in good condition. 

  1. Exercise long-term financial planning 

Ideally, the portfolio management process that a business owner adapts should easily translate into long-term financial plans. With a good financial plan in place, the owner can then assess which objectives are feasible, and which ones need to be prioritised.  

Benefits of Portfolio Management 

  1. Improving acquisition and application 

By keeping tabs on a business’s investments all through their lie cycle, a business owner can improve their technique of acquiring and applying investments.  

  1. Improving compliance 

Government agencies, non-profit organisations, and firms are required to provide comprehensive reports on how they acquire, apply, and dispose of investments. To ease the reporting process, a majority of them record their portfolio information in a central database. In such a way, when they need to compile the reports, they can easily access all the information they need.  

Portfolio Management Career 

A portfolio manager oversees the management of investment portfolios for their employers. Employers include: 

  • Pension funds 
  • Banks 
  • Hedge funds 
  • Wealth management firms 
  • Insurance firms 
  • Charities 
  • Family offices 

The portfolio manager is responsible for maintaining the proper asset mix and investment strategy that suits the employer’s needs. The personality of someone who would thrive in a portfolio management position likely has the following character traits: 

  • Cerebral 
  • Detail oriented 
  • Quantitative 
  • Focused 

In terms of progression, some people take on leadership or executive roles at the firm, or they start their own portfolio management firm.  


Portfolio management is simply a system that assists businesses keep tabs on all their investments. Keeping tabs on the investments assists streamline operations. The process also lowers the chance of recording ghost investments since all the available investments are well accounted for.  

Financial Analysis

Financial analysis includes both operational and staff advisory functions related to the firm’s budgetary and financial performance. It involves budgeting, accounting, managerial-financial reporting, and related activities such as internal auditing and management analysis.  

Financial analysis involves activities such as formulating budget and price estimates to support plans, programmes, and activities. Financial analysts review and evaluate budget requests, review requests for apportionment and allotments, and review, manage, and report obligations and disbursements. They also present and defend budget estimates before fund reviewing and granting authorities.  

Financial analysis is an in-depth review of proposed and actual disbursements and revenues of a firm or programme. The financial analyst is involved with forecasting future trends in revenues or disbursements or determining future cash flows or budget requirements. Financial analysis involves assessing a firm’s financial position, including its fund balances and reserves, current and future cash flow needs, and current and future revenue flows. 

Financial analysts also analyse and make recommendations of the values and benefits of alternative methods for financing firm programmes and administrative operations. They implement legal and regulatory guidance over application of funds to support firm programmes and activities.  

Some financial analysts are responsible for examining, accepting, amending, approving, or rejecting the budget submissions and requests of firms, and developing and interpreting firmwide budgetary policies and practices.  

Financial analysis includes: 

  • Budget analysis 
  • Assessments of financial condition and financing plans 
  • Internal facility fund analysis 
  • Activity value analysis 
  • Financial modelling and projections 
  • Prospective financial analysis 
  • Revenue enhancement analysis 
  • Operator fee/value recovery analysis 
  • Application rate analysis 
  • Analysis of contracting for facilities 

The benefits of budget and financial analysis include:  

  • Evaluation of appropriateness of planned disbursement levels 
  • Identification of revenue enhancement opportunities 
  • Assessment of financial position before embarking on a multi-year capital project or expansion 
  • Identification of excess fund balances or reserves 
  • Identification of inadequate reserves for future rates.

Corporate Finance

Corporate finance is an important corporate function Kayndrexsphere applies to gather, record, and analyse financial information. This financial information often provides detailed information regarding our operations. We also apply historical financial information to plan new strategies for growing sphere operations. Developing a growth strategy centred on financial information gives Kayndrexsphere reasonable expectations for future operations. We also apply this financial information to determine where to make sphere improvements.  

We spend time reviewing corporate financing information for developing strategies to generate capital and grow Kayndrexsphere. A few corporate financing growth strategies include expanding through profits, accelerating income, building strategic business relationships, diversifying business operations, and streamlining current production operations. Each type of growth strategy requires Kayndrexsphere to focus on various aspects of the Sphere.  

Accelerating income requires Kayndrexsphere to improve rates on various investments and facilities. Our strategic business relationships also include contracts or partnerships for obtaining lower rate economic resources. Diversifying business operations often includes investing in new products or facilities and expanding into other business industries. Streamlining production operations fosters Kayndrexsphere to lower excessive spending and increase the production efficiency of the Sphere.  

Kayndrexsphere is able to develop other strategies for growing business operations. Focusing on corporate financing growth strategies sometimes upsets a delicate balance relating to the price investors are willing to reimburse for investments or facilities. Kayndrexsphere obtains information for growing its business from its corporate finance department. The department offers the Sphere information regarding current economic trends or other information that can assist to determine which (corporate) financing strategy should result in the best growth opportunities. Information includes investor income levels, objective industry or demographic groups, and other important financial analysis information.