Finance
The general areas of finance are business finance, personal finance, and public finance. The field of finance deals with the concepts of time, money and risk and how they are interrelated. It also deals with how money is spent and budgeted. Finance is the management of funds in a business, personal, or public setting.
Investment Banking
•Financial Planning
•Money Management
•Real Estate
•Commercial Banking
•Insurance
•Money Management
•Real Estate
•Commercial Banking
•Insurance
Career Mentor Interview
Mentor: Sara Lammons
Marketplace:
• What are your projections for this type of work or industry? Is it stable, growing, declining?
- I would say that there are a LOT of positions like mine in companies across the country, so my feel is that this type of work is stable. First, I should probably point out that I am more a business and compliance officer than maybe what is thought about as “typical” finance (banking, investment, Wall Street, etc.) I also have a close family member who is a certified financial planner (personal finance) and that industry also appears to be quite stable as people look for help in their personal finance.
•What are the key trends or issues? New developments? Key challenges?
- There are better and faster ways to track information and to perform tasks, but the cost and the training requirements to get up to speed are pretty high. One of the key trends both in the niche of finance that I occupy as well as the wider field is the ever-changing information technology piece. Even in a relatively small company like Oak Ridge Associated Universities (<1,000), we are always looking at ways to make the systems that we have better or even to find better systems. Excel spreadsheets and simple database management aren’t enough anymore.
-Additionally, there is the culture of instant information. Because of the fact that we can instantly communicated with just about anyone, there is an expectation that information can also be provided at the same speed. Especially in a quantitative field where there is a right and wrong answer, there has to be a balance between the need for speed and accuracy.
-I don’t get a lot of reading done outside of work, so I am sure that there are plenty of articles about recent global trends in the field. What I do find is that in the workplace, trends are “local.” There may be real change going on in the world, but getting it implemented in a specific company at a specific time takes someone(s) to push it and make a good case for it with the folks that hold the corporate resources. Still, it is interesting to watch ideas come into an organization and then what happens to them to make them work in the context of a specific company.
-Finally, the industry that I work in is government contracting. Not only are we bound by the GAAP (Generally Accepted Accounting Practices) and the CAS (Accounting Standards), but also by all of the government regulation related to contracting (FAR – Federal Acquisition Regulations). Many of the policies and practices that we have in place wouldn’t exist if we were truly a corporate entity. We would still have the GAAP and CAS, but not the additional layers. That said, there is a lot of government regulation in a lot of areas of finance. Certainly after ENRON, there was Sarbanes-Oxley and I suspect that there will be more and more as the government and industry continue to struggle with the root cause(s) of the financial meltdown. So, I would argue that government regulation is probably a growing trend rather than one that is on the wane.
•What and where are the opportunities?
-Realistically, there are probably opportunities anywhere for someone who is bright and hard-working, some of them are just going to take more persistence.
-One huge advantage that I had was that my first finance job out of my MBA program was with GM (Saturn/Spring Hill, TN). There, we rotated jobs every 12-18 months. So, I had hands-on experience with a wide variety of jobs. One of the biggest favors people can do for themselves (IMHO) is find a first job that is going to give them exposure to a wide variety of things. Maybe it would be in a smaller office where everyone has to wear a lot of hats. Or, in a bigger company where they are committed to personal and professional growth for their employees.
Entry Into Position:
•When and how did you get involved in this work?
-My career path is a bit checkered. I actually finished undergrad with a BS in Foreign Service (International Ecomonics) in ‘85, which I put to use with a USAID contractor working on international development projects in the Middle East and the former Soviet Bloc. When I made the decision to get my MBA, I focused on marketing and finance as I have always felt that you had to be able to market whatever product you were working on (even yourself) and be savvy enough to do the analysis to know where you stand at any point. Coming out of my MBA in ‘97, I went to work for GM at the Saturn Plant in Spring Hill, TN as a financial analyst and worked in the following positions: capital assets, general ledger, budget and forecasting, and finally direct support to the Powertrain team. The work that I now do at ORAU is not that different from what I did for GM, except now I straighten the tangles out of the National Security and Emergency Management finances rather than those of the GM Powertrain organization.
•What was your training and background? Is this typical for people in your position and in similar positions?
-I had MBA classmates with a variety of undergraduate degrees. Realistically, if you come out of a bachelor’s program with good interpersonal skills, good communication skills, and a good work ethic, then you are going to do fine. If your intent is to go into finance, then the broadest set of classes that you can find in the subject matter will probably stand you in the best stead. Interviewing companies are going to want to know that you did well in those courses and that you have some work history that shows your work ethic. And, sometimes the weirdest things will distinguish you from the competition. I actually did a year of volunteer service with the homeless between my undergrad and starting work with the USAID contractor. I was told later that the only reason that I was chosen over the other candidate for that job was the fact that I had done that year of volunteer work and it spoke well to some of the folks interviewing me. In all other respects, the other candidate and I had very similar resumes and had interviewed one as well as the other. Ironically, I had been told by another recruiter that I had worked through as I was interviewing that I should take that entry off. I am so glad that I didn’t.
