Newbie to the finance world (albiet a well-read one) with some questions
Hello,
This is my first post on this site, but I have read through all the threads on the first page of each forum, so I think that I have an alright understanding of the culture here. It's the most informative forum I've come across thus far, so I thought I'd ask some questions. Forgive me for starting off with a long post, but I have a lot of questions. Thank you in advance to anyone that takes the time to read through it and respond!
First, my background:
I started off at a top five national public university (and I had about a 3.0 g.p.a. there), but I transferred to our state's top liberal arts college after one year there because A) I didn't think I was getting much of an education at the big school, and B) I wanted to play football again. I graduated from the liberal arts school about two or three months ago with a degree in History and about a 3.3 g.p.a (and I have been working for my father's lumber company since then).
Throughout my college career, I had little idea about what I wanted to do for a living, so I took a lot of courses in a lot of different areas. I did well in some, and bad in others. It hurt my g.p.a., and my immediate career options, but I think it made me a more well rounded person as well. I was raised by blue-collar parents in a small mid-western town, so I knew little about the finance world until living with a friend that was headed there my last year of school. Since then, I have been doing a lot of research, and I had some questions that I was hoping some of you might be able to provide some insight on.
Second, questions:
1) If you were me, how would you go about starting a financial career? I have a humanities degree from a small liberal arts school that has an incredible local reputation, but not much of a national one...a mediocre g.p.a....and zero working experience in the finance world. I have been thinking about doing a one year masters program in Applied Economics at the original top five national public university I attended to get started. I think that would help me to improve my academic record, break into a starting position at a financial institution, and begin building my business school resume.
2) If you had a hypothetical eighteen year old child that was set on going into finance, but unsure about what field he wanted to go into (i.e. his or her 'destination' job), what would you suggest?...assuming that s/he had the skills to succeed in any given field. I know that I'm going to get a little bit of a bias in the answers on a PE forum, but try to be objective, taking into account all life-style factors. I'm guessing that the answers will be something like...
1-Hedge Fund/Investment Management
2-Private Equity/Venture Capital - I'm tempted to rank this first due to concerns about potential hedge fund regulations on the horizon.
3-Investment Banking - Insane hours at all levels.
4-Management Consulting - Same hours as IB, but lower salaries (perhaps more interesting though).
3) What are the best finance jobs in the Caribbean? I studied abroad there for a semester and have wanted to live there ever since. I'm guessing that there are some great hedge fund/investment management positions at the leading off-shore financial centers there because of the low/complete lack of taxes. But I can't imagine that there are many great PE/VC/IB/MC shops there due to the lack of fortune 500 companies and great universities in the area. It's a hard thing to find information about on the internet. Does anyone have any insight of any kind here? (It seems like getting a phd and teaching at a business school down there wouldn't be a bad life either).
4) Is it absolutely essential to be exceptional at/enjoy mathematics to have success in the finance world? In high school, I scored a 30 on the math section of the ACT (equal to a 1340 on the SAT), and got A's in all of my math courses, but I was never on the advanced track, so I never reached calculus. In college I took intro to statistics, intro to econ1, and intro to econ2, and I got A's in all three courses. Even though I have had success in all the math courses I've ever taken, I've never really thought that the courses themselves were all that interesting. But with that being said, even though I know little about it, I have always been interested in investing and the stock market in general. Does this mean I will hate, and/or not be successful in, a career in finance? FWIW, I am an ENTJ personality, which means that I'm best suited for an executive/administrative role.
5) The academic area that I have come to be the most interested in, and the most proficient in, is psychology. I took about six courses in that area in college, got all A's, and without having to give much of an effort. I also did my senior thesis in psychology (about a 100 page paper), and recieved honors on it. For these reasons, I have been considering going into something that involves psychology, like marketing, human resources, educational administration, or public health. If I could rise to partner in a major consulting firm in one of these areas, then I could make a great living. If I got a PhD in one of these areas and became a professor, then I could make a good living (as a teacher/consultant). If I went the marketing route, I would have a decent chance to become an executive in a fortune 500 company, right? (I've heard that marketing people make it to CEO quite often because they are 'big picture' people).
...I guess what I'm basically getting at here is this: Do you think that I'll make more money sort of going against the grain in finance (as I'm not that great at, or interested in, mathematics), or going with the grain in something involving psychology?
Thank you very much to anyone who has taken the time to read this post, and has some input...I would really, really appreciate it!
Sincerely,
Blue
The best way I've had it explained to me is to break into the best jobs in Finance (Consulting, IB, HF, IM, AM, etc etc) you need to show a history, at least a recent history, of interest in finance. If I were in your position, I'd find whatever job I could in finance in your area and try and leverage your experience to a good (read: top 12, pref top 5) MBA program.
Or if you work with the lumber company and do something truly unique, it might work to get you in there.
