Careers In Finance

Careers in Finance

“The longer you’re not taking action, the more money you’re losing”
This e-book is designed to help you understand your field of interest in finance. There are many job opportunities in this field including corporate finance, financial planning, investment banking, insurance and real estate. You will find some comprehensive info on this e-book and website. You will also find links to quite a few other sites, finance job listings, recommended books and a list of helpful headhunters. Good luck!

©The Finance Kid

- Sagar Paras

www.TheFinanceKid.com

Careers In Finance

Area’s To Explore
1. 2. 3. 4. 5. 6. 7. 8.

Commercial Banking Corporate Finance Financial Planning Hedge Funds Insurance Investment Banking Money Management Real Estate

Things which would be covered in this e-book regarding these area’s are:1. Overview of the Area 2. Skills and Talent Required 3. Job Options in the Area

©The Finance Kid

- Sagar Paras

www.TheFinanceKid.com

Careers In Finance

Commercial Banking
Overview:Commercial banks are in the business of providing banking services to individuals, small businesses and large organizations. While the banking sector has been consolidating, it is worth noting that far more people have jobs in the commercial banking sector than any other part of the financial services industry. Jobs in banking can be exciting and offer excellent opportunities to learn about business interact with people and build up a clientele. Today's commercial banks are more diverse than ever. You'll find a tremendous range of opportunities in commercial banking, starting at the branch level where you might start out as a teller to a wide variety of other services such as leasing, credit card banking, international finance and trade credit. If you are well-prepared and enthusiastic about entering the field, you are likely to find a wide variety of commercial banking jobs open to you. Carefully read through the material below as you decide whether you've got what it takes to pursue a career in commercial banking.

Skills and Talent:Broad Business Understanding and People Skills Needed To be good in banking you need a broad understanding of business because your job will most likely involve interacting with businesses. People skills are essential because you will be helping people get the loans and investments that they want. Accounting and Writing Skills are Crucial The most common jobs in commercial banking are as a credit analyst and as a lending officer. These jobs require a strong understanding of accounting. Because banking often requires that you document loans and justify credit analyses you've written communication skills are extremely important. High Grades less important than work ethic Banking attracts a diverse group of people. You don't have to be a superstar student with a phenomenal GPA to make it. You do have to be detail oriented, unafraid to sell and conscientious. International talent is in high demand at money-center banks. According to Hoyle Jones, Head of recruiting at Citicorp: The firm is "aggressively in the hiring market. "We're looking for U.S.-educated Asians and Latin Americans to go back home and grow businesses."

©The Finance Kid

- Sagar Paras

www.TheFinanceKid.com

Careers In Finance

Marketing Types Wanted A new business model which is spreading into banking is that of the marketing-oriented consumer products company. Banks are trying to build valuable brand images with consumer-oriented advertising and distinct product lines. According to Richard Kovacevich, CEO of Norwest: "I believe we all must be salespeople; and we should be proud of it... We can no longer be ordertakers, which is still the characteristic of the old banking industry. In fact, we must be great as salespeople. We must be customeroriented, we must be needs-based and we must be aggressive." In light of this demand, if you have good marketing skills and have taken a number of marketing courses, you will be well-suited to this new environment. Because of the increasing marketing orientation, many banks have also been paying big bucks to lure product managers away from consumer products companies. Pros with skills in product design and market segmentation wanted. Wall Street Types Will Find a Home Because commercial banks remain profitable and are more involved than ever in the financial markets, they are competing with Wall Street for "high-tech finance jocks" involved in foreign exchange derivatives and financial engineering. Corporate Investment Products in High Demand There is also high demand for finance professionals who can develop products for the corporate market. According to Windle Priem of Korn/Ferry International, a top recruiter in banking: "Half of the [recruiting activity in banking] has been in the capital markets and corporate finance arena of these banks. The other part of the commercial banking practice that's booming is investment products and mutual funds. That's been very, very strong. ...Most of those people have been hired from other investment firms, other mutual fund companies. The traditional corporate lending people continue to be downsized and terminated." MBA Optional It is generally not necessary to get an MBA in commercial banking although it wouldn't hurt you. Many of the execs at the very top do have MBAs from prestigious schools. And others have attended summertime masters programs at places like the Southwestern Graduate School of Banking (Dallas, TX) or the Stonier School of Banking. Days of Easy Hours Long Gone Banking is reputed to be a low hours/workload position. This is possible, especially in smaller markets, but increasingly bankers are working longer hours as their jobs become more oriented towards general marketing of financial services. Consumers are increasingly banking from home using online services and the Internet. If you are Internet savvy and familiar with computers you will have an edge in banking. "Banks are at the point now where they have to seriously start moving into an online environment, or risk losing some of their best customers, potentially forever. It's a very crucial and very perilous time for banks,"

