Danielle Stein Fairhust literally wrote the book on Excel and Financial Modeling. Well two books, actually. Using Excel for Business and Financial Modelling and Financial Modeling in Excel for Dummies.
Here, the Excel MVP from Australia provides her secrets to financial modeling.
- Her road to financial modeling after traveling for seven years, and leaving investment banking Why Excel is so crucial for businesses
- Budgeting and forecasting vs financial modeling
- How she was commissioned to write her famous books
- Difference between creating a LinkedIn course vs writing a book
- Encouraging and raising the profile of women in financial modeling
- Secrets to training and behind the scenes of the Financial Modeling World Cup
- How to Become an Excel MVP
- The biggest issue people face with financial modeling
- The Financial Modeling Institute work and how to ace the test
- Favorite Excel Function?
- Biggest advice for someone starting in FP&A today?
Links
Danielle Stein Fairhurst: Using Excel for Business and Financial Modeling
Danielle Stein Fairhurst: Financial Modeling in Excel For Dummies
Danielle’s LinkedIn course (new), Excel: Financial Functions in Depth.
Follow Danielle Stein Fairhurst on LinkedIn
Follow Paul Barnhurst on LinkedIn
Full transcript below
Paul Barnhurst:
Hello everyone. Welcome to FP&A Today, I am your host, Paul Barnhurst, aka the FP&A Guy, and you are listening to FP&A Today. FP&A Today is brought to you by Datatsild, yhr Financial Planning and analysis platform for Excel users. Every week we welcome a leader from the world of financial planning and analysis and discuss some of the biggest stories and challenges in the world of FP&A. We’ll provide you with actionable advice about financial planning and analysis. This is going to be your go-to resource for everything, FP&A. I am thrilled to welcome today’s guest on the show, Danielle Stein Fairhurst. Danielle, welcome to the show.
Danielle Stein Fairhurst:
Thank you. Thank you, Paul. Thanks for having me.
Paul Barnhurst:
Yeah, super excited to have you. So just a little bit of Danielle’s background, and then I’ll let her tell us a little bit more about herself. But she comes to us from Sydney, Australia. Yes. She did her undergrad in MBA in business, and she also earned the Chartered Financial Modeling certificate from the Financial Modeling Institute. She currently runs her own business called Plum Solutions, and is the founder of Woman and Financial Modeling online. It’s a meetup community. In 2021, she earned the prestigious Microsoft Most Valuable Professional Award, and she also earned this last year a lifetime achievement award from the Financial Modeling Summit. And then more recently she launched her a financial modeling course on LinkedIn. So she has a ton of great experience and we’re super excited to have her. So Daniella, maybe you could start by just telling us a little bit about your background and how you ended up where you’re at today.
Danielle Stein Fairhurst:
Yeah, yeah. I’ve got to say, I didn’t start out thinking, Hey, I’m going to be a financial modeler for the rest of my life. But I tell you, I must say I didn’t even know what a financial mo modeler was when I first graduated, but it was just something that I got into and found that I really, really loved it. So I started out in investment banking. So most, you may know that most young Australians go off traveling. And as I did now, I was gone for about seven years and I ended up in the UK and started in investment banking then, and first started as an analyst there and started using Excel. And I just never looked back. I absolutely loved it. And when I came back to Australia, I was just working in just using Excel and in finance and worked in a number of different roles. And I always knew that I wanted to start a business that was just something that I’d always wanted to do. And so I decided to build the business around myself and the skills that I had, cause I could see how in demand those skills were. So that’s kind of how it came about.
Paul Barnhurst:
Oh, great. So you started investment banking, you said uk. Is that where you started kind of the career and then came back to Australia?
Danielle Stein Fairhurst:
Yes, yes.
Paul Barnhurst:
So what particularly was it that interested you so much in kind of financial modeling in Excel? What drew you to that within kind of the financial? Yeah,
Danielle Stein Fairhurst:
It was, I guess the idea that it was something that I found. I just really enjoyed it. It was just, it’s quite very structured. It’s very technical, but it’s also quite creative. So there were lots of things about it that drew me to it. And also the fact I think that it’s quite hard or it’s perceived to be difficult and it certainly can be very difficult, but it’s a sort of thing that most people find hard to do and it’s very much in demand. And so that’s kind of why I started. First of all, I started doing it or leasing out my skills in that area and then found that there was a real demand for people to learn how to do this. And at that time, there was no financial modeling training in Sydney. And I started a little course and kind of never looked back from there because I just really enjoyed teaching as well as consulting.
And I have done, I’ve pretty much all I’ve been doing with the businesses to teach and then also to consult. So you are going into a business and helping them with their models, with their forecasts and actually working on the coalface and then teaching as well, whether that’s in person and more recently, almost exclusively online. And that’s just that sort of combination of those varied avenues of income and activity. But all within, I just do financial modeling with Excel. And I don’t use other software. I don’t, and I don’t really go outside. I don’t need to go that because it’s just such a huge area and there does seem to be such a high demand for those skills.
So when you said you don’t go outside Excel, I, so I think this will make you laugh. The other day I put on LinkedIn, I said, in three words or less, describe what you would do if Excel ceased to exist tomorrow. And there were multiple people that would cry and I just had a laugh.
