Money Management

Investment bankers are known for advising large institutions and earning top dollar for their services. But what do investment bankers do? Read on to find out! 

If you’re interested in finance, you’ve probably discovered that there are many different fields to choose from. Between accounting, investment banking, personal finance, and everything in between, it can feel overwhelming. For example, investment banking, commercial banking, and investment management are all related concepts, yet they serve different purposes. If you’re curious about the investment banking world, you’re not alone. Here is what investment banking is in simple terms, as well as how the industry works.

What is investment banking?

Investment banking may sound intimidating, but it really just means helping companies, institutions, and governments raise money and make better financial decisions. Imagine you have a lemonade stand but you need more money to buy cups and lemons to make more lemonade.

Investment bankers help you find people who have money that want to invest it in your lemonade stand. They help startups as well as big companies raise billions of dollars to fund new projects. It’s like being a matchmaker between people who have money and people who need money.

Investment banking also focuses on helping companies manage their money. Think of it like a financial advisor who advises large organizations and the government. Instead of just recommending the best savings account, an investment banker helps them make big financial moves like buying and selling businesses, maximizing their investments, and minimizing their risks. So, it’s like having a super-powered stock broker with access to tons of resources and experts to help large companies make the best decisions possible.

What do investment bankers do?

The answer varies depending on their specialty. There are different fields within investment banking. You may have heard of terms such as securities underwriting, initial public offerings (IPOs), and mergers & acquisitions (M&A) dominating headlines. Here are some of the types of services they provide:

Raising capital

Investment bankers help companies raise money through equity or debt financing, private placement, and securities underwriting. This means helping companies issue stocks, bonds, or other financial instruments to investors for capital.

For example, investment bankers provide advisory services to companies going public. As part of the IPO process, they will determine the valuation of the company, identify potential investors, and help the company prepare to be a publicly traded entity.

Mergers and acquisitions (M&A)

M&A involves assisting companies with buying, selling, or merging with other companies. When two companies come together, there are two different ways it can happen. One is a merger, where they blend to form a new entity. The other is an acquisition, where one company buys or takes over another. The process can be complicated and complex.

Using the lemonade stand example, an investment banker would help you find a similar or complementary stand and help determine if you should buy it, sell yours, or merge them together. They will recommend the right buying price as well as selling price.

Research and financial services

Investment bankers also guide companies through complex financial decisions, financial restructuring, and corporate strategy. They provide research from financial analysts who examine various economic trends, investment opportunities, and the dangers and potential financial benefits. At its core, investment banking is about being smart with money, which is why investment banking is one of the best-paid professions.

In short, investment bankers act as intermediaries between issuers (the ones seeking capital) and investors (the ones providing capital). They are the financial wizards behind many successful business deals and ventures. They also provide valuable advisory services to clients who seek to maximize their investments, minimize their risks, or manage their projects. With skilled professionals acting as intermediaries between issuers and investors, investment banking plays a vital role in the world of finance, helping businesses and governments raise capital and achieve their financial goals.

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If you’re looking for new-to-you affordable Trader Joe’s items, check out the freezer section. Here are seven yummy freezer finds that you can buy for under $7. 

Many shoppers rave about Trader Joe’s. The popular grocery chain frequently adds new products to its lineup and has budget-friendly prices. If you’re new to shopping at Trader Joe’s, you may wonder which products are worth buying. The freezer section is packed with exciting and delicious finds that are perfect for stress-free dinner nights at home. To inspire you, we’ve outlined some must-try frozen foods from Trader Joe’s that cost less than $7.

1. Mandarin Orange Chicken

Price: $4.99

Craving Chinese but don’t want to pay takeout prices? Trader Joe’s Mandarin Orange Chicken tastes amazing and has a price tag that won’t leave you feeling broke. Pair this delicious dish with a side of rice or broccoli, and you’ll have a complete meal in minutes.

2. Trader Joe’s Vegetable Masala Burger

Price: $2.99

I tried these for the first time a few years ago and I’m so glad that I did. These vegan “burgers” are packed with veggies and full of flavor. As a non-vegetarian who eats a lot of vegetarian dishes, these are some of the best meatless “burgers” I’ve ever had. Instead of eating these on bread as a sandwich, I like to serve them with rice.

3. Hatch Chile Mac ‘n’ Cheese

Price: $2.99

If you’re stocking your freezer with individual frozen meals, you don’t want to miss the Hatch Chile Mac ‘n’ Cheese. It’s creamy, cheesy, and flavorful. It’s an ideal dish to have on hand for those days when you need a filling last-minute lunch. At this price point, you can confidently add a few to your cart without worrying about draining your checking account balance.

4. Paneer Tikka Masala

Price: $3.69

Trader Joe’s Paneer Tikka Masala is another savory find that makes for a satisfying meal when you’re short on time. Inside each single-serve box, you’ll find a generous portion of paneer with tikka masala sauce paired with Spanish basmati rice.

5. Roasted Garlic and Pesto Pizza with Deep Fried Crust

Price: $5.99

If you like fried food, you’ll want to try Trader Joe’s Roasted Garlic and Pesto Pizza with Deep Fried Crust. It’s more like cheesy, garlicky bread than pizza — but it’s fantastic. While this may not be the healthiest item to add to your freezer, it’s definitely satisfying.

6. Breaded Fried Ravioli

Price: $3.99

Are you searching for an easy appetizer for your next weekend movie night with friends? Trader Joe’s Breaded Fried Ravioli is a win for your taste buds. Pop them in the air fryer and serve them with a side of marinara; they’ll disappear before your eyes!

