Finance Today

What is the role of finance in a typical business?

Money is the blood of a company. The role of finance is like the heart or bone marrow of the company. Without these vital parts, the business would quickly die. "Decisions that are made at the corporate level are all based on the projections of future corporate earnings," says Bruce Ellis, my Finance Mentor.

What are the key trends, developments, and challenges?

I am sure that as we crawl our way out of this barbwired obstacle course of this financial crisis so many people will be seeking Financial planners and innovators  will constantly be looking for ways in helping the lay man understand more about the ways of investment. The internet has helped with expanding the possibilities of investing in stocks and other means of investment.

What are where are the opportunities?

Wherever there is a company, there is a need for a financial forcaster in helping them plan, budget and decide where and when to put their money.

(note: the other questions were asked in the interview)

Finance Careers

1. Commercial Banking

2. Corporate Finance

3. Finance Planning

4. Insurance

5. Investment Banking

6. Money Management

7. Real Estate

Key Finance Terms

ROI: Return Of Invested capital

Net Present Value: An approach used in capital budgeting where the present value of cash inflow is subtracted from the present value of cash outflows

Stocks: ownership of a corporation represented by shares that are a claim on the corporation's earnings and assets

Bonds: a fixed term investment option offered by a government or semi-government organisation with an undertaking made to repay the funds loaned by investors at a specific rate by a specific date

Stockholders: A shareholder or stockholder is an individual or company that legally owns one or more shares of stock

Government Securities: The short- and long-term bonds the government sells to finance its expenditures

Mutual Fund: Fund operated by an investment company that raises money from shareholders and invests it in stocks, bonds, options, commodities, or money market securities

SEC: The Securities and Exchange Commission. The SEC is an agency of the federal government which is in charge of monitoring and regulating the securities industry

Stock Markets: Places where shares of common stock are bought and sold

Investment Bank: A financial institution that acts as a middleman (underwriter) between the corporation issuing stocks and bonds, and the public

Venture Capital: Money and resources made available to startup firms and small businesses with exceptional growth potential

Interest Rate: The percentage rate paid on consumer deposit accounts, which could include an interest-bearing checking account, savings account, and CDs; It is also the percentage rate charged on a loan or line of credit

Cash Flow Curve: The illustrations of the increase or decrease of ROI

Finance Mentor:


Bruce is a financial planner for various clients. Most of his work is involved in preparing retirement for typically wealthy people. Even though he is an independent worker, he shares certain clients and plans with other workers of the firm.


Q What's a typical day like for you or someone in a similar position?

A: Well, I get up and go fishing until noon. Just kidding! I try to be at my desk at about 9:30am or 10:00am when the market opens up. I prepare portfolio reports. I meet with one or two clients and go over their positions. I Give my recommendations as to what to do with each position, explain what and why they own it. “Should we keep it? Should we make profits off of it? Should we sell it for a tax right off?”

Q: What do you like most about your work?

A: The thing I like mostly is that it is very flexible. I work from home most of the time. I have an office here at the house, so I don’t have to drive down 400 everyday. I like the fact that I set my own schedule; if I want to take a couple weeks off I can. If I want to take a month off I can. I don’t normally do that. I like the freedom that allows me to do what I want.

Q: What do you like least?

A: What I don’t like about it is market fluctuations, like we’re going through right now – makes my job very difficult.

Q: With our current economic situation, how has this effected your business?

A: I’m having more people realize really how important my job is and how dependent upon me they really are. I have picked up some more business with this. I have been in this business long enough to where I am almost at a saturation point; it is very difficult for me to take up small clients. If I’m going to have to take up a large client I will have to get rid of smaller clients.

Q: What talents or skills do you think are the most crucial to succeed in this work?

A: You have to have good communication skills. You have to elicit trust. They have to trust you. People have to feel comfortable talking to you about things that matter most. People have to trust you that you are not going to share with anybody else what you discuss with them. Those kinds of conversations are very private. Especially when you start dealing with people’s money it’s a very private issue with people. So they have to trust you.

You have to have good English skills because you have to write a lot of letters.

You have to have good math skills as far as business algebra goes. You have to have math skills there, accounting skills. You have to be able to read balance sheet. You got to be able to an income statement and tell how a company is doing. A lot of decisions are made based on that.

Q: What  are your projections fo this type of work or industry? Is it stable, growing, declining?

A: I think it is growing. I think it is growing slower than it was when I got started. I feel the need for financial planners is greater than it has ever been, because people just don’t know what to do. If I charged a fee to everyone I ever talked to for giving them investment advice, I’d be so rich you couldn’t afford to talk to me, haha. There is a lot of need out there for people, like me, who understand why the market does what it does. People just don’t know what to do sometimes. In times like these make people realize that they don’t know what to do. So I think that in the future there will be even a greater need for financial planners, especially ones that understand the in's and out's of the market.

Q: What are some new developments?

A: Mainly just software packages that are out there. The trading platform that I use is called Net X pro. That has much streamlined my business. I use financial planning software; it is called IAF. It is something that we subscribe to; it is all internet based. That has made out business much more streamlined. I used to spend days putting portfolio reports together. Now I can do it fifteen to twenty minutes. Twenty years ago, business was very labor intensive, but not so much anymore.

Q: What are typical salaries in this type of job?

A: I charge a percentage of the value of the assets, normally 1%. It’s all in the math. If you manage $500 million, you can do the math. That’s a lot of money.

Q: What and where are the opportunities?

A: I think those kind of jobs are plentiful in the US, if you’re good! If you want to work in the corporate world, get an MBA, that’s a great way to go. 

Q: What is the role of Finance in a business?

A: A job that is going to project earnings, income of the company, during the next fiscal year is very important to the business. And the person that usually does that is in control, a financial officer of the corporation. So, are those people important? You bet they are. They are vitally important. Decisions that are made at the corporate level are all based on the projections of future corporate earnings.