I missed that.
Yeah, it was pretty funny. I think I had about a hundred responses for people. I bet there were some creative ones, but there were quite a few that cry. One was like, well, I’m going to short Microsoft Stock. So
Yeah, I mean, what would we do without Excel? And ever since I started, people are, oh, Excel is dead. There’s going to be something so much better than Excel. But of course there’s not. Of course we all just using Excel all the time and it’s just something that I just can’t imagine a world without Excel for sure.
Paul Barnhurst:
No, I agree with you. It’s really, I, we’ve all heard it, the Excel is dead. They did that for a couple decades and it’s still the most popular software. And pretty much any software that does any numbers finance as an export to Excel button, as I like to say, its the most common feature in any software.
Danielle Stein Fairhurst:
How do I get this into Excel so that I can actually get my hands on it and turn it into something useful so I can actually use it.
Paul Barnhurst:
Yeah, no, I hear you. So you know had mentioned, we were kind of chatting that you’re partnering with the Global Excel summit. Yes. This summer it looks like to run a public masterclass, you’re going to be in London for a few months, I think you said you’re doing two courses at financial modeling and budgeting and forecasting. Could you talk maybe a little bit about that?
Danielle Stein Fairhurst:
That? Yeah, yeah. I’ve got to say that’s one of the things that I just love about what I do. It’s, I have so much fun every single day. And one of the things that I absolutely love doing is traveling. And I love being at home here in my office here in Sydney, but having the opportunity to travel is amazing. And being able to run a masterclass in London in person now that we’re able to do that again is absolutely fantastic. So I’m going to go through a really condensed course. So it’s just one day on each of the topics and it’s just going to be the best of financial modeling. So just the things that you absolutely need to know about financial modeling. So it’s quite hands on. People bring laptops and they actually build a financial model during the day. They get one of my books in.
Oh, they get, sorry, get both of my books, I think it was is included as well. And then the next day we do budgeting and forecasting. So that’s really a bit of both. So it’s more about the use of financial modeling in a budgeting and forecasting context. So you’re actually looking at what skills you would need to build a budget or a forecast or being able to, and again, just staying within the confines of Excel. But of course looking at what’s available in terms of course, when I say Excel, I mean that we would look at how to use Power Query and Power BI because of course that is really part of the Excel Microsoft ecosystem. We can’t ignore that for sure.
Paul Barnhurst:
No, and especially I think if you’re doing budgeting and forecasting and you want to update any kind of actuals PowerQuery, you should be using it. It makes of course it so much easier I am a huge fan of that. So that makes sense. So I’m curious, just this ask a little bit budgeting and forecasting versus financial modeling. When you mentioned kind of the difference in skills, what do you see as the key difference in need when you’re really focused on budgeting and forecasting and you’re going to be regularly rolling and updating versus maybe building a kind of one-time project model or a deal model that isn’t something that you’re maybe using for five years?
Danielle Stein Fairhurst:
The way I see it is that budgeting forecasting models is a subset of financial modeling because financial modeling is such a huge, huge skillset and there’s so many, but the skills are transferable across so many different disciplines. So you can build transactional models, you can build M&A models, you can build operational models, just so many different types of financial models. And those types of models that you need to build for budgeting and forecasting are very specific. So there are certain things that you need to be able to use, but the skills that you learn there are applicable across different disciplines and across all of FP&A. For sure.
Paul Barnhurst:
That makes sense. That’s kind of figured. I just wanted to get your thoughts on that. I know I want to talk a little bit about books. I have one of the two books you’ve written.
Danielle Stein Fairhurst:
Wow.
Paul Barnhurst:
So I got that one about a year ago or so. And so I know you’re really passionate about educating. And so first we’ll talk a little bit about the books you’ve written. Two, the one I just showed there. And the other one I believe is Financial Modelings in Excel, one of the Dummies series.
Danielle Stein Fairhurst:
Series. Yeah. It’s kind of dummies. Yeah.
Paul Barnhurst:
Yeah. So maybe first talk a little bit about why you wrote the books and that experience if you could.
Danielle Stein Fairhurst:
Oh, again, I mean it was just something I always wanted to do. I mean, you just want to, who doesn’t want to write a book? And when I got the offer from Wiley Finance, I just thought why not? It’s a fantastic thing to do. But of course Excel keeps changing and when you write something that is full of screenshots, it has a limited life. And so yeah, I’ve had to that first book using Excel for business and financial modeling, the part of the Wiley Finance series. And when you’ve got it in your hand. Yep, that’s the third. That one you’ve got is the latest edition. Yeah. So
Paul Barnhurst:
I was just looking, I noticed it says Third edition.
Danielle Stein Fairhurst:
Third edition. Yeah. So I’ve had to do it three times. And the financial modeling in Excel for Dummies is second edition because, so that’s updated 365. So it’s so much work and so much work and I’ve got to say it’s great to have done it and it’s such a great thing to have. And it’s actually really useful for training because if you do run, when I run a training course to actually give people a copy of the book as part of the training, it’s just great for them to have something to refer to. It’s like a take home and they can don’t have to remember everything. They can write notes of where the instructional text is for what we’ve talked about during the course for sure. But I’ve got to say I did have, it’s quite, it was similar but quite different when I recorded the LinkedIn course because it’s almost similar to writing a book in the way that it was laid out in terms of the modules and to actually put it together and make it sequential almost as much work. But I feel like it’s a more dynamic medium. I mean it’s similar in that if you make a mistake or if you change your mind about what you want to say, having to change it is quite difficult. So it’s a similar type of thing to writing a book. But I feel like for some people they learn better through videos. So I think it’s good to have both.
