Hello FinOak fam! It’s been long since our last edition came out. We were working on scaling our systems and now we are back with even more interesting editions coming your way! Scroll down to know more about latest Hurun report highlights and changes introduced by CFA institute. Learn how to make emergency fund for tough times. Lastly, read on the story of Bhavya Sood, final year student of SSCBS, where he shares his experiences full of learnings.

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Weekly Wrap Up

 Hurun 2023 List- Loss Makers Ranked!

According to the report, the world lost five billionaires every week in 2022, leading to a depletion of around 10 per cent of global wealth to roughly $13.7 trillion. According to the survey, there are 3,112 billionaires - 269 fewer but up from pre-Covid levels.

In terms of wealth loss, Jeff Bezos, executive chairman of Amazon, ranks first, followed by Adani and Ambani. By absolute value, Mukesh Ambani and Gautam Adani are among the top wealth losses in the world.

Past year billionaire count: 3,384

This year billionaire count: 3,112

% drop: 8%

Nations Involved: 69

Companies Involved: 2,356

India is ranked third on the 2023 M3M Hurun Global Rich List in terms of billionaires. India has consistently risen in the ranks of the world's billionaires during the past five years. India now makes up 8%of the total number of billionaires worldwide, up from 4.9% five years ago.

During the past ten years, Gautam Adani and his family have advanced more than 437 levels. Ironically, the Adani boss has lost $28 billion over the last year - or an average of ₹3,000 crore per week in 2022:)

Other Interesting Facts:-

1. Mukesh Ambani emerged as richest Indian in 2022, with a net worth of $82 billion.

2. Hindenburg- Hit Adani gained the 23rd spot with networth at $53 billion, 35% y-o-y decline in wealth (amazing CAGR decline:))

3. Mumbai is home to 66 Indian billionaires, followed by New Delhi with 39 billionaires and Bengaluru with 21 billionaires.

Changes introduced by CFA institute to include practical skills

After a two-year survey of its members, the Chartered Financial Analyst (CFA) Institute recently announced sweeping changes to its flagship certification program.

The 6 changes, which will be the biggest package of changes introduced to the program since its inception in 1963, go into effect in 2024.

They come at a time when the CFA program has been under scrutiny, and have been made after obtaining industry opinions and consulting employers.

The six changes are :-

1. Introduction of new modules that aim to imbibe practical skills and create separate specializations. The modules are as follows :-

2. Financial Modelling or Python Programming Fundamentals (any one to be chosen by Level 1 candidates)

   Analyst Skills or Python, Data Science and Artificial Intelligence (any one to be chosen by Level 2 candidates)

3. There has been an introduction of 2 new role-focused specialized pathways for Level 3 candidates. Level 3 candidates can choose to go for the already existing Portfolio Management path, or can choose to specialize in any one of ‘Private Markets’ and ‘Private Wealth’.

4. With a view to cut short the study time required to complete the material, there has been a removal of introductory material including topics such as time value of money, microeconomics and company accounts. The content is now provided separately as reference material.

5. The Institute has also introduced new practical material for the examination. It will now be offering 6 new mock tests and upto 1000 additional practice questions.

6. There been the institution of a digital badge for candidates who have cleared Level 1 or Level 2. The badge will enhance the employability of such candidates by acting as a credible proof of their skills.

7. Last but certainly not the least, there has been an extension in the eligibility criteria for the examination. Candidates can now start their journey to becoming a CFA upto 23 months before the date of their graduation.

   Experts believe that these changes have been introduced to ensure that the certification stays up-to-date with latest technological developments and can help in the creation of future ready professionals.

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Personal Finance

Preparing for the Unexpected: Building an Emergency Fund

An emergency fund is an essential component of any financial plan, particularly for young Indian college students and early-career professionals. This safety net can assist you in coping with unexpected expenses and financial shocks, such as job loss or medical bills. However, many people struggle to create an emergency fund and are often uncertain about where to begin. Here are top five tips on how to get you started!

Set a monthly goal

Start by determining how much money you wish to save each month. Setting a realistic goal that fits your income and spending is important. Once you've decided on a sum, divide it into smaller monthly payments. This makes the process less overwhelming and encourages the formation of a saving habit.

Use a separate account

Create a second account to keep your funds safe and out of reach. Consider short-term debt funds, such as liquid mutual funds, which provide better returns than a traditional savings account. This keeps the money safe and prevents you from being tempted to spend it.