©The Finance Kid

- Sagar Paras

www.TheFinanceKid.com

Careers In Finance

A typical job in banking in the lending or branch management area would require the following skills: Key Skill Area People skills: Sales skills: Communication skills: Analytical skills: Ability to synthesize: Creative ability: Initiative: Work hours: Job Options:Credit Analyst This is a common entry level job which requires that you evaluate business and consumer loan applications made to your bank. Your duties include projecting a company's future cash flow, evaluating its current financial soundness, visiting and interacting with financial people at businesses and dealing with lenders. You will learn a lot about business in this job. Your success in this job will depend on how detail-oriented you are, your knowledge of accounting and your ability to communicate. Loan Officer This is a highly desirable job in banking which involves making loans to businesses and consumers. Being a loan officer requires that you have good selling skills, an ability to understand a business and a solid understanding of how banking works. Most people in upper management at banks were once loan officers. Branch Manager You would be responsible for overseeing all activities at your branch including opening new accounts, loan origination, solving customer problems, and foreign exchange and safe deposit boxes. Most importantly, you are responsible for establishing relations with customers. This job can be very satisfying, is never boring and requires you to be handson. Many bank managers start as tellers or customer service representatives. Key things go have for this position are customer service skills, empathy, quantitative ability, strong work ethic, organization and and a solid understanding of banking. Can move up to be a market manager and oversee branches in a market. Trust Officer In this job you would deliver trust services, financial products and advice to bank customers (often more upscale ones). This work will give you knowledge of business, investing, estate planning, taxes, probate law and will involve a lot of counseling. Requirement High High High Medium Medium Medium Medium 40-60/week

©The Finance Kid

- Sagar Paras

www.TheFinanceKid.com

Careers In Finance

Mortgage Banker Your job will be to make mortgage loans to homebuyers and businesses. This involves heavy contact with real estate professionals, credit checks, and dealing with new buyers. Today, many loans are sold to other investors in the mortgage backed securities market.

Other jobs in banking involve accounting, marketing and advertising, commercial card operations, securities transfer, wire operations, private banking, cash management services, installment loans, loan servicing, correspondent banking, personnel, operations and communications.

©The Finance Kid

- Sagar Paras

www.TheFinanceKid.com

Careers In Finance

Corporate Finance
Corporate Finance Overview:A career in corporate finance means you would work for a company to help it find money to run the business, grow the business, make acquistions, plan for its financial future and manage any cash on hand. You might work for a large multinational company or a smaller player with high growth prospects. Responsibility can come fast and your problem-solving skills will get put to work quickly in corporate finance jobs. The job of the financial officer is to create value for a company. For example, the finance group at American Electric Power of Columbus, Ohio has four main areas of concentration: liquidity, flexibility, compliance with laws and regulatory support. AEP's Finance Department carries out four main activities to meet its objectives: 1) designing, implementing and monitoring financial policies, 2) planning and executing the financing program, 3) managing cash resources, and 4) interfacing with the financial community and investors. Jobs in corporate finance are also relatively stable. Performance in these jobs counts, but your job is not going to depend on whether you're selling enough this week or getting good deals finished this quarter. Rather the key to performing well in corporate finance is to work with a long view of what going to make your company successful. Many would argue that corporate finance jobs are the most desirable in the entire field of finance. Some of the benefits of working in corporate finance are: 1. 2. 3. 4. You generally work in teams which help you work with people It's a lot of fun to tackle business problems that really matter You'll have many opportunities to travel and meet people and The pay in corporate finance is generally quite good.

Skills and Talent:Different jobs and companies call on different skills from the corporate finance professional. A typical job in corporate finance would call for the following skills: Puzzle-lovers Wanted Most corporate finance jobs involve solving problems using a combination of intuition and analytics. If you are good at problem-solving, this may well be the job area for you.

