I hope that by reading this you will be inspired to find new and different ways of applying your skills in ways that you never thought possible.
When I started my corporate career 20 years ago I would never have imagined connecting the analytical skills I developed to social issues like obesity, youth homelessness, the criminal justice system, social and affordable housing or any other impact investment programs and interventions.
Then again, why would I? I studied accounting, finance, tax (I try to forget that I did auditing too) and not social sciences, medicine, law and justice.
However, like technology has infiltrated and changed almost all aspects of our lives, the need for financial modeling skills has expanded across a much broader part of the business and now social world. It is no longer limited to investment banking corporate and project finance transactions.
It was really by fate that I stumbled across this opportunity whilst working at a large corporate. I was looking for purpose and a way to contribute to society other than my volunteer days planting a tree. Not that there is anything wrong with planting trees, but after having planted dozens I wanted to apply my passion and skills rather than my spade to help the world we lived in.
Since then I have built more than half a dozen financial models to support bids to the NSW, VIC and QLD governments for either social benefit bonds or affordable housing infrastructure.
What should your financial models contain and how and where can you learn more?
If you are not sure how to build the components of a robust model then I recommend you look at the “Best Practice Spreadsheet Modeling Standards as an excellent place to start.
You can learn more by:
Trying to find ways not to use hardcoded numbers in formulas.
Keeping formulas consistent horizontally and potentially vertically too if you can in some cases. In a block shape of formulas. It is kind of like painting with a small paint brush vs a rolling pin, and definitely worth learning.
Thinking out of the box. Now this is a hard one and in some cases impossible to get easily. Finding ways to get a square peg into a round hole comes handy.
Learn even basic VBA to automate tasks like copy paste, goal seek, running check boxes etc. I don’t write code, I record and then edit…or get some genius to write if for me. But those that write good code, make sure you know how to use it.
It’s time to seriously benefit from building robust, flexible and accurate models that allow you more time to play and less time fixing errors or hardcoding / copy pasting etc.
Welcome to the future of financial modeling.
It is now possible for you to efficiently build models in a way that will save you so much time, you will now be able to find business solution to some of the most complex questions regarding cash flow, profit or pretty much anything a business or deal/transaction may throw at you.
For me it was the social issues that were thrown at me and find the right deal between Government and Private sector to ultimately save peoples lives (indirectly of course).
The Financial models are required to estimate the potential savings and cost of services being provided in respect of the social issue being targeted. The models range from high level annual cash flow models (5–10 years) to detailed project finance style 3-way models for property development which operate over much longer periods (more than 25 years).
Knowing that the output of the financial models are not just financial metrics but social outcomes which improve society and can change people’s lives gives a whole new meaning to work and how we feel about ourselves whilst doing it.
In fact, performance objectives are based on outcomes in society like improved stable housing, which can result in potentially less people requiring the emergency ward thereby reducing the need to build more hospitals, or increasing the number of people that contribute to society rather than sitting trapped in the justice system. Early intervention programs for obesity which is still one of the highest causes of chronic illnesses like diabetes. If these cause and effect examples seem far fetched to you, think about how wolves can change the course of rivers.
With a financial model you are able to assist the world socially. Just as when you buy a drill bit, you don’t want a drill bit, you actually want a hole! Connecting a financial model to a social issue is what is most challenging.
And you thought your financial model couldn’t save people’s lives? If you think outside the box it just might.
The counterfactual*, where will financial modeling take you?
Like the movie sliding doors with Gwyneth Paltrow, the counterfactual and the impact certain events can have on our lives can change the way we view and experience things.
Humans, by their very nature will go through scenarios in their minds, recreating past events and dreaming up different alternatives to things that have already occurred.
The bottom line is that no matter where you are on your career journey, there is still time to learn financial modeling.
Hopefully people can view financial modeling as more than just a financial skill of investment banking but also a pathway to improve our society. Which door will you choose to take?
At Model Citizn we believe in leveraging our skills to help gain insight into some areas of society that need it the most.
If you or your team are looking to find out about the exciting things we are planning in 2017, sign up to our mailing list and maybe one day you too can change someone’s life, without being medically trained.
Or what follow up on our newly created YouTube channel, the future of financial modeling.
We are currently designing training courses that will open new and exciting horizons for your career.
Is 2017 going to be the year you alter your path and find your counterfactual?
* -Definition of counterfactual — relating to or expressing what has not happened or is not the case.
If you want to learn more in 2019 and also understand how you can upskill in FM be sure to reach out to us or stay tuned.
I encourage you to also take a peak at my past/present articles on financial modeling which is the foundation of business decision making, planning and forecasting.
We have also redesigned our website to help you along your journey of levelling up in this space.
We will continue to discuss this topic and you can click to follow me on Twitter or LinkedIn or subscribe to our short but sweet newsletter.
Be sure to check out our pods and video page.
Here are also some past/present blogs that might be of interest.
Lance Rubin is the Founder of Model Citizn, partner of theOutperformer, approved training provider to the Financial Modeling Institute and Group CFO for SequelCFO.
I have more than 20 years of combined experience working in model audit, investment banking, corporate finance, finance business partner and Fintech CFO.
Organisations I have worked with include PwC, KPMG, National Australia Bank, Investec Bank and Banjo small business lender.