Paul Barnhurst:
I agree written a lot. I haven’t written a book, but obviously a lot of content with LinkedIn and different things and released my first digital course a few months ago. And I know you’re talking about there’s little things I would change now, but I already have it out. I had it professionally produced. I’m like, I don’t want to go back through and rerecord it. And yeah, cause they’re minor things, but when you want to correct them, it is just like a book. It’s a fair amount of work. So I can appreciate that. So it’s clear you’re really passionate about teaching. What is it you love about teaching? What gets you so excited to go into a room, go to a different place and share about financial modeling?
Danielle Stein Fairhurst:
This is going to sound ridiculous, but I have friends who, my husband’s an architect and he builds things and he does amazing structures and things that are so important. I have friends who are doctors or they have that saving people’s lives and doing the most amazing things. And I used to, when I first started my career and I used to think, wow, if I don’t get this report out by the end of the day, no one is going to die. Do you know what I mean? And I do. It’s that lack of impact. I want for every single day. Every day that I go to work, I want there to be impact. And every time I do something, I want to reach people and I want to help them. And I want to do something that benefits not only me. I mean I get paid, that’s great, but I want it to be meaningful. And it’s really important. And when you are teaching, you can see what a difference you’re making to people. It’s hard online, it’s much, much harder to, particularly when people don’t turn on their cameras. But you can still know that you’re having an impact and you can still tell even without the cameras and there’s nothing quite like in-person training and just seeing the impact and seeing how you can make their lives easier and how that you can have that kind of reach and really help people. That’s what I love about teaching.
Paul Barnhurst:
Yeah, I’m with you. I love, I’ve always enjoyed teaching. I worked a lot with youth for a number of years doing scouting as a leader and things like that. Now I do training today and I really enjoy that. And I totally know what you mean. It’s more challenging online, especially if nobody has their camera on. So it’s hard to tell are they getting it? To see the faces, to be able to tell the energy level when you’re in the room, it’s so much easier to be like, all right, you see that interaction, you can see them face to face and talk with them. And so I agree with you. There’s definitely a difference in training. Most of my training’s been remote. I’ve done a little bit of in person and there’s definitely a difference.
Danielle Stein Fairhurst:
Yeah, you can get it straight away. You’re like, I’m losing them because exactly where they’re at, where they’re with you, are they bored? Are they, they’re looking at their phone or whatever. It’s so much better to be able to really, and you just know and there’s that moment that hush when you just know that everybody is really getting what you’re saying and they’re really understanding it. And that’s just fantastic.
Paul Barnhurst:
Yeah, no, I agree. Teaching is a great thing and it’s the best is when you know made a difference. When you actually hear back from somebody like, Hey, I’m using what you taught me. I mean the worst is when you leave and you fear that they’re just going to never use what you’ve taught. I’ve seen that with some organizations where you’re like, okay, they paid me for a day, there’s not going to be an impact. And other times you’re like, you could tell they’re actually going to use it. And so much more rewarding when that’s the case.
Danielle Stein Fairhurst:
Yeah. One of the best things I started doing was actually, and it’s quite ridiculously generous to, we actually allow people to, we actually give ’em 12 months of support after the course and we allow them to make an appointment every month. So I open up my calendar but only for a day or two and they come different time zones and whatever, and they just book a short call and it’s one of the best things to do. It’s so much fun and it’s just so fantastic to get that follow up because they can continue to learn. It’s not just that kind of one brain dump of wow, I learned all this stuff. But to have that check-in once a month and sometimes they might skip a month or they might not always use it, but they know that they can just jump in and help with a formula or say, I’m thinking about guidance, I’m having this problem with a colleague or whatever. It’s almost like a coaching session and it’s lots of fun. It means, and it allows me to connect with the people that I’ve met previously. And you get that continuation of their learning, which I think is fantastic.
Paul Barnhurst:
No, that’s great. And that gives me some ideas and that’s very generous. I typically will do, we usually have a follow up kind of Q&A after the training a week or two later.
Danielle Stein Fairhurst:
I used to do that as a group. And particularly for the FMI training, we would do, prior to the exam, we would do group webinars and group sessions. And I actually found that people were silent.
Paul Barnhurst:
That’s what I’m finding.
Danielle Stein Fairhurst:
They just wanted the recording. They often would register, but they wouldn’t turn up live and they would watch the recording, but they don’t get much out of it because it’s just about me pushing, me talking, me generating the content for them. And they were just listening. Whereas it’s, it’s better if it’s an interactive session. So we found that doing them and just keeping them short was far more, far more effective because people then have to think about what is it that I need to know? What questions do I have? We just found that better than doing a group. I mean obviously it wouldn’t work if I have, don’t have hundreds of students all at once. At any one time. We probably only have a hundred or a couple of hundred students going through. So it’s not completely overwhelmed with people.
