5 Finance Jobs Explained (and what they pay) Pt1

what's up everyone kenji here and in this video 
i thought i'd share five career paths in finance   now i realized that quite a lot of people don't 
really seem to understand the differences between   investment banking and trading or equity 
research and other sort of finance related   roles so in this video i'm gonna try my best to 
explain those and hopefully you can decide what's   most suited to you so the five that i've 
picked are financial planning and analysis   trading investment banking equity research and 
financial audit and i'll mainly be focusing on   these roles for entry level as well as maybe one 
two years down the line too so i'll be discussing   the work life balance the pay as well as the 
skills required and with that i'm also gonna   provide examples of companies in each career path 
and obviously this is just five positions right   this is by no means a complete list but if this 
video does well i will consider making a part two   covering some other things like what might be 
private banking commercial banking as well as   quants and other things like that i've also made a 
similar video on business career paths if you want   to check that out i'll leave it in the description 
but for now let's jump into this one so the first   one is fp a which stands for financial planning 
and analysis and this basically has to do with   forecasting and budgeting a company's 
finances so things like what will our revenue   look like in three years time what about our net 
income or how much money should we allocate to   the marketing team how much should we pay our 
employees other things like that will typically   be solved by the fbi team and i do want to clarify 
that fp a isn't necessarily for finance companies   so apple say or exomobile or any other large 
company really also has a finance team right   and within it it's probably going to have an fpna 
team as well and generally how it works is that   the senior executives will come up with a macro 
level plan like what might be hey reach 10 billion   in revenue by in five years time or something 
like that and then the fpa team is going to be in   charge of actually implementing certain policies 
so that that can actually be achieved and for this   kind of a role you can either get hired fresh out 
of college like some of my friends have or you can   spend a couple years working say at a big four 
or something like that and then make the switch   for the skills required it's mainly got 
to do with excel work so spreadsheets   secondly finance and accounting obviously as well 
as some strategy too so you know where the company   might be heading towards ray as for the work 
hours i'd say from 50 to 60 is more or less the   average so it's nothing say exaggerated it is 
a good amount of work though there's obviously   some peak seasons right so typically when the year 
ends that's when the account closes and obviously   you need to work slightly more during that period 
right as for the pay it obviously varies depending   on location right the thing with fpa is that it's 
such a broad thing that it can either be you can   be working in fpa at the local hotel or you can be 
working in fpna at apple right which is obviously   going to pay you a lot more but i'd say a typical 
range in a say a big u.s city could be something   like 60 to 90 000 us dollars the second one has to 
do with that of a trader which basically entails   buying and selling securities so these might 
be things like stocks and bonds or more complex   things like what might be options futures swaps 
or other derivatives like that now typically for   the dynamics of this it's either you trade your 
your money or your company's money or you can also   trade on behalf of clients now the job is known 
to be quite stressful and that's mainly because   you're dealing with money right and that 
money goes up just like it goes down sometimes   which can be very unpredictable and stressful 
for some people also you're constantly measured   on your performance right it's very obvious to 
tell if you're winning or losing money because   all you have to do is look at your account as 
for the hours it's usually around 60 hours a week   basically the most intense hours are when the 
markets open in the u.s i believe that's around   from nine to four thirty and before that and after 
that you're basically gonna be planning doing some   research and getting ready for the market open 
time right some of the big skills required for   this kind of a role is being good with numbers 
being really a fast thinker fast decision maker   in that sense because you can win and lose money 
in just a couple seconds and then thirdly has to   do with being relatively unemotional right it's 
obviously going to help your decision making too   also you usually need a license to become a trader 
and in the us at least that's typically through   the series 7 exam now most of the cases the 
company that you're employed at will usually pay   for the course work as well as well as the test as 
for the salary it really varies hugely here that's   primarily because some people make tons of money 
and through bonuses and other things like that   they might be able to really increase that whilst 
others just don't make that much maybe they're   not as good at trading right but i'd say a good 
estimate for the big financial cities is around   70 to 100 000 and some of the companies with 
entry-level trader roles include the investment   monks oil and gas companies as well as the big 
asset managers like blackrock or vanguard as well   and i'll leave this article linked as well where 
a trader basically goes through his day in the   life if you're interested now the next path 
is investment banking and this is definitely   one of the most popular ones out there so let me 
briefly explain what they do and at its core it's   really two main things number one has to do with 
financing which is basically raising money for   companies so for instance that might be through 
stocks like airbnb's recent ipo or through bonds   like apple recently selling 14 billion worth of 
bonds where the investment bank helps out in the   process right then on the other hand you have what 
is called advisory which basically has to do with   advising companies on financially related matters 
