How to Get a Job in Finance

How to Get a Job in Finance

Sure, the financial world is in disarray. Yes, there is a recession. Of course, loads of banks have failed. But…what else can you do with your finance/business degree?

I’m in the same boat as you. I spent the past 5 years of my life studying finance/math, and now I’m faced with the problem of trying to get a job in this field during one of the worst recessions in the past 20 years. It’s incredibly unlucky, but you have to roll with the punches. What I want to get through to you, dear reader, is that it is still possible to get a great job in finance.

Personal motivation aside, you also need incredible perseverance, organization, and confidence. Got all those? Good, let’s get started.

  1. Figure out what kind of job you want.

Finance is a ridiculously wide field. There’s jobs for all types of personalities, people, and career goals. If you don’t like being in the pressure and spotlight too much, look towards a backoffice job. If you like excitement, try trading. Like being a dealmaker? Corporate banking is the place for you. My point is, there’s something for everyone here.

You should determine what kind of role best fits your personality. Do research into what that job involves, and read about other people’s experiences. Incidentally, you can read about my experience in Corporate Investment Banking here. The key is, if it doesn’t fit your personality, chances are you’re going to hate it, and you’ll have wasted all that effort to get the job for nothing.

  1. Find out what companies offer those types of jobs.

In most cases, the bulge bracket banks will have something for you. These include major companies such as Bank of America, UBS, Deutsche Bank, and Citigroup. Look on these companies’ websites in the Careers section to see if they offer any open positions. Don’t be afraid to look at postings that aren’t exactly what you want, because who knows, they might actually interest you.

The key here is to expand your findings as much as possible. Don’t limit yourself to just the well known companies. As you continue your research, you’ll turn up lots of smaller boutique firms that offer the same positions. Add these to your list. Also helpful are job websites. A search on Google for “finance jobs” will turn up a whole retinue of sites advertising jobs. I also like to read the financial newspapers to see what companies get mentioned so I can do more research on them.

Info sessions and career fairs will also be massively helpful. Dress nicely, have plenty of resumes handy, and chat with the people there. Who knows, you might be the one lucky person they call back.

One caveat is that you must also realize your own limitations. If certain jobs require specific and advanced knowledge/experience, you may not have enough time to acquire it. In that case, look towards another avenue, or start a notch “below” that job.

  1. Prepare for applications.

At this point, you should have a very large list of places to apply for. Most of these companies will have websites or email addresses where you can submit your resume, and most likely, you’ll have to register your profile on their websites. I recommend that you start an Excel sheet to keep track of things. Your (very necessary) Excel skills should come in handy here.

On my sheet, I have the following headings:

Company name    Website: hyperlink to the URL for quick access    Account information: for the companies that require a registration. It’s much easier to keep track of your login info and passwords like this    Application deadline    Application submitted: a Yes/No checkbox    Cover Letter: hyperlink to the cover letter I submitted for that specific job    Resume: hyperlink to the resume I submitted for that specific job    Comments: any special notes I have about that job

It may seem like a lot of work, but keeping organized will help you in the long run as applications begin overflowing. Doing this will also allow you to sort by application deadlines, so you always know which ones to prioritize.

  1. Start applying for jobs.

Obviously, this is the hardest step. I say it’s harder than the interviews and all of the prep, because there’s just so much of it, and most of it leads nowhere. Don’t let this get you down. Prepare for the worst, you may get no responses. Understand that there are thousands of others competing for the same jobs, and no matter how much of a superstar you were in college, there are hundreds of other superstars out there too. However, you have to want this more badly. You have to persevere. You have to wade through the crap, and come out clean on the other side!

Hopefully, you’re now adequately gung-ho. Good.

I won’t get into the specifics of resume writing. There’s thousands of websites outside for that. I will make a few points about finance resumes though:

Do not make your resume longer than 2 pages. 1 page is preferable.    Write things in finance language, try to use keywords you know are applicable in that field. However, don’t overdo it to the point where it’s obvious you’re just keywording    Don’t add in jobs that are irrelevant. A lot of resume websites I’ve been to say to add in any experience you have, but I don’t agree with this. I feel that if you add “Waitress” to your resume for a trading job, it will detract from your chances    If you have no work experience, play up your school knowledge. Talk about financial techniques you know and have applied in classes, talk about personal experience in your trading account, talk about how you frequently analyze companies in your spare time.    Tailor your resume to each job!

  1. Going to an interview.

Wow, great job! You’ve got a response! At this stage, you’ve got your foot in the door, and all you need now is to nudge it open. Again, plenty of specific finance interview advice is out there. For example, for banking interviews, you need to brush up your accounting and valuation knowledge. Google is your friend.

