Financial capital

Financial capital represents the total assets of a person at market prices. It groups those amounts of money saved, that is, that have not been consumed by its owner, but are invested in different financial organizations. In addition to human capital represents the total wealth of a person.

It is therefore a common concept in the field of finance, since it encompasses those monetary sums with which different financial entities constantly work throughout the world. We would be referring to that capital that seeks an income, benefit or interest later and therefore the increase in capital itself . We would therefore be talking about different concepts common to all such as stocks , bonds, state bonds or simple deposits of money in a banking entity.

Its birth and importance in recent times (especially in the twentieth and twenty-first centuries) has been one of the foundations of the operation of the capitalist system in the economy worldwide.

By developing a special concentration of capital around banks and other financial institutions there is a transfer of power and responsibility to these areas for the political and socio – economic life of the most developed countries. This happens because these agencies have the money resources they collect and use them to finance businesses and families in the short and long term, influencing the economic and industrial life of each nation.

One of the most important aspects of financial capital is the concept of time , since when covering future incomes it is directly related to other concepts such as inflation or purchasing power . This is observed for example when talking about a particular investment, which has a deposit start date and an expiration date on which to obtain the resulting income or dividend.

Leave a Comment