right a common example here has to do with mergers   and acquisitions and an example of that happening 
in real life has to do with say amazon buying   mgm recently for around 8.5 billion the job is 
highly deal oriented which basically means that   you have to work very long hours in order to meet 
the deadlines of those deals right and sometimes   they can also be quite unpredictable so i'd say 
an average week could be around the 80 hour mark   which is definitely a lot more than your average 
brain that said you do get compensated quite a   lot typically in a big u.s city like say new york 
you'd probably start with a base salary of around   85 000 and then the bonus depending on performance 
it is quite high it can reach something like   50 000 or so in performance as well as for 
the skills required for the job it mainly   has to do with financial accounting and corporate 
finance and then on the computer side of things   excel and powerpoint and then later on as you 
move up the ranks as you become a bit more senior   the ability to sell being a good salesman being a 
good presenter obviously starts taking more of an   importance as well and i'll leave this resource 
linked in the description as well which basically   goes over the day in the life of an analyst i 
did make a day in the life video myself as i was   working at goldman sachs in their investment 
banking division as an intern if you want to   check that out i'll leave a link as well the next 
role is equity research and this one basically   has to do with producing reports as well as 
recommendations on investment opportunities   for clients now i do realize that this does get 
a bit confusing in that within investment banks   there are equity research teams and there are also 
traders within an investment too and the reality   is that investment banks are so big nowadays 
that they actually have a lot of different   divisions some of which do overlap with some 
of the roles that i'm talking about here today   so i can understand why some people might get 
a bit confused on that so apologies for that in   advance but at its core equity research is about 
whether you should buy hold or sell a particular   investment now these investments could be stocks 
which is the case most of the time or it can also   be bonds funds or other instruments like that and 
here's an example of what that report might look   like this one's from morgan stanley's research 
team as they analyze apple and give an estimate   of a price target right and as you can take 
a look here it is quite extensive it is quite   detailed i mean it's quite a long document i'll 
leave it in the description just in case you're   interested too so you can take a closer look i did 
find this one online for free on the internet so   you can definitely find a lot more too as for 
the work hours unlike investment banking equity   research isn't so deal oriented so typically you 
do have quite a bit of a structure in that say   you're giving a set number of companies that you 
should be researching and based on that you're   obviously gonna know when each one's coming up 
with new financial statements and other things   like that right so there's no surprises in the 
same way right so i'd say around 60 to 70 hours   a week it's quite normal it is still more than 
your average work but they do get paid fairly   well i'd say around 85 000 as the base salary 
just like investment banking but the bonus is   typically slightly less even though it can still 
reach 100 000 plus as for the skills required it   is quite technical so you do need a good knowledge 
of statistics economics finance and accounting and   other things like that it is also important to 
know how to write as you can obviously see by the   by the reports that i showed you earlier and in 
addition to that people are typically somewhat   knowledgeable with some programming languages 
like what might be sql or vba too also the cfa   which is short for chartered financial analyst is 
a common designation for equity research as well   and i'll leave this article going over a day in 
the life in equity research as well if you're   interested so this brings us to our final path 
which is financial audit that's basically got to   do with verifying the accuracy of the financial 
statements of a company so it's really about   investigating whether there's potentially any 
errors or even fraud somewhere in there this can   either be in the form of an internal auditor or an 
external auditor internal auditor basically means   that you're employed by the company that you owed 
it so for example i could be employed by coca-cola   not be auditing coca-cola's financial statements 
internally right and then on the other hand you   have external auditors which are typically the 
big four you've probably already heard of them   and you go around auditing different companies 
out there so typically you might spend say two to   three weeks in a particular company auditing their 
accounts and then move on to the next company and   so on and so forth it's actually what i did myself 
for a summer at pwc for instance also while at the   job auditors do work towards a designation known 
as the cpa which stands for the certified public   accountant in the us at least and usually as for 
the work hours it's typically around 60 hours a   week something along those lines it does peak it 
does go slightly higher in the winter months which   is basically when the companies are closing all 
of their accounts so it does get slightly busier   obviously as for the pay i'd say it's around 60 
to 70 000 us dollars a year in the big financial   cities and then lastly looking at the skill set 
this mainly has to do with obviously finance and   accounting and then some excel work even though 
that's not that heavy on the end as well as some   more presentation and other skills like that 
especially as you move further down the road   so those are five i do realize that there's a 
ton of other finance roles out there which i'd   like to cover at some point maybe in a part 2 if 
this video does well so make sure you hit that   like and subscribe button do comment down below if 
there's any particular position that you'd like me   to cover though that's all for this video i hope 
you enjoyed it and i'll catch you in the next one you

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