7. Vegetable Fried Rice

Price: $2.99

Whether you’re looking for a simple side dish or a base for a filling meal, Trader Joe’s Vegetable Fried Rice is tasty and affordable. For those evenings when you want to get dinner on the table quickly, this is a great item to have ready to go.

Spend less by shopping at Trader Joe’s

If you’re sick of the high prices you’re paying at your local chain grocery store, it might be time to shop somewhere else. If you have a Trader Joe’s in your community, you may want to plan a visit to get a feel for the variety of products available. Thanks to the grocer’s affordable prices, you can fill your cart without disregarding your personal finance goals.

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Home prices may be up. But read on to see why you may not end up with the amount of money you expect to after selling. 

There’s a reason so many people are struggling to buy a home these days. Not only are home prices still up, but mortgage rates are still pretty high. That combination has left many buyers with affordability issues to grapple with.

But while today’s housing market isn’t so favorable to buyers, for sellers, it’s a different story. And if you’re looking to sell your home today, you might end up with a pretty nice profit due to property values being up on a whole.

Also, real estate inventory is still very low these days. As of the end of February, there was only a 2.6-month supply of homes on the market, according to the National Association of Realtors. It normally takes a six-month supply to fully even out the housing market so that neither buyers or sellers have an advantage. Because of this low inventory situation, you might receive multiple offers if you put your home on the market — and that could result in a higher sale price.

But even if you manage to sell your home at a price you’re really happy with, you might end up walking away with less money than expected. Here’s why.

Different fees could eat into your profits

In 2021, when mortgage rates were super low and buyer demand was red hot, it was more feasible to sell a home without a real estate agent. But these days, buyer demand isn’t quite as strong. Because of this, you may find that you need to enlist the help of a real estate agent to move your home off the market. And if you go this route, you’re going to end up paying a fee.

That fee might be substantial, though. Redfin reports that the typical real estate agent commission is 5% to 6% of a home’s sale price. And it’s on you, the seller, to pay that fee. So if you’re selling a home with a $600,000 price tag, even if you’re only looking at a 5% commission, that’s still $30,000 of your profit.

Then there are real estate transfer taxes to think about. These vary by state, but essentially, they’re a fee you pay to sell your home and transfer ownership of it to the buyer. In New Jersey, for example, selling a $600,000 home will mean facing real estate transfer taxes of roughly $5,200.

Some states also impose a mansion tax — an extra fee for selling a more expensive home. The rules and thresholds here also vary by state, and some states don’t impose a mansion tax. But if you’re selling a high-value property, this is an important extra cost to be aware of.

If you’re using a real estate agent to sell your home, they should be able to tell you what sort of fees you’re looking at in transfer taxes based on where you live. Or, you can find an online calculator that helps you find that number. But either way, this is yet another expense you’ll often face when you sell a home.

Don’t get caught off-guard

You may be inclined to sell your home today, while prices are still high and real estate inventory is generally still pretty low. Doing so could mean snagging a nice offer. But don’t start counting your money before doing the math and accounting for real estate agent fees and real estate transfer taxes.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
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An engagement ring is a major purchase, but is it worth borrowing for? Check out some pros and cons to taking an engagement ring loan. 

There’s an old rule of thumb that says you should spend three months’ salary on an engagement ring. Many people don’t follow this rule any more, and for good reason; following an arbitrary rule that may not match your budget or goals doesn’t make a whole lot of sense.

Still, even if you don’t opt for a ring you’d have to work three months for, chances are good you’ll likely spend a few hundred or even a few thousand dollars buying jewelry if you plan to propose to your beloved.

That’s a lot of money to come out of your bank account. In fact, many people simply cannot come up with that much cash so they end up having to borrow for it. If you’re thinking about financing an engagement ring using a personal loan, there are some things to consider when deciding if doing so is the right move for you.

Specifically, you should think about these pros and cons before you move forward with getting a loan.

The pros of buying an engagement ring with a personal loan

Here are some of the benefits of buying an engagement ring with a personal loan.

Your interest rate may be lower than with other kinds of financing. Qualified borrowers who get a personal loan can usually get an interest rate well below the standard APR on credit cards. If you can borrow for a ring at an affordable rate, your interest costs and total borrowing expenses will be lower.You get control over when and how you pay off the debt. You can choose a personal loan with a repayment timeline that works for you, such as five or seven years. And you can pick between a fixed or variable rate loan. Fixed rate loans provide certainty in total costs since you’ll know upfront what your monthly payments will be.You have a choice of many lenders. Many banks, credit unions, and online lenders offer personal loans. You can compare options to find a lender offering you the best rates so your loan will be more affordable.

The cons of buying an engagement ring with a personal loan

There are also some major disadvantages of buying an engagement ring with a personal loan.

If you’ll be combining finances, your spouse will get stuck paying for their own ring. If you merge bank accounts and both pay the loan together, your spouse will be contributing to those payments. This may not be a problem, but not everyone is comfortable with this arrangement.You’ll make your ring cost more. Interest will increase the cost of your ring. And engagement rings usually lose value after you buy them, so you’ll be paying even more for an asset that’s already not worth as much as you paid for it.You’ll be limiting future options. Your ring loan payments could eat up money that you might want to use toward other financial goals as a couple.

These downsides are worth considering, and you may not want to take out a personal loan to buy a ring without talking to your future spouse. This decision can affect both of your finances going forward.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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