Math isn't that important in most finance positions beyond the basics.
If you like psychology so much, why not be a psychologist? They make a damn good living, maybe not the same as in finance, but $100,000s easily. Especially if you're going for your PhD, why waste it in Finance, why not make a career out of doing what you love?
If you're looking to be a senior manager/CEO, management consulting is definitely the way to go. Bain, Mckinsey and BCG have a shitload of people in Chief Officer positions.
3
I'm not certain how many oppotunities there are in the Caribbean unless you want to do offshore banking. I know there's at least one firm in San Juan, Puerto Rico in asset management that takes on interns in the summer (can't remember). But a lot fo those Caribbean countries are very poor and I wouldn't expect there to be a lot of opportunity. Plus, the global recession has to be hurting the economies there too.
There are boutiques everywhere though, so who knows?
1) Ask your father if you can do something business related with the Lumber company. Work under the CFO if you have one or accounting. I would try to get into to a top 12 MBA program to boost you networking and alumni base.
3) The Caribbean (Bahamas, Cayman Islands) has loads of insurance companies. Also, I assume Private Banking is very big there. Don't forget about money laundering. I mean drug kingpins, arms dealers, terrorists, wealthy guys hiding money from the wife. There are loads of opportunities for a money man, although being able to retire safely might be a little tricky ;)
4) Unless you want to be a quant or deal with structuring derivatives, you math ability should be fine. Banking requires little math above simple calculations and trading requires you to be able to do quick mental math, although the computers do most of it for you.
1 Figure out what you want to do. You say you have done a lot of research but you still don't seem to have any idea of what you want to do or how the industry works. There are many different career paths in finance and I would imagine there are a similar number for psychology. Every path has different steps take take and you don't want to waste any more time than you already have by taking the wrong ones.
2 All of the careers you listed are extremely competitive to break into especially with a low gpa humanities degree from a non-target school. Each of them have different requirements and the preference of each is a completely personalized choice. Some people love IB and would hate working for a HF and vice versa.
3 There isn't much opportunity for finance in dirt poor countries.
4 Some jobs are heavy on quant other are not.
5 In my experience the psychology taught in undergrad is pretty worthless in practical application for most careers in finance.
Blue, you really need to do a lot more research into finance to make sure it is an industry you want to get into. Every single finance related career you have mentioned (Hedge funds, I Banking, PE..,) are very competitive fields often with high barriers to entry. While it is certainly possible for you to break in you will likely need to make some significant improvements to your resume to be competitive for entry level jobs. If it is what you truly want to do then go for it, you sound like a young guy so you might as well pursue a career you will love.
http://www.citco.com/Index.jsp
These guys do HF accounting and have a lot of offices in the Caribbean. I don't know of any FO firms out there though.
Green Cay Asset Management is a firm in the Bahamas
https://www.greencayasset.com/
First, mas1987, Victor252, Gekko21, judowned, GoodBread, Dirrty - Thank you very much for taking the time to read my post and respond. I know that most of you are incredibly busy, and I really appreciate it! I was a little afraid that I was going to get jumped on for being a newbie, but you were all very kind and helpful.
judowned - I'm apologize for coming off as though I thought I knew "a lot" about the finance world. I do think that I've done a significant amount of research over the last year (I didn't even know what a hedge fund was then), but obviously, I still do have a lot to learn!
1) Psychology - I have looked into becoming a psychologist, but perceptions of their earnings are quite exaggerated. The average PhD psychologist, according to the BLS (Bureau of Labor Statistics), earns $64,140 a year. That's not much for nine years of graduate studies. The average psychiatrist earns $163,660 a year, but again, that's not much for twelve years of graduate studies...and psychiatrists today are more similar to pharmacists than therapists.
2) Breaking in - First, Lumber Co. - I guess I should have been more specific about this. My father's lumber 'company' isn't really much of a 'company.' I am our only employee, and I go through a lot of bug-spray, lol. So, here is where I stand. I have a non-relevant degree (from a great school), a mediocre g.p.a., and no previous experience. I think it's going to be hard for me to get hired at a respected financial institution in this recession. The real question, I think, is this - should I go and get a masters of applied economics from a target school...or...should I just work somewhere for free until I'm qualified enough to get paid?
3) Math/Caribbean - The Caribbean is where I want to work, and it sounds like there isn't much available there other than private banking, so I'm just going to FOCUS on that for now! Investment management is what I'm most interested in as far as the world of finance is concerned anyways.
...How do these banks define themselves? What do they call themselves? Do I need to be a math whiz to work there? I want to know so I can begin researching them. I need to find out what their equivalent is in the states so I can begin working there. I need to find out what kind of skills they require so I can make it to the highest level. I need to find out who the major players are in the Caribbean. I need to find out how much money I can make working in these kinds of banks...and how many hours I will be working...so I can compare it to other career options. Etc. Etc. This is what I'm going to focus on for now! Any additional input will be greatly, greatly appreciated.
