Do you want to know, Is finance a good career path? Then it would help, if you first acknowledge that there’s no straightforward answer to it. As for career choices - it’s always about what works for people individually.
A career in Finance does merely depends upon your interest in it. Are you well aware of the paths that it may lead to? or do you know it well adequately to pursue a whole career with it? There should be no space left out for such questions, as you may not want to regret holding a degree with what you want to do absolutely nothing!
If you want to see whether finance fulfil all such blanks for you, then keep on reading below;
1.1 What should you know about Finance?
The very basic concept of Finance revolves around the acquisition and management of money. If I give you a task “to think about starting a business”, what do you think would be your first need? Yes, money for sure.
No business or day-to-day affairs can be settled down without it. Finance is the fixed need for the society.
There are numerous career paths in Finance, but before turning towards them, we must take up the direct-route to understand its main structure and how financial job-posts come into existence.
What are the main components of Finance?
Finance is covered by three areas and components. These areas facilitate different public and private organizations. They are as follows;
- Public Finance.
- Corporate Finance, also known as “Investment Finance.”
- Business Finance, also known as “Sales and trading.”
1.2 What is Public Finance?
Public Finance is a government activity. It involves financial processes that build Finance for government entities. Anyone who chooses it as a major subject of the degree or planning to craft a career-path across it should know, that it involves financial management of governmental institutions — they are those public sectors, agencies, organizations and projections that run through the state itself.
These can extend to the fund’s management of cities, towns, public sectors with having the following examples as a practical part;
Roads projects and infrastructure (Construction works, Bridges and tunnel management, Public transit systems, municipal water systems, garbage controlling system, parks and other mega projects)
Defence, purchasing weapons, conducting law and order
Social sectors like education, health care, pensions and housing.
Financial funding & management in Public Finance:
You’ve already learnt the concept of public finance above - now further you’d need to be enlightened with the procedure of money acquisition and management. How is Finance funded and managed in public Finance? Let’s learn it in detail.
How finance is funded in Public finance?
Tax collection: As Public Finance includes, collection of funds to fulfil the needs of government — The practice is usually done through imposing taxes, I.e., Income tax, Sales tax, Property tax and Freight taxes (Import and export). Financial managers look-after this system.
Exempted securities: Government with the help of Investment banks, issue federal tax-exempted securities such as municipal bonds. Public invest in government securities and get “interest” every year over their investment. These exempted securities raise the fund.
Investment banking: Investment bankers help government sectors and corporations to raise fund by issuing corporate bonds and stocks. The citizens buy such stock & bonds, through which capital is raised.
How finance is managed in Public finance?
For the departments mentioned above, there need to be people who handle the money or capital once it’s raised - to help the government work well. There is a whole team of financial managers, accountants, financial controllers, risk manager who help the public financial management cycle to complete. Every fiscal year the budgets, accounts and controlling factors are managed through human-capital.
What career can you choose with a major in public Finance?
Chartered public finance accountant (CIPFA)
Municipal Investment banker
Other small roles relating to financial management. Please read Point 1.6 - to know more about these roles in detail.
1.3 What is Corporate Finance?
Corporate Finance is an organizational activity. It refers to the management of the organization’s finance in a long-term manner — keeping its interest foremost. Here it would help, if you keep in mind that big organizations’ focus remains intact on their brand equity. They want to increase the shareholders’ wealth.
Corporate Finance deals with the financial management of large national and multinational organizations. It’s not easy to do the task. Despite that, are you aware of how Finance is raised and managed in Corporate Finance? Read the next point.
How finance is funded in Corporate finance?
There are two main sources through which Finance is funded in the organization.
Internal factors: Owner’s Equity is the way of raising money in the organization, i.e. Initial public offering (IPO), Shares, Sale of stock (Goods that the organization manufacture), return on investment and retained earnings (the amount left after profit distribution)
External factors: Debt or borrowing is another way of raising funds in the organization, i.e., bank loans etc.
How financial is managed in Corporate finance?
Once Finance is raised in the organization, it is then invested to increase shareholder’s wealth. Corporate Finance is supported in the current asset (other big ventures etc) and fixed assets of the company (buying plant, machinery and mandatory fixtures).
