Category: Finance

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Basic Elements of a Financial Plan

As students progress through college, often their mindset shifts from “broke college student” to “young professional.” And their questions shift from “how do I afford pizza next Friday night” to “how am I going to save for retirement?”

A financial plan is a sensitive and individualized thing. Different people look at finances differently, and that is okay. This post is a summary of some of the most important considerations to have when discussing your financial plan with a mentor, advisor, planner, or parent.

  1. Emergency Fund: Fast-forward a few years to when you are working, maybe pulling in $4,000 per month, getting your loans paid off, taking care of other expenses, saving for a down-payment, and enjoying life. But then something unexpected happens and you find yourself unable to work for a few weeks or months. What do you do? Having an emergency fund equipped to cover 3-6 months of expenses is vital to building a sound financial plan because it protects you (and your other savings) from unexpected events.
  2. Retirement: This means different things to different people, but for almost everyone it is a larger number than they expect, and saving/investing towards this goal can be daunting. Set healthy savings habits and goals now, and find out what you need to save each year to make your dreams happen.
  3. Budget: Based on your income, subtract out taxes. Then divide this income by 12 to know your monthly after-tax income. From this, start categorizing expenses as either fixed or discretionary (discretionary means optional or “for fun”), budget your savings and investments, use some of the left over for “fun” money, and then boost your savings with anything left after that. The most important part of a financial plan is the plan; a mediocre financial plan is worlds better than no plan.
  4. Other goals: Take time to think about and write down your goals. Maybe you want to have a house by the time you are 27; perhaps a car you will want to buy before the age of 30; maybe a dream vacation 10 years after you graduate or once your student loans are paid off. Whatever these goals are, write them down. Prioritize them. Put a price tag on them. Figure out a strategy to start moving towards them. Even if your goals change later, you will look back on your earlier self and thank yourself for saving the way you did.

Finances are difficult, and financial planning can be complicated. Thankfully, there are endless resources for people like you and me. Start with the basics, and try to cover all your bases. Being one step ahead can make all the difference in the world.

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Accounting/Finance Majors: CPA, CMA, CFP, CFA

If you are or considering becoming an accounting and/or finance major, you have probably heard a lot of acronyms thrown around in reference to different professional certifications (read: exams) that you can acquire. This article is aimed at breaking down some of the confusion and clarifying what each one is. This is the first step in deciding which one(s) may be for you.

  1. CPA- Certified Public Accountant. This is the flagship certification for those who want to actually be accountants. Professions include tax and audit, though the CPA is widely enough respected that many corporate lawyers, business consultants, tax attorneys, and personal financial planners have it as well. The CPA is quite difficult with four 4-hour exams which must be passed within 18 months of each other. Pass rates for each of these exams is between 40-60%, though Grove City College students tend to have much higher pass rates. The exam sections are audit, financial accounting and reporting, tax and regulation, and business environment and ethics. This is a very valuable certification, but you have to really want it. If you are considering or would like the option to take the CPA, look into your state’s CPA eligibility requirements for undergrad course work. Some states (such as CO) require you to have specific courses under your belt that the College does not include in graduation requirements.
  2. CMA- Certified Managerial Accountant. This is similar to the CPA, but with more of a managerial emphasis. This means that costing, cash flow, inventory, and those types of issues are more heavily emphasized. The CPA is incredibly broad, the CMA is less so. Professions are similar to those of CPAs; financial analyst, managerial accountant, corporate controller, financial manager, and many others.
  3. CFP- Certified Financial Planner. Usually, to use this certification you must also pass other financial licensing exams such as the Series 6 or Series 7. A CFP works with individuals and families to provide financial solutions to their problems and to grant them added security. A CFP works in a very personal role with their clients and has a lot of responsibility for giving them good recommendations. CFPs understand finance and financial products, are empathetic and caring, and have strong people skills.
  4. CFA- Chartered Financial Analyst. The CFA exam is sort of like the CPA of finance. There are several exams (called levels) which must all be passed. CFAs become experts in finance, and often work as asset or portfolio managers, financial managers, risk management experts, or consultants.

