Disadvantages of Salary Caps
In the previous couple of articles, we have tried to understand what salary caps are. We also know the different types of salary caps, where they are followed across the world, their objectives as well as their advantages. It needs to be understood that the salary cap system is not free from its flaws. In […]
Indicators That Help in Predicting Stock Market Crashes
The stock market tends to run in cycles. For a couple of years, the market maintains a bullish stance. Then some catalyst incident happens, and it seems like the market has suddenly taken a plunge. However, this is usually not the case in reality. Markets neither rise nor fall overnight. The catalyst incident merely sparks […]
Types of Fixed Income Securities
When the term “fixed income securities” is mentioned, investors immediately conjure up images of bonds in their heads. However, this is a generalization on the part of the investors. In reality, fixed income securities can refer to many different types of securities. As an investor, one must be aware of the wide range of securities […]
Pension Funds and Private Equity Investments
Pension funds have always been considered to be conservative investors. This means that pension funds have generally been associated with low-risk instruments such as bonds. However, over the past few years, pension funds started aggressively investing in privately listed equities. As a result, they were able to generate a fairly high return as compared to […]
Role of Social Media In Start-Up Funding
In the past couple of decades, social media has literally dominated the world of business. It has touched almost every single aspect of business. The funding of start-up companies by venture capitalists as well as angel investors is no exception. Several studies have been conducted to ascertain the impact of social media presence on the […]
Are you aspiring for a career in banking and finance and financial services? Do you dream of working in a glitzy office and be part of a glamorous club of professionals that travels around the world and wines and dines in style? Read for on for some tips and suggestions on how you can prepare and what you need to do right from the time you are in Business School pursuing a degree in finance.
Indeed, while the finance career might appear to be all “milk and honey”, it also requires discipline and a single-minded focus in addition to putting in long hours at the work desk and being prepared for late nighters and all-nighters in the office.
To start with, most banks and financial institutions require advanced quantitative skills and abilities, and hence, it would be better for you to start early and work on things such as understanding what financial statements are and how to understand balance sheets and income and cash flow statements.
A good resource would be the ever-popular book, How to Read a Balance Sheet, which demystifies the arcane figures and financial data in financial statements such as the Balance Sheet and Income and Cash flow statements.
Also, there are many websites and other online resources that you can consult to understand the financial ratios and the other “jargon” that makes up such statements.
Next, you must be good at financial modeling which is essentially the art and science of preparing future projections of financial viability, profitability, and other aspects where the need to model and recommend choices of investments and how profitable they would be are needed.
Indeed, financial modeling takes up much of the time that a career in finance entails for the first few years in the job.
The reasons why many Wall Street firms and other financial institutions require financial modeling is that the grounding in analyzing financial numbers and preparing projections about the viability or otherwise of the firms’ investments are the bread and butter of finance professionals, and hence, you should prepare for this by preferably starting early and acquainting yourself with such skills.
Third, all Wall Street firms hire the so-called Quants or those who are good at Quantitative Financial skills wherein the need to perform complex quantitative calculations and assist in preparing software and other tools that are based on quantitative analysis is paramount. Indeed, in some firms, the Quants are better paid than the bankers which mean that it would be good if you can take courses in such skills in your finance education.
In addition, you can prepare better by learning about Derivatives, Options, and other complex financial products that need advanced knowledge and other abilities to master them.
Thus, you should ideally read a lot about such products, and you can do this by not only textbook and class learning but also by reading reputed journals and publications such as Financial Times, Wall Street Journal, The Economist, and Forbes and Fortune Magazines.
Indeed, these and other publications such as Economic Times provide valuable information about the latest trends in Equity markets, Debt Markets, and the Mergers and Acquisitions niches where the action happens.
Much of the work that financial professionals do is in these areas apart from the core banking and retail investments space. Talking about Core Banking, it is very important for you to understand this first before you can even think about advanced topics. This calls for a nuanced and deep understanding of Accounting and other topics that you need before you can even think of majoring in finance.
So, don’t bunk that Accounting Class if you are really serious about a career in finance.
It is not the case that Wall Street firms seek only quantitative skills. Indeed, it has become the fashion among such firms to hire candidates with liberal arts and humanities majors to ensure that they can also think in abstract and nonlinear ways that would help them in their work.
Thus, while we do not recommend majoring in such specializations alone, we also suggest that it would be better if you can become a well-rounded person with varied skills and other attributes that would help you in your career.
Even if your business school does not offer courses in such topics, you can always rely on reading works of fiction and nonfiction that can help you develop a worldview and perspective on how the world works that can help you in any career and not only in finance.
Apart from this, your soft skills are another area that you need to focus on. This means that you need to be conversant with how business is transacted world over and understand how different cultures approach the very nature of the business.
Indeed, if you want to jet set around the world, the least that you can do is to brush up on your linguistic and other soft skills such as people management so that you can work in diverse cultures around the world.
Lastly, a career in finance is as much about these skills as it is about a nuanced understanding of human nature. Therefore, broaden your worldview and develop a sense of perspective that can help you navigate the demanding career in finance.
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