Careers that you can choose with a degree in Corporate Finance:
What career prospects do you have with a major in Corporate Finance?
There are many smaller and bigger roles that you can opt for with a major in Corporate Finance see point 1.6, but the most prominent one is that of a Financial manager.
Summary: An organization raise finance through borrowing money or selling its shares and stocks. It does add in money by receiving a return on investment and the amount left after profit distribution to all the shareholders. At the same time, it manages its Finance through investment.
1.4 What is Business Finance?
Business finance is a smaller business activity. Sole proprietorship or partnership is an example of small businesses. Here the financial funding and management are different and easier than that of bigger organizations, i.e. It is easier than that of Corporate Finance.
So, does it all done? Follow up
How finance is funded in Business Finance?
In Business finance, money can be funded through the sources of the owner itself. The owner(s) of the business bring forward with a set amount of Finance and start the business. Besides a second option is considered as well — debt borrowing.
Finance can be added by borrowing it from institutional and non-institutional sources. Institutional sources refer to banks, investment companies, specialized credit institutions, and non-institutional authorities include friends or relatives.
How finance is managed in Business finance?
After the required Finance has gathered, it then is invested to buy fixed assets (Plant, machinery, building) and Working capital (Raw material, advertising, expenses and repairs). Once the business is structured and start selling goods, the finance managers keep managing the working capital; it pushes the company to run forward. Financial reports such as income statements, cash flow statements, profit or loss statements and balance sheets are managed.
What careers can you choose with a major in business finance?
There are whole a lot of careers that you can choose with a business finance degree such as business planner, research officer, cost estimator, financial analyst and many other. Read point 1.6 for all the details.
Summary: Business finance refers to the Finance that helps smaller businesses or organizations run. It is funded in by owners themselves or borrowed by lending organizations. Money is managed in business finance through employees; who keep checking the financial reports and sell off the stock.
1.5 Details about the Career paths for finance majors:
Actuaries are those professionals who evaluate the livelihood and severity of the risk through their historical, mathematical, statistical, economic and financial knowledge. Business needs such people to prevent upcoming risks. A person who has a degree with a major in finance can apply for actuarial jobs - though the field itself is called Actuarial sciences.
Actuaries are best suited for careers in corporate finance. Besides, the candidate needs to give actuarial exams and earn an internship certificate to have the edge over other candidates.
2. Financial Analyst:
Keep it public or private corporation; Financial analysts are the supreme need. They use their research tactics and all the possible knowledge of securities altogether to advise the relative organization regarding their investment decisions. They sense the prospect risk and approve or excuse to invest in stock, bonds and other investment securities.
They also foresee the companies’ ability to repay their debts with the inclusion of bonds. A person with a finance degree can apply for the position of a financial analyst. They are also called research analyst, investment analyst and rating analyst.
3. Financial Accountant:
Financial accountants mainly deal with the company’s financial statement such as balance sheets, profit or loss accounts, income statements, cash flow statements etc. They keep a check on the organization’s reports. They do all the transactions-recording and accounts-ending process. How a certain amount of cash flowed into a business? How much has the company invested on certain projects? What’s the overall profit? All such inquiries are made and recorded by financial accountants.
They are best suited for all three major financial areas: Public finance, Corporate finance, Business finance. Besides, they also compare corporate practices with legal and economic standards. A finance degree holder can opt for this field.
4. Financial Advisor:
All the governments and corporate institutes need people who give consultations about their financial decisions. Financial advisors provide special advice regarding how their clients can manage the organization’s cash flow efficiently and what corporations, sectors and products will be best suited for them to invest in. People with a finance degree can apply for this job.
5. Investment Banker:
They help the Government and Private sectors to issue debt and securities. Investment bankers also advise about transaction decisions relating to mergers and acquisitions. This is a high paying job which initiates with a six-salary figure. Being a lucrative and fancy job, it is highly well-versed and demanding. A person who has studied finance as a major subject can opt for this career.
6. Audit Manager:
These managers verify the financial accountant’s work by conducting an internal audit. The audit is done by following the company’s policy and plans. The system of conducting an audit is different for various companies. Audit manager’s main duty summaries to check the financial and operational balance. They ensure that the company is not following any illegal practices mistakenly or the finance has not been misplaced due to dishonesty.
