Finance majors know a good investment when they see one. Not only do they enjoy one of the best starting salaries and highest lifetime earnings of any major, but they also develop career skills that are applicable in almost every economic sector.
Nowadays, finance majors are not destined to work in banks or investment firms, either: they start robo-banking startups and help nonprofits reach their funding goals. A finance degree is versatile and profitable, anywhere in the world, which makes it a great option for international students.
But what is finance? What is it like to study finance at a university in the United States? Which courses do you take in a finance program and which skills do you need to be successful? Keep reading to learn if a degree in finance is right for you.
What is finance?
Finance students study risk and reward, with a focus on individuals, corporations, and institutions and how they make capital-based decisions. Capital, in this case, means wealth and it can be in the form of money or other assets, such as equipment or property, that can be put to use for economic growth.
A finance professional uses quantitative data, complex computer software fluency, statistical analysis, creative problem-solving, and strong communication skills to inform investment decisions, such as:
Should a growing company buy a competitor and utilize its resources or build their own product version themselves?
How should a portfolio manager protect her client from risk, but still maintain a decent profit?
Which executive compensation strategy is the best for a corporation?
Finance professionals create long-term plans and strategies to help companies thrive financially. According to The College Board, finance student “course work covers such topics as planning, raising funds, making wise investments, and controlling costs.”
Students who major in finance generally study for a bachelor of science degree, as many of the classes require solid high-level math skills. There are many finance specializations available, and they often align with professional career paths in sectors including real estate, risk management and insurance, and banking. Featured finance courses at the University of Illinois at Chicago (UIC), include classes on entrepreneurial finance, emerging technology, and energy finance.
According to the National Association of Colleges and Employers First Destination survey, finance majors make approximately $55,000 after graduation, 11% higher than the average graduate salary ($49,000). The projected median lifetime earnings of a finance major ranks eighth ($3,641,668) out of eighty-five popular majors, according to Temple University economics professor Douglas Webber. At US colleges and universities, finance is considered a business major, which is the most popular area of study for undergraduate students in the United States, forty years in a row.
What is fintech?
Fintech, or financial technology, is a disruptive innovation sector that impacts traditional financial services. Fintech companies use technology to deliver services such as insurance, investing, credit and lending, and payments, for a fraction of the cost of traditional consultancies and financial advisors. Everything from paying bills online to developing cryptocurrencies based on blockchain technology (think Bitcoin) fall under the fintech umbrella.
Fintech is an emerging industry, which means it is young and still growing. It also makes it an exciting career path, both domestically and internationally, especially for recent graduates who want to tackle new problems where finance can provide solutions. However, working in a fintech startup does mean more risk: many startups fail, as much as 90% according to some projections. Since startups usually have less money, they generally have a smaller pool of employees who are often expected to work long hours doing several different jobs. For a recent grad, this means accelerated opportunities for mid-career projects and experience, with the tradeoff of job instability.
There are many growth projections available for the fintech industry; all of them claim substantial economic gains in the upcoming years. According to a Kenneth Research report from late 2019, Asian-Pacific fintech markets are expected to grow the most, at 43% by 2023.
Popular examples of fintech companies around the globe include:
How is a finance degree different from an accounting degree?
Many people confuse accounting with finance because both deal with money and making decisions based on financial number crunching.
Finance is the study of money, or capital, and how it is acquired, invested, and otherwise spent. When compared to accounting, finance is a much broader area of study.
Accounting is the measurement and recording of a business’ financial transactions. It is often described as a part of finance or a skill that finance majors need. For instance, an accountant may look at financial statements, tax returns, income, and revenue to piece together a company’s financial health. A finance professional will then use the data compiled by the accountant to help craft a long-term financial plan for an organization.
Should I major in finance or accounting?
Finance and accounting majors share many of the same skills and interests. Accounting, however, is much narrower in scope than finance. The career paths for an accounting major are generally limited to tax-related, bookkeeping, or controller positions or adjacent roles such as actuaries. Finance majors have a more extensive range of job prospects in banking, investment, and technology-related industries.
