Well, the term “finance” needs no introduction. Every individual right from a student studying in school, to an employee working in a corporate, has some idea or the other about finance. And, when this comes to a business it is of utmost importance. Finance is considered as the lifeblood of any business.
That being said, finance is the one aspect that every individual in his/her life is concerned about. Today, before performing any activity, the one thing that crosses every individual’s mind is the monetary expenses that they are going to incur and the monetary gains they are going to reap out of it. In other words, everyone (be it an individual, a corporate, a political body, an entrepreneur or an enterprise) enquires and is concerned about their sources of funds and ways to spend or invest it and this is the reason why the finance industry is booming and is attracting young minds. While the industry might seem lucrative enough, there might be various queries about the discipline which is why we are here.
- What is Finance?
- Significance of Finance
- Career Paths in Finance: Types of Jobs For Students
- How To Get Started? : Career Counselling, The Building Blocks
- The Bottom Line
What is Finance?
Finance is a broad term. It comprises of all the activities which are associated with banking, leverage or debt, credit, capital markets, money and investment. It is the management of money particularly in relation to companies, organizations or government. In simple words, finance deals with the question of how an individual, organization or government acquire the money which is needed by them to operate and later on spend or invest it.
Significance of Finance
Now that you have understood the meaning of finance, you would also have drawn a conclusion and that is “finance is important for everyone, be it an individual or an enterprise.” Let’s us now dig in deep into this domain and try to analyze the need and importance of finance for different people.
Personal Finance Needs
- Personal finance needs are specific in nature and vary from one individual to another. It involves identifying and analyzing the current or present financial position of the individual and then formulate various strategies or plans to achieve their future goals within the financial constraints.
- The personal finance needs vary from individual to individual and depend upon their personal information such as their earning, lifestyle, goals, desires etc.
Example- guiding individuals to save enough for their retirement by investing in long term plans.
Thus, personal finance includes the purchase of financial products such as credit cards, insurance, mortgage, investments etc.
Corporate Finance Needs
- Corporate Finance compromises of all the financial activities which are related to running an organization/firm either directly or indirectly.
- Usually, a separate division or department is set up to look after the financial activities of the enterprise. Also, the decisions regarding which projects the company should finance and which projects to put on hold fall under this category.
Example- assisting and guiding the enterprise’s decision process while opting for sources of finance, advising them for the issue of various securities to the public for raising funds and also answering why to offer particular security to the public over the other available options.
Public Finance Needs
- Public Finance refers to all the activities that affect how the government pays off the debt for the services it provides to the general public.
- It includes tax, spending, budgeting, debt issuance policy etc. In addition to the government’s routine and daily expenditure, the government also has to ensure welfare programmes for taxpaying citizens so that they are motivated.
- Public Finance aims to assist the government sources of income and expenditure so that it is able to meet its daily expenditure along with meeting it’s social and fiscal responsibilities.
Example- suggesting various measures to be taken to help the nation tackle the economic crisis, framing and suggesting new taxation policies to relax the people in a way that will not hamper government much etc.
Career Paths In Finance: Types Of Jobs For Students
Today, the financial service industry is a multi-faceted one and offers a variety of positions to competent and keen professionals as per their skills and interests to work in this industry. Today, a career in finance isn’t all about money but about growing and development as well. Following are the types of jobs, a student can preferably get in this domain:-
- Financial planners develop plans to ensure the present and future financial stability of an individual.
- They need to understand their client’s financial goals and then devise an appropriate plan which is suitable and logical and will help them to achieve their goal. It may also include estate and tax planning.
- Generally, Financial Planners who have a Certified Financial Planner (CFP) degree are in demand as their training is rigorous. They have to attain 6,000+ hours of financial planning experience, pass several exams and meet continuing education to meet the changing industry’s requirements.
Corporate Financing Jobs
- Typically, it involves corporate finance jobs in which one has to work for a company in the capacity of finding and managing the capital which is necessary for the enterprise to function. One has to perform this task while maximizing the corporate value and reducing its financial risk. While performing such task one is generally expected to devise the company’s overall financial strategy, forecast the profits or losses, prepare the financial statements, and coordinate with outside auditors.
