Finance is the foundation of any business. No organization can run without some sort of financial management; to pay salaries, invest in technology, ensure that suppliers are paid, or to produce publicity materials. Every type of organization, from a small start-up, to a charity, all the way through to huge multinationals all need to have financial management strategies in place to ensure their survival.
Sound financial management approaches are what allows a business to grow and develop. Using specific software to help manage payments, organizations can maximize their financial well-being and ensure return on investment, thus promoting growth.
But What Is Finance?
Public Finance deals with the allocation of resources to meet government budgets. It is the economics that is responsible for reviewing government spending policies and examining the effects of taxation versus expenditure, and the impact of policies on the economy as a whole.
Private Finance deals with personal and business finance. Personal finance covers things like savings, car finance, and mortgages. Business Finance covers short, medium, and long-term financial management strategies used by businesses that involve the acquisition and sale of assets and allocation of funds.
Debt Finance is when a private company borrows money to be paid back at a future date with interest.
Equity Finance involves selling a part of the business in return for investment. This could be selling a specific part of the business, or shares/dividends.
Why Do People Choose To Work In Finance?
1. Exciting And Dynamic Industry
The finance industry is fun and forward-thinking. It adopts new technology and is constantly looking at new ways of working. Working in the finance industry requires a combination of skills around legislation, maths, and technology.
For some, money is a huge motivating factor, and working in private finance can be hugely rewarding. In 2019, the median salary for a financial analyst in the US was over US$80,000, and high-end finance managers made over US$180,000 in 2019. Reports show that the average salary in 2018 was US$121,000, with 22% earning over US$150,000, and 5% earning over US$250,000.
Some want to do good and pursue a career in public finance as a way to have oversight and involvement in the allocation of public money. Essentially, the funds they deal with comes through in the form of taxes and is allocated to different government departments to keep the country running. There needs to be a trade-off between maximizing the finances, including some element of investment, and provision of public services like education, policing, and healthcare.
Those in public finance also look at the economy as a whole, setting interest rates, dealing with public debt amongst other key activities. Whilst salaries in public finance may not be as high as in the private sector (particularly when taking into account bonuses and additional payments and bonuses), the base salaries are not to be sniffed at and roles in this industry provide a great deal of security.
4. Growth Opportunities
The skills required to be successful in finance are valuable across the board. Whether it be to continue to grow within the finance realm, such as progressing to Chief Financial Officer, or elsewhere, those working in finance can find themselves in demand in other areas, including Law, Accounting, Investment banking, and even Marketing.
5. Opportunities Worldwide
The basics of finance are constant worldwide, meaning that those in the industry can use the career as a starting point to travel the globe. Of course, language barriers may pose a challenge, but there are plenty of English-speaking countries that offer opportunities for US citizens, including Australia, the UK, and India (pending visa and migration conditions). Additionally, many global organizations have offices around the globe and may offer internal opportunities for those working in finance, especially when there are new acquisitions elsewhere.
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