How to Invest $40k as College Junior
Currently going into my junior year of college and very grateful to have an IB SA 2022 role secured (bless the WSO gods)I had saved up some money in high school and even more through college. Sitting on $40k in cash in my bank, which is just rotting away and I want to use some of it to invest. My current summer role has a very generous 401k, been putting a good chunk of my paycheck into it so far but started late. I've already invested in a few companies and index funds the past year. Here are a few other details about me: Age: 20 Cash in Bank: $40kOther holdings: $20kStock Portfolio: $11k401k: $2kTotal Net Worth: ~$73kIf you were in my current position, how would you invest this cash and where? Not limited to stocks, all thoughts welcomed
Put 30k in an index, use 3k to speculate in the stock market (derivatives) and put 2k in crypto. Keep 5k in a HYSA
agree^ id put 4 in a hysa and maybe 1 in something speculative like shoes/collector items
What are some good HYSA you recommend?
GameStop shares. I was in an almost identical position to you in college and traded my way to 7 figs in the last 3 years. WSB was life, now it's all about Superstonk. Can't go tits up.
It really can’t, dumping it all in
AMC OTM Calls
I would put as much as you can into a Roth IRA if you haven’t opened one already. I put as much as I could in between 18 and 21 and if it grows at it’s current (quite low rate because someone is actively managing it and has high fees) it will be worth 16-32x what I put in or between 600k and 2.2 million. I wouldn’t underestimate the power of compound interest.
If you’re eligible for a HSA and your plan allows rollovers, put 4K or the max in there as well. It’s another tax advantaged account that you can use to your advantage.
This way you can pretty much be set for life at 25/26 if you decide IB and other high paying jobs are too much and take a pay cut or go down a different career path.
Finally, congrats on saving so much money! You’re super lucky.
First of all, thanks!
I opened my ROTH IRA last year and will work towards maxing it out every year. What are the mainly holdings in your ROTH if you don’t mind me asking? I plan on managing the account myself for the time being. I haven’t thought about HSA, but will definitely look more into it now.
Trying to be set as early as possible is the goal for me. I eventually want to have my own thing a bit later on, so I’ll try investing as much as I can.
I really appreciate it! My goal was to not spend money on things I don’t need, crazy how much that’s helped me so far
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