Finance Today
Finance plays a larger part in our life than we think. Finance is not only banking, but is also loans, stocks, bonds, etc. Essentially it is how individuals or companies obtain money to support themselves and expand. Every large corporation has a finance department that determines how the company will finance their activities, as revenue isn't always enough. People use finance as they pull out their credit card to pay for something or take out a loan for a car or house. Finance is an important part of keeping people and businesses running smoothly when used effectively.
Finance took a hit a couple of years ago when our nation went into a long recession. This insighted fear into people and they wanted to hold on to their money, spending slowed down, and businesses weren't making profits. Many areas that were effected were the housing market, automobiles, etc. Other factors were businesses taking risks in borrowing too much, then they weren't able to pay it back when due. Today, as we are climbing back up, money is flowing again. Careful planning is needed to prevent financial crisis from happening on a small scale as well as in our nation.
Finance took a hit a couple of years ago when our nation went into a long recession. This insighted fear into people and they wanted to hold on to their money, spending slowed down, and businesses weren't making profits. Many areas that were effected were the housing market, automobiles, etc. Other factors were businesses taking risks in borrowing too much, then they weren't able to pay it back when due. Today, as we are climbing back up, money is flowing again. Careful planning is needed to prevent financial crisis from happening on a small scale as well as in our nation.
Finance Careers
Financial Analyst
- uses economics to determine market tendencies
Financial Planner
- Manages clients' financial portfolios to meet their investment wants and needs.
Chief Financial Officer (CFO)
- Oversees finances in a corporation
- uses economics to determine market tendencies
Financial Planner
- Manages clients' financial portfolios to meet their investment wants and needs.
Chief Financial Officer (CFO)
- Oversees finances in a corporation
Finance Mentor: Peter Hibert Finance Graduate
What are your projections for this type of work or industry? Is it stable, growing, declining?
Currently it is still declining, it looks like it will pick back up again soon.
What are the key trends or issues? New developments? Key challenges?
Well, there was the financial downturn a few years ago. This has brought on a lot of proposed regulations from the government. Also, there aren’t any more investment banks. Everything has been consolidated into around 5 commercial banks.
What and where are the opportunities?
Many companies have their own finance departments, and of course banks, and investment companies.
What are typical salaries in this type of job, entry-level to experienced? What are the opportunities for career growth?
Entry level jobs make about $50,000 and more experienced people will make about $100,000, but at the top you can make a ton of money. Your career growth is pretty much limitless.
When and how did you get involved in this work?
I wanted to go into business, and finance seemed to interest me the most. This is where I will do best.
What was your training and background? Is this typical for people in your position and in similar positions?
I majored in finance, and interned at an investment firm. That is pretty much typical.
How important are specific credentials for entry or success?
It is not too important for entry level, but career wise, to move up you will need an MBA or a CPA certification.
What’s a typical day like for you or someone in a similar position?
There is a lot of interoffice communication. There are a lot of meetings with clients and working with data and info.
What do you like most about your work?
I like to analyze finances and see where we can earn more money.
What do you like least?
The work is tedious and people can be overly competitive.
What talents or skills do you think are the most crucial to success in this work?
You need and eye for detail, analytical capacity, and the ability to work well with others.
What attitudes or values are important?
You need to be honest, dependable, and a team player.
Who doesn’t do well in this type of work?
People who always need a new adventure or people who can’t stay in the office don’t do well in finance.
How do you advance or get promoted in this type of work?
Hard work, stand out, make yourself indispensable.
What would you recommend I do if I want to go into this type of work?
You need good internships, either to work for that company or to add experience to your resume.
Knowing what you do now, would you approach this career (or job) in the same way? If not, what would you do differently, and why?
I would get my MBA right out of college.
Currently it is still declining, it looks like it will pick back up again soon.
What are the key trends or issues? New developments? Key challenges?
Well, there was the financial downturn a few years ago. This has brought on a lot of proposed regulations from the government. Also, there aren’t any more investment banks. Everything has been consolidated into around 5 commercial banks.
What and where are the opportunities?
Many companies have their own finance departments, and of course banks, and investment companies.
What are typical salaries in this type of job, entry-level to experienced? What are the opportunities for career growth?
Entry level jobs make about $50,000 and more experienced people will make about $100,000, but at the top you can make a ton of money. Your career growth is pretty much limitless.
When and how did you get involved in this work?
I wanted to go into business, and finance seemed to interest me the most. This is where I will do best.
What was your training and background? Is this typical for people in your position and in similar positions?
I majored in finance, and interned at an investment firm. That is pretty much typical.
How important are specific credentials for entry or success?
It is not too important for entry level, but career wise, to move up you will need an MBA or a CPA certification.
What’s a typical day like for you or someone in a similar position?
There is a lot of interoffice communication. There are a lot of meetings with clients and working with data and info.
What do you like most about your work?
I like to analyze finances and see where we can earn more money.
What do you like least?
The work is tedious and people can be overly competitive.
What talents or skills do you think are the most crucial to success in this work?
You need and eye for detail, analytical capacity, and the ability to work well with others.