Sample career job growth for both majors is about average, at 6% for accountants and financial analysts, according to the Bureau of Labor Statistics (BLS). According to PayScale.com, financial analysts make approximately $54,000 out of college, where accountants make $46,000. The lifetime earnings for an accountant are approximately $3.2 million, or $400,000 less than finance majors make, according to Webber.
It is also possible to dual major in both accounting and finance, or major in one and minor in the other. Be sure to review the programs offered at your prospective US universities before you apply to see if they offer the areas of study and degree options you want.
Why should I study finance as an international student in the United States?
According to U.S. News and World Report, nine out of the top ten business schools in the world are located in the United States. However, you do not have to study at an elite school to receive a top-notch finance education in the US. Here are three reasons why:
Opportunities for real-world experience
For prospective finance majors, Wall Street needs no introduction. However, Chicago; Washington, DC; and Boston are just a few of the many cities in the United States with global financial districts. From hubs for innovation to stock market floors to the federal reserve of the world’s largest economy, many cities in the US offer unique, real-world educational and professional opportunities for finance majors.
Students at UIC, for instance, have the Chicago Mercantile Exchange and the Chicago Board of Trade, not to mention corporate offices or headquarters for several large firms and businesses nearby, such as Archer Daniels Midland, Boeing, and more than thirty other Fortune 500 companies.
Students at the Kogod School of Business at American University in Washington, DC, have unique access to the Federal Reserve and the U.S. Treasury, as well as the International Monetary Fund and the World Bank.
Boston is home to major corporations such as Fidelity, not to mention a growing fintech sector, based out of the city’s Innovation District.
Universities that are not located in the biggest US cities also have a lot of opportunities for professional experience. Many of the world’s most recognizable companies have relationships with US universities, especially if they have a hub in the same state as the school. For example, Bank of America, Merrill Lynch, and Metlife recruit on-campus at the University of Kansas in Lawrence, Kansas.
Cutting-edge tools and facilities
In addition to recruitment opportunities, many schools boast cutting-edge facilities with real-world implications, such as the Securities Markets Analysis Research and Trading (SMART) Lab at Louisiana State University (LSU). The SMART Lab provides a simulated trading floor so that finance and other business students can get an understanding for what to expect after graduation. Students have access to the latest hardware and financial software, such as Bloomberg, FactSet, Morningstar Direct, and many other professional analytic programs that professionals use.
At the University of South Carolina, students take advantage of the Risk and Uncertainty Management (RUM) Center to learn how to make better financial decisions when confronted with the many risks that modern corporations face. The RUM Center helps students develop strategies to confront uncertainty, with the help of professors and corporate partners.
Global networking opportunities
More than 25% of the world’s largest public companies are based out of the United States, according to Forbes Global 2000. In addition, more than one million international students are currently studying in the United States, according to the 2019 Open Doors report. So, from working with global brands to international and finance-based student organizations on campus, students studying in the United States have more networking opportunities than at universities in any other country in the world.
What is it like to study finance as an international student in the United States?
Of the approximately two million bachelor’s degrees conferred by US universities in 2016-17, 37,000 were general finance degrees, representing less than 2% of the total, according to the National Center for Education Statistics (NCES). Specialized bachelor degrees in finance, from banking and financial support services to international finance, added 1,200 degrees to that total.
According to the 2019 Open Doors Report on International Education Exchange, of the approximately 432,000 international students studying in the United States in 2018-19, 17% studied business and management, including finance. DataUSA.io reports 47,000 general finance degrees awarded in 2017, with more than 15% conferred to international students.
Which courses do finance majors take?
Finance programs at universities in the United States tend to focus on commercial and investment banking, corporate finance, and asset management. Specialized courses and concentrations also cover the following areas:
Finance and technology
Personal finance planning
Risk management and insurance
With a finance bachelor’s degree, students gain the knowledge and skills to prepare and review financial reports and statements, analyze market trends, understand and mitigate business risks, and help managers and individuals make sound economic decisions.