All of these paths provide excellent career opportunities, but you may fit one of them more than others. Spend some time reading about each one, finding out who you may know with a background in one of these areas, and considering your end goal to help you decide!

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Big 4 Internships and the Pandemic Impact (Part 3 of 4)

This is part 3 of a 4 part post. If you already saw the part prior, go ahead and skip over the remainder of this introductory paragraph since it is the same as that in the others. During the summer of 2020, in the heat of the pandemic, I had a rare opportunity: I was part of Ernst & Young’s first fully virtual internship experience. Depending on how you look at it, this is either a scar in my past or a badge of accomplishment. I certainly view it as the latter, but I did not initially. This post is geared towards students looking at interning at the “Big 4” in the coming years, so this post is particularly suitable for current or prospective accounting majors. But, if you are not considering accounting, there is still something here for you.

I discussed previously what companies the “Big 4” are and what they do, and I covered why internships there are so significant. This post is aimed at relating my experience from the summer of 2020, and discussing how it was shaped by the pandemic.

3. My expectations

My relationship with Ernst & Young started long before my first day as an intern; I met a recruiter on campus for a mock interview, and knew from that meeting that EY was a place I wanted to work and grow. As I progressed through the application and interview process, everyone that I spoke to or exchanged emails with further affirmed my decision. When I applied, interviewed, and accepted my offer (all before Easter in 2019), no one knew how the world would change over the coming year. I went into this expecting to be sitting in a recently remodeled office in one of Denver’s tallest buildings with a view of the city and the mountains. I expected intern activities after days in the office, and opportunities to visit client sites and really see a “day in the life of an auditor.” More importantly I expected to be challenged, pushed, taught, mentored, and exhausted.

Disclaimer: I do not represent nor am I speaking on behalf of any of the Big 4; all information in this article is subject to change; the intent of this article and all following posts on the same subject is to help inform students, not to advise their career decisions.

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Big 4 Internships and the Pandemic Impact (Part 1 of 4)

During the summer of 2020, in the heat of the pandemic, I had a rare opportunity: I was part of Ernst & Young’s first fully virtual internship experience. Depending on how you look at it, this is either a scar in my past or a badge of accomplishment. I certainly view it as the latter, but I did not initially. This post is geared towards students looking at interning at the “Big 4” in the coming years, so this post is particularly suitable for current or prospective accounting majors. But, if you are not considering accounting, there is still something here for you.

1. What are the “Big 4”?

The “Big 4” is a term used to refer to the four largest global accounting firms in the world. The firms, in no particular order, are EY (Ernst & Young), KPMG (Klynveld Peat Marwick Goerdeler), PWC (Price Waterhouse Coopers), and Delloite. While they differ in what portion of their business comes from which service line, they are known for high performance in three key areas: audit, tax, and consulting. Audit is also referred to as “assurance,” because the service line is geared towards assuring clients and users of clients’ financial statements that the statements are free from material misstatement. In other words, we make sure they did their accounting right. It is required by law that public companies get audited, and the largest ones rely on the Big 4. Consulting is pretty much what it sounds like – consultants are hired by clients to lend a set of fresh, expert eyes to business operations and decisions. For example, if a client is considering a new operational strategy, they may ask a team of Big 4 consultants to analyze, evaluate, and help make the decision. Tax is also fairly intuitive – public companies have to navigate a complex tax system whether they are US only, foreign, or multi-national; they also deal with often complex transactions (such as mergers or acquisitions) that have powerful tax implications. In short, successfully navigating the tax system requires expertise and planning, and the tax service line at Big 4 companies exists to provide that.

Disclaimer: I do not represent nor am I speaking on behalf of any of the Big 4; all information in this article is subject to change; the intent of this article and all following posts on the same subject is to help inform students, not to advise their career decisions.