All I can say now is that it’s entirely up to you. How much you prepare, your actual knowledge, and your confidence will be what gets you the job. In finance interviews, your interviewers will have pretty much decided whether they want to give you the job within the first 10 minutes. If you make a bad first impression, it is incredibly difficult to overcome.

Some general tips:

Dress the part: Very neat, professional    Prepare extensively. Study up on your resume, memorize that thing! Study the company (I recommend reading their most recent annual report – doing so will put you above 95% of the applicants), study the industry, read the news (you should have been doing this all along). Also prepare some stock answers for stock questions, like “Tell us about yourself” or “Why have you chosen this field?” I personally think there’s no point going too creative in these answers. Sure it might be sort of interesting, but your time is better spent impressing them with your knowledge.    Be confident. You want to be enthusiastic, but keep cool at the same time. Act as if you belong there already. Be like one of them, match the level of your interviewers but watch out. If they’re serious and subdued, don’t go overboard with the laughing. If they’re laughing a lot, laugh too, but not too much. All in all, you want them to feel comfortable and feel like they’d want to work with you. These interviews are all about “fit”.    Send a short thank you note after the interview. Chances are they’ll have talked about it already and have chosen or rejected you, but being polite never hurts.    Do not hound the people afterwards, nobody likes a stalker.

And that’s it. The steps are simple, but can become incredibly grueling. The process is hard, but can be extremely rewarding. Whatever motivates you, whether it be the fame, respect, or money, keep it in mind and let it drive you to keep going. With enough perseverance, you too can find a job in finance!

See What Your Neighbor is Trading with Social Finance

Trading with Social Finance

Not too long ago, the Internet observed the emergence of a new generation of websites – social networking. Those like UK-based Bebo, US home-grown FaceBook and MySpace (acquired by News Corporation for more than US$580 million) have been the pioneers to lead this genre on the Internet. It’s been a hot topic, and it’s hardly impossible to read about news on social networking here and social networking there. More recently, a new league of niche social networking websites have cropped up, tapping into all fields from sports to politics to the world of stocks and finance.

With the robust US economy combined with the strong market performance, many entrepreneurs saw the space of financial social networking untapped. According to Alexa.com, as early as March 2006 financial networking sites like Bullpoo.com, Feelingbullish.com and Stockpickr.com were born. This has not gone unnoticed. On the Wall Street Journal, Mike Gross, a 24-year-old Toronto resident discovered Bullpoo.com in 2006, and says he started actively using the site to get investment ideas about stocks and sectors — such as Asian stocks — from other members.

These websites help like-minded investors interact with each other and share investment ideas, from writing personal blogs to opening up a transparent portfolio. Users are then ranked by other community members based largely on their contributed content and accuracy of stock picks and forecasts.

It’s a large space that has been attracting a lot of media attention in recent months. With an average of a US$1.14 million investment portfolio, and over 70% of a 78 million baby booming market browsing the internet for personal finance and investing sites (according to Kiplinger’s Personal Finance Retirement Report 2005), its no wonder that many major media companies and brokerages are getting interested in entering this space.

Zecco.com, a US-based online brokerage launched in October 2006 offers commission-free trading, saying that it leverages its social community to generate advertising revenue to support its free services. Elsewhere, Reuters announced that it too is also planning to launch its own version of MySpace this year, as published on the Guardian Unlimited. But critics like Charlene Li, an analyst at Forrester Research Inc., say that risk of fraud is high from discussing your financial affairs with online strangers. What’s more is that the usefulness of the sites depends in large part on the size of the communities. And so, while having a large audience, the sheer size and diversity of services of companies like Zecco.com and Reuters might make it difficult to manage the focused communities they want to create. On the other hand, startups like Bullpoo.com and Feelingbullish.com may be nimble enough to stay in touch with their communities, and avoid the risks that larger companies encounter. The question of who will take over this rapidly expanding market is still up in the air. Will the small companies, which lack experience, funding, and exposure, be able to stand up to the media and financial juggernauts? Perhaps a successful middle ground lies in the combination of their strengths: the focus and creative flexibility of the startups with the resources and expertise of the corporations.

The web has been changing the way we exchange information in revolutionary ways, and challenged the traditional mindsets of the media and the way we use it. Who would have thought that the most comprehensive encyclopedia is managed by anybody and everybody who wants to write something? Yet Wikipedia has proven that a self managed community can be successful in administering such a complex information source. Can the same apply for social finance? Is it truly dangerous as some analysts portend?