Pay your future self first

It is important to prioritize your savings and pay yourself first. Make saving a priority, just as you would for retirement or a large purchase. Set aside a little portion of your monthly wage or company revenue and automate the transfer to your savings account. This guarantees that your savings are prioritized over all other costs.

Trim your expenses

Reducing non-essential costs can help you reach your savings objectives faster. Prioritize your spending; instead of eating out regularly, restrict your trips to one or two per month, watch movies at home, limit non-discretionary online purchases, and so on.

Reallocate lumpsum receivables

Set aside a percentage of any fortunate income, such as a bonus at work or a tax refund, for your emergency fund. While it is permissible to spend some money on yourself, devoting the majority of your income to savings allows you to reach your goals faster.

Finally, creating an emergency fund is an important step toward financial security and peace of mind. It protects you from financial shocks, reduces stress and worry, and assists you in reaching your financial objectives. So, whether you're a young Indian college student or an early professional, start saving for an emergency fund today.

P.S. This article reminds us of the song ‘Lego House’ by Ed Sheeran. Funnily, this song’s lyrics fit what savings or a so-called ‘emergency fund’ does for a person!

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Featuring Future Leaders: Bhavya Sood

Hi Everyone, I’m Bhavya Sood, a third-year student at Shaheed Sukhdev College of Business Studies, University of Delhi. I have worked with both big and small organizations like EY, Indian Angel Network, and Manush Labs. I’m also the Founder of Project Bridgeway, which is a nonprofit initiative aimed at bridging the knowledge gap by providing students with relevant information and skills that can help them make their college experience fruitful. Today, I’m going to walk you along my journey through college, hoping my experiences and lessons help you out too!

Internships

EY

My experience at EY was great and quite diverse. I was in the transaction advisory space, and quite interested in valuation at the time. I would say I learned quite a lot about creating financial models in this internship. I worked in close proximity to people who were working with models, wherein I helped with some aspects of creating models. This was an exhilarating experience in itself. I worked in the plastic and microfinance industry in regard to the same.

How I got the role: I can’t stress this enough - the most important thing for everyone right now is creating a network. When we talk about business, it’s something that involves people, and people are business. That’s how I got my role at EY. I reached out to people on Linkedin, asking them for opinions regarding internships as I was just entering the field. I had a mentor who was kind enough to give me an opportunity when there was an opening and arranged an interview. It wasn’t a very tough interview, they just asked me whatever I knew from my 12th. They didn’t require a lot of expertise on my end, so the interview was pretty basic. However, I was interested in valuation at that time and had read up on that, so there were some questions about that and they were satisfied with what I knew. Whenever you’re applying for an internship, know that people won’t expect a lot of you. Be confident and show zeal. For instance, I was able to answer questions on valuation without actually having studied the subject which showed that I am eager to learn.

Indian Angel Network

This was an online internship where I worked in the portfolio management team. We worked on a project where we had to summarise investments. I would read up on VC term sheets and be involved in shortlisting some startups, as well as preparing short notes for the team. That was a very new and interesting experience for me. In the VC space, there are a lot of companies that will reach out to you even if you are an intern, and they'll send you pitch decks and so on. I used to share them with my mentors, and they would ask me to prepare notes for them.

Since I was in my first year, my mentors would guide me on what I needed to do - not just relating to the business and analysis aspect of work. We had a few sessions on learning more about term sheets and whenever we had questions, even if we were working as late as 8 pm, we could reach out to the seniors to help us with the same. I’m very thankful for this internship for the same - it has taught me a lot. It was a wonderful experience and I got to work with a lot of interesting people there.

How I got the role: I got this internship through college where the selection process was simply based on my CV.

Manush labs

Manush Labs was a phenomenal experience. The mission of the organization was based on social impact. The goal was to find startups and help them with expertise coming from universities like Harvard, and Stanford. When I joined, the company was pivoting - they were entering this new space where they were organizing an event. It was the Global CleanTech challenge for the Aditya Birla Group. It was a Startup Challenge, where we had to work on some problem statements for a developer. They wanted to reduce the use of plastic in their company and for that, they were looking for innovative ideas - for instance, how to reutilize FGD waste.