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Internship Spotlight – Finance

I recently interviewed my boyfriend, Dave Bereck, on his current internship. Dave loves working and sees himself as a hard worker and very driven. Currently, he is a full-time student majoring in Finance and Management but also works at a business called Treloar & Heisel. Although Treloar & Heisel provides financial services of all types, Dave specifically works in the wealth management department. He works 15 hours a week and does all sorts of work for the company. He is in charge of inputting client specific data into the company’s system, listening in on important client calls, and calling and speaking with clients to see if they would like to work with his side of the business.

Treloar & Heisel is a financial firm that provides financial services to dental and medical professionals. The niche that Treloar has is that they are dental-specific. According to Dave, there are a lot of dentists that get taught the medical side of life but do not get to learn the financial side. Most dentists get out of residency with hundreds of thousands of dollars of debt. The average amount of debt that a dentist leaves residency with is $450,000. At this point in their lives they are around 32 years old so they usually will be looking to buy a house soon. This only adds to the amount of debt that they have. It can be a very stressful situation to be in but that is where Treloar comes in to help. They put together a comprehensive financial plan based off of all the doctor’s financial documents and then deliver the plan to the doctor. The company bills on a flat fee rate and only asks that the doctor commit to the first year of service and then they pay on a monthly basis after that. This is so that the company can complete their fiduciary duty of making sure the doctor is in a better place than when they started.

Though it is challenging to juggle 16 credits and the internship, Dave feels that the experience that he is gaining will really help him in the future. I asked him to provide one piece of advice to anyone thinking of working while in school and he said, “It is so important that you plan out every day and that you stick to your schedule. There is not a ton of free time and little time to waste. In the end, it is all worth it though! This semester has been challenging, but I have learned about finance and will use these skills in my career. I am thankful for the opportunity.”

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Rob Kunst – Balancing Football & School

Rob Kunst, a senior Finance major and Analytics minor, has played football all four years during his time at Grove City College. He began playing his junior year of high school, sparking his passion for the sport. Rob’s decision to play college football was inspired by his two uncles, alumni football players from Grove City. His dad also played football during his time at California University of Pennsylvania. “I knew playing football in college wasn’t going to be easy, and as crazy as it sounds, I think that’s why I did it. I wanted to be pushed, tested, and have an opportunity to learn lessons that can’t be taught in a classroom,” Rob explained. He specifically chose to come to Grove City College for the academic reputation, religious atmosphere, friendly culture, and strong alumni network.

Coach Chris Smith, the College’s head coach on the previous staff, recruited Rob four years ago, along with coaching his two uncles way back when. In high school, Rob played tight end and inside linebacker. He came to college as a tight end but has evolved into a tight end and wide receiver hybrid.

Rob discussed his football season schedule, as it is a year-round commitment. For pre-season, players receive an optional summer training book with detailed regimen regarding lifting, running, conditioning, and nutrition. With three years of past summer internships, Rob was challenged with fitting training into a structured 40-hour work week. He worked hard to start his days at 5:30 in the morning for training before work, a process that eventually came naturally in his day to day life.

After a rigorous routine of “eat-sleep-football” during August football camp, the season begins … but so does school. Football is six days per week, including games on Saturdays, until about mid-November. Balancing football and school is not easy, but Rob found a way to stay organized and use prioritization skills daily.

The post/off season begins with lifting after Thanksgiving, leading into the spring semester of school. After months of daily training, April brings Spring Ball, a time where the NCAA permits team practices on the field three days per week for five weeks. In addition to the training and practicing in the spring, there are also team meetings one night per week that include senior leadership training.