A finance degree-holder can apply for this job, but without certificates or chartered accountancy as a major – it becomes difficult for larger companies to hire fresh degree holders. Mostly, common financial accountants get to this position with experience.
7. Tax manager:
Tax managers are responsible for creating plans relating to tax management. They implement and review the agenda so that the organization remain good in terms with its operation. They do it by creating and analyzing the necessary tax related documents, rechecking its accuracy and recommending certain amendments or practice to the organization.
Tax managers verify and handle the tax reporting system of the organization. A person with a major in finance can apply for the post. The hiring is made based on previous experience most prominently as a tax manager or a financial accountant. Mostly, people after working as accountants - gain optimal Knowledge of accounting, tax management and finance. They then apply for the role of tax managers.
8. Security Trader:
Security traders work as a bridge between the security buyer and purchaser. They help to sell securities like share or bonds to the potential buyer in a financial market. For each deal, they earn a little amount of money. Sometimes the amount earned is in pennies, but if constant effort is made and activity is resumed then through bigger deals, the higher amount can be attained. People who have a financial background can opt for the profession.
9. Sales Manager:
Sales managers are mainly managers who are in charge of predicting total sales and making plans to improve the sales volume of the company. They also implement those plans and create sales budgets within which all selling processes —such as marketing and advertisements — need to face the edge.
Sales managers are the need of all the profit-making companies. This career path can be chosen with a degree in finance. The sales manager can start with an internship or from the basic career lines within sales management, such as customer relationships builder.
10. Customer Relationship Builder:
Customer Relationship builders are responsible for helping a corporation generate sales. They bring in customers through their interactive services. They are highly persuasive and possess professional communication skills. Relationships builders at the lower hierarchy level are a part of sales management. A degree in finance can also make a person eligible to go for the field.
11. Operation manager:
Through, it is a field of management, yet people who have studied finance can choose to be an operation manager. An operation manager makes operational strategies about the production of goods. All the processes that take place in it are covered by an active manager. They manage the process of manufacturing, finalizing goods and hiring employees; such as workers, daily wage labour. They also are in charge of budget controlling activities.
12. Market research analyst:
Market research analysts are those, who conduct research and gather qualitative and quantitative data about the customers’ needs and wants. They help you with launching your new product-line or improve the sale volume of the existing one. People who study finance can choose to be a market research analyst.
1.5 Why finance is a good career choice?
Pros: There are four main reasons for finance being one of the optimal career choices one can make. Let’s read why is it that so?
1. It is a lucrative profession:
Although, most of the career paths in finance demand to work as a low paying internee or even at times — an unpaid one. Gradually, once you attain a necessary skill-set and learn to evolve in the field’s environment — promotions can uplift your position as an employee. People who work in the the finance field are enjoying 6 figure salary after good years of hard-working. It depends what’s your experience level and who you’re working with. If you’re looking to have an ingrained lifestyle, thdn finance is the one good option for you.
2. There is no edge to it:
People who studied finance and chose it as a career, sooner or later gather enough expertise to take charge of themselves. In case of not wanting to resume their jobs, they can set up a small business of their own. Finance does not restrict a person to take up 9 —5 jobs throughout their lifetime; it encourages and wipes off the way for its mates to take individual steps and ride the horse themselves.
3. it has an explosion of different fields:
It is not necessary to work as a banker. When we hear the word ‘finance’ many misconceptions aim to hinder our way to the truth. People often relate finance with banking — which is true in a sense— but that’s not the whole truth. People who want to study finance can also work in other related fields.
Though finance is the study of money management but a student - along with it - learn a variety of different subjects such as Accounting, management, economics and Insurance. People can turn the routes and drive to any other field that they had studied during university times. Besides, finance gives the whole a lot of options within its grounds.