Thank you all again.
Sincerely,
Blue
Citco
Firstly, you should drop any notion of getting an advanced degree in econ. If you aren't good at math, you won't get in to any good programs, and if you do, you certainly won't enjoy them or do well in them.
Secondly, as has been said, you really need to define your career goals. You're not getting in to FO PE/HF any time soon, and if you're not good at math, you're not going in to trading either. Approach it from two sides - consider what interests you and why, and also eliminate anything that you're not realistically going to get in to. For instance, you could probably a get a role in the back office at some mediocre hedge fund with your marks, but that doesn't jibe with your interests or your skill set.
Thirdly, you need to consider why you're interested in finance - nothing in your post gave any indication that you have a genuine interest in the field, while several things very specifically suggested that you're not actually that interested in finance.
Finally, once you do figure out what interests you, do the same thing everyone else in your position does - reach out to alumni, do FOCUSED research, and begin applying to jobs.
DREXELALUM - Thank you for your response!
1)
2)
3)
4)
Masters in Economics are worthless. If you do a Ph.D in Economics your first year you will get a masters ....
So you know what you like/don't like and that's good. Don't waste your time getting an advanced degree in econ. You won't enjoy the classes, you won't get a great GPA if you're not that dedicated and you may not enjoy the work you find yourself doing later.
Consider doing wealth management and estate planning. Tons of wealthy retirees are moving down to Costa Rica and a few other hotspots. You many want to try your luck there.
There's absolutely nothing wrong with wanting to make a shitload of money in finance. That's one of the rewards in the field. Doctors like being respected and thanked for their work, we like poppin' bottles and living in nice places.
Remember that living in the Caribbean requires a lot less money than in the US so keep that in mind. Do some more resarch and ask some more questions. You may wind up selling bonds or something but you definitely need to do more research.
Wanting to make money in finance is good and fine but it's important to understand the tradeoffs and risks that come with. It requires a lot of sacrifice and hard work so it's important to keep that in mind while making your decision.
I'm assuming your school is not a target but if it does have a very solid local reputation like you suggested, you could be fine.
First off, where is this school geographically? You said you were raised in the midwest but I don't know if you stay there still. How close is it to Chicago? How reputable is your school in Chicago?
Did you just graduate from college? If your school is pretty popular in Chitown and you just graduated from colleges, I can see you getting an IB job in Chicago since a 3.3 gpa is not that bad if the school was good. You will need to network like hell of course and develop a "story" but if you can do that, you should be fine.
Now the reason I mention Chicago even though you talked about the Caribbean is because if you can answer yes to the above questions, you can get a decent IB job in Chicago. Now, the Carribean doesn't have many opportunities for careers but how about Florida? Same weather, same atmosphere, etc. With a good IB job, you can go get an MBA after a few years and then lateral into an exec position in a Florida company. Example of this: work in a gaming/leisure group in IB, go to MBA program, and then work for a company like Carnival (CCL) in Miami.
Sure it'll take about 5 years for you to start working in the FL but in my opinion it's the best bet. If I was in your shoes, I'd much rather do this. Just my .02.
Everyone is probably right about the masters in econ program. I don't like math. I probably won't do THAT well in the program. Really, I guess another part of wanting to do that was to boost my overall g.p.a., and to get myself in a better position to land that first job. Maybe I can still get one without it though.
My school is very close to Chicago, and I think more people from my school head there to work than Detroit. So, that might be the best plan. But still, my interests aren't really in IBanking. I'm sorry, but the hours are just too terrible, at all levels, from what I've heard/read. Wealth management seems like a pretty laid-back way to make a living. Good money, good hours, etc. So with that being said...should I still be looking at I-Banking firms...or Wealth Management firms? I know that IBanking is sort of considered a right of passage for all finance jobs...but at the same time...it seems like it would be beneficial to spend my pre-mba years gaining knowledge of an industry that I want to later work in.
Thanks again in advance!
Sincerely,
Blue
Well, if you want to do wealth management then do wealth management. And I'm sure that there are plenty of opp's for that in FL/Caribbean. And no one goes from IB -> PWM so don't worry about that rite of passage part.
Consequatur sit eius aut rerum dolore et. Qui autem aut dolor ut consequuntur veniam. Ea harum consequatur et enim doloremque molestiae. Eum consequatur magni delectus ut odio id voluptatibus pariatur.
Est corporis recusandae doloribus et nihil. Ut hic ipsum temporibus culpa nostrum. Et dolores nostrum excepturi beatae sit fugiat earum. Sit voluptatem omnis amet.
Et voluptatem officia dolor ut occaecati quo. Et autem distinctio facilis tempora.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...