What was unique about this opportunity was the kind of ownership that I got - I got to conduct this event end to end which included inviting the applications from startups, marketing the event, then inviting all the judges for that. We had to prepare notes on all the startups, which involved a lot of analysis and reading up on things - and I found that to be extremely interesting. Working in a small organization, you get a lot of work and a lot of responsibility which I thoroughly relished. It’s important to note that although there would be a lot of work, and you’ll like some parts, you should also do the work that is ugly without complaints. Don’t hesitate to ask for better work, but relish all types of work. Let’s say I’m working on a project where I have to make a lot of calls and write cold emails, but I will also work on the business analysis and work on pitch decks.

How I got the role: I interviewed Mr. Piyush Verma, the CEO of Manush Labs, for a college society of mine. Coming from a small city myself, I felt that this is a person who is actually harboring innovators working in this space. I liked the mission of the organization, and really wished to be a part of it. He was kind enough to give me an opportunity to work at Manush Labs, and this opportunity led to a fantastic experience!

Project Bridgeway

It’s just been a few months since this project started, and I’ve already learned so much. I would like to first begin with how we started out and what our motivation was. In college, I would see people all around me, and I’ve noticed that we all feel sad or dejected, for being rejected from an internship or job, or for having lost in a competition. Everyone does get competitive and though it is understandable, it also means that we have kind of lost touch with the bigger picture. People used to reach out to us to talk about competitions, and we have actually acquired a lot of experience in this regard. Our seniors would also help us out in this regard. So, we felt that there are two things that we must do through Project Bridgeway.

First, just like our seniors were there for us, we wanted to be there for everyone by making a community that helped multiple people at a time. This creates a bridge between the knowledge divide that exists. The second thing is to actually connect them to a cause that they care about. Now, losing out is not that important, because you’ll get multiple opportunities in your professional journey, but if you look at the bigger picture, you’ll realize there are more vital things in life. When you help out a kid with something, that would feel way more fulfilling. Hence, the second goal is to connect people to resources, and why this is so phenomenal because we have to ideate, hire people, learn about various things, and actually apply those things that we learned in classrooms and competitions - marketing targeting, positioning yourself, etc. There is no single takeaway from Project Bridgeway because there have been so many which is a different sort of experience. We also recently held a session and were able to raise 10,000 rupees and donated it to save the children which was great!

What are your future plans after college?

Well, I’m still figuring that out, but one thing I’m really interested in is consulting. I have been doing it in terms of case competitions, but I want to see what the real consulting space is like, in the developmental and public policy space. I believe there is a massive impact in that space as it’s a mix between consulting, economics, and policy that is pretty intriguing. So I would want to gain work experience in both these domains, and then figure out whether I want to go for a master's in public policy or do an MBA.

Working in Big and Small Organisations

I really love working at smaller organizations because you work a lot, get more responsibility, and learn even more. I liked working with such organizations because I felt that here, you're actually able to make an impact and also trace the impact that your ideas are born with. However, the world that we are in, values brands a lot. When you will be sitting for your jobs, the sad reality is that you will be considered a better applicant if you have brands in your CV, even if the work was not so great. You'll have to balance it out, work at smaller organizations to grow and learn, but also work in larger organizations for experience, and to signal that you are in fact capable of working for huge companies.

Quality > Quantity + CV

What would you prefer: a 3000-page book, or a 100-page book, which has all the aspects of a wonderful story? I would say that when we talk about a CV, it shows your story - and your story should be entertaining, and interesting but mainly, it should have a lot of meaning. The meaning will only be there unless you do quality things, things that you'll really learn from, or you'll really enjoy. Also, I believe we shouldn't run after the ‘perfect’ CV. We look at our seniors and think of an ideal CV - that we must do five internships, and we must win three case competitions. But at the end of the day, we can only go so far with that piece of paper. People won’t value your CV as much as they would value the person that you are. Don’t go after the perfect templatized CV, but try to go out of your comfort zone, do case competitions, and do projects. Spikes in your CV will come naturally, once you begin working passionately, and with purpose.

IFSA Network India

My journey with IFSA began when I was in Grade 12. At the time, I hadn’t heard of SSCBS. I scored about 95% in exams, which meant getting into a North Campus college was difficult. Around this time, I read a news article that 5 college students defeated working professionals of JP Morgan Chase at the Harvard Global Case Competition. From this article, I learned of SSCBS and that 4/5 of the students were from IFSA Network India. Joining this prestigious society became a goal of mine as soon as I entered college. The recruitment process was pretty interesting. They interviewed 19 people, and I was in fact the 19th person they chose - so you really had to prove your worth. The most wonderful thing about IFSA was the people that were there. The peer group, the juniors that I’ve interacted with - are genuinely the smartest people I've come across. And there is a lot to learn not from not just the seniors, but also the juniors. I was able to do live projects with a fabric company and a couple of projects with VC firms - and we were also able to start up an investment fund which gave me great exposure. But the highlight of this experience was the people.

