How to Learn Business Finance Fast, According to an Expert
- Self-taught financial strategist Andrew Chen, founder of Hack Your Wealth — a personal finance blog for high earners — shared with Business Insider how to quickly catch up on business finance if you have no idea what it is or how it works.
- Chen suggested enrolling in a CFA program even if you don’t plan to complete it, because the first level of exams teaches you a lot of what you need to know to pass.
- He also recommended reading books like “Analysis for Financial Management” by Robert Higgins and studying YouTube videos on pages like Corporate Finance Institute and Breaking Into Wall Street.
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Many would-be entrepreneurs have great business ideas, but may not have the financial resources to launch and sustain a successful startup. Even if you’re not an entrepreneur, developing expertise in corporate finance can help you pursue opportunities for finance-related positions in your own business.
“Corporate finance is always a good investment for my career,” said Jonathan Poston, director of the advertising agency. tombras, told Business Insider. “Money is the lifeblood of the modern organization, and the more we understand the levers and concepts around it, the more oriented we are towards business goals and how we fit in with them.”
If you think your business finance skills could be improved, you’re in luck. Business Insider grilled self-taught financial strategist Andrew Chen, founder of Hack your heritage – a personal finance blog for high earners – on how to get up to speed quickly.
Chen previously served as a consultant at McKinsey & Company and a private equity investor at Huntsman Gay Global Capital. He told Business Insider that his original motivation for learning corporate finance was to take advantage of a career opportunity in McKinsey’s corporate finance department. His efforts to build his skills in this area later paved the way for other professional opportunities, including landing a role as a private equity investor after McKinsey and eventually creating his own financial website.
“I had absolutely no business/finance experience before McKinsey; [I was a] history major [and] law student,” said Chen, who has a JD from Harvard University.
Enroll in a CFA program – even if you don’t plan to complete it
The best way for Chen to learn the ropes of corporate finance was to enroll in a Chartered Financial Analyst (CFA), which is offered by the CFA Institute and enables participants to earn the globally recognized professional designation of CFA.
The program requires you to pass three levels of exams and lasts about four years, and the Institute offers the exams in more than 170 cities around the world.
Chen studied for all three exams – and passed them – in his spare time.
But, he added, “You don’t have to pass all three levels to get the majority advantage. You can get 60-70% of the basic knowledge you need at level 1, and that doesn’t only takes a few months of study.” Just be aware that if you choose to complete only the first level, you will not receive an official CFA credential.
Sign up for online courses and view ebooks
Chen didn’t stop once he received his CFA; he also signed up for online applied training from training companies like The Street Training (TTS). Self-paced courses from TTS cost between $250 and $500 for group lessons and individual lessons cost between $75 and $200.
“They teach a mix of advanced Excel skills applied in a corporate finance/valuation context,” Chen said. “These trainings usually last one to several days [long] and provide a great crash course in learning applied techniques after learning some basics through reading.”
Chen also mentioned that Adkins Matchett & Toy, aka AMT trainingoffers online courses that range in price from $100 to $600, and Wall Street Preparation offers individual lessons starting at $33, with bundle packages from $169 to $424.
In addition to online courses, Chen leveraged online content such as financial/quantity interview guides from Vault.com, which he found helpful. Vault offers a comprehensive list of banking and finance topics in ePub format, including a “Investment Banking Career Guide” and one “Practical guide to financial interviewsfor $29.99.
Read literature on corporate finance
Chen targeted what he identified as “canonical” books on finance – industry standard texts on corporate finance that are widely read and respected – such as those by McKinsey”Valuation: measuring and managing the value of companieswhich, according to its website, “enables everyone, from the budding professional to the seasoned manager, to excel in measuring and maximizing shareholder and business value.”
“McKinsey’s book, in particular, provides the most theoretically sound and rigorous approach to understanding corporate finance and valuation,” Chen said. “Even if you don’t read the book cover to cover, you can get a lot by skimming through and reading certain chapters.”
Additional books Chen has read and recommended include:
Study Corporate Finance Modeling on YouTube
Chen also taught himself to do business financial modeling in Excel outside of his working hours. He recommended searching YouTube for learning content to do just that. Two channels that he particularly likes are corporate finance institute and Breaking into Wall Street.
“In corporate finance, there is [are] now a ground useful step-by-step videos you can find on YouTube to teach specific aspects of corporate finance modeling: balance sheet modeling, cash flow modeling, WACC, valuation/DCF, LBO modeling, etc. “, did he declare.
Take advantage of internal company training
While working at McKinsey and later at Huntsman Gay Global Capital, Chen also participated in several optional in-house corporate trainings, which covered topics such as DCF Valuation Modeling, Balance Sheet and Cash Flow Modeling. treasury, LBO modeling and advanced merger modeling.
“You had to do these trainings on your own time; sometimes they were full-day trainings, in which case you had to negotiate time off with your teams – usually by agreeing to catch up on work later in the evening,” Chen said. “I introduced the class [to my boss] as an opportunity to hone my skills in a way that would also benefit the team, as I would have more analytical skills and understanding to more effectively model the issues the team faced on a day-to-day basis.”
He added that if your company offers free training, it’s a great opportunity for you to improve your knowledge and skills, as these courses can be expensive to fund yourself. Investopedia, a website dedicated to simplifying complex financial reporting that serves million usersreports that the best financial modeling courses for investment bankers, for example, range from $100 to nearly $2,000.
If you take advantage of your company’s trainings, Chen recommended being flexible in negotiating with your teams for “time off” to take the courses; for example, by offering to make up lost work time on nights and weekends if necessary.
“Defend the benefits training will bring to your employer by emphasizing that it will make you a more effective employee,” Chen said. “If your company does not offer the trainings, you can even ask HR or learning and development to start such trainings, perhaps by interviewing your office colleagues to demonstrate that several people in your office are interested. to take the course, thereby reducing the per capita cost to the employer.
This article originally appeared on Business Insider on December 5, 2019.