What attitudes or values are important?
You need to be honest, dependable, and a team player.
Who doesn’t do well in this type of work?
People who always need a new adventure or people who can’t stay in the office don’t do well in finance.
How do you advance or get promoted in this type of work?
Hard work, stand out, make yourself indispensable.
What would you recommend I do if I want to go into this type of work?
You need good internships, either to work for that company or to add experience to your resume.
Knowing what you do now, would you approach this career (or job) in the same way? If not, what would you do differently, and why?
I would get my MBA right out of college.
Key Finance Terms
- ROI - (Return on Investment) A performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments. To calculate ROI, the benefit (return) of an investment is divided by the cost of the investment; the result is expressed as a percentage or a ratio.
- Net Present Value - The difference between the present value of cash inflows and the present value of cash outflows. NPV is used in capital budgeting to analyze the profitability of an investment or project.
- Stocks - An instrument that signifies an ownership position (called equity) in a corporation, and represents a claim on its proportional share in the corporation's assets and profits. Ownership in the company is determined by the number of shares a person owns divided by the total number of shares outstanding.
- Bonds - A bond is a fixed interest financial asset issued by governments, companies, banks, public utilities and other large entities. Bonds pay the bearer a fixed amount a specified end date.
- Stockholders - An individual, group, or organization that holds one or more shares in a company, and in whose name the share certificate is issued. Also called shareholder.
- Government Securities - A government debt obligation (local or national) backed by the credit and taxing power of a country with very little risk of default.
- Mutual Fund - An investment vehicle that is made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets. Mutual funds are operated by money managers, who invest the fund's capital and attempt to produce capital gains and income for the fund's investors.
- SEC - (Securities Exchange Commission) A government commission created by Congress to regulate the securities markets and protect investors. In addition to regulation and protection, it also monitors the corporate takeovers in the U.S. The SEC is composed of five commissioners appointed by the U.S. President and approved by the Senate. The statutes administered by the SEC are designed to promote full public disclosure and to protect the investing public against fraudulent and manipulative practices in the securities markets.
- Stock Markets - The overall market in which shares are issued and traded on exchanges or in over-the-counter markets. Also known as the equity market.
- Intial Public Offering (IPO) - The first sale of stock by a private company to the public. IPOs are often issued by smaller, younger companies seeking the capital to expand, but can also be done by large privately owned companies looking to become publicly traded.
- Venture Capital - Money provided by investors to startup firms and small businesses with perceived long-term growth potential.
- Interest Rate - The amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets.
- Dow Jones Industrial Average - The most widely used indicator of the overall condition of the stock market, a price-weighted average of 30 actively traded blue chip stocks, primarily industrials. The 30 stocks are chosen by the editors of the Wall Street Journal (which is published by Dow Jones & Company), a practice that dates back to the beginning of the century. The Dow was officially started by Charles Dow in 1896, at which time it consisted of only 11 stocks. The Dow is computed using a price-weighted indexing system, rather than the more common market cap-weighted indexing system. Simply put, the editors at WSJ add up the prices of all the stocks and then divide by the number of stocks in the index.
References
http://www.investopedia.com/terms/r/returnoninvestment.asp/#axzz20EvrDK00
http://www.investopedia.com/terms/n/npv.asp/#axzz20EvrDK00
http://www.investorwords.com/4725/stock.html
http://economics.about.com/cs/economicsglossary/g/bond.htm
http://www.businessdictionary.com/definition/stockholder.html
http://www.investopedia.com/terms/g/governmentsecurity.asp#axzz20EvrDK00
http://www.investopedia.com/terms/m/mutualfund.asp#axzz20EvrDK00
http://www.investopedia.com/terms/s/sec.asp#axzz20EvrDK00
http://financial-dictionary.thefreedictionary.com/Stock+Market
http://www.investopedia.com/terms/i/ipo.asp#axzz20EvrDK00
http://www.investopedia.com/terms/v/venturecapital.asp#axzz20EvrDK00
http://www.investopedia.com/terms/i/interestrate.asp#axzz20EvrDK00
http://www.investorwords.com/1566/Dow_Jones_Industrial_Average.html
http://www.investopedia.com/terms/n/npv.asp/#axzz20EvrDK00
http://www.investorwords.com/4725/stock.html
http://economics.about.com/cs/economicsglossary/g/bond.htm
http://www.businessdictionary.com/definition/stockholder.html
http://www.investopedia.com/terms/g/governmentsecurity.asp#axzz20EvrDK00
http://www.investopedia.com/terms/m/mutualfund.asp#axzz20EvrDK00
http://www.investopedia.com/terms/s/sec.asp#axzz20EvrDK00
http://financial-dictionary.thefreedictionary.com/Stock+Market
http://www.investopedia.com/terms/i/ipo.asp#axzz20EvrDK00
http://www.investopedia.com/terms/v/venturecapital.asp#axzz20EvrDK00
http://www.investopedia.com/terms/i/interestrate.asp#axzz20EvrDK00
http://www.investorwords.com/1566/Dow_Jones_Industrial_Average.html