IFSA also helped me in building my leadership qualities, definitely - it gave me a lot of confidence. When I was at IFSA, I was not only responsible for my branch, but I was also responsible for branches LSR, St. Stephens, Hansraj, and BITS. The recruitment was also a stimulating process, we had two rounds of interviews. Before the interviews, we had to fill out a non-eliminative form, which had a problem statement. The problem statement for us was how Google Classrooms could be monetized. Afterward, there were two rounds of interviews where they’d ask you questions. And those questions weren't specific to a certain field - there was zero expectation that you will know things from finance or other domains. They asked me questions about what I knew and was comfortable with, and engaged in conversations - for instance, I was reading up on Aswath Damodaran at the time, so most of my interviews were spent talking about that. We also had a group discussion, where we had to do a business analysis of a business case after which I was able to make it through. I’ve been taking the recruitment process for others as well, and I really find it to be engaging and interesting.

College Societies

The process of getting into college societies is a bit stressful, sure. But I think the process is important as it teaches you how not to take anxiety. This is a process that will be mimicked throughout your internship season, perhaps even more stressful. The most important thing about this entire process is the rejections that you will face. One of the most pivotal skills for us right now is to learn how to take rejections - not to get rejected, but actually to learn. We're talking about the future and where it is headed, the job market may get way more difficult for us, and there will be a number of fronts. So one has to learn how to take all of this in their stride. Another thing is that during recruitment, you are expected to know a little bit about the world - case interviews, and guesstimates, too. So again, it does help you do better during your internship season or during placements.

Case Study Competitions

For me, my motivation to participate in case study competitions was money. I was able to fund quite a lot of my college expenditures. If you do proper competitions, you can earn lakhs, so that should attract you. Case study competitions are held in an offline setting to facilitate networking, and they would help you get a lot of referrals as well, as distinguished people and experienced judges come for such events. You get to make a lot of friends. The network that I have created at Delhi University, I owe to case competitions. I think the most important aspect is that you actually apply what you have learned, in school, in college, or through books. I’ve also learned how to make effective PPTs and learned more about financial modeling through these competitions.

You can find case study competitions on Unstop and Google. You’ll find a plethora of competitions on Unstop, but make sure you are registering for a competition that is recognized and is giving out a cash prize - essentially because in a way you are paying for these competitions with your time- and your time is the most precious thing in the world. Unstop doesn’t advertise many international competitions so that’s something you can use Google for. Make sure that the competition has brand value and also good cash prizes. These competitions are very prestigious, they have more recognition and better competition. Also, even if you are a beginner, you shouldn’t shy away from going for high-level, international, or national-level competitions. Even if you don’t win, you’ll learn a lot from others.

Building Skills - Modeling, Presentations, and Other Skills

When we talk about financial modeling, It's a combination of two things: a) valuation and corporate finance and b) Excel and creating financial models. For valuation, I would recommend Aswath Damodaran, - his books and videos are very accessible and interesting although his videos might be a bit complex. I found his books to be very comprehensive and they’ll give you a good knowledge base to start with for valuation, and once you know these basic concepts, you’ll learn how to create a financial model. I also used the A Simple Model website for making Three Statement Models, which provided a lot of great and free videos on the same, and I actually ended up using those concepts in case competitions which enhanced my learning. I learned about mergers and acquisitions from Paul Pignataro, whose videos you can find on youtube.

There’s one resource known as firm learning. It does not have a lot of data, but I think it's good to get started with. I would recommend books by Nancy Duarte for creating slides, but I think the best way to learn slide decks is by consistently making the same for your class projects, and case competitions - that’s the best way to really learn this skill. Keep participating in competitions and projects, speak in front of crowds, and be fearless. Just find opportunities where you would be required to do these things, resulting in delightful experiences with loads of lessons.

Googling skills really help with research in competitions. There’s this thing known as SCQA - situation complication question answer. First, you need to understand the situation, the problem, and the complexities in that situation. Let’s take an example - how did Microsoft enter the Metaverse? First, you need to identify stakeholders. Microsoft is involved in a number of industries revolving around personal computing, servers, and the cloud. You can research these industries and viola!