Finance has always been a conventional field. Perhaps it’s time it explored this new territory. I’ve enjoyed trading actively on my virtual portfolio, so I’ve tried it, and I’ve liked it.

How to Get Started in Owning a Franchise

Get Started in Owning a Franchise

There’s lots of advantages to owning a franchise. You can operate under an established name, sell products people already want, have a pre-determined pricing structure, and it can be a valuable opportunity. Some may be more beneficial than others, and you’ll have to do your homework though! Is a franchise investment for you?

While it’s still no walk in the park; a franchise could be saving grace for anybody who wants some of the ‘work’ that owning a business involves done for them. This bonus comes at a heft cost, and there are lots of pros, and cons to the situation. Let’s examine each of them.

The number one pro to owning a franchise is of course operating under an established name. Let’s say somebody is driving down the road, and they see two resturants – Burger King, and Joe’s burger shack. People are more likely to stop at the place that they are familiar with (Unless of course they’re an avid BK hater).

There’s always the one extremist who’s totally against Mc Donalds, KFC, or any other chain. Whether it’s because they’re funded by the Church of Satan, they way they supposedly treat employees, ect. The people who appreciate a chain store more than outweighs those that do not; else this model would not exist.

You also can take into account that all your product sourcing, pricing, and materials are through the company. This means that you won’t have to barter with dealers, and go through the hassle of making sure you can turn a profit for the price you charge. The only problem with that is that the corporation can charge you anything that they want. You’re only allowed to by cups from them, buy computers from them, buy fries from them, ect.

There’s also a certain code of ethics you’re not allowed to change. Typically regarding wages, benefits, practices, how employees are handled, ect. For example somebody I know used to be a manager of Papa John’s. Per their chain’s rules they are not allowed to hire any drivers with traffic violations – No exceptions. Things like this will be beyond your control with a franchise; wherein if you owned your own business the law is made by you.

There can be other rules involved with you even purchasing a franchise though too. For example Chik Fil-a manually approves buyers, and if they deem that where you wish to put the franchise is unacceptable they’ll deny your claim. The fees for operating different entities varies a lot as well. It can be anywhere from $70k to upwards of $1 million dollars. The price tag is not for the faint of heart, but if you’ve got the cash it can be worthwhile to you.

Some people own several franchises whether they be the same store or different businesses, and make a pretty penny doing it. A franchise owner does not always manage the franchise either; meaning they don’t come to the store everyday, and do the dirty work. Many simply bank roll the operation, and collect the rewards – opting to pay somebody else to over see operations for them.

You also will not have to deal with the hassle of supplying benefits to your employees. Since you are owning a franchise any of that goes through the actual corporation, and they can take part directly. This goes for training as well – Your store will most likely recieve pre-made materials for your future employees.

If you decide you want out of this particular franchise you’re free to sell it at anytime most cases to another individual. Our local Dominoes pizza store trades owners probably a couple times a year – Mostly because they find out that particular chain has a very low profit margin, and expensive equipment.

Enterpeneur.com recently released their list of the top franchise opportunities for 2009! Start up costs in parenthesis.

  1. Subway ($78k -$238k)

Subway is a very popular sub chain. Growing in name for value, and health reasons. Personally I detest their food, but considering the low start up costs, and big profit potential I’d probably still own one of those if I were to go a franchise route.

  1. Mc Donalds ($950k – $1.8M)

The biggest burger chain in the world of course commands a high price. No doubt you’re paying for their big name, and not equipment charges. While this is pretty much guaranteed to turn a profit – It might be a while before you recoup your expenses on this one.

  1. Liberty Tax Service ( $53k – $66k)

Very cheap start up costs, but low profit potential in my opinion. More, and more people are getting their taxes done online, and with software these days (including me). It’s not hard to do them yourself, and I don’t think it will be much longer before people refuse to pay $70 to pay money to the government. There’s also a limited time frame to do business so the earnings seem small to me – Not something people would want every week like fast food.

  1. Sonic Drive-Thru ($1.2M – $3.2 M)

This franchise seems rather expensive considering their popularity, and their equipment costs. This resturant pretty much consists of a kitchen, and outside dining room!

  1. Intercontinental Hotels Groups (Varies)

In the right area a hotel could be a very good investment. I live in what may be the vacation capital of the United States – Everyone wants to come to sunny Florida, and they need a place to stay! The pricing is unlisted, and probably varies by location, and building size.

  1. Ace Hardware ($243k – $1m)

Ace Hardware is of course a hardware store – which again looks overpriced to me. They pale in comparison to competitiors like Home Depot, and Lowes who have a much bigger selection. The store layouts are basic, and unimpressive. I don’t see the huge profit potential from something so pricey, and yet so small.

