What does a Treasurer Do?

What is the function of the treasurer of a company? The answer is simple: the treasury function is all about looking at possibilities, risks, and returns. A treasurer of a company analyzes the economy, the business cycle, the product life cycle and the business plan of the company. What funds are going to be needed? Is there a recession coming or underway? How can funds be deployed for the best risk-adjusted returns? What is the cost of capital? The answers to these questions are all moving targets, and a lot of it is educated guesswork. The treasurer has to work with the management team in formulating and executing the business plan. The work is at the same time very granular and yet also broad brush to the point of conceptual. If they have promising projects, with large risk-adjusted returns on investment, that is where they should put their funds. If they can buy businesses with a good return on investment, they should do it. If they can place the money in investments which pay a greater return than their cost of capital, they should do it. If the Treasurer’s team sees a big recession coming, they may decide to build …

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What is a Financial Advisor?

Financial Advisor = one who advises on finances. In the real world, we’re talking about someone who is either: A financial products sales person, eg a stock broker, insurance salesman, annuity salesperson, or A fee-only financial advisor who provides advice for a fee eg an accountant who provides personal financial advice and planning, an attorney who prepares estate plans. The vast majority of “financial advisors” fall into category # 1. There is no requirement to qualify as a financial advisor, one need not even have a high school diploma to call themselves a financial advisor. In order to sell securities, insurance or annuities, one must possess a license. These licenses (insurance license, Series 63, Series 7) are of varying difficulty. For example, I took the insurance license test with no preparation and passed. The Series 63 and Series 7 tests, administered by FINRA, take a little preparation, but are only mildly difficult compared to the CPA exam. They focus primarily on the legal implications of selling investments. The licenses do not prepare a candidate to adequately advise anyone on investments. Other credentials do that. A CFP ( certified financial planner) is one of these additional credentials that at least indicates …

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Things to Look For in Buying a Business

Question: What kinds of things should a buyer look for in the financials when considering the purchase of a business?

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Advising People about Investing

Q:  I’m thinking of starting an LLC/partnership with my friend and investing his money. I would get paid a percentage of whatever profits I make.

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