Paul Barnhurst:
Thanks for sharing. I happreciate that. So I’m going to move on here a little bit. In finance and financial modeling, we see a lot more men than women in general. And I still remember, I remember on LinkedIn I’d actually shared a quote from your book and I talked about financial modeling and then I tagged a bunch of men and I really appreciated you came back and said, what about the woman, you didn’t even mention me. And I’m the author and I remember thinking, man, I really messed up here.
Danielle Stein Fairhurst:
You quoted from the book?
Paul Barnhurst:
Yes, I quoted you, yes. I quoted a line of what a financial model was, how you defined it. Cause I really liked it and I’d mentioned it was from you, but I didn’t tag you in the post and you, you’d found it and you’d been like, wait, you’ve tagged like eight men here and the author is a woman, why did you do this? And I was like, and you were really nice about it. Ok, but that really hit home for me. Yes, you were very polite. But it just reminded me of the importance of making sure we’re being diverse in recognizing everybody in the field and in financial modeling and in finance in general. We see a lot more men than women. So I know you’ve been very active in trying to get more women involved. I know you started the woman in financial modeling online meetup community. Can you talk a little bit about why you started that and why that’s kind of a passion project of yours?
Danielle Stein Fairhurst:
Yeah, yeah. I just sort of wanted to try to encourage and to raise the profile of women in our profession because I think there’s plenty of women who work in finance in fp and a as financial modelers. You just don’t necessarily hear from them. And it’s just a way of trying to raise their profile, trying to give them a safe space to learn from each other and to get together. And I would love to make it open to men as well, but I find that women don’t talk as much, they don’t talk as much if it was a mixed group. And at the moment we’ve just been, lately we’ve only been getting together and we train for the financial modeling World Cup. So we’ve actually got a session tomorrow, early in the morning our time, which will probably be late for you. And we get together and we go through the cases of what was in the financial modeling World Cup and say,
What did you think about that question? And oh, that one was really hard. And all that sort of stuff. And just kind of talk about the, the round in general just, but sometimes we have interviews and just different sort of forums to just talk about issues. I’d love to do more. I think it’s a great forum. I just don’t have a huge amount of time to do it. I would like to spend more time on it, but it’s kind of, yeah. So that was the reason that I started to do it. Just to try to get more women involved and to hear from more women,
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Paul Barnhurst
Now that’s great. I’m really glad you did that. Cause I agree with you, you don’t hear as much. I mean I know I can even see that sometimes when I’m looking for guests, I get a much higher response rate from men than I do women to be on the show.
Danielle Stein Fairhurst:
Oh yeah.
Paul Barnhurst:
And so it’s trying to balance that. Cause I’d like more women, I’m always kind of looking and it becomes a challenge because I’ll spend reach out to about three times as many women as I will men to get people on the show. They tend to be much more comfortable coming on the show. And so I’m grateful when I can get ’em on the show because you guys have so much to offer and I find, and there’s often a different perspective and some of the smartest people I’ve worked with. And so I appreciate you making that concerted effort to make sure their voice is heard. Yeah. Cause I think it’s important. Yeah,
Danielle Stein Fairhurst:
It, you do have to work quite hard to make sure that you have equal representation. And it’s often in a lot of conferences, they need to really make an effort to make sure that women are submitting because they just don’t. And often they sort of put out a blanket a first when they a call for speakers, they would just put out a blanket call for speakers and a whole lot of men will go, yeah, I’ll do it, I’ll do it. And I’m probably, I’m a bit like that too. I’ll kind of like, yeah, yeah, yeah. I’ll talk, hang on. I don’t even know what it is I’m talking about, but I’ll talk. Yeah, I just love talking. I’m very happy to do that. But that’s probably a little bit unusual. So they have to really sort of go and track down and actually make sure that there are sufficient women that are being invited to speak. So I think it’s really important.
Paul Barnhurst:
Yeah, no, I agree. And when you reminded me, it’s really helped me focus on making sure that diversity, it’s become something I’m more conscious of. Because sometimes you don’t even realize that you just kind of go with the people you, you mostly work with or know. And sometimes at different times they tend to be dominant to one group or another. And so I totally agree with you, whatever event you’re doing, try to be consciously aware of how you can have diverse opinions. And it goes much beyond just gender. But that’s one thing to consider is, and how do you make sure you’re bringing in those different viewpoints and different people from different backgrounds. Cause that’s how we all learn, that’s how learn the most is having diverse opinions to and thoughts and backgrounds and experiences to learn from.
Danielle Stein Fairhurst:
For sure.
Paul Barnhurst:
So one other thing I want to ask a little bit is, I know you love the mic as you told me. I know you mentioned you do a, you’re announcer on a community radio station. You also do some announcing for financial model modeling, world Cup, Excel, eSports. Can you maybe talk a little bit about that experience, what it’s like for you to announce that type of event?