After graduation, finance students will be able to use advanced mathematics, complex financial programs, and risk analysis strategies to answer the following types of questions:
Where should an individual invest?
Does the return justify the risk?
Should a corporation pursue a project or not?
How can we reduce costs?
How much is a company worth?
How do I use cash flow projections, capital costs, and net values to create a budget?
Where is our next opportunity, based on market trends?
What does an undergraduate class schedule look like for a finance major?
Students in the US generally pick their major at the end of their sophomore year, regardless of whether they are in a business school program. Universities in the United States require students to take core classes in arts and sciences. This well-rounded approach to undergraduate academics allows students to explore different areas of study before deciding on their major.
In addition to core liberal arts classes, finance students take several general business classes, general finance classes, and finance specialization courses. At the University of South Carolina, students are required to take 122 hours of courses to graduate, half of which qualify as business or finance-specific classes.
Let us take a look at a sample curriculum of classes for a finance major at the University of South Carolina:
First year, first semester: 15 hours
Critical reading and composition
Calculus for business administration and social sciences
Foreign language requirement
Introduction to financial accounting
First year, second semester: 15 hours
Rhetoric and composition
Elementary statistics for business
Global citizenship and multicultural understanding: historical thinking
Foreign language requirement
Introduction to finance
Second year, first semester: 17 hours
Rhetoric and composition
Global citizenship and multicultural understanding: social sciences
Elementary statistics for business
Aesthetic and interpretive understanding
Foreign language requirement
Second year, second semester: 18 hours
Introduction to managerial accounting
Survey of commercial law
Effective, engaged, and persuasive communication: speech
Values, ethics, and social responsibility
Business careers in the global economy
Principles of microeconomics
Third year, first semester: 15 hours
Principles of macroeconomics
Introduction to finance
Principles of management
Third year, second semester: 15 hours
Statistics for business and economics
Principles of marketing
Corporate financial analysis
Investment analysis and portfolio management
Fourth year, first semester: 15 hours
Data analytics for business
Management of risk and insurance
International financial management
Business information systems
Fourth year, second semester: 15 hours
Computer information systems in business
Corporate risk management
Financial statement analysis
Should I intern as an undergraduate finance student?
Interning as an undergraduate student in the United States is a good idea for all international students, and especially international finance majors. There are many great opportunities for finance-based internships in the United States, from top banks to personal finance consultancies to fintech startups.
According to a survey from the Institute of International Education, 78% of international students choose to study in the United States to enhance their career opportunities and gain professional experience.
Internships help you:
Build your resume: even entry-level positions require experience
Network: creating connections within your area of study can help you find a job
Find work: many internships turn into full-time job offers
Talk to your Shorelight advisor if you need help finding the right internship for your career path.
Should I pursue a master’s or doctoral degree in finance after I graduate?
Graduate school in the United States is where students go to dive deep into their area of study. Finance students apply their generalized business education to an area of specialization that interests them, such as real estate finance or entrepreneurial finance. As a result, many employers consider candidates with finance grad degrees as specialists in their field. Unlike many generalized graduate degree programs, an MS in finance often translates directly into a higher salary.
A finance graduate with a BS can expect to make approximately $61,000 a year, according to PayScale.com, and a graduate with an MS can expect to make $26,000 more out of school ($87,000). That is a compelling argument for graduate school!
A master’s degree in finance makes you more employable
In addition to the higher salary, employment trends from the last five years suggest employers are growing more interested in candidates with more specialized experience, rather than the more popular master of business administration (MBA) degree holders.
According to NCES, approximately 6,200 general finance degrees were conferred in 2016-17, while more than 104,000 general business administration and management degrees were conferred during the same period. That said, there are many MBA programs available with finance concentrations, if a more generalized business approach fits your desired career path.