©The Finance Kid

- Sagar Paras

www.TheFinanceKid.com

Careers In Finance

Are You a Forrest Gump Type? Many of us imagine working in a corporation as a boring, routine experience designed for dim-witted, persnickety pencil-pushers in short-sleeved pastel plaid shirts. Not so pal. Rather, you need to be comfortable with ambiguity and rapidly changing environment where tasks change from day to day, maybe hour to hour. Geek of the Week? Not Really, But... Lets not avoid the obvious. You have to be computer literate with spreadsheets, word processors, presentation packages and mainframes in corporate finance. This is especially true for entry level positions where you will need to crunch numbers as you get involved in the details of corporate financial planning, accounting and capital-raising. Execs love to talk about strategy, quality and vision. Funny, but when they interview you expect to be asked "Have you ever written a VBA macro in Excel?" or "Have you used a Reuters or Bloomberg station before?" Are You An Impatient, Entrepreneurial Type? One of the most common complaints among new entrants in corporate finance jobs is that they are surprised by the low level of the work. "I didn't go to school to do this..." is a common refrain. Keep in mind that corporate environments reward longevity and loyalty. Be patient, learn from mentors and invest in yourself along the way. If you complain early on you may never get the break you want that comes from doing a minor task particularly well. Why Do Nice People Get the Good Jobs? The movies portray "killer" operators in corporate environments, getting ahead by manipulation and chicanery. This isn't exactly how it works. People who like people, can communicate their ideas, build deep networks and are passionate about their work get ahead. Leader or Follower? The number one attribute most corporate employers are looking for is initiative. If you can give examples in interviews of situations where you did something plain useful even though no one asked you to, you will be a hot commodity. Have you ever started a business? Or put together a social event that brought people together? Or started a new organization? Speak a Foreign Language? Large corporations in the U.S., Europe and Asia are more globalized than ever and jobs will often take you across borders. You will obviously be more desirable to a company if you have a command of at least one foreign language and knowledge of international corporate finance. Would you be comfortable managing a bank relationship for your company in Argentina? Or costing new plants in China? Risky Business The last decade has seen a dramatic increase in the sophistication of corporate risk management strategies. How are we going to hedge against fluctuations in the cost of our inputs? And what should we do to protect against foreign currency fluctuations? If you are familiar with models, techniques and derivatives which can be used to manage risk, you will be in high demand.

©The Finance Kid

- Sagar Paras

www.TheFinanceKid.com

Careers In Finance

Did You Ever Build Something? Manufacturing firms often hire corporate finance types with a background in engineering. Ford, for example, wants people in the factory who can understand complex manufacturing processes, communicate well with engineers and enjoy complex costing work. How Are You With People? The best financial professionals are good with people. According to Fortune, (11/18/95): "Their biggest weakness is a lack of people skills," says John Dasburg, CEO of Northwest Airlines. "Finance types are often curt and colorless. By contrast, the best CFOs are master persuaders with a streak of the sales person. They read people as surely as balance sheets." Job Options:Treasurer Duties involve supervision of Treasury department which is involved in financial planning, raising funds, cash management and acquiring and disposing of assets. This is an upper management job which requires both analytical skill and the ability to manage and motivate people. Financial Analyst Duties involve determining financing needs, analyzing capital budgeting projects, longrange financial planning, analyzing possible acquisitions and asset sales, visiting credit agencies to explain firm's position, working on budgets, analyzing competitors, implementing financial plans, monitoring the the market price of your firm's securities analyzing of leasing agreements and determining needs and methods of dealing with derivatives. Often you will be assigned to a specific area such as revenue, planning, capital budgeting or project finance. This challenging job requires good analytical skills, computer skills and a broad understanding of finance. Credit Manager Duties include establishing policies for granting credit to suppliers, setting guidelines for collecting on credit and considering whether to securitize receivables. This job requires knowledge of the customer and ability to analyze accounting statements. Cash Manager Duties involve establishing relationships with banks, managing short-term credit needs, ensuring that sufficient cash is on hand to meet daily needs, putting excess cash into a concentration account bearing interest and handling international transfers of funds. This job is detail-oriented and requires good ability to negotiate. Real Estate Officer This job involves finding real estate locations for a company, negotiation of lease agreements, acquisition of real estate and valuation of properties. This job requires a thorough understanding of finance and real estate.

©The Finance Kid

- Sagar Paras

www.TheFinanceKid.com

Careers In Finance

Investor Relations Officer Duties involve dealing with the investing public by disseminating financial information, responding to queries from institutional investors, issuing press releases to explain corporate events and organizing teleconferences with investors. This challenging job involves contacts with top-level executives and requires understanding of finance and public relations. Many who hold this job have backgrounds in PR or advertising. Controller Duties involve financial planning, accounting, financial reporting and cost analysis. Will get involved in property, revenue, benefits, derivatives, lease and joint interest accounting. May need to develop forecasting models to project revenues and costs. May be called on to implement or work with a complex costing system, efforts at financial reengineering, transfer pricing issues or interface with auditors. This job requires extensive accounting experience. Often holders of this position enter a company from a Big Six accounting firm.