Danielle Stein Fairhurst:
Yeah, yeah. It’s really fun. It’s a sort of thing where I think it’s because the competitors, it can be quite hard to follow I think. So the competitors are really fast and we are switching. So it’s Excel, eSports, usually there’s different types of battles, different times of year. I’ve been doing it for a couple of years and they just, it’s, as a commentator, it’s our job to explain what’s going on the screen and to make it accessible and interesting for the audience so they can follow perhaps a little of what’s going on, if I can follow what’s going on because it’s really fast. So they’ve got multiple screens going and they’re sort of flicking between them and they’re usually solving a question very, very quickly. And it’s really fun because we don’t know what the solution is going to be. So usually they have one that we did a couple of weeks ago, had one question and each game went for 10 minutes and we had I think four competitors and they and multiple rounds of the same game.
And we were watching them, we’d seen the competition beforehand and thought about how to solve it. But then when the competitors go and you go, wow, I didn’t think of solving it like that, that’s a completely different tech. And my co-host and I would go through it in advance and say, well how would you do it? How would you do it? And then the competitors come up with something completely different and you go, wow, what are they doing? And this use of dynamic arrays, formulas or use of a data table or some other type of power query or something that you think, wow, I would not have thought of doing it like that. And it’s absolutely, it’s really kind of edge of your seat kind of stuff because you just dunno what they’re going to do and you’re like, wow, that’s a formula that I did not expect to see today. And just seeing how they solve these problems is absolutely amazing and so much fun.
Paul Barnhurst:
Yeah, I bet. So I have to ask because I love his voice and listening to him. Have you had the opportunity to co-host with Oz?
Danielle Stein Fairhurst:
No. All I think, cause we’re in different time zones.
Paul Barnhurst:
That would make sense. I
Danielle Stein Fairhurst:
Was just curious. Haven’t actually met him in person and he’s lots of fun. Yes. I love how he commentates for sure.
Paul Barnhurst:
Yeah, I’m a big fan of his videos. He’s just his storytelling folks. His style is unique
Speaker 2:
And so it’s
Paul Barnhurst:
Fun. I was just curious on that. All right, so next question here, I wanted to ask you a little bit, this goes back a little bit about woman. Let’s say there’s someone listening that really wants to get more involved in finance, financial modeling as a woman, any advice you would offer? Any things that you’ve found has helped you in your career you would offer
Danielle Stein Fairhurst:
Yeah, if somebody wants to get into financial modeling. Yeah, I think particularly
Paul Barnhurst:
Let’s say there’s a woman who wants to get more active, maybe they want to get involved in the World Cup or some of those things. What would you say to them?
Danielle Stein Fairhurst:
Yeah, I probably wouldn’t say go into the World Cup first off because it’s Sure quite,
Paul Barnhurst:
Yeah, very competitive.
Danielle Stein Fairhurst:
Yeah. Every time I compete I Whoa, whoa. So it’s not exactly an ego booster when you sit the financial modeling world. That’s probably why
Paul Barnhurst:
I haven’t done, I’ve had a few people tell me I should compete and I’m just like, no, I’ve seen what they could do and they’ll just wipe the floor with me is what I say. Yeah,
Danielle Stein Fairhurst:
I wouldn’t say start there. You probably give up. It’s not a good place to start I think. But once you, what you’re doing and get some experience. But I would say the best place to start is to just start using Excel. Give yourself every opportunity to use Excel for financial modeling, for whatever in your work. So if you are working in FP&A, make sure that you are the person that’s the models. Get the opportunity to use that volunteer for these projects and say, Hey, I’ll do this. And show the aptitude that you have, particularly when it comes with working with Excel. If you are not working in that kind of role, you can absolutely build models for your own personal investments, for your cash flow, that sort of thing. There are lots of examples online that you can go to. You can have a look at how people build these things and then try to create them some of the, even on some of the financial one, once you get better atfinancial bonding World Cup examples because they will actually give you the solution probably it is an absolute bargain I’ve got to say, because you sign up for it and I don’t know, it’s, it’s not terribly expensive, but they will actually, once you’ve sat for it, even if you bomb don’t do very well at all, you get given the solutions, which is fantastic.
So you can actually go through and see exactly what, it’s not the only way to build it, but it’s our way to build it and it’s a great learning experience.
Paul Barnhurst:
That does sound like a great one. And I like how you said budget, do your own budgeting, whether it’s an investment or something. I had on Chris Reilley who’s done some courses and teache his financial modeling and his advice was, model your life is how he put it. He goes, most of the things I learned about Excel, it was by building my own models for myself is really how to do it. And so I really kind of like that advice and you know, mentioned some similar things there and I like as you continue to advance, look at things like World Cup and learn from others, when you see the way others solve it, it gets you thinking about things you wouldn’t think of. You do your attempt, like you mentioned watching ’em and you’re like, wow, I would’ve never thought of solving something that way. Because there’s always more than one way, if not 10 different ways to solve something in Excel.
Danielle Stein Fairhurst:
Absolutely, absolutely. Yeah. Just you do it your way, the way that your brain works. And I have learnt things off people I have never even met because you look at their models, you take them apart and you kind of work out how their mind works, which is completely different to your own. And the design and the way that they lay something out, you go, oh that’s really interesting. And every model that you build, every model that you take apart is going to make you a better modeler because you might spend ages nutting through something and going, how did I do that? And then the next time you come across that problem, you’ll be able to solve it like that and you’re going to be so much faster at that sort of problem. And you’ll be able to take that solution that little bit further. And by doing these sorts of things like preparing for one of the FMI exams hose sorts of things.
