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What is Finance?
Finance is the area of business that deals with investment and the value of money, assessing risk and return in order to maximize profit. Finance is broken down into three categories, corporate, personal and public, each dealing a particular area and specific set of clientele and governed by different rules and laws based on what may or may not be done. In addition, individuals may pursue the study of financial theory, which is used to govern and regulate the activities of those practicing finance.
A degree in finance equips students with the knowledge, skill and ability to manage money. Individuals who obtain a degree in finance will learn how to manage the assets of businesses, institutions, and individuals. Market analyses, the making of sound investments and tracking the flow of money is also covered by a finance degree. Degrees in finance are available at the associate's level, but a master's degree is the most beneficial in obtaining work. A doctorate in finance allows the holder to teach finance.
A curriculum in finance will include a variety of subjects for study relating to the flow of money, how it is tracked and invested, and how business profits and losses are calculated on a large scale. Students will take courses in math at various levels as related to the field, statistics, and a number of other courses to build practical skills useful for finance. Upper level courses will focus on business, economics, markets and other such areas necessary to understand and operate in the realm of finance. Students will be provided with scenarios, both real and fictional, that will ask the student to analyze and implement financial strategy in order to successfully assist the business provided. Such case studies help build experience through analyses and provide a better understanding of real world implementation of classroom theory and information.
Classes for a degree in finance may include:
- Corporate Finance
- Mergers and Acquisitions
- Risk Management
- Derivative Markets and Securities
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Employment Opportunities, Certification and Career Options
A degree in finance is similar to other business related degrees in that there is no one career path attached to the degree. Many of these degrees cover much of the same ground in terms of business, what differentiates the degrees is on what facet the emphasis is placed. Thus it is important to note that a degree in finance does not limit one to a particular group of jobs, and recent graduates entering the workforce would do well to broaden their job search. As a cross between business and accounting, finance degree holders may pursue careers in either field, with those having pursued higher levels of education capable of pursuing managerial positions with relative ease. As mentioned earlier, certified individuals will be in much higher demand.
Those seeking a career in finance have a variety of options available to them. To increase desirability and pay, it is wise to pass the exam to become a certified public accountant (CPA), certified management accountant (CMA), or chartered financial analyst (CFA), depending on which field one is planning a career in. Individuals starting their own business as financial managers or advisors in particular should consider certification as a method for bolstering client confidence in one's abilities.
Obtaining certification is important for obtaining and maintaining a career. Individuals who do not pursue some form of certification early in their career tend to be pigeonholed into mid-level positions with little opportunity for promotion. Certification demonstrates a certain skill set and professional dedication. Individuals with certification are in higher demand and command a premium in regards to salary. Some businesses actively support individuals in pursuing certification, paying for courses and study materials as well as the exam. This is due to the demand for qualified professionals in the field of finance, so much so that businesses cover the substantially expensive costs in order to have one in house.
Careers available to a finance graduate include:
- Credit Analyst
- Financial Advisor
- Financial Analyst
- Loan Officer
- Investment Banker
- Financial Planner
Salary, Job Growth, and Related Fields
The average wage of an individual with a degree in finance varies based on education level, experience and position. Financial managers, for example, average about $99,000 per year, with entry level positions starting around $70,000 per year. Job growth is expected to be high in this field as markets grow and more financial experts are needed. Additionally, individuals who have obtained one of the various certifications can expect to earn more than those lacking certification, often the bump in pay is quite large and obtained immediately after one passes the exam (assuming they are currently employed).
For additional information on a career path in finance and financial planning, visit our Definitive Career Guide for a Financial Planner on our blog.