©The Finance Kid

- Sagar Paras

www.TheFinanceKid.com

Careers In Finance

Financial Planning
Overview:Financial planners and wealth managers help individuals plan their financial futures. How are you going to cover your retirement needs? What do you have to do today to put your children through college? This work can be personally and financially rewarding and requires excellent interpersonal skills. A good financial planner understands investments, taxes, estate planning issues and knows how to listen. This work can be done within a company such as IDS Financial Services or by yourself, as a sole proprietorship. Most planners go solo or work within smaller practices. It's essential then that you have a certain amount of entrepreneurship given that you will be running your own business. The work pays well and is rewarding if you like to help people. Increasingly, it pays to obtain the Certified Financial Planner (CFP) designation. An alternative designation popular outside of the United States is the Chartered Wealth Manager. The job outlook for this profession is considered to be good and it is expected that career opportunities and salaries will grow substantially in the next decade.

Skills and Talent:The financial planning sector is booming and offers a variety of career options. This field deals with the largest markets of any kind in the world and call on the following skills: Key Skill Area People skills: Sales skills: Communication skills: Analytical skills: Ability to synthesize: Creative ability: Initiative: Work hours: Requirement High Medium High Medium High Medium Medium 25-65/week

©The Finance Kid

- Sagar Paras

www.TheFinanceKid.com

Careers In Finance

Hedge funds
Overview:A hedge fund manager runs all or part of a hedge fund, with the goal of maximizing return. The hedge fund manager makes calls on a wide range of financial assets - from corporate bonds to stocks to currencies. This is one of the most "white knuckle" jobs in all of capitalism. The compensation for working in a hedge fund can be unusually high. It is not uncommon to see a person in their late 20s or early 30s pull down $5 million a year or more in one of the right positions at the big funds. But, of course, there are many others who make much less and and many more who fail altogether. All who participate in this industry take on high risk. It comes down to skill, timing and a little luck. Skills and Talent:1. 2. 3. 4. 5. 6. High Intelligence Strong Domain Knowledge Consistency and attention to detail Deep investing and finance knowledge Strong quantitative and legal skills The ability to dive deep on an investment story

Salary Survey for year 2007-08:-

Hedge Fund Salaries
How much can hedge fund managers make? A lot. A whole lot. Consider this list of the topearning hedge fund managers of 2008, as reported by Alpha Magazine:

Rank

Name

Firm Name

2008 Earnings

1 2 3 4 5 6

James Simons John Paulson John Arnold George Soros Raymond Dalio Bruce Kovner

Renaissance Technologies Corp. Paulson & Co. Centaurus Energy Soros Fund Management Bridgewater Associates Caxton Associates

$2.5 billion $2 billion $1.5 billion $1.1 billion $780 million $640 million

©The Finance Kid

- Sagar Paras

www.TheFinanceKid.com

Careers In Finance

7 8 9 (tie) 9 (tie) 9 (tie)

David Shaw Stanley Druckenmiller David Harding Alan Howard John Taylor Jr.

D.E. Shaw & Co. Duquesne Capital Management Winton Capital Management Brevan Howard Asset Management FX Concepts

$275 million $260 million $250 million $250 million $250 million

If you're motivated by the prospect of a very big payday, those numbers will be inspiring. But the information below will be a little more useful. The first thing to realize about the pay at hedge funds is it is largely about how the fund performs. Therefore it's the size of your bonus more than your base salary that determines how well you do overall. And bonuses paid for a given position are often explicitly tied to the fund's performance. In general, if the fund's return is stellar, your bonus will be too. If it sucks wind, so will your compensation. That is, if you're lucky. Often, if the fund does badly enough, you will simply be out of work. No matter how skilled you are, or how difficult overall market conditions are, if you work for a hedge fund that loses a significant amount of money you will likely lose your job. The second thing to realize about the pay at hedge funds is that the principals and senior portfolio managers take home most of it. The pay for more junior positions in successful hedge funds can be extremely attractive, as the tables below show. But if you're after the really, really big bucks, what you're gunning for is to become a senior portfolio manager or run your own fund. And that'll take some time, experience, skill, and luck. So in the meantime, since you'll be working awfully hard to position yourself for that opportunity, you might as well make sure the work excites you. Because after all, it's not just about the money. Is it?