- When an individual acts in the role of financial analyst, treasurer or internal auditor it falls under corporate finance jobs. Also, there exist some sophisticated corporate finance jobs which might involve mergers and acquisitions activity such as calculating the value of an acquisition target.
Commercial Banking Jobs
- Generally, positions in the commercial banking sector include bank tellers, operations, loan officers, marketing and branch managers.
- In most cases, talented and skilled professionals get promotion from a local branch to some position at the headquarters. Such promotions not only results in an increase in salary but also enhances their position in the bank and gives them an exposure to other areas of commercial banking such as international finance.
- As an investment banker one has to facilitate new issue of a corporation’s securities and has to also bring them to the market so that the investors could purchase it.
- They also trade securities and advice both to corporations and individual investors.
- It is one of the most glamorous and intense jobs where one could work on the trading desk or could become a qualitative research analyst in stock research, corporate bonds or other fixed-income securities.
Hedge Fund Jobs
- Hedge funds are largely unregulated private investment funds whose managers can buy or sell a wide range of financial products and assets.
- Most of the people don’t know about this job and thus this job is considered both mysterious as well as glamorous.
- A typical hedge fund job includes the following roles– financial analyst, trader, regulatory compliance officer, marketing manager and a portfolio manager.
Private Equity & Venture Capital Professionals
Private Equity professionals help businesses find capital for expansion as well as survival. They also help in managing the buyouts and restructuring of a company. Many times, private equity jobs refer to working as an interim executive at a struggling company where your work decides the fate of the company.
Venture Capital professionals work mostly with the startups and small businesses and help to determine if the firm will make an investment or not. They structure deals that favor the investor.
Insurance Sector Jobs
- Mostly under this sector, individuals work as a sales representative selling insurance policies to people.
- A job in the insurance sector could also involve helping businesses and individuals clients anticipate their potential risks and try to save them from incurring losses.
- An individual could also help in computing risk and premium rates according to probability which is based on historical quantitative data sets.
Public Accounting Jobs
- Public accountants record business transactions, help prepare financial statements, audit the financial records, file income tax returns and provide related consulting services.
- It is a broad field which provides various accounting job opportunities. Generally, accountants work in partnership which is known as the Big Four.
- Typically, new hires in this field start as a staff accountant, then slowly and gradually raise to the post of audit manager with all their hard work, then advance to audit manager and then as a tax manager and lastly if they are able to maintain themselves through the tough working schedule for many years then they become a partner in the firm.
How To Get Started? : Career Counselling, The Building Blocks
- By this point, we believe that you have started seeing yourself probably 5-7 years down the line in the field of finance field but are you still confused about how to start from level 0. Well, don’t worry much, all you need to this take one step at a time. Go through your micro and macroeconomics textbooks of class 12th as they would help you to understand the basics concepts of this domain.
- Next, communicate and interact with like-minded people who are as much interested in this domain as you are. Talk to them and try to acquaint yourself from their perspective and you will find yourself more equipped with knowledge and skills that you will probably need in this journey. And if this doesn’t work out for you, attend a career counselling session. Most of these sessions are conducted online and include one to one interaction and trust me you won’t regret your decision. A career counselling session will not only add to your knowledge in this field but will also include activities to understand stuff from your perspective and will help you in the way.
- Additionally, you can also interact with your teachers, read a new article and watch videos through which you will learn more and more every day.
- Finally, after having a degree in finance and becoming a graduate you will find openings both via online and offline mode. While going through offline mode, specialized executive recruiters can be excellent resources for both financial job opportunities and career advice as well. Also, maintaining regular contact with your university alumnae could help you get in touch with the industry.
The Bottom Line
Wrapping it up, all I would say is “financial sector jobs are highly specialized and you will require all your knowledge, skill and hard work to build a career in this industry.” Just go with the flow, keep learning, keep growing and that’s the way how you will earn your name and place in this industry.
This is all from our side. We hope that this blog was insightful and would have helped to take a small yet important step towards pursuing your career in finance. In case you have a doubt, please let us know in the comment section below and we will be more than happy to help. We wish you a great career ahead!