how funds work
individuals businesses and governments all use funds to set aside money individuals might establish an emergency fund also called a rainy day fund to pay for unforeseen expenses or start a trust fund to set aside money for a specific person individual and institutional investors can also place money in different types of funds with the goal of earning money examples include mutual funds which gather money from numerous investors and invest it in a diversified portfolio of assets and hedge funds which invest the assets of high net worth individuals hnwis and institutions in a way that is designed to earn above market returns governments use funds such as special revenue funds to pay for specific public expenses types of fundsthe following are examples of funds commonly used for personal ventures in the realm of investments some types of funds include the government also creates funds that are allocated for various reasons some government funds include 