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The world of investments and finances seem quite complicated at first sight. The big jargons like capital, stock, debenture, equity, stock, dividend, etc. imbue a chilling vibe for the unassuming ordinary person. However, these aspects are not as scary as they seem. An understanding of the basic concepts would alleviate the difficulties in deciphering the arena of investment banking.

With small steps

The first step to understanding investment banking is not just asking the right questions. It’s about asking the right questions in the right chronological order. Therefore, the first question to understand investment banking should be “What is investment banking?” »

The main reason for the difficulty in understanding investment banking is that people usually start with the question “How to become an investment banker?’ which removes the scope of understanding about it.

Going back to the preliminary question, investment banking is basically concerned with the area of ​​the banking industry which is responsible for raising capital (the money needed to run or start an organization or business) for corporations, government institutions or any other similar entity.

Although raising capital is the primary function of investment bankers, there are a whole range of other activities, duly grouped together, within the broader framework of investment banking. Some of these important activities include:

  • Underwriting new debt as well as equity securities for various types of companies
  • Help is selling safety
  • Facilitate mergers and acquisitions
  • Assistance in structuring reorganizations
  • Assistance in brokerage operations for private detectives and various institutions
  • Provide valuable advice to issuers regarding the issuance of shares and their market placements

Choosing a Career in Invest Banking

The profession of investment banker is as prestigious as it seems. The old-fashioned way to land an investment banking job is to earn an MBA from prestigious business schools and work your way up the corporate ladder with the dual combination of hard work and connections. Being an investment banker has its perks. The main teaser of this job is the handsome salary that one gets while working.

Top investment banks like Goldman Sachs, Morgan Stanley, etc. invest heavily in recruiting investment bankers. Various studies and surveys suggest that investment bankers earn around $100,000 per year during their first days in the industry. Another aspect that makes an investment banker’s income quite lucrative is when he earns between $25 and $35 on an hourly basis. Considering most of them work around a hundred hours a week, the math might seem tantalizing.

It is not only the salary that is attractive for investment bankers, but also for several other professionals. Like, for example, they can hone their marketing skills while working in a high-pressure, high-performance environment. It also sharpens their soft and people skills.

These skills, when combined with business, financial and accounting abilities, open up enormous potential for professional growth, thus propelling one’s career to great heights.

The other takeaway from being a revered investment baker is the relationships one builds over the course of the profession. As investment banking includes both private corporations and governmental organizations, an investment banker can easily build top-notch relationships, which would practically ease his or her way into any type of situation.

Is it so difficult to become an investment banker?

Coming back to the question that started this discussion is whether becoming an investment banker is hard or not, the answer can be both yes and no. If you choose the old-fashioned way of studying with proper degrees and then landing a job, then yes, it may seem difficult. However, we live in an ever-changing world where almost anything is possible. Therefore, with the right approach, it is not as difficult as it seems.

It should be understood that becoming an investment banker depends on your degree of knowledge of how the investment market works well for the benefit of the business and your ability to perform so that the respective customers remain in a bed of perpetual profit.

While the first aspect depends entirely on your research and homework, the second depends on the quality of your connections in the existing market. Therefore, having a good network is the rule of thumb for success in investment banking.

The next point is the B-School. Top-notch B schools like those in the Ivy leagues have a relatively smooth run in the world of investment banking. Therefore, if your school is not in the top ranks, it naturally becomes a bit difficult to follow the path of investment banking. However, with patience, tenacity, and hard work, overcoming this hurdle becomes a piece of cake.

It can be stamped that experience speaks a thousand words more than high-level education certificates. Education in schools is often done in a controlled environment and lacks practicality.

Therefore, having hands-on experience is beneficial not only for the candidate but also for potential employers. Therefore, it is always suggested to dive into the market as early as possible and gain as much experience as possible.

Last but not least in the list is CV or Curriculum Vitae. Even though it’s virtually impossible to judge a potential recruit through certain pieces of paper, a decent CV goes a long way in earning a chance to have interviews at prestigious investment banking organizations, which could eventually turn out to be recruitment opportunities.

Conclusion

While the silver world of investment banking sounds like a tantalizing opportunity, it also has its darker side. Work-life balance is almost non-existent for investment bankers. Too much work stress often leads to mental strain and a resulting sedentary lifestyle leads to various physical problems at a fairly early age.

Therefore, it must be noted to have a stable work-life balance despite work pressures to ensure outstanding performance not only in one’s career but also in life.