©The Finance Kid

- Sagar Paras

www.TheFinanceKid.com

Careers In Finance

Fund Head

Salary Bonus Total

Mean $315,096 $3,312,864 $4,935,070 $199,022 $1,018,608 $1,247,953 $152,744 $492,819 $542,376 $97,323 $204,250 $309,438 $103,852 $168,740 $266,171 $129,813 $257,188 $378,438

Median $200,000 $1,000,000 $1,300,000 $175,000 $325,000 $500,000 $150,000 $300,000 $450,000 $100,000 $96,000 $177,500 $99,500 $115,000 $205,000 $125,000 $132,500 $245,000

Normal Range Low High $208,502 $421,691 $711,156 $5,914,571 $908,960 $8,961,180 $178,132 $744,694 $978,910 $124,144 $352,439 $434,505 $79,678 $65,735 $154,562 $88,536 $125,999 $212,662 $113,206 $118,581 $228,433 $219,911 $1,292,521 $1,516,996 $181,344 $633,199 $650,248 $114,968 $342,765 $464,313 $119,348 $211,481 $319,679 $146,419 $395,794 $528,442

Sr Portfolio Manager Salary Bonus Total Jr Portfolio Manager Salary Bonus Total Jr Trader Salary Bonus Total Salary Bonus Total Salary Bonus Total

Jr Analyst

Risk Manager

Note: The preceding figures are from Alpha Magazine's 2007 Compensation Report. They can be expected to vary sharply from year to year as capital flows between hedge funds and other investment vehicles and as returns vary.

©The Finance Kid

- Sagar Paras

www.TheFinanceKid.com

Careers In Finance

Insurance
Overview:Did you know that some of the hottest jobs in finance aren't on Wall Street at all? These are jobs in insurance. Insurance is a trillion dollar business. This is great news for you if you're thinking of going in to insurance. Jobs in insurance involve helping individuals and business manage risk to protect themselves from catastrophic losses and to anticipate potential problems. Work in this area is not only personally rewarding, but can be financially rewarding as well. Insurance is a stable yet dynamic industry that provides a wealth of advancement and career opportunities. From administrative support to management programs, from sales to information technology, from accounting to customer service ... anything you want to do in business, you can do in the insurance industry! You will help clients understand their insurance needs, explain their options to them and hopefully help them purchase appropriate insurance policies. You could work in a variety of areas in insurance including as an underwriter, a sales representative, an asset manager, a customer service rep or an actuary. A theme that is constantly emphasized by insurance professionals is that the industry is ultimately about helping people when they need it the most. The stereotype of a slick, sleazy, fast-talking insurance salesman is largely a thing of the past. Major areas of opportunity include auto insurance, life insurance, P&C (property & casualty) insurance, and health insurance. It's worth noting that private health insurance companies are central to all versions of health care legislation now being proposed in the US. If anything, the health insurance industry is likely to grow in size due to efforts to achieve universal coverage.

Skills and Talent:Key Skill Area People skills: Sales skills: Communication skills: Analytical skills: Ability to synthesize: Creative ability: Initiative: Work hours: Requirement High Medium High Medium Low Medium Medium 35-55/week

©The Finance Kid

- Sagar Paras

www.TheFinanceKid.com

Careers In Finance

Job Options:Actuary Actuaries use their analytical skills to predict the risk of writing insurance policies on property, businesses and people's lives and health. Why does automobile cost so much more if you under the age of 25? Because an actuary somewhere found that the risk of insuring automobiles is highly age-dependent. Actuaries are a crucial part of the insurance process because they use statistical and mathematical analysis to determine the risk of providing coverage. To perform effectively, actuaries must be informed about general societal trends and legislative developments which may affect risk. Actuaries can work either within insurance companies or for government, pension planning org anizations or third-party advisors. Agent and Broker Agents and brokers advise people and organizations on how to protect things they value by selling customers insurance contracts. You will be the first person contacted after an accident, fire or injury. An understanding of insurance contracts is essential to this type of occupation. A career as an agent or broker can be financially rewarding. This work is highly time-flexible, requires some background in business and is best if you enjoy interacting with people. Claims Adjuster Adjusters negotiate insurance claims with people have experienced a loss. The adjuster is responsible for reaching a claim settlement that is fair to all parties. Doing well in this job requires a person who is resourceful, tactful and good with people. Some adjusters work in the field, while others work out of an office. Service Representatives Service representatives are the link in the field between agents who sell policies and insurance companies who write the policies. Field representatives must be good listeners and communicators. This position requires knowledge of your companies products and ability to establish good rapport with those working for your companies. A background in liberal arts can be a great preparation for this type of position. Loss Control Specialist As a loss control specialist your job is to help keep accident and losses to a minimum. You will visit factories, shop floors and businesses to identify potential hazards and help to eliminate them. In the health insurance area you might work with an organization to promote preventive health care in the workplace or to limit exposure to certain types of ailments. This work requires an understanding of safety management or engineering. A combination of a technical major and a business major would be outstanding preparation for this job. Risk Manager A risk manager is employed by an organization to help identify the risks that it faces and to make recommendations for dealing with these risks. The recommendations may include the purchase of insurance, adoption of precautionary measures and presentations to upper management. Risk managers are involved in the management of

