If you want to understand what finance does, you must look at what finance used to be. Finance was once about saving up enough money so you could have a nice life in the future, for example, to buy a house on Virginia credit card or send your kids to college. As a kid, you usually got a small allowance, if you saved enough you could spend it on yourself.
That changed when you got older when it became more of an option to ask your parents for money. At this point, you would have to convince them that you can’t afford something but that you can pay for it with a loan. Finance in this situation would be the lender. Another early example of how finance has changed was when the US dollar came into existence.
What used to be a single unit, where everybody accepted a fixed number of dollars for any given amount of goods or services. Finance today is still very similar to this early age, except that today it is now a professional career. There are hundreds of thousands of jobs in finance, and anyone can take one of them if they want to.
What are the jobs in finance?
Finance jobs are based on assessing risk and determining the best way to make a profit from it. Here are the main areas you will find most finance jobs in:
- Investing and trading
- Investment banking
- Securities trading
- Bank lending
- Asset management
- Financing private equity
- Banks and insurers
- Insurance brokers
What are the risks in finance?
Finance is a complex and highly competitive industry and new risks come every day. The main risks associated with finance are hacking, technology and cybercrime, for example to buy bitcoins you need a strong internet connection and protected computers. For example, in 2017 criminals started using Botnets to spread viruses on the internet to steal money from victims.
This has become a major concern and one of the big threats in finance. There are also some more general risks of finance, like that you can lose money in bad investments, or overpa for a product you could get cheaper somewhere else. Another risk is that you could get in to serious financial trouble through bad investments.
How to get into finance?
There are two main ways to get into finance, in the beginning you may want to read about finance to prepare yourself and then when you have a better understanding you can apply to a job. You can read about finance at any time and come back to it whenever you need to.
Ending Words
To get a finance job you need to be able to meet and communicate with a wide variety of people. To be a successful trader, you need to be comfortable with negotiating and convincing people on the other side of the table, while in investment banking you need to understand finance and its impact on the world.