I recently had lunch with a group of fellow adjunct graduate-level real estate faculty all senior to me, and the subject of financial calculator proficiency arose. There was a spirited consensus among them (all of whom are now and have been real estate practitioners) that proficiency is no less critical today for students graduating from real estate degree programs than it was 25 years ago, even though Excel is now beyond ubiquitous in the workplace. I agreed wholeheartedly. Excel is just a more modern tool that executes the mathematical functions that the financial calculator (predominantly the HP12C) performed in replacement of long-hand math.
- The HP12C, ~$60 new on Amazon
While it is true that spreadsheets that support financial functions are now available to everyone, even for free via Google Docs and the like, if you do not understand what is going on in the spreadsheet, you’re going to be dangerous at best in the work you produce that includes financial functions.
Being proficient with a financial calculator displays a more granular understanding of the mathematical functions that are occurring, and requires you to instruct the calculator what to do in a deliberate manner. Naturally, this all stems from having an understanding of the long-hand math behind the computations that the calculator performs.
- You can have 12C functionality on your iPhone via the iTunes App Store, but there are customer reviews complaining of crashing…to which I say on behalf of HP, Why break tradition?
Accordingly, there is no substitute for being able to compound or discount a cash flow and do a Net Present Value calculation by hand, which shows the highest level of understanding of the mechanics of these financial functions.
What do you think? Has the relevance of financial calculator skills passed? Why?
Have you ever been in an interview and been asked to perform skills on a 12C right in front of the interviewer?
Hey Bruce, I’ve been on a few different interviews recently for analyst level positions and each of them have asked me about my proficiency with excel, but haven’t asked about the HP12C. That being said, the required finance class at NYU Schack uses HP12C for the fist half of the semester and excel for the second half, so it’s definitely still used in the workplace.
I agree that proficiency with the HP12C shows a more granular understanding of the mathematical functions that are occurring. This post is a good reminder for me to brush up on my HP12C skills while I continue my job search.
Hi Joe, agreed! You can never be too good at anything.
Excellent commentary. I missed the faculty meeting but have seen the follow-up correspondence, can attest to the same uneven proficiency levels with my students, and endorse the need for expanded capabilities. When I got my Real Estate degree from Harvard back in 1987, the HP12-C was required, and was in-use professionally, everywhere. But so was Lotus 1-2-3, the precursor to Excel which had the same basic purpose and functionality, although without recent Excel data manipulation upgrades. Then, as today, the HP12-C was a necessary business tool, distinct from spreadsheet analysis, even with some functionality overlap. Because of its power, its agility and its common conventions, the business calculator was an integral part of all planning and negotiation meetings, where spreadsheet analysis was typically too cumbersome, too personalized, or too nuanced to facilitate consensus. And it’s the same today – HP12-C functionality and output has become part of a trusted business lexicon and without it, in-person interaction is hampered if not crippled.
What continues to astonish me is that HP got it so right when they came out with the original model in 1981. In a world where technology upgrades typically obsolete earlier editions at an alarming pace, the only change I have noticed over the years is a battery upgrade, and a 40% cost reduction since the mid 1980’s.
Hi Jim, thank you for weighing in with your insights! People always revere the one at the table who can do HP12C math in their head more quickly than those at the table using their calculators 🙂
I have been using the HP 12c everyday for the past 16 years in my CRE career. I think it is one of the best tools in the industry along with the CCIM courses and spreadsheets.
Thanks for weighing in! – Bruce
I’ve used a 12C daily since starting my CRE career in 93. Excel is an excellent tool for a formal presentation or locking down concepts when time permits. I’ve found the 12C to be invaluable in the true “back of the napkin” scenarios we encounter daily in this industry and still to this day it remains the most important tool in my bag.
Thanks for weighing in! – Bruce
I’m a huge fan of the HP 12c, and I use it everyday. I find myself carrying the calculator in my suit jacket just like a pen. At NYU every real estate class that I have taken especially (Valuation) my professors advocated the importance of using the HP 12c.