©The Finance Kid

- Sagar Paras

www.TheFinanceKid.com

Careers In Finance

employee benefit plans. Valuable skills include knowledge of the insurance industry and of business practice as well as skill in making presentations to upper management. Underwriter Underwriters decide whether to provide insurance to applicants seeking coverage. An underwriter evaluates an applicant's exposure to risk and decides whether an applicant meets an insurer's standards. An underwriter may also become involved in setting prices for insurance applicants.

©The Finance Kid

- Sagar Paras

www.TheFinanceKid.com

Careers In Finance

Investment Banking
Overview:Welcome to a comprehensive web site on investment banking careers. Investment Banks help companies and governments issue securities, help investors purchase securities, manage financial assets, trade securities and provide financial advice. The top investment banks including Goldman Sachs, JP Morgan and Morgan Stanley are said to be in the bulge bracket.

Skills and Talent:Investment banks want employees with a combination of strong analytical and interpersonal skills. Some jobs lean more towards one skill set than another (e.g. brokers need to be mainly sales people). A typical job of an equities analyst requires both analytic and interpersonal skills. The skills involved include: Key Skill Area People skills: Sales skills: Communication skills: Analytical skills: Ability to synthesize: Creative ability: Initiative: Work hours: Requirement High Medium High High High High Medium 50-120/week

Job Options:Hard Work Expected and Respected Investment banking is a high work, high risk, high reward profession. When you start your hours will typically be long but the work can be exciting. Be prepared for moments of frustration where you are stretched too thin and moments of exhilaration where everything clicks. Tough to Break In It's relatively hard to break into investment banking. You need to be prepared to pursue firms on your own after you have thoroughly prepared yourself.

©The Finance Kid

- Sagar Paras

www.TheFinanceKid.com

Careers In Finance

Believe it or Not, Bankers Have Social Value Investment bankers are often the subject of social scorn in movies like Bonfire of the Vanities. Are investment bankers really greedy narcissistic scum? Some probably are. But keep in mind that they play a crucial social role of helping to direct capital to companies with great ideas that make people better off. Analyst Jobs Are the Best Entry Point Many college graduates start in investment banking in an analyst position. To succeed in these positions you need to be extremely dedicated, have good spreadsheet skills and be analytically fluent. Your next step will be to become an associate. Same skills, just raise the volume. Communication and Completion Abilities Key In mid-career, your success usually will depend on your ability to communicate with clients and get deals done. At this level it is also important to have a good understanding of market trends, the political and macroeconomic environment and deal mechanics. Math Skills Can Help Some jobs in investment banking call for very strong mathematical ability. If you are good at math think about getting an advanced degree in a technical field (studying areas such as stochastic calculus and differential equations), then take some advanced finance courses in options pricing or bond valuation and apply to a research department on Wall Street (Carnegie-Mellon's MSCF program is a leader in training mathematicians and physicists for Wall Street jobs). Accounting Skills Valuable The ability to analyze accounting numbers critically is important in most analyst positions. Ultimately, you should aim for the CFA designation if you would like to be a securities analyst. The CFA helps you become much more mobile over time. If you have ambitions too "bail out" some day and become a corporate financial analyst you might also want to consider the CMA (Certified Management Accountant) designation. Traders are Multi-Talented It's hard to define what makes a good trader. A good understanding of the market, quick reactions, analytical skills and the ability to bluff help. Read Liars Poker by Michael Lewis to learn more about sales and trading. Teamwork Crucial A crucial success factor in investment banking is teamwork. Being able to pull together persons with large egos to get a presentation together for a client is a challenge and is likely to be rewarded highly. Scientists and Lawyers Wanted There's definitely an interest in people with backgrounds in science and law. Scientist types can work on everything from derivatives algorithms to biotech banking. Lawyers can help design new securities, sell leasing business and use their analytical prowess to talk to clients. This said, you have to sell yourself. It often doesn't hurt to go back and get an MBA from a top school, and then try to repurpose your career into investment banking.

