How An Investment Banker Raises And Manages Money

Investment banker roles are tightly defined within the capitalist countries in which they are employed, and the job titles are standardized within a country's system, if not across the entire developed world. The services which are offered by these corporations are virtually identical in all countries, although some of the terminology may be different. These banks are used by corporations and governments for the purpose of raising borrowed funds, which are placed into the open market for purchase in the expectation that the full issue will always be sold.


The first point to understand about investment bankers is that they are not a typical deposit taking bank such as you would find on the major streets in any Western town or city. There is no provision for outsiders to place money directly with the bank, either for the purposes of earning interest or so that funds can be spent and used in everyday life. These banks are lesser known to the average person as they have no major presence in the everyday media, but they do have huge presence and prestige within the financial industry. Many companies raise finance through the same bank multiple times, almost as a matter of routine.

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The banks can perform other functions for investors on a management basis, such as placement of pension funds or mutual funds into the market. The pension fund provisions which have been laid down by the government aid people of all classes in saving for the future, as they shelter capital gains from taxation if the money is held within the same investment vehicle until the person retires. The tax free vehicles can only contain a limited amount of money, so many wealthier clients are using mutual funds to hedge their investment in Wall Street corporations.

Investment banker organizations are prone to the highest levels of scrutiny from government authorities, because of the potential for gain which would accrue to anyone successfully gaming the system. Banks which have operations in both the buying and selling sectors of the market are able to keep both sections completely apart and to function without any hint of corruption. This high level of regulation is necessary for the effective functioning of the financial industry as a whole, although there are always going to be individual incidents in which it will appear to have been breached.

If you have to ask what is an investment banker, then you are obviously right at the start of your knowledge gathering process. The distinguishing feature of an investment bank compared to what the average person thinks of as being a bank is the way in which it interacts with the people who fund it. The investment bank is dealing exclusively with corporations and wealthy individuals, either in the placing of money into the market and managing investments, or in the creation of stock which can be sold into the open market, giving the corporation access to what are effectively borrowed funds.

The career of investment banker is one which can give high rewards in a relatively short period of time, but it is also one which demands a college education, and one which involves working an extreme number of hours. There are many people who enter the profession who burn out at a relatively young age, so be sure you can handle the workload before you begin thinking of this as a potential career. There are several distinct routes into this type of banking and related careers, but they all start with study at a college, from which the recruitment takes place.

The typical market analyst is at the bottom of the investment bank food chain, and the are effectively the work horses which make the system run. This is a job which you can move into straight after college, but it can be something of a rude awakening. It is common for analysts to put in two or three years of work, and then move on to another job in a related sector. This is likely to be in managing money for outside clients, as you will by then have an enhanced understanding of how the system works.

There are other ways to become an investment banker which will usually see your career following a completely different path, but these are notoriously difficult to achieve. If you are able to study with one of the highest rated MBA programs, there is a chance that you will be hand picked to become an associate, which will give you more power right from the start. In exchange for this, you will be expected to stay in the job for a much longer period of time. Getting onto the highest rated college program you can find will be a sensible plan if you want to have a stable and successful career as an investment banker.




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