All of the fields, as mentioned above are inclusive of specific career-lines such as, for Financial managers there are finance executives, finance deputy managers and finance deputy directors. The hierarchical system goes well with all the fields. Besides, other related areas are as follows;
|Insurance sales manager|
4. It’s a promising field:
It can be observed that how financial managers serve benefit to all of the organizations and how without them, nothing can reconcile. With the outrage of new technology and management, many systems and professions vanished. Youngsters and teenagers are highly confused with their career choices, as what they’ve chosen now, would be replaced tomorrow by a computer system or a robot. Finance is truly a profession, which will never be outdated. No matter how accurate and faster a computer system work, still it needs validation from a human at the end of the day. Stock markets are highly activity places; businesses are running, corporates are busy managing their brand-equity and profits and trade is normally happening there. Could that ever stop? It’s not yet predicted.
1.6 Why finance is not a good career choice?
Cons: There are four main reasons for it to be not suitable as a career path. let’s learn them one by one.
1. Finance is a life drenching career.
One who chooses this field must compromise with all the non-materialistic activities and bonds. There are these beauties of life that need proper time and attention but gets traded off under the anxiety of financial profit or loss, i.e., Family time, passions, worship, volunteering charity work etc. If you choose it as a career, there’s a high possibility that you won’t get time for yourself or to do other important stuff.
2. It makes you an obedient cog.
If you like it that way then it may be good for you - however, it’s unhealthy for general human growth. A man is not made to work like a machine throughout life and say ‘goodbye’ when he must leave the world. Instead, he must explore himself, connect with the purpose of life and find an objective that benefits him and ultimately, the whole humankind. There are other fields which serve the purpose i.e, History, Philosophy, Astronomy, Science etc.
3. It works against your interest.
Once you get the job, all of your interest gets replaced by the company’s interests - That’s all how you’d be working like! It’s a highly demanding field. After reaching a certain milestone, you’ll not find your responsibilities getting easy on you. In most of the companies, senior employees make their office’s “their homes”. When in 2004 google opened its Initial public offering (IPO) it demanded 20% extra time of its employee sparing with the normal job schedule. Although, it was a special case yet that’s the common story of the industry.
4. It’s a dry subject!
If you don’t enjoy mathematics, statistics and other analytic activities, then it’s better if you look for alternatives. In finance, you’ll be dealing with accounts, financial reports, financial analysis, Swot analysis etc.
1.7 What should be your stance?
The world is evolving. There are a thousand new fields that are being born in this modern age, so are a thousand areas that are going outdated. Choosing a career is not same as picking up a favourite dress, rather it’s about choosing a whole lifestyle. Someone said it right that “Choose a job and a wife wisely, for they are those who you’ll be spending the rest of your life with.” If you’re comfortable and love doing what you’ll be doing in a specific field, go for it only then.
We’ve defined finance well enough for you to make a choice. Indeed, in the end, you’re the one who has to make a decision. Everyone struggles once they step into a job-market, the stress should not instruct you for running towards the things that seem like glitters - “for all the glitters are not gold”.
1. Is it hard to get a job in finance?
Honestly, it’s a tough task. Financial markets are highly competitive industries, but that does not limit the hiring process. Thousands of commercial jobs are offered every year relating to finance, but it’s always the skilled people who get the job. People with good credibility are accepted for a financial position. It is better to build a strong cv and gain some experience along with studying finance.
2. Is finance harder than accounting?
No, it’s not harder than accounting. In fact, accounting is not harder too. Finance is about money management, whereas Accounting is about book-keeping and interpretation of the financial data.
Both come with different perspectives. If you’re a person, who enjoy analytics, then accounting may seem a bit tough, besides that, if you enjoy mathematics and calculations, then accounting can prove to be best for you.
3. Is a career in finance stressful?
Yes, it is stressful, but those who enjoy their work in the field develop different viewpoint for it. It solely depends upon the nature and level of your job within the walls of finance as each milestone hit differently with all its responsibilities and workload.
4. What is the best career path for a finance major?
The students with a finance major can choose different career paths. They may fit in any organization for a variety of roles, but they are suggested to begin the career hunt in the following directions;
- Bank Jobs
- Corporate Jobs
- Teaching Jobs
The Final Word
This article is rather a detailed discussion to help you make a decision relating to your career choices. A few brainstorming techniques have been used. Is finance a good career path? Is it really good for you? We’ve explained all the prospects, advantages and disadvantages. Now, the table has turned to your way. Evaluate your abilities, contemplate upon your interests, explore other fields and then come to a conclusion. A very best of luck to you.
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