©The Finance Kid

- Sagar Paras

www.TheFinanceKid.com

Careers In Finance

Contacts are Everything The key to breaking into investment banking is a good network of contacts. You may already be blessed with such a network, but if you don't have one, you can start to develop one by going on informational interviews, attending industry conferences, finding alumni from your school in the business etc.Keep in mind that your network might not really "pay off" for some time. If you are young and haven't gone for an MBA degree, try to get into the best possible school and then go for quantitative and analytical coursework. Getting Things Done is Important Starting off in an investment bank, you are usually responsible for getting projects done well and on-time, whether it be writing reports, running spreadsheets, trading, doing research or coding programs. Later, once you get involved with clients and ideas for generating revenue, you will be rewarded greatly if you can bring in business. At higher levels (usually Director, Managing Director and up) you are exposed to much greater risk. At this level, people are often fired for non-performance, whereas at lower levels you may not be scrutinized as closely. Job Options:1. Industry Coverage 2. Corporate Finance 3. Capital Markets 4. Mergers and Acquisitions 5. Project finance 6. Trading 7. Structured finance 8. Derivatives 9. Advisory 10. Equity and Fixed Income research 11. International Sales/Emerging Markets 12. Public finance 13. IT and Systems 14. Rating Analysts

©The Finance Kid

- Sagar Paras

www.TheFinanceKid.com

Careers In Finance

Money Management
Overview:Do you like to look behind the numbers? Do you like to analyze market trends? Do you get an adrenaline rush when a stock takes off? If so, then money management may be the career for you. Money managers hold stocks and bonds for institutional clients and are on the buy side of Wall Street. Some money managers use the latest sophisticated quantitative techniques while others do very well using simple intuition. Each investment manager has their own unique style. The key to being successful is to have discipline, be broad-minded and be willing to admit defeat if an investment goes against you. Many money managers buy and hold fixed income securities including mortgaged-backs, corporate bonds, munis, agency securities and assetbacked securities. Others focus on equities, including small stocks, large caps and emerging market stocks. Unfortunately, it is hard to get started in investment management. It is particularly hard to start working for the best money managers or a top mutual fund. Good places to start are in bank trust departments, state and local pension funds and in insurance companies. Many people cross over into money management after getting years of experience on the sell side of the business in investment banks. Perhaps one of the best ways to break in is on the marketing side. If you have the social skills and intelligence required to market money management services, there will be many companies interested in hiring you. To get started today, be sure to study portfolio theory, learn fixed income investments, take the CFA exam and, above all, learn the industry. And then, with a little luck, you will enjoy one of the most personally rewarding careers in the world of business: Money Management. Skills and Talents:The money management industry is booming and offers a variety of career options. This field deals with the largest markets of any kind in the world and call on the following skills: Key Skill Area People skills: Sales skills: Communication skills: Analytical skills: Ability to synthesize: Creative ability: Initiative: Work hours: Requirement Medium Medium Medium High High Medium Medium 55-75/week

©The Finance Kid

- Sagar Paras

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Careers In Finance

On the Buy Side The field of money management involves working on the opposite side of the fence from the investment banks. That is why this field is known as the "buy side." More Humane than Investment Banking Many investment bankers are "Type A" personalities whereas money managers aren't as hard-charging. The job calls for a mix of Type A and Type B. Must be Able to Take Risk Money managers get to face the challenges of investing. If you like the excitement of selecting investments and can deal with the uncertainty of waiting for the payoff this field is for you. It's Important to Have a Broad Understanding of Business One of the exciting things about investing is that you get rewarded for knowing how business works. People who understand and enjoy business are among the most likely to succeed in this arena. You Gotta Hang In There You need to be a tenacious person to succeed in money management. It's tough to break into the business but once you have experience, the rewards can be high. Be prepared to hang in there through some tough times. Approaches are Diverse There are many styles and approaches to investing. You can approach the field in a very technical way with heavy reliance on computers or, instead, resort to a common sense, low-tech approach. One of the leading investors of our time, Warren Buffett, employs a small staff and spends little time with quantitative models when making investment decisions. Think About How You Are Going to Get Started Because it is so hard to break into money management it is advisable to think carefully about your entry strategy. You have to bring something to the table in an interview that others can't. This will either be superior knowledge and understanding or experience. A good place to start is to get experience in investing by working for a public pension fund, a bank trust department or for a mutual fund.