You can look at a few research reports by companies like BCG, Bain & Co., IDC, etc. as well. For instance, if I want to read a research report on Personal Computing, I could find the same by searching: Personal Computing research by BCG type file pdf.

You have a ton of resources, and you should use as many as them to help you get a better understanding of cases. I also think it’s appropriate to mention here that as researching, creating slide decks, financial modeling, etc encapsulate a lot of what is to do with case study competitions, we at Project Bridgeway will soon be coming up with compendiums and books which will help students out. We are trying to condense all that we have learned in short books so that we can help each and every student and of course, the proceeds of the same will be donated to an NGO.

Prestigious Case Competitions

I was fortunate enough to get opportunities to participate in quite a few of these competitions, be it Duff & Phelps, or representing India in the International Economics Olympiad. But, I wouldn’t have gotten these opportunities or excelled at them without the vital ingredients -

1. I was fortunate. I would say that a lot of people discount one very important factor and that is luck.

2. Teamwork. All of these events and processes happen with the team, which includes interesting people who are willing to go the distance and work with you.

3. Drive and determination. Everyone is doing competitions - a lot of people put in 5-6 hours but if you are willing to put in 24 hours, there is no chance you’ll lose. There is not a lot of difference in skill gap between either, it’s just the time a person is devoting to this and the time a person is actually spending pursuing excellence. Just give it your all, and work hard. Don’t get dejected if you lose out. Every experience has something to teach you.

Bain & Co. Competition

This competition was uniquely interesting! There were two rounds. In the first round, we were given a lot of data about a beverage company and a problem statement as well, for which we had to send a 3-page slider identifying the root cause of the problem - the profit margins were falling. So, the hypothesis for us was that it was because of the labour crisis which was something that wasn't very obvious from the data itself. I think you could draw and connect the dots that something was happening with the labour cost. Then we actually read up a bit and researched - and came to the conclusion that labour prices were increasing because of the great resignation.

For the second round, we had to prepare solutions for the same, and during this time we had access to a Bain Consultant who was so insightful. Then we presented the solution. It was like a general case competition, and our prior experience played an essential role in our winning the competition as well. One very important aspect is also storytelling. When you brainstorm solutions, a lot of us end up having the same ideas - there are only a few possible solutions to a problem. But how do you present that solution? How do you convince people that your solution is the most intelligent thing that can be done? It’s all about storytelling.

What the case at Bain was: We had been given a lot of data. Mathematically, we had to price things out and look at all the geopolitical aspects, for instance - was staying in the US more helpful or outsourcing abroad? We devised other potential solutions, mainly surrounding the increase in labor prices that led to margin pressure. One alternative available to every company is to increase the prices, and so we acted on that. Prices have been increasing - or if they haven’t, then people have been compressing the packaging, like for 20 bucks, instead of 100 grams of a product, only 80 grams would be sold. We looked at factors like price elasticity, the number of products in the beverage space, and at price hikes. As economics and commerce students, this was like applying what you learned in the classroom to real-world problems and that is why doing Case Competitions are fantastic!

After clearing the first round, as mentioned before - we had access to a Bain Consultant. So while we were working, we were able to take his advice on certain things, how we should present and how we should simplify the idea that we are trying to say. We had access to a mentor who took a couple of sessions which helped us gain a lot of first-hand knowledge from an industry professional. This is how rewarding case competitions really are - you build your network, knowledge, and aptitude!

Parting Note

1. College is what you make out of it. Don't follow a templatized life where I need to do X, Y, and Z because there are so many people doing X, Y, and Z. The world is changing, there will be uncertainty, and the job market will change.

2. Go out of your comfort zone, try out things that are difficult for you, and learn things along the way. Don't stress a lot about the end result or about a job.

3. Don’t run after the proper CV. Try to be somebody who is special or good at something, and build your knowledge base.

4. There will be multiple rejections - learn to take them in stride. And just look at the broader picture. At the end of the day, people will not remember that you got rejected from company X or Company Y, they'll remember you as the person you are, the person they have interacted with, and the impact that you have eventually created.

5. You have a story that is exciting and that everyone will read. Everyone would love to see it. Just believe in yourself and go out of your comfort zone.

if you wish to learn more about my journey, feel free to reach out to me on LinkedIn, happy to help! All the best for your college life and beyond :)

This will be all for this week, see you next week :)

Team FinOak