Teaching Finance: A First Semester In Review
Teaching is challenging but immensely rewarding.
Teaching is the art of conveying the delight that comes from an act of the spirit without ever giving anyone the notion that the delight comes easy. - Norman Maclean
Yesterday was my last day of classes teaching undergraduate finance this semester. Only finals remain now.
A few of you have shared that you're interested in teaching and want to hear what it's like.
I'll preface this by saying that one semester does not make me an expert - far from it! - and that plenty of tenured professors can provide more information on the subject. The professors at the University of Dayton and elsewhere have been tremendously supportive.
However, because I'm relatively new to it, I hope that what follows will provide some insight into the initial experience.
Tradition
One of the great things about the investing world is the long tradition of reaching back to help the next generation. Many of the legendary investors and thinkers I admire—including Buffett, Greenblatt, and Mauboussin—have taught at the university level.
In fact, their example is what motivated me to explore teaching in the first place, initially as an adjunct in 2017. I wanted to see what all the fuss was about.
While I only taught one semester at Xavier University's MBA program, I found that teaching suited me, and teaching this semester at U.D. has only reinforced that.
If you're interested in teaching, here are a few things to keep in mind:
Credentials
Accredited schools must show that you're qualified to teach a subject, which means advanced degrees (e.g., M.B.A., Ph.D.) or certifications. If you're interested in teaching, you must pursue one of those paths.
As a liberal arts major, earning the right to use the CFA designation unlocked the door for me to teach finance at the university level. Some of our peers in the investment industry have grown cynical about the CFA, but it has paid dividends on dividends for me. Being able to teach a subject I’m passionate about is another example of the payoff.
Workload
Double the work you think you'll need to do in your first semester and double it again.
Slide preparations, homework, groupwork, classwork, exam writing, exam reviews, grading, office hours, and administrative responsibilities take time. If you want to pursue an adjunct or lecturer role, be prepared to give more time than you expect the first time around.
Preparation
Teaching is partly entertainment, so you need enough material for each class to keep students engaged.
You'd be amazed by how much material you can cover in 20 minutes, only to realize you have 30 minutes left. Overprepare or perish.
Lecturing
One of the things I've come to appreciate this semester is that teaching is not a one-way street where you stand in the front of the classroom and hold forth.
Lecturing is essential in establishing the subject matter, but the most enjoyable moments are the discussions that occur inside and outside the classroom. The more interaction you can facilitate, the better.
Theory vs. Practice
Unless you create a curriculum from scratch, you'll use a textbook as the foundation of your class. As a practitioner, you'll disagree with some of the theories presented, but the students need to get the foundational knowledge.
As an adjunct, I tried to sidestep the textbook and teach the way things are done inside the industry. That was a mistake for a number of reasons, including limiting student studying resources and confusion related to homework terminology not matching in-class content. It added unnecessary time for students and teacher.
What is important for you to share as an industry professional is pointing out where theory and practice diverge. Sprinkling in real-world stories also helps bring otherwise bland content to life.
No jargon
Many professionals dream of teaching security analysis or investments like Graham and Buffett did, but don’t shy away from teaching Intro to Corporate Finance.
One of the reasons I enjoy teaching Intro to Corporate Finance is that I get to work with non-finance majors. The learning curves are much steeper than in higher-level courses, but it's rewarding when the concepts click.
In the industry, we use a lot of jargon and assume everyone in the room knows what we're talking about. That's not the case in an intro course, and you need to break concepts down and explain them in the simplest possible terms.
This process has forced me to revisit some topics I've taken for granted over the years. What is the DuPont analysis really telling us about this company? Why should active investors assume they are getting compensated for taking on idiosyncratic risk rather than just market risk?
I would not have revisited these topics in my ordinary course of business researching companies. Teaching can help you improve as an investor, as well.
Non-finance majors also tend to ask the most challenging questions. Inside the industry, we rarely ask why something is for fear of looking stupid. To students new to the industry, there are no sacred cows and that makes for a better learning environment for everyone.
At the start of the semester, most non-finance majors think that finance is just math. And while there's plenty of math to learn, finance brings the numbers to life. If accounting is the language of business, finance is the art/science. The numbers make finance seem nearly scientific, but not quite. It can baffle engineers and artists alike for different reasons. An appreciation for both sides is necessary.
It's precisely that angle to finance that can attract more cognitive diversity into the industry.
Privilege
It’s a privilege to teach and have an opportunity to make an impact.
Having worked from home for almost six years, being in the classroom and being part of the academic community has been refreshing and inspiring, to say the least. It's rewarding to see your work make a difference.
I work with great kids at U.D. They say "thank you" after each class (I’m serious - they really do) and respect their teachers and fellow students. I would hire them in a heartbeat. You can teach finance, but you can't teach character.
The kids are alright.
Final thoughts
If you’ve thought about teaching a university-level course and have the time to commit to it, you absolutely should. If you have a university near your work or home, email the finance department chairperson and see if there’s a need for an adjunct next semester. That’s how I got my first teaching opportunity.
No matter how well you understand the material, teaching is a skill to be learned and practiced. What worked for you in learning the material may not work for your students. You’ll make mistakes. You’ll get some blank stares. You’ll improve.
Stay patient, stay focused.
Todd
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At the time of publication, Todd and/or his family did not own shares of any company mentioned.
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My wife teaches. She started a new program at a vocational school 5 years ago, so a similar experience to your first semester. I can confirm all of the "plan for it to be WAY more time intensive than you think" and "prepare more material than you think you'll need" points.
Some of her days are incredibly challenging, but she has the very rewarding ones too. I think that's what keeps her going back...
As someone who spent almost 30 years teaching finance, you really captured teaching finance (and probably most other fields as well). Your first semester, you'll learn far more than the students. The interaction with students is a huge plus. I always thought that 25% were motivated learners, 50% were moderate learners, and 25% were going to do the bare minimum to pass (if that). That top 75% was a lot of fun most years. The time spent was definitely high (if you were interested in teaching) and doing it right, but the payoff was great as well during those "lightbulb" moments. Kudos to you for passing on your insights...especially in the introductory course (which I agree with you is a lot of fun along with teaching Investments courses).