5 Finance Jobs Explained (and what they pay) Pt1

Summary

In this video, Kenji explains five key career paths in finance: Financial Planning and Analysis (FP&A), Trading, Investment Banking, Equity Research, and Financial Audit. He discusses each role's work-life balance, salary expectations, and required skills, focusing on entry-level positions and early career stages. Kenji also touches on the differences between similar finance roles and provides examples of companies in each field. The video aims to help viewers decide which career path suits them best, with a promise of more content on other finance roles if the video performs well.

Takeaways

• 💼 The video covers five career paths in finance: financial planning and analysis (FP&A), trading, investment banking, equity research, and financial audit.
• 📝 FP&A involves forecasting, budgeting, and allocating resources for companies, with a work-life balance of 50-60 hours per week and a salary range of $60,000 to $90,000.
• 📊 Trading focuses on buying and selling securities, including stocks, bonds, and derivatives, with high-pressure work due to performance tracking. Traders often work 60 hours a week, earning $70,000 to $100,000, plus potential bonuses.
• 🏦 Investment banking revolves around financing (e.g., IPOs and bonds) and advisory (e.g., mergers and acquisitions). It's known for long hours (around 80 per week) but high compensation, starting at $85,000 plus significant bonuses.
• 📈 Equity research involves producing reports and recommendations for clients about investment opportunities. It offers a work-life balance of 60-70 hours per week and a base salary of $85,000, with bonuses slightly lower than in investment banking.
• 🔍 Financial audit ensures the accuracy of financial statements, involving either internal or external auditing. The role often requires a CPA certification and has a salary range of $60,000 to $70,000, with peaks in work hours during the year-end.
• 🖥 FP&A requires strong skills in Excel, finance, accounting, and strategic thinking, as it's not limited to finance companies but applies to various industries.
• 📈 Trading requires strong numerical skills, fast decision-making, and emotional resilience, along with licensing, like the Series 7 exam in the U.S.
• 💰 Investment banking demands proficiency in financial accounting, corporate finance, and presentation skills, with significant sales responsibilities as one advances in their career.
• 📊 Equity research requires strong analytical skills, knowledge of statistics and programming languages like SQL and VBA, and a clear ability to write detailed reports.

Q & A

What are the five career paths discussed in the video?

The five career paths discussed are Financial Planning & Analysis (FP&A), Trading, Investment Banking, Equity Research, and Financial Audit.

What is the role of Financial Planning & Analysis (FP&A)?

FP&A involves forecasting and budgeting a company's finances, such as estimating future revenue, net income, and allocating budgets to different departments. It plays a crucial role in implementing strategies set by senior executives.

What skills are required for an FP&A role?

Key skills for FP&A include proficiency in Excel, finance and accounting knowledge, and strategic thinking to align financial planning with company goals.

What is the typical work-life balance in FP&A?

FP&A professionals generally work 50 to 60 hours per week, with busier periods at the end of the year when financial accounts are being closed.

What does a trader's job entail?

Traders buy and sell securities such as stocks, bonds, and derivatives. They may trade using their own money, the company’s money, or on behalf of clients. The job can be stressful due to market unpredictability and performance-based evaluations.

What are the important skills for a trading career?

Key skills for trading include quick decision-making, strong numerical abilities, and being able to manage stress while remaining unemotional during high-pressure situations.

How do investment bankers assist companies?

Investment bankers help companies raise money through financing (e.g., stocks or bonds) and provide advisory services, such as mergers and acquisitions.

What is the typical work schedule for investment bankers?

Investment bankers typically work around 80 hours per week due to the deal-oriented nature of their work, which often involves tight deadlines.

What does equity research involve?

Equity research involves analyzing investment opportunities and producing reports that recommend whether to buy, hold, or sell stocks, bonds, or other financial instruments.

What are the responsibilities of a financial auditor?

A financial auditor verifies the accuracy of a company's financial statements, checking for errors or potential fraud. This can be done internally within the company or externally by firms like the Big Four.