In a globally competitive world we live in now, it is important to be smart in handling our finances and

secure the future of our family. But how can we do that? What can an ordinary citizen do to attain
financial security? First and foremost we must educate ourselves on money matters and investment. Let
us first define investment, when we say investment, it is an asset or item acquired with the goal of
generating income or appreciation. Appreciation refers to an increase in the value of an asset over time.
When an individual purchases a good as an investment, the intent is not to consume the good but rather
to use it in the future to create wealth. An investment always concerns the outlay of some capital today
—time, effort, money, or an asset—in hopes of a greater payoff in the future than what was originally
put in. For example, an investor may purchase a monetary asset now with the idea that the asset will
provide income in the future or will later be sold at a higher price for a profit. Now that we know how
investment works, let us know more about banking and how it works. Banking is an industry that
handles cash, credit, and other financial transactions for individual consumers and businesses alike.
Banking provides the liquidity needed for families and businesses to invest in the future. You can use the
products and services offered by a bank or credit union to protect your money, to borrow more, and to
build savings. Banking means you won't have to save up before going to college or buying a house.
Companies can use loans to start hiring immediately to build for future demand and expansion. In short,
banking provides the means for further financial growth. Now that we are familiar with investment and
banking let us proceed to understanding what investment banking is all about and how it will help our
financial growth. We define investment banking as raising capital for individuals, corporations, and
governments, as well as giving advice on mergers, acquisitions, and corporate restructurings.
Organizations hire investment banks to assist with complex financial transactions, such as securities
underwriting and debt issuance, as well as to ensure that all regulatory requirements are satisfied.
Essentially, investment bankers act as the middle men between investors looking to make an investment
and businesses that could use some of that capital to grow. Is it safe to trust someone with our finances
and investment? How reliable are these investment bankers? It is important in investment banking that
the banker handling your finances comes with credentials and from a stable bank. After choosing the
right investment bank, what’s the nest next step? All investment banking activities are either placed on
the sell or buy side of a transaction. Before we go on, you need to remember two things. First, you need
to know the definition of securities. Second, you need to know that neither the sell nor buy side of
investment banking could exist without the other. Buy side: The buy side of investment banking involves
providing informed financial advice to entities, which usually consist of private equity funds, mutual
funds, life insurance companies, and hedge funds. What do investment banks do? There can sometimes
be confusion between an investment bank and the investment banking division (IBD) of a bank. Full-
service investment banks offer a wide range of services that include underwriting, M&A, sales and
trading, equity research, asset management, commercial banking, and retail banking. The investment
banking division of a bank provides only the underwriting and M&A advisory services. Full-service banks
offer the following services: 1.Underwriting, which means capital raising and underwriting groups work
between investors and companies that want to raise money or go public via the IPO process. This
function serves the primary market or “new capital”. 2. Mergers & Acquisitions (M&A) meaning advisory
roles for both buyers and sellers of businesses, managing the M&A process start to finish. 3. Sales &
Trading which matches up buyers and sellers of securities in the secondary market. Sales and trading
groups in investment banking act as agents for clients and also can trade the firm’s own capital. 4. Equity
Research which are the research group research, or “coverage”, of securities helps investors make
investment decisions and supports trading of stocks. 5. Asset Management manages investments for a
wide range of investors including institutions and individuals, across a wide range of investment styles.
Knowing all these, what will happen then if there is an economic crisis? While there are benefits of
investing during a crisis, the high risks can’t be ignored. Not all markets will recover, meaning there is a
big chance you could lose what money you do invest. Of course, the higher risks mean the rewards are
also higher. During a financial crisis, you can expect investments to be riskier but much more lucrative if
they pay off. A great way to minimize the risk is to use the services of financial advisers. They will be able
to help you determine which investments pose a lesser risk. So, investment banking is a great help even
during economic crisis. If you are thinking of investing banking, start now. Don’t wait for that perfect
timing, but rather take that first step and keep moving forward. Next, think about long-term, don’t focus
too much on the percentage rate but rather on how much you will save for the future. Know your
investment goals. This will motivate you in attaining your goals, whether its short-term or long –term as
long as you have that drive to be successful. When setting goals, use it to determine your time horizon.
It may be 10 years or 5 years but what is important is that you know how much risk you can take and it
will also help you determine how you will use your money in a long run. Don’t be overwhelmed and
always ask questions to your broker or investment banker for help but