Hey everyone, I'm looking for some advice on where to allocate some surplus cash I have. For reference I'm a 1st year IB associate (A2A) in a mid-COL city. I max out my 401(k) and HSA, contribute to a high-yield savings account (2%+ APR) for emergency-fund purposes, and the rest goes into my checking account (just b/c it's there doesn't mean I spend it, I have good discipline). I've earned enough to this point that I'm starting to feel that I have too much surplus cash in my checking account (I wanted to have a decent amount built up for future purchases, as once I contribute to the other three accounts I mentioned earlier, that money will not be touched). I don't want to contribute much more to the HY savings account than the 15% I'm currently doing, but I don't know what else to put my money in that would be tax advantaged. IRAs are out of the question due to the income limits, and I feel like investing in individual stocks, ETFs, or low-cost mutual funds is a waste if there's no tax advantage to it. Are there any investment vehicles that I'm missing? My main objective is to get tax-advantaged savings/capital gains somewhere in a high growth investment. On a side note, I am too risk averse to own real estate for investment purposes.
Thanks.
Cannabis brah.
If you're maxing out HSA and 401k, don't want real estate then unfortunately there aren't many options left (until you hit accredited investor and qualified purchaser levels and can talk PE/hedge funds etc. but those don't benefit much on tax either). They are rolling out qualified opportunity zone funds that you can take a look at, but frankly it's still real estate and a large chunk of the benefit in those is that you already have large cap gains that you're rolling into it (to defer to 2026/get % tax break on gain. If you're ok with lower returns, Municipal bonds (tax free) and often much less risky, but I mean if this is retirement money, you're 23 in banking, you can afford some equities/volatility for bigger gains on average long run.
In your situation I would say dollar cost averaging/low cost index funds is the way to go, sorry to not be of more help.
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