If you’re thinking about a career in finance and you enjoy working with people, you may find the investment niche quite attractive. Plus, with the right skills, it’s easy to find the job enjoyable and satisfactory in terms of rewards and perks.
But what career path should you take if you want to work as an investor? Just like many other professional areas, the world of investment can take you on extremely different journeys, depending on the steps you take.
For instance, many beginners see investment management as the ultimate position for their career. While this is not a wrong approach, it’s also important to ask yourself – is investment management a good career path?
Just because investment managers are some of the most well-known and respected finance professionals, it doesn’t mean the job will fit everyone’s needs. Plus, there are other amazing jobs in investing that you may find more attractive.
This is a guest post by Ken Boyd. Ken Boyd is an accounting and finance expert at AIS-CPA. He is also the author of several books, including Cost Accounting For Dummies, Accounting All-In-One For Dummies, The CPA Exam For Dummies, and 1,001 Accounting Questions For Dummies.
Moving forward, we are going to have a look at some of the top investment career paths, starting with investment managers. We considered the skills needed for the position, how easy it is to get there from a beginner position, and the overall annual income.
Investment managers have an advisory role as they help their customers make successful investments. They do so by running risk analyses, keeping an eye on the data, and carefully observing the market.
While the real-life role of an investment manager is not as exciting as what you see in movies, it is a high-pressure job in a competitive environment. You need to be passionate about the world of finances and have good people skills (you work directly with customers).
Also, you need to be goal-oriented and proficient in data analysis. It helps if you have a problem-solving attitude and a logical way of thinking.
Is investment management a good career path?
According to the U.S Bureau of Labor Statistics (BLS), there were over 730,800 open positions in the US in 2021. Plus, the median pay for the same year is around $131,710 per year.
Also, if you find the right path, you may even be able to join well-known financial institutions such as HSBC, JP Morgan Chase, or Vanguard. There is plenty of room to build your own business and redraw the rules according to your view of the world as well.
As a stockbroker, your job is to execute orders in the market on behalf of customers. You usually work with a brokerage firm and handle the transactions assigned to you. In this case, your skills and hard work can easily pay up since most stockbrokers work on commission (the median salary for a stockbroker in 2021 was $129,535).
But, before you can even dream about becoming a stockbroker, you have to get a Series 7 license, which is not an easy feat. If you do manage to do it, you’ll get a glimpse into what it means to be a stockbroker.
The job is dynamic, competitive, stressful, and requires beginners (at least) to invest a lot more time and energy than the typical 40-hour workweek. You may have to come to work hours before the market opens and stay up until late in the evening for marketing events and seminars.
To grow in this position, you have to build a solid portfolio of customers, which may entail making cold calls to prospective customers and businesses. So, having sales skills and good people skills are definitely a plus.
As a hedge fund manager, you have similar duties to an investment banker. The only difference is in the type of portfolios you manage. Your customers are likely to be investors who pool their capital into hedge funds and make investments with a higher level of risk and reward.
Your job is to protect the investors’ interests by monitoring the market and taking action in case something threatens the health of the hedge fund. The job is just as stressful as the others we mentioned and the work schedule is just as hectic.
The median salary for a hedge fund manager is $97,845/year, but it can get as high as $200,000+ if you snatch the right investors and know how to keep things under control.
However, given the level of risk is higher, you need to fare well under stress and have strong analytical skills. You also need to be a good negotiator, with strong persuasion skills and have a good grasp of how investment bias can influence your decisions.
So, is investment management a good career path for beginners? It depends on your preferences and plans moving forward. Regardless of what you decide, a job in finance requires a specific set of skills, so make sure yours fits the bill.
Otherwise, you may grow to resent the niche, which is not fair considering there are so many exciting opportunities out there!