•How important are specific credentials for entry or success?
-If there is something very specific that you want to do in the field of finance, you would probably be wise to make sure that you had a variety of classes in that area and that you were close to a professor or other professional that could help guide you. If you are just looking at “finance” in general, then the broader you base of skills, the better off you will be. Ironically, I believe that for most jobs, communication and interpersonal skills are as important as the hard-core math, computer and technical skills. I would qualify that by saying that if you want to go into something very specialized (statistical modeling of derivative futures), then make sure that you have taken the right classes and have the right mentor. If you are looking more generally or if you aren’t really sure, then it would probably be a great idea to try at least one internship as well as to take a broad sample of classes so that you can get a feel for what fits. I worked an internship at Bank of America between my two years of the MBA program and learned a lot. But, I mostly learned that banking as an industry, didn’t fit me personally. Good to know before it was a choice that I made as a career!
-One of the things that I would do differently if I had the opportunity is that I would have gotten to know my professors better in my undergraduate program. I didn’t want to “bother” them and because of that, gave up the opportunity to talk to them and pick their brains about opportunities and ideas.
Key Terms
Key Finance Terms
ROI-Return on investment. A measure of a corporations profitability, equal to a fiscal year's income divided by common stock equity plus long-term debt.
Net Present Value-The present value of a project or an investment decision determined by summing the discounted incoming and outgoing future cash flows resulting from the decision.
Stocks-The capital raised by a corporation through the issue of shares entitling holders to an ownership interest (equity).
Bonds-A certificate of debt (usually interest-bearing or discounted) that is issued by a government or corporation in order to raise money; the issuer is required to pay a fixed sum annually until maturity and then a fixed sum to repay the principal.
Stockholders-An individual or company (including a corporation) that legally owns one or more shares of stock in a joint stock company. A company's shareholders collectively own that company.
Government Securities-Bonds and other debt instruments issued by federal agencies. Although government securities have high credit ratings, they are not backed by the full faith and credit of the federal government.
Mutual Fund-A collection of stocks or bonds. This happens when a large number of people give their money to professionals, to manage and invest, with the aim of achieving a return. these qualified and experienced professionals invest in instruments according to the objective of the fund.
SEC-A federal commission that regulates and supervises US financial markets to protect investors.
Stock Markets-A place where shares, stocks and bonds are bought and sold.
Initial Public Offering (IPO)-A corporation's first offer to sell stock to the public.
Venture Capital-Money invested in an innovative enterprise in which both the potential for profit and the risk of loss are considerable.
Interest Rate-The percentage of a sum of money charged for its use.
Dow Jones Industrial Average-Consists of 30 of the largest and most widely traded stocks in the United States. It is a weighted average of stock prices. The movement of the Dow index, is a good indicator of the broad movement of the market.
References http://www.investorwords.com/4316/ROI.html
http://en.wiktionary.org/wiki/net_present_value
http://wordnetweb.princeton.edu/perl/webwn?s=stock
http://en.wikipedia.org/wiki/Stockholder
ROI-Return on investment. A measure of a corporations profitability, equal to a fiscal year's income divided by common stock equity plus long-term debt.
Net Present Value-The present value of a project or an investment decision determined by summing the discounted incoming and outgoing future cash flows resulting from the decision.
Stocks-The capital raised by a corporation through the issue of shares entitling holders to an ownership interest (equity).
Bonds-A certificate of debt (usually interest-bearing or discounted) that is issued by a government or corporation in order to raise money; the issuer is required to pay a fixed sum annually until maturity and then a fixed sum to repay the principal.
Stockholders-An individual or company (including a corporation) that legally owns one or more shares of stock in a joint stock company. A company's shareholders collectively own that company.
Government Securities-Bonds and other debt instruments issued by federal agencies. Although government securities have high credit ratings, they are not backed by the full faith and credit of the federal government.
Mutual Fund-A collection of stocks or bonds. This happens when a large number of people give their money to professionals, to manage and invest, with the aim of achieving a return. these qualified and experienced professionals invest in instruments according to the objective of the fund.
SEC-A federal commission that regulates and supervises US financial markets to protect investors.
Stock Markets-A place where shares, stocks and bonds are bought and sold.
Initial Public Offering (IPO)-A corporation's first offer to sell stock to the public.
Venture Capital-Money invested in an innovative enterprise in which both the potential for profit and the risk of loss are considerable.
Interest Rate-The percentage of a sum of money charged for its use.
Dow Jones Industrial Average-Consists of 30 of the largest and most widely traded stocks in the United States. It is a weighted average of stock prices. The movement of the Dow index, is a good indicator of the broad movement of the market.
References http://www.investorwords.com/4316/ROI.html
http://en.wiktionary.org/wiki/net_present_value
http://wordnetweb.princeton.edu/perl/webwn?s=stock
http://en.wikipedia.org/wiki/Stockholder