Ways that you can just consistently build your skills so that you’ll just become a better modeler and you’ll be so much faster. You’ll think of better solutions that you just wouldn’t otherwise. And you, the other thing that is fantastic about these things where you put yourself under pressure, particularly with the financial modeling World Cup, you have two hours and you have to finish certain cases. There’s three cases and it’s very few people. Well, I certainly don’t get through every single part of the cases. I just kind of do as much as I possibly can in the time. And you are under pressure and it’s stressful. And you putting yourself in that situation is such good training because it is low stakes, it doesn’t matter. It is, you can be anonymous, you don’t even have to have your name up there. And that’s so fantastic about it, you can just go for it. And then at the end of it you go, oh well I bombed, it doesn’t matter. And look at oh how I could have done better next time. And then when you are in an interview or you are in a real situation at work and you have got to get something done in a certain timeframe and you’ve got to be right, it’s got to be accurate and it’s got to be done quickly, you are going to be so much better at it as a result.
Paul Barnhurst:
I love that. Great advice. Making me think that I might have to try out one time if I think my ego can handle it. Yeah,
Danielle Stein Fairhurst:
Yeah. It is quite ego crushing.
Paul Barnhurst:
I appreciate being honest about that. And yeah, I have a friend who’s a big financial model or two and someone’s like, you should join this. And he looked at him, he goes, I would get clobbered. He’s done a few. And but how hard, they’re
Danielle Stein Fairhurst:
Also, remember it’s not real, it’s not real life and it’s, it’s about all of these things. The games that he sports, they’re not, they’re just simulated. And one of the problems with the World Cup is that it’s about trying to get the answers quickly and the model that you build is not the sort of model that I would build for a client because it’s single use, it’s not repeatable and it’s not properly, generally the solutions that they give you are well structured. But the models that I build when I’m competing are certainly not well structured at all.
Paul Barnhurst:
Sure. I mean it’s more for the learning, the pressure, the experience, thinking differently, the logic. It’s not like you’re going to take what you built there and that’s going to be your ideal budgeting and forecasting model that you’re going to use for the next couple years. Right. Cause you’re thinking, how quickly can I get this done? Which is very different. How can I make this so it’s easy to update and reuse month to month. Exactly. I totally agree. Those can be very different logic and they’re both beneficial and they can help each other, but they’re just different environments and different ways of thinking when you’re doing competition versus a work assignment.
Danielle Stein Fairhurst:
That’s a really good point. And particularly when it comes to budget models, the reuse of them is just so valuable. Being able to use the same templates and to be able to have that forecast, a rolling forecast that you’re just going to be able to roll forward. I’ve had models that clients come back to me 10 years later and they say, oh, I’ve been working this and I’ve eventually run out of rows and something’s broken. And I go, oh my goodness, are you still using that model? That is amazing. And they go, oh yeah, yeah, I just changed the model start date and everything just rolls through. And I go, wow, I am doing myself out of a job here. Because they’re just reusing the same models over and over again.
Paul Barnhurst:
It is pretty amazing how long they can last. Sometimes I got a email from someone I worked with and I’ve been out of the company for two years and they’re like, I was just thinking, cause I was watching one of your videos explaining how to calculate some sales commissions in a commission model I had built. And I was like, oh, good luck. I guess you’re still using it so it must work.
Danielle Stein Fairhurst:
Yeah, I mean the thing with Excel is that a lot of look sometimes back at these old models that I built and I go, oh my gosh, I can’t believe I did it like that. Why wouldn’t I have used a dynamic array? Because we didn’t have dynamic arrays back then and I just want to go through and completely rebuild it and going That does. It works. It works. And the thing is that the old features still work generally, but we know that there’s a more efficient way of building it now.
Paul Barnhurst:
Yeah, no I’m totally with you. I look at things I did 10 years ago and I’m just like, what was I thinking? You feel like, yeah, exactly. You want to just jump in and rebuild it cause you’re like, this is so inefficient And some of it’s cause you’ve learned more in some because the software’s changed. Yes. Dynamic arrays is a prime example. Yeah. Yeah. So next question here. I know in 2021 you first earned the MVP, the most valuable professional for Microsoft. And then last year as we mentioned, you earned the lifetime achievement award at the Financial Modeling Summit. Can you maybe talk a little bit about what that was, those experiences of being recognized that way?
Danielle Stein Fairhurst:
Yeah, amazing. Well the MVP thing is an annual award. Yes. So you get the award for the work that you do in the community and it’s not for any kind of work, it should be for something that you do just to basically as an ambassador for the product. And it’s, which is really easy to do because we all love Excel and we just go on about Excel all the time. And it’s really to recognize people who are really spreading the word about Microsoft Excel and we get the opportunity to give feedback to Microsoft about the products and and that sort of thing. We get to go to the summit, which I haven’t actually been to yet because it’s was online and would love to do that if I am a continue to be an MVP next year or if you have to do a certain amount of activity within the community to stay an MVP, which is great. It’s a fantastic thing to be and gives you a lot of great access to Microsoft and you just get to talk about what you love, which is using Excel. And the Lifetime Achievement award award was amazing. I was really not expecting that at all. So it was quite an honor.