Head coach Andrew DiDonato has been a huge blessing for Rob; he has a positive mindset no matter the situation, takes responsibility for all of his actions, strives for a successful life, finds joy in helping others, and works effectively even with challenges. “One of the biggest lessons in faith has been that true, overflowing, and everlasting joy comes from a meaningful relationship with God. If that’s what fuels my fulfillment and happiness, then there’s nothing in this world that can take my joy away. Living this out has changed my life and strengthened my walk with Christ,” Rob said. Although Rob will not develop his football career after college, he plans to support coach DiDonato and the Grove City College football program in any way he can.

“I have already began to apply lessons to academics, my career, and relationships. I would say that the most significant impact has been on my early career. To provide some context, I came into Grove City’s football program in the pit of its 33-game losing streak. There’s nothing fun about being part of a losing streak, but the experience of working towards ending one is priceless. Living out this challenge was the closest simulation I had to turning around a failing company in the business world. With that in mind, the lessons preached by successful entrepreneurs and business influencers about building a prosperous business align closely with the lessons that we had to implement as a team to improve our success. Therefore, these skills have been highly applicable to a business setting and have already helped me to succeed in several different business/finance internships and secure a full-time position with an exceptional company in August of 2018 – before even stepping foot on Grove City’s campus as a senior. These lessons aren’t a secret, and they’re not ‘life hacks.’ They just require necessary discipline to live out and follow every day,” Rob said.

After graduation, Rob will be based in New York City and can help large companies solve complex business issues as a consultant at Protiviti, a global management consulting firm that helps its clients solve problems in areas like business process, analytics, internal audit, and technology. Rob’s goal to become a consultant stems from being a part of the transformation that is taking place within Grove City College’s football program. He wants to help companies, managers, and executives become better at what they do, along with reaching their goals. Rob is excited to have the opportunity to help and grow with Protiviti. He thanks his influential professors, coaches, internship colleagues, members of the Career Services Office, and quality friends for the constant support and compassion.

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Alumni Spotlight: Larry Thompson

Larry Thompson graduated from Grove City College in 2017 with a major in Accounting and Finance. As the first in his family to graduate from a four-year college, he is now successfully working on his future Certified Public Accountant title. Larry currently lives in Charlotte, NC working for the accounting firm RSM U.S. LLP audit, tax, and consulting services. While enjoying his life down in North Carolina, Larry is also benefiting from the perks of his company. A major perk he has in mind is traveling. In the past eight months he has been able to travel to Dallas, Texas; Charleston, SC; New York City; Atlanta, Ga.; and Greenville, SC. Larry looks forward to traveling more in his future.

When asked about the CPA exams Larry replied, “I worked on studying every day. I woke up and went to the public library to free myself from any distractions from 9 a.m. to 5 p.m.” He then stated that he had three out of four exams already completed before he started working for RSM U.S. Being put into his job during busy season, Larry could not really focus on passing the fourth exam; he had to work hard and study even harder in order to prepare himself for the final module of the CPA exam. Soon after the busy season, he ended up passing his fourth and final exam. His next move in his career is to work for RSM U.S. for a year, but in order for him to obtain his CPA title, he must pass all four modules and work for an entire year to become officially “certified”.

A motivational part of Larry’s experience with the exams is the way he went about taking them. Larry stated, “I took the exams in order from hardest to easiest [in his own opinion].” He believed that if he could pass the hardest exam, then the rest would be easy. His motivation to pass in this order kept him dedicated to studying and keeping on top of things in order to fulfill his dream of becoming a CPA.

Ideally, Larry plans to work for RSM U.S. for two to three years and then reevaluate his options after being certified. He wants to end up in Wealth Management or become a stay-at-home father who does technical stock analysis trading. His dedication and commitment to becoming a CPA has already and will furthermore open up doors in his future.

Larry finished the interview by stating a word of advice: the Career Services Office is extremely helpful. He acknowledges that they want the best for students here at Grove City College. Career Services should be taken advantage of more often to set up a student’s future and career. “Make friends with them, and do not ignore them,” Larry stressed. He believes they have truly helped him further himself earlier in finding jobs and even more so now during work.