Today, I’m not going to discuss any Finance topic, but share with you some of the methods I adopted while learning the subject. Coming from a Computer Science background, Finance was a new subject for me. Having graduated from the college in 2003 and then working in the corporate sector for eight long years completely into computer technology and its related field, it was very difficult for me to absorb the contents. Moreover, trying to learn the things on my own was a big challenge (and change) that demanded tremendous amount of effort and dedication from me. Today, after gaining a good understanding of this subject, I realized that I should have done it in early part of my life, but nevertheless, somebody says, “Everything happens when it has to happen”. So, I’m sure it was for good.
I’ll keep this article short and simple, and at any moment you feel you should ask questions, or share your experiences, ideas and thoughts with me and others in this blog, please do not hesitate to leave your suggestion(s) in the “Comments” section below. Let’s get started!
(1) Always Keep a Paper and Pen/Pencil Beside You
Franklin Allen, Nippon Life Professor of Finance, The Wharton School says, “It’s important to realize that Finance is not a subject where you can just simply read things and understand them. You have to absorb the material over time and be able to apply it, which is somewhat different than understanding the concepts.”
So, in my opinion, the best way to learn this subject is through practice, practice and practice.
Before you pick up that finance text and start reading it, ensure that you have a cool mind. As you read, try to understand the fundamentals to the core. Always keep a paper and pencil/pen beside you, and take notes as you learn the concepts. After understanding the concept, practice a few problems in that area, and then try to solve “real-life” problems (using case studies) so that you can apply the concept. Net Present Value (NPV), Internal Rate of Return (IRR), Payback Period, Opportunity Cost of Capital, Annuity and Compounding are few of the concepts that will find its play in any aspect of finance. So, learn them in depth and apply them real-time. Also, do not confine yourself to one book. Read other authors’ compositions so that you understand the subject from every angle. Make a habit of reading finance related topics every day.