Paul Barnhurst:
Well congratulations. No, that is a big honor and it just shows the great work you’ve done. I mean I’ve been following you for a few years on LinkedIn. I’ve watched a few videos on your website around financial modeling and I’ve been aware of the great work you’re doing for a while now. So I think it’s definitely well deserved. So congratulations on that. And next question I want to ask a little bit here on is Financial Modeling Institute. I know you’ve been involved a little bit of that, you have a course related to that. So maybe can you talk a little bit of your experience working with that organization and also taking the tests? Just maybe talk a little bit about that.
Danielle Stein Fairhurst:
Yes, so it’s really the only kind of practical qualification for financial modelers. So it’s just, there’s lots and lots. When it first came out I was just thought, this is ridiculous. I’m not going to do a test to prove that I’m a financial modeler. I know I’m a financial modeler, I don’t need to prove it. And I didn’t do it at first and then I went, actually it’s pretty cool to have that you, and that way people know if you have that qualification, people know it is such a high standard and it’s quite difficult. So it’s anyone who has that qualification that they can be the level one, a advanced financial modeler, the fm, you have to build a three statement model. So an income statement, a cash flow and a balance sheet within four hours and getting the whole thing built and fully working. So you know that anyone who has that qualification can do that. So they’re a reasonable modeler. Level two is a whole lot of different types of models and problems and solutions. So there’s a couple of different, you can choose a few different models to build for that. And then there is a level three which is coming, I believe.
Paul Barnhurst:
That’s my understanding is that one’s coming. Well congratulations on that. And it’s something I’ve wanted to sit for that I have in the future. Covid kind of delayed that, but I’m getting there. Yeah,
Danielle Stein Fairhurst:
Yeah, I’m sure. Next question. I think for someone who’s, who already has the basics of financial statements, I don’t think it was would be that much. It’s certainly not massive amount of work, but you know, do need to prepare and you do need to rehearse. And that was the reason why I set up an on demand prep course so that people to take people through the course and just to try because it’s totally, it’s the sort of thing that is quite rehearsal. So it’s quite easy to train someone to do it because it is literally, the three statements are always different. Of course different companies, different numbers, but the format and the layout and what you need to build is almost exactly the same for every exam. So that was why I wanted to build something that would help people to pass that exam.
Paul Barnhurst:
No, totally makes sense. And that’s what I’ve seen in studying it. And the biggest thing for me is all my experience are primarily has been with large companies and you’re not building three statement models. So I didn’t do my first three statement model for work till about two, three years ago. And I to do, the first one I did was for a client and it took me about four hours to find out why my balance sheet wouldn’t balance and I could kick myself when I was done. But I was able to build the whole model because the P&L, the revenue, all that stuff was easy. The headcount for me, the time was spent on making sure my schedules are right and stuff ties. Cause I understood the statements. So I think it’s great to, I wish everybody had to start with that core of really understanding and being able to build that integrated three statement. Cause I think it provides a very solid foundation, even if you’re in the type of role where you’re not going to use it like mine, you’re, I’m forecasting for American Express, I’m not going to be forecasting the balance sheet. I’m doing P&L and revenue and headcount and those type of things. So like you said, there’s a lot of different areas you can get into when it comes to financial modeling
Danielle Stein Fairhurst:
For sure. Yeah, yeah, absolutely. And it is something that, yeah, every model, every modeler needs to have those skills.
Paul Barnhurst:
Well I’m curious to get your take. I recently had Ian Schnoor on the podcast. I know you’d listened to that episode and shared some things about it. One of the things he mentioned, he said far and away the biggest problem with financial models is design. And so I’m curious, what’s your take on that? Do you agree that that tends to be the biggest problem with financial models or do you think it’s something else?
Danielle Stein Fairhurst:
Oh yeah, I do agree. Absolutely. I agreed with a lot of things that Ian Schnoor says, which yes, I definitely would say that a design is often a big problem. I dunno whether it’s necessarily, there are lots and lots of problems with the way that people have built models. I think probably, yeah, just so many different issues with the way the models that when you inherit somebody else’s models and you have to look through them and oh my gosh, yes. And design is certainly often a really big problem with the models that you inherit for someone else. Just being able to follow them and what the heck? And just trying to figure out how the model works, how it flows, how it actually hangs together is often a very big issue. But probably, I think errors is something that’s very concerning. You know, are not, as a modeler, if you are not constantly vigilantly searching for errors, you have a problem because there will be, without fail, there will be errors in your model. So just having that constant vigilance. So errors, building in error checks, people not building models efficiently. Having models that are too big and slow and inefficient in how they’re hang together. Which I guess, yes, that is design actually not just being really slow and repetitive. And that’s a real issue with the models.
Paul Barnhurst:
I totally agree. As far as size, I once inherited a model that was 1.3 gigabytes. . And the person’s like, yeah, it opens pretty quick on my 64 gig machine. I’m like, okay, if you need a 64 gig machine to open your Excel file, you got bigger problems.
Danielle Stein Fairhurst:
Yeah. Wow. Okay.
