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/STFG/: STEM to Finance General

Anonymous Sun 24 Apr 13:58:04 2022 No.14424086 View Reply Original Report

Quoted By: >>14424477 >>14424909

Welcome to the STEM to Finance General!
This thread exists to discuss finance career from a STEM perspective.
>Discussion of good career paths given your degree.
>Questions regarding how finance works and how to break into finance
>Or anything in relation to finance from a STEM perspective

Resources for basic financial jargon and how finance careers work:
https://www.investopedia.com/
https://mergersandinquisitions.com/
https://corporatefinanceinstitute.com/

Every single job in pic related either makes over $100,000 straight out of college, or has a path to six figures within your first two years out of college. If this beats your current salary expectations then I suggest you start looking into a finance career.

Anonymous

Anonymous Sun 24 Apr 2022 14:27:59 No.14424177 Report

Quoted By: >>14424401 >>14424850

Can I get into quantitative finance with a data """science""" degree?

Anonymous

Anonymous Sun 24 Apr 2022 15:49:00 No.14424401 Report

Quoted By:

>>14424177
you probably have a better chance than any other non finance degree

Anonymous

Anonymous Sun 24 Apr 2022 16:28:24 No.14424477 Report

Quoted By: >>14424850

>>14424086
Getting a PhD in biophysics and computational biology. I work with part transitions and material properties. I like math though. I'd there hope for me to do this stuff? I just wanna stay home and analyze data

Anonymous

Anonymous Sun 24 Apr 2022 18:54:06 No.14424850 Report

Quoted By:

>>14424177
You can get into quantitative finance with any degree. The reality is that finance jobs will have certain preference when screening candidates, however you'll find even philosophy majors being quants. Finance is about making money, and making money is about being smart. Your degree is mostly worthless once you finally break in. That said, a data science degree is a good eye opener with HR so expect to get a few calls. However, you better prep yourself properly for those calls. Quant finance is a catch-all term so you should do some research on which kinds of positions you are targetting. A quant that will be sitting in the risk desk of a long-only fund will do a completely different job than a quant in a credit derivatives desk. Prepare yourself accordingly for those interviews.

>>14424477
Read above. It's not about your degree, it is about how smart you are and how capable you are at doing the job. The fun truth about finance is that not even 'finance' degrees teach you what you will actually be doing in a finance job. A perfect example is Investment Banking. Most people study finance to do Investment Banking yet the most common reason Finance people fail to get a job is because they perform badly doing the 'technicals'. 'Technicals' being the technical finance questions asked in an IB interview. Stuff like answering 'If a machine loses $100 in value how does that affect the three financial statements' or performing a DCF in the interview. Stuff that you'd imagine that a finance major would know but actually is barely covered in practice.

Anonymous

Anonymous Sun 24 Apr 2022 19:18:36 No.14424909 Report

Quoted By: >>14424911

>>14424086
To add a little more the pic in the OP, The CFI actually does a great job of dividing finance careers in the 4 major categories however one must note that it is not an exhaustive list of careers. For example, 'Risk Management' is not explicitly mentioned even though 3/4 of the branches mentioned will have a risk function.

That said, I will add some commentary on what these 4 branches are and where you could fit.

Public Accounting:
Here I'll just say that this is the worst area of finance for someone coming from STEM. Most of this stuff is standard procedure. For example, doing due dilligence for a company is about reading income statements and doing calls. Being smart will help here but you will definitely not do any interesting math. However if you think this could be interesting for you, google 'Big 4 Accounting' and go from there.

>Corporates:
This is the first place you should look at if you will you don't have a love for 'pure' finance. The reason being that 'corporates' mean corporation. For example, love electric vehicles? Well, Tesla has a finance function. Doing Corporate Development at Tesla, for example, would be finding electric battery companies that Tesla may want to acquire, or perhaps doing the work to set up a new factory. So if you love ANY industry, but are a bit negative about how your salary will look in the future being a traditional 'researcher', then look into what the finance jobs look at that company.

Anonymous

Anonymous Sun 24 Apr 2022 19:19:36 No.14424911 Report

Quoted By: >>14424915

>>14424909
>Institutions:
This should be the second place to look at. This is because these are pure finance companies (their money comes from investing activities) but they will usually have a mandate. For example, you could be a researcher or portfolio manager in a green energy fund. This means that you'd be researching green energy companies and then placing financial positions on them if you figure out that their product has potential. Same with private equity - there are plenty of private equity funds targetting specific industries that you may enjoy. But now you won't be part of the company, you will be part of a bigger company buying out those interesting companies.

>Banks:
And this is the purest of the pure. Banks work only with money. That said, banks can still make discretionary decisions regarding where to target their services however most banks will be interested in capturing everyone regarding of industry. And once transactions are agreed upon, a lot of the time it is the bank that has to go through the dense financial documentation to make it happen. This can be cool, but it will be mostly finance work.

Anonymous

Anonymous Sun 24 Apr 2022 19:20:44 No.14424915 Report

Quoted By:

>>14424911

Now I'll give you an example of how all these areas may intertwine:

Imagine you are a recently graduated Chemical Engineer. You just got hired for a massive Chemical products company to do Corporate Development. It is now your job to find deals to make your company grow. You talked with your boss today and he told you that he really wants to expand into a new business line involving chemicals the company has never worked for. You start calling up your bank to see what their bankers have in stock.

One Investment Banker returns your call saying that they know about a privately owned company that specializes in handling those types of chemicals and that the private equity fund that owns it is just looking to close that fund so that they can return money to their investors before they open up their next fund. Therefore they would be willing to sell. They hook you up and you have a meeting with the Private Equity fund to confirm if they are open to selling their company to you. The Investment Banker was right: they are looking to sell. And you are interested.

Given that you are looking to acquire a privately own company you know that there is very little public data out there. You want to make sure that you pay a fair price and are not scammed by this PE fund looking to exit. Therefore you call up your public accounting friend to perform due dilligence on this private company and also give you a valuation (how much you should pay for it).

It turns out the company looks good intervally and the PE fund is willing to sell for a fair price. You now bring the deal to the CEO and he backs you. Now, depending on how much cash your company has, you may buy it entirely out of pocket or maybe you will call up your bank again to give you a loan to buy the company.

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