Job Options:Portfolio Manager Portfolio managers will usually work for a money management firm or pension fund to select and manage investments which meet the goals of a group of investors. Many managers now work in specialized commodity funds or hedge funds. Portfolio managers have different styles ranging from a bargain-hunting approach (value investing) to a growth stock selection approach. This work requires patience, discipline and a strong understanding of financial markets and companies. Portfolio Management Marketing If you are outgoing and knowledgeable, then you might consider a sales position in portfolio management. This means that you will spend a lot of time putting together

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- Sagar Paras

www.TheFinanceKid.com

Careers In Finance

presentations for clients (working with the portfolio manager). Each presentation needs to be put together very well and calls for hours of work and strong knowledge of the firm. Firms often are looking for seasoned professionals in this position. People who command respect and trust when making recommendations about ways to invest large sums of money. Expect heavy travel and good pay. Investment Advisory There is a large industry of firms which provide investment advice, performance evaluation and quantitative analysis to the money management sector. Mutual Fund Analyst Many mutual funds and large pension funds require analysts to do the analytical work required before an investment is made. Is a particular municipal bond safe? What is its interest rate risk as measured by duration and convexity? What other features of the security are important to understand before purchase? This work is analytical and requires a working knowledge of computers, perhaps in the programming dimension. Most mutual fund analysts truly enjoy their jobs because of the sleuthing involved and the fact that the work is different every day. Hedge Fund Principal/Trader Hedge funds are opportunistic, private funds which invest in stocks, bonds, currencies and derivatives often using significant amounts of leverage. These funds hire analysts and traders and have exhibited rapid growth in recent years.

©The Finance Kid

- Sagar Paras

www.TheFinanceKid.com

Careers In Finance

Real Estate
Overview:As you read this, more than million people around the world have jobs in real estate fields such as title insurance, construction, mortgage banking, property management, real estate appraisals, brokerage and leasing, and real estate development. In addition, many were engaged in corporate real estate and in real estate lending in commercial banks, savings and loans, and insurance companies where their jobs are included in counts of jobs in the real estate sector. Over a third of the world's wealth is tied up in real estate. Real estate is collateral for mortgages and a large amount of financial assets. Of course, at present, the markets are weak in housing and real estate but this field is not going away. It is also worth recognizing how interesting jobs in real estate are. Real estate professionals are tied to the development of our society in a very direct way and participate in decisions that will shape the way we live for centuries. Work in real estate is personally rewarding, ever-changing and challenging. Take some time and consider your potential in the field of real estate. Skills and Talent:Real estate employers are looking for people with a combination of strong deal-making and interpersonal skills. The skills involved include:
Key Skill Area People skills: Sales skills: Communication skills: Analytical skills: Ability to synthesize: Creative ability: Initiative: Work hours: Requirement High Very High High Medium Low Medium High 20-70/week

Excellent Job Opportunities The field of real estate involves the sale, management and analysis of land and properties. This is one of the largest parts of the economy and offers excellent job opportunities. The Field is Highly Entrepreneurial Real estate jobs tend to be more entrepreneurial and create opportunities to become wealthy if you have the right mix of analytical skills and entrepreneurial drive. There are Many Ways to Play the Field One of the exciting things about real estate is that it can be approached from so many different ways. You can be a white-collar worker projecting and analyzing cash flows from new developments with spreadsheets; an agent in the field with heavy contact

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- Sagar Paras

www.TheFinanceKid.com

Careers In Finance

with customers on a day to day basis; or an entrepreneurial property owner/manager looking for undervalued real estate buys and strategies for creating value. Multiple Entry Points Available There are a variety of ways to break into real estate. If you are interested in the sales side you need to get licensed and should go to work for a commercial or residential broker. If you would like to get involved in property acquisition and analysis you should get a higher degree with a specialization in real estate and go to work for a major property management company. There are also many other ways to enter including through corporate site selection departments, governmental entities and banks.

Job Options:1. 2. 3. 4. 5. 6. 7. 8.

Residential Real estate Agent/Broker Commercial Real Estate sales Real Estate Appraisal Property Management Real Estate Advisory Investment Banking Development and Construction Real Estate Entrepreneur

©The Finance Kid

- Sagar Paras

www.TheFinanceKid.com

Careers In Finance

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- Sagar Paras

www.TheFinanceKid.com

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