  1. Pizza Hut ($638k – 2.9 M)

A popular pizza chain. The have the advantage sometimes of being both a sit down resturant, and a delivery service. Similar stores like dominoes, Hungry Howies, and Papa John’s do not offer a dining room. Again, a tad pricey for their offering I think. Perhaps to be more exclusive, but they may offer better profit margins than competitors.

  1. UPS Store ($171k – $280k)

This one looks like an opportunity to me – Owning an internationally recognized postal carrier outlet. Especially in a busy shopping center where people could do their shopping, and mail their packages all in one go. While I use USPS myself; I know somebody who mails packages at UPS about every week. The start up costs are much lower than some of the other options as well. Could be very busy during holidays too.

  1. Circle K ( $161k – $1.4m)

Circle K is a quickie mart type of store, but can also have gas pumps. Any place convienient to the main road that sells gas can make a pretty penny. I’m surprised this one is so cheap considering the prices to install pumps, maintain gas containers, ect. Though that will probably all come out of your pocket – Something to watch out for.

  1. Papa John’s Pizza ( $135k – $431k)

Cheaper than the other pizza place on the list, but probably not quite as popular. This one seems like a better value to own, but you’d have to do your market research before buying. Some of those marked as more expensive may be that way, because of their desirability. The profit margins they turn, the desire for their product, ect. Investing in a business peddling pricey products at this time may not be wise, but a company like Mc Donalds with it’s dollar menu should be seeing pricing booms.

Even if a family can’t afford to drop a good $100 at Outback for dinner they can afford to spend a few dollars at McDonalds instead. A recession puts a strain on every business, but some are doing better than others. You might look into lower cost resturants, or discount stores such as Dollar Tree too.

If you don’t have a load of cash sitting around it is possible to get financing for a franchise purchase – though this will be no easy feat. If you have less than perfect credit then you will have quite a time doing it. Below 700 probably will not net you a loan for an expensive business venture.

How to Finance a Business Purchase in Today’s Economy

Finance a Business Purchase in Today's Economy

You’ve come to the right place if you want to understand how to finance a business. Getting your business financed can be a piece of cake if you get a complete evaluation on all potential lenders, choose the right loan for you and discover how to structure your financing. Stay tuned to learn how you can make getting your business financed a breeze.

Our current economic situation leaves many people reluctant to spend any money. Many banks are hesitant to lend money in fear they will lose their investment or gain a business in foreclosure. Protect yourself and your business by requesting a background check before you decide on one particular lender. With many banks dropping like flies from day to day, it is important that you get the protection you need for your investment. Once you’ve mastered securing a stable and reliable lender for your new business, finding the right loan for you will be the icing on the cake.

Once I’ve made a list and checked it thoroughly to find a good lender, then what? How do I know what type of loan would be best for me and my business? Your loan should fit you like a well fitted glove. It’s important to choose a loan that won’t cause you to “live beyond your means”, your business will only last if you can afford it. Choosing the right loan is important, but a proper financing structure is the key part to the purchasing process.

I found the right lender and a loan that fits my requirements, what else do I need? What else would I need to do to make my business purchase? It is important to fully analyze your finances. You need to make sure that your finances are structured for success now and in the future. Understand that the research and planning you put in now will create the foundation for success for your business.

Did you realize all the thought and planning that goes into purchasing a business in today’s economy? Getting your business financed can be a piece of cake if you get a complete evaluation on all potential lenders, choose the right loan for you, and discover how to structure your financing. Now show the world that you aren’t going to let the current economic recession crush your dreams of owning your own business today.

 

Eliminate Debt by Going on a Spending Fast

Eliminate Debt by Going on a Spending Fast

Consumer debt is at a all-time high. Families are living above their means and using credit to cover the expenses they can not afford. If you are reading this article, I will assume you are at a point where you are tired of debt running your life and ready to eliminate it.

Fasting is traditionally known as a time without food. People in the Bible used a Fast as a time with no food to seek direction through prayer from God. A spending fast can help your family seek direction on your finances by eliminating your current spending habits.

