pay off debt or invest

irish_bob

hi there , not sure if im in the right forum but here goes

i recently sold an overseas property , like everyone else who ever was dumb enough to look at eastern europe , i lost money , i sold it for 95,000 euro yet i still have a loan of 145,000 to pay off , i am able to pay this off with my job but my question is , should i pay off most of the loan with the 95 k and leave a relativley modest loan of 50k left to be repaid or do i continue paying off the 145 and invest the 95k in cheap stocks and shares , my gut instinct is of course to clear off some debt but i do have a sizeable amount of cash at my disposal right now and i am not finding it too difficult to meet the repayments on the 145 k

pocketdooz

irish_bob wrote: »

hi there , not sure if im in the right forum but here goes

i recently sold an overseas property , like everyone else who ever was dumb enough to look at eastern europe , i lost money , i sold it for 95,000 euro yet i still have a loan of 145,000 to pay off , i am able to pay this off with my job but my question is , should i pay off most of the loan with the 95 k and leave a relativley modest loan of 50k left to be repaid or do i continue paying off the 145 and invest the 95k in cheap stocks and shares , my gut instinct is of course to clear off some debt but i do have a sizeable amount of cash at my disposal right now and i am not finding it too difficult to meet the repayments on the 145 k

Clear

The

Debt

.

Blackjack

pocketdooz wrote: »

Clear

The

Debt

.

+
1
.

rugbyman

Irish Bob,
I have read of your problems, in your posts , of the appartment in Hungary( think it was) . I am now facing a potential similiar situation in another country and wonder if i could /can face taking the loss.

Regarding your situation, and the decision you have to take, both the above comments are factually true, repaying debt with available capital is wise rather than investing it for interest. the interest paid would be greater than that gained.

HOWEVER, and I am not recommending you gamble, had you not enquired on here, and put all of your 95,000 on INM two weeks ago it would now be up by 30,ooo and your debt on property would be 20,000, not 50,000.

greater gains could have been made on AERLINGUS,

Should you have done it, I dont know, would i have advised it?, not to such an extent,
The word IF is one we all plague ourselves with.

the belief of most of the conservative people on here is that stock markets WILL rise but that the safest way to gain is via funds and ETFs.

I havent looked at pocketdoozs annual thingy lately but i think it may be up 30 % in 3/4 of a year.

Your saga in Hungary has gone on for three years or so now, but if you pay down that loan and pay the 50,000 loss over say, ten years, a hundred a week plus interest !

Investing (gambling) on the stock market and NEEDING to win is a bad position to start from, I am just pointing out how INM or AERLINGUS could in two weeks have halved your debt. Did anyone know that for sure, NO.

Regards, Rugbyman

lucky-colm

op ithink you are mad thinking of investing this in the markets they are so volitile at the moment.

my advice is to put it into the loan and lets say it reduces your repayments by €500-€600 per mth well then maybe think of investing this amt each mth or better still save €300 per mth for the rainy day and then invest the remainder. unless your a public servant no ones job is gauranteed in theese times:D

stepbar

Well if your going to be stupid, at least diversify your investment. Sticking 95k on one share is beyond mad.

pocketdooz

irish_bob wrote: »

invest the 95k in cheap stocks and shares

The obvious problem is finding these stocks.

If you pick the wrong one you are compounding your problem and will likely face a situation where you are desperatley scrambling to find "bargains" which will more than likely lose you further money.

In my humble opinion, when given the option to pay down debt, you should do this.

.

ixus

You've taken the first correct step by exiting the property market in Hungary.
Most people's natural instincts is to not take the loss. Well done on this one.

However, your loss aversion is creeping in on you again. You have a loss, you have CREDIT and, while your gut is telling you to pay down the debt, the loss aversion is telling you to make a quick buck and not take the loss.

Pay down the debt, and where possible, pay extra, reducing your credit premium. Is the debt in euros/forint?

You never know what could be around the corner in terms of job security, illness etc.

Deflation in our economy could decrease your capacity to repay in the future. Inflation could increase your capacity to repay quicker.

Remember, that credit is not yours, it's the banks. The debt is yours.

AARRRGH

I think you should put the money against the loan and try to find some other way to make cash on the side. This could be share dealing or gambling or a part-time job or whatever.

Chrysostomos

Pay off the debt, forget investing. You are asking for trouble.

displaced dub

this money is really not yours its the lