I want to major in the business field. But I am currently trying to decide and narrow down what specific thing I want to study. I have quite some time before I enter college but I want to know what exactly is finance? What does it involve? Do you think it’s an enjoyable field and is it a good field to enter when looking for a job?
There is no reason to decide at this point. Apply to undergraduate business programs for now. Once you start you will take a busienss core curriculum including introductory classes in subjects such as accounting, finance, IT, marketing etc. and you can see where your interests and aptitudes lie. Once in college you will also have opportunities to speak with professors and career placement to get a sense of jobs you can get from each area. You won’t declare a major until the end of your sophomore year of college so give yourself time to explore your options.
What is finance? There are 3 main areas (and a bunch of minor ones): corporate finance, intermediation/banking, and investment. A financial analyst or manager at a main street company, e.g., Google or Boeing, is an example in the area of corporate finance. An analyst or associate at an investment bank, e.g., Goldman Sacks, is an example in the area of intermediation. A security analyst or portfolio manager at a mutual fund company, e.g., Fidelity, is an example in the area of investment. Relative minor areas of finance include real estate, insurance, derivatives, etc.
Relative to other fields of business, finance involves more quantitative skills. Having said so, the use of math is mostly at the level of algebra, simple calculus, and statistics; nothing really that demanding. Like learning in other fields of business, it is more about good intuition and logics. In the field of finance, it generally takes a certain level of polish. Interpersonal relation and networking is important.
Some people enjoy finance, and some do not. It is generally an exciting profession for young people. It has a liquid labor market in the sense that there are many jobs and many candidates each year, pretty much regardless of whether it is a good year.
@prof2dad Thank you for your response, this is good to know. Do you mind me asking what’s the typically salary for finance major?
It has a wide range; the starting salary for undergraduates is largely depending on how reputable the employer and/or the university is. At the highest level (think of the typical placement for Wharton finance or HYP economics major), including expected bonus, we are talking about close to or sometimes higher than 100K. But note that these jobs are usually located in large cities where the costs of living are high. At a more reasonable level (think of top 30-150 universities), the “average” number is about 50-75K depending on ability, network, a little bit of luck, and cost of living. I do not have official numbers to back up my statement here. They are based on the placement reports of Wharton and HYP and the placement records from a subset of my own students.
One of my son’s friend is graduating in finance this coming Spring 2017 from a top 3 undergraduate business school in the West Coast. The friend has an offer for over $70K (>$80K with signing bonus) from a big name high tech employer headquartered in Silicon Valley. Though the experience may be better and broader, big 4 firms are offering > $55K for new hires. Generally, high tech companies in Silicon Valley pay high salaries compared to other companies unless one compares the salaries with investment banking firms such as Goldman & Sachs. GS hires the creme of the crop from the the perceived best schools, i.e., Stanford, Ivy League, UC Berkeley, etc…