The Theories of Excellence - Finance

Top 21   Common Job Interview Questions  and Answers Samples Practice and get comfortable with these common job questions and answer samples before our interview and we’ll feel more confident, while giving much better answers. We recommend spending some time getting comfortable with what we might be asked, what hiring managers are really looking for in our responses, and what it takes to show that we're the right man or woman for the job. 1. Can you tell me a little about yourself? To answer, walk them through our background, starting at how we began our career or our current line of work. Take them through key accomplishments, key career moves we’ve made, and end by sharing what we’re looking to do next in our career and why we’re job hunting. Good answer sample: “I started my career in Marketing after graduating with a Business degree in 2011. I’ve spent my entire career at Google, receiving 3 promotions and 4 awards for outstanding performance. I’m looking to join ...

The book is organized by chapters that correlate to important money issues:  1. Know the Score  Orman says that the most important thing twenty- and thirty-something-year-olds can do for their financial future is to know and improve their credit score. She thoroughly explains what the FICO score is comprised of, how to improve it, how to run a credit score report, how to fix errors, and how your credit score can affect your financial future.  2. Career Moves  Orman’s advice in this chapter is sometimes surprising. She advocates that you find a job you love, and not just work for the money. She even advocates using credit cards for a few years to supplement your income if you have a job you love but that does not pay much in the beginning. Orman doesn’t advise that you finance an expensive lifestyle, but rather that you use credit to help survive by meeting basic needs until your career pays enough to support you completely.  3. Give Yourself Credit  Because...

Taking Stock of Your Financial Life – Covers goal setting, tracking your spending, and financial organization Dealing with Debt – Credit cards, student loans, car loans, credit scores, identity theft, and bankruptcy are covered here  Basic Banking – How to find a good bank, and whether to do joint or separate accounts  All You Really Need To Know About Investing – Pointers for new investors, and good explanations of all the basic financial instruments (money market funds, stocks, bonds). Also covers financial advisors  Living the Good Life in 2070 – Saving for retirement, including overviews of 401ks, IRA’s and options for the self-employed  Oh, Give Me a Home – Buying vs. renting, qualifying/shopping for a mortgage, and the costs of home ownership  Insurance: What You Need and What You Don’t – An overview of all the key types of insurance (health, car, disability, home, life, and types you don’t need  How to Make Your Life Less Taxing – Tax basics, tax rat...

“Accountants in the United States rely on a set of guidelines known as Generally Accepted Accounting Principles, or GAAP (pronounced gap) for short… Companies take those guidelines and apply a logic that makes sense for their particular situations. The key, as accountants like to say, is reasonableness and consistency… The rest of the world—more than one hundred countries—uses… International Financial Reporting Standards, or IFRS.”  “The most important GAAP guideline that accountants rely on for recording or recognizing a sale is that the revenue must have been earned. A products company must have shipped the product. A service company must have performed the work… Project-based companies typically have rules allowing partial revenue recognition when a project reaches certain milestones… The ‘sales’ figure on a company’s top line always reflects the accountant’s judgments about when they should recognize revenue. And where there is judgment, there is room for dispute—not to say man...

A penny saved is actually two pennies earned when you also consider taxes. So get creative on ways to save money in all areas of life. The simple proven way to grow your net worth is to spend less than you make.  Never ever fall into the trap of piling up credit card debt by buying things you don’t need that you can’t afford.  Always buy in bulk for home supplies—it will save you more money than you imagine over the years.  Set up a financial plan for you, or your family, in this order: 1) Tally your net worth, 2) Set goals, 3) Figure your annual earnings, 4) Add up your expenses, 5) Take a second look at your expenses, 6) Refine your plan, 7) Find a way to track your progress (mint.com), 8) Give yourself a break.  Save a few thousand dollars in an emergency fund in case something bad happens—you lose your job, end up in the hospital, or face an unexpected high expense—before you start investing.  You shouldn’t trust anyone to take care of your money more than y...

The Theory of Investment Value by John Burr Williams is a classic, and was referenced by Warren Buffett in his 1992 annual shareholder letter as “the equation for value”. This post will present and explain this exact formula published by John Burr Williams and help modernize it in today’s terms. Nobody has done it better than Warren Buffett himself, and so I recommend reading his 1992 letter for yourself for additional insight.  The equation for (intrinsic) value that eventually came to form the basis for modern DCF valuation is admittedly difficult to model even when reading the John Burr Williams classic, so I’ll have to explain some of the Greek symbols he presents in the final equation, which are scattered throughout the book.  Keep in mind that some of these Greek terms won’t necessarily correlate to the general terms used in regular algebra.  Capital Vo (on the left of the equation) is defined as the investment value per share (page 76), which is what we are trying ...