Paul Barnhurst:
Yeah. So that was the largest I’ve ever dealt with. And there were some definite design issues. Number one being Excel is not a data is not a large database. being the first issue.
Danielle Stein Fairhurst:
And we often have the model, the data sitting within the model and it, it just really slows things down, things down and clogs it up.
Paul Barnhurst:
Yeah, exactly. So I know our time’s coming up here, so we’re going to move into kind of final phase here. Just a couple little more personal questions that we ask everybody as we wrap up. So the first one we like to ask all our audiences. What’s something unique you can tell us about yourself? Something we wouldn’t find online about you?
Danielle Stein Fairhurst:
Oh gosh, I did, when I did my undergraduate, I actually majored in Korean language and I learned to speak Korean reasonably fluently. And I lived in Korea for three years after I graduated. And to this day do not use that skill at all. So being able to speak Korean is really not that really useful. Although I did actually go to a little town in the south of Korea just a couple of years ago to do an FMI exam, which was lots of fun. And I did actually get to use my Korean language. But yeah, that’s probably not something you would know about me.
Paul Barnhurst:
Yeah, I definitely will say that’s one I didn’t know. I had no idea. Cool. So thank you for sharing that one. Next one, this is one of my favorite questions to ask everybody is what’s your favorite thing about Excel formula feature? Do you have favorite kind of function?
Danielle Stein Fairhurst:
Oh my gosh, how can I answer that isn’t completely impossible. It’s asking me to choose between my children.
Paul Barnhurst:
I knew you were going to say something like that.
Danielle Stein Fairhurst:
That? How could I say, could I say, oh, there’s just so many fantastic features. There’s so many of the functions I couldn’t live without. And it’s always amazing when something’s only been around for a year or so and I go, I can’t believe, how did I ever live without this? The sequence function, for example, the unique function, I have not been using it that long and then all of a sudden it just becomes part of your repertoire and you just can’t imagine life without it. And then when I was in Cairo recently, I had to run a course for, they were using 2019, which is not 365. So we had to use basically all the, we couldn’t use X lookup, we had to go with V lookups. And just having to go back and live without those features was quite a challenge.
Paul Barnhurst:
I recently did a training for a company that wasn’t on 365 and all the formulas because usually I introduce em, a lot of people to XLookup, Unique, those type of things. And I all of a sudden had to be like, oh wait, I can’t got to change my course here.
Danielle Stein Fairhurst:
Yeah.
Paul Barnhurst:
So I could relate to that one. So is there kind of a favorite one you’ve been learning about recently? Any kind of recent new formula that you’ve really enjoyed? You mentioned sequence unique, any of the other kind of new dynamic arrays or text formulas they’ve come out with in the last year that, yeah,
Danielle Stein Fairhurst:
I got to say, I found when the filter function first came out, I did find it a little bit tricky to find a just to kind of, it’s just not exactly intuitive. So I try use that one all the time because you just want it to just roll off the fingers. You just want to be able to use it very quickly. Cause I used to always find it a little bit difficult and just when the new functions come out to try to make sure that you are using them and finding uses for them. But not if the client is not using 365, that’s something you’re always having to remember
Paul Barnhurst:
To totally agree. It’s a bit big thing to remember. So thank you for sharing that. And yeah, filter’s a fun one. But yeah, it does take a while to get used to. It’s a different logic for it. So it’s taken me a little while to get used to that. So next question here and then we’ll have one final question as we wrap up is if someone was starting a career today, say they were working in FP&A, so they’re going to be doing obviously a lot of budgeting and forecasting. Any advice you’d offer somebody starting a career today?
Danielle Stein Fairhurst:
Learn excel.
Yeah, just making sure that you have really, especially for people who are starting their career because it is not going anywhere. It is, these are skills that you are going to have throughout your career. It’s something that it’s highly unlikely that wherever you, particularly if you are, certainly if you’re working in FP&A, but in any kind of office environment, I mean it’s very unusual. It’s unusual for people not to need to use Excel and to have those skills and having good Excel skills at the beginning of your career is something that you’re going to use right throughout it. So definitely just getting to go to the Excel and staying up with all the new features is a really good skill to have.
Paul Barnhurst:
Totally agree. Great. A great advice there. I mean, learning that especially early in your career when you’re using it every day and often most of the day. So great advice. So last question. If someone wants to get ahold of you to learn more about you and what you do, what’s the best way to do that?
Danielle Stein Fairhurst:
Oh, well I just like you, I just hang out on LinkedIn. That’s kind of where I am all the time. So that’s probably the best way to get in touch with me.
Paul Barnhurst:
Great. And we’ll make sure to include that in the show notes so people can reach out there. We’ll also put your website. But thank you so much Daniella, for the time. I really enjoyed getting to talk with you. Appreciated it and look forward to continuing to learn from you on LinkedIn and see all the great content and things you’re coming out with. So thanks for making some time for us today.
Danielle Stein Fairhurst:
Thank you. Thank you so much Paul, and thank you for the fantastic podcast. I do really enjoy listening to it every week.
Paul Barnhurst:
Thank you, I really appreciate that. You have a great evening.
Danielle Stein Fairhurst:
Thank you. Bye. Bye.
