Over $63.6 Billion was earned in investment banking revenue in 2012. It’s no surprise, then, that many people are interested in this job. According to the Bureau of Labor Statistics, jobs related to investment banking will increase by 15 percent between the years 2010 and 2020. But since the role of an investment banker is often obscure, it can be difficult to know how to break into this industry. There is no investment banking major, and advice on how to become one is scarce. But by looking at the skills necessary to successfully practice as an investment banker, you can narrow down the degrees that will best serve you in your future career goals.
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Necessary Skills
By looking at the skills needed to become an investment banker, you can narrow down your options for educational degrees and programs. The degree you obtain, in and of itself, is not as important as what you know and how readily you can apply that knowledge.
Knowledge of Finance
Knowing the basics of finance is extremely important. As an investment banker, you will spend a good portion of your time advising people how and where to spend and save, so understanding basic financial principles is a must. At the end of the day, you are advising others on how to get the most from their finances, and how to make their money work for them, so understanding the basics of finance is crucial to being able to adequately advise your clients and, thus, be successful at your job.
Understanding of the Market
You must have an understanding of the financial market as a whole, including the ability to spot financial trends and invest accordingly. It is crucial that you keep up with marketing and financial trends and use market analysis and history to predict where the market might go and how that affects your clients’ money. Essentially, you need to have a practical understanding of economics.
Understanding of Business Principles
Part of your job as an investment banker is to sell products and services, in addition to managing your clients’ money. You need to understand basic business practices, including accounting principles, marketing, and sales. Your sales approach will likely be consultative instead of confrontational, but you should still have at least a few marketing classes under your belt, as this will help you obtain new clients at the outset.
Degree Options
Given these necessary skills, there are three undergraduate degrees that would be most beneficial to the aspiring investment banker.
Finance – By obtaining an in-depth understanding of finance and obtaining a degree in the subject, you not only learn about how to manage personal accounts, but you obtain knowledge regarding how financial markets work as a whole.
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Economics – If the finance degree helps you apply the personal to the global, economics does the opposite. Economics teaches you about broad economic topics on a global scale so you can understand how the international financial market works. However, you can also apply that knowledge to personal accounts and financing, as well.
Business Administration – Business is a great option if you just can’t choose between finance and economics. By obtaining a degree in business, you get a little bit of everything from finance to economics to marketing and entrepreneurship to what makes corporations tick.
The Closing Bell
In addition to choosing a bachelor’s degree that will be helpful to your future career, you will also want to choose your elective courses strategically. Psychology, marketing, and even computer science courses are all great options for bolstering your career as an investment banker. If you have the opportunity to take courses in business law and Excel, these will also be of great benefit. Learn as much as possible in school, and try to get an internship; additionally, consider pursuing an MBA, as well.
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