Money knows no boundaries
A finance degree is also great for students with aspirations for international careers. From opportunities within emerging economies to travel between the established hubs of finance, such as New York and London, it is clear that finance is a global endeavor. In addition, many schools offer international finance specializations at the master’s level. Many universities in the United States, such as American University in Washington, DC, have excellent programs that incorporate global finance courses into their graduate programs.
However, there are other options available, depending on your career path.
What is a Certified Financial Planner™ professional?
Students interested in personal finance career options should consider the Certified Financial Planner™ professional (CFP®) courses. CFP® status is an internationally recognized qualification that ensures its holder adheres to professional and ethical standards. It also requires continuing education on industry regulation changes and technology updates.
Many universities, such as the University of Utah, weave CFP® certification into their academic programs. It costs $825 to take the CFP® exam, and between twelve and eighteen months to prepare. Exam prep material can be expensive, bringing the total cost of certification to more than $1,000, but this is just a tiny fraction of the cost of a graduate school education.
Qualified financial planners bring in excellent earnings and have strong job outlooks for the next several years. According to the US Bureau of Labor Statistics, the median pay for personal financial advisors is $89,000, with a 7% job growth rate from 2018-28.
Before you decide to go back to school for a master’s or doctoral degree in finance, think about your career path. If you decide that you want to apply your finance education to a broader business setting, a master’s in business administration may be better for you. If you want to pursue a career in personal finance, a certification may be all you need, for a fraction of the cost.
What can I do with a finance degree?
Money will always need to be managed, but the economy may play a role in open positions for finance majors. After the 2008 financial crisis, many finance professionals lost their jobs. That said, as an economic sector, finance bounced back, with a higher-than-average job growth rate, according to the BLS.
There are many more opportunities for finance majors now than there were twelve years ago as well. From fintech to an expanding personal finance industry, which is expected to grow 12% annually from 2020-23, the finance employment landscape is much different than it was a few years ago. Of course, the coronavirus (COVID-19) may affect these projections, as its full impact on the global economy is still to be seen. If the pandemic results in a global recession, job growth rates will be negatively affected.
Let us take a look at a few typical jobs for finance majors after graduation and beyond:
Job description: Perform financial calculations, such as creating cash flow and sales reports, keeping balance sheets, and administering payroll for businesses and individuals
Median salary: $51,000, according to PayScale.com (2020)
Growth projection: 6% growth (average), according to the BLS
Job description: Examine financial transactions to ensure they are compliant with federal and local laws and regulations
Median salary: $62,000, according to PayScale.com (2020)
Growth projection: 7% growth (faster than average), according to the BLS
Job description: Raise capital for individuals, corporations, and governments from within a financial institution
Median salary: $100,000, according to PayScale.com (2020)
Growth projection: 4% growth (average), according to the BLS
Senior financial analyst
Job description: Analyze a corporation’s accounting data to assess economic, statistical, and financial risks
Median salary: $80,000, according to PayScale.com (2020)
Growth projection: 6% (average), according to the BLS
Why study finance in the United States
Great schools, cutting-edge programs, networking opportunities, and internship and job prospects are a few reasons international students should consider the United States for their finance studies. The US has the biggest economy in the world, and every major global corporation has a presence here. Many of the technological breakthroughs that are driving fintech and disrupting the traditional finance industries are happening in the United States.
However, before you apply to a finance program, take time to explore your options. Consider which area of finance you want to study and make sure the school is in an area that has plenty of opportunities for you to learn and gain real-world experience. Finance is a lucrative business, but do not pick finance just because it pays well. Consider how happy you will be in the finance profession. Think about job postings back home—is there the same demand for financial professionals as in the United States?
A degree from a US university can help you stand out in a crowded field, but only if the jobs exist in the first place. Remember to reach out to current finance professionals for interviews, and do not forget to contact your Shorelight representative for more information! With a little planning and research, you will be on your way to London, Hong Kong, or Wall Street.
Talk to a Shorelight advisor today about studying finance in the US >