Here are 5 steps to complete a spending or financial fast to eliminate debt

  1. Pick an upcoming month to do the spending fast. Make sure you pick a month that you are able to complete it. Do not pick a month that you know you are going to have some issues with. If you make an exception for one item or event it will be too easy for you to slip off of the spending fast.
  2. Make a list of the expenditures that you truly need for a month and make a vow to not spend over this amount. For example you need gas for your car to get back and forth to work but you do not need gas for your car to travel for entertainment or other events. You need groceries but try to make a vow to only spend a certain amount per week. Attempt to make as many meals as you can out of your pantry. By separating your needs from wants before the month starts you have set the rules and groundwork for your spending fast.
  3. During your month long financial fast make some tough decisions. If a friend calls and asks you to go out to dinner, explain to them what you are doing and that you are attempting eliminate some debt. Ask the friends to come over after dinner to play cards. Cutting entertainment like going out to eat, movies, and even cable can save you lots of money that can be used at the end of the month to pay debt. If something in your house breaks that is not an emergency, try to find a solution to fixing it that is inexpensive. Be creative, look on line for some solutions to different household problems.
  4. Keep a journal. Write down those things that you did not miss and those that you did during the month. Maybe you did not miss going out to lunch at work but did miss taking your kids to a movie. These journals and note entries can be used later to reset your budget. If your spending fast can identify some areas that you spend money carelessly with no real gain then it will prove to be a life changing event.
  5. Track your savings each week and write a check to pay a debt at the end of each week. By using your surplus to eliminate debt weekly you will encourage yourself to continue and get the money out of your checkbook to not be tempted to spend more when the spending fast is completed.

A spending fast to eliminate debt can help a family to pay down debt during their spending fast month and also encourage new habits to be formed that can help them permanently change how they save money. A website with Christian roots that you can sign up for a 30 day spending fast is www.financialfast.com This Christian ministry will pray for you during the fast and send you some encouraging materials to help you along the way.

Good luck on your plans to eliminate debt and I hope a spending fast can get you their faster!

How to Use a Commercial Factoring Company to Finance a Business

Finance a Business

Factoring is designed to increase cash flow when funds are limited and accounts receivable are high. It is short-term financing to solve short-term cash flow bottlenecks. The cash-poor company sells its accounts receivable at a discount to a commercial finance company known as a factor. Cash is made available to the entrepreneur as soon as proof of shipment is provided or on the average due date of the invoice. Most factoring arrangements are made for one year.

Factors make their money by acquiring a company’s invoices and collecting on them, charging the business a fee. Unlike banks, factors buy, pay for, and own the receivables outright. If your creditors don’t pay, the factor may incur a loss. Some factors require that the entrepreneur establish a reserve for bad debt of approximately 5% of the account. If the account is not collected within 120 days, the factor will draw against the reserve. If the receivables eventually are collected, the factor’s return on investment exceeds that of conventional lenders.

Many business owners use factoring when their banker turns down a loan request that they had tried to guarantee with their accounts receivable as collateral. Under factoring, accounts receivable are not used as collateral against a loan but instead are sold directly, at a discounted value, to a factoring company. For example, if the factoring company uses a one-time charge and discounts 6%, then for every $1,000 in receivables, the seller receives $940.

Some factors discount according to a schedule, paying a smaller percentage up front and then paying an additional percentage depending on whether the receivables are collected within 30, 60, or 90 days.

The factor takes over the entire collection procedure, including mailing the invoices and doing the bookkeeping. Each of your customers is notified that the account is owned by and payable to the factor.

If you are a new business and your accounts receivable are evaluated as marginal credit risks, you may not be able to find a factor that will accept your accounts receivable. Let’s face it: although they take greater risks and are more liberal lenders than commercial banks, factors need to be assured that your customers will pay their bills. They will execute substantial credit checks on each debtor and carefully analyze the quality and value of the invoice before buying it; they look to the strengtMof the receivables and creditworthiness of the invoices that you are selling them. Factors will also establish credit limits for each customer.

Factoring is not the cheapest way to obtain money, but it does quickly turn receivables into cash. The advantages of factoring are receiving a cash injection quickly, paying bills in a more timely manner, obtaining more credit, and fostering better growth than traditional borrowing. Also, the fee is an expense and offsets taxable income. Essentially, the entrepreneur is buying insurance against bad debt.

The chief disadvantage of factoring is the high cost of money relative to traditional borrowing. Also, to many entrepreneurs, factors receive outrageously high returns. A business concerned with cash flow but not with collection might want to pursue the less costly route of using accounts receivable as collateral for a commercial bank loan.

Overall, factoring can be compared with using a credit card for your business. Factors work best with businesses that have cash flow problems because of long delays between making and selling goods and then collecting cash. Start-up ventures, emerging businesses, and service companies are prime candidates for factoring. For recommendations and references about which factoring companies to use, talk to your trade associations, to members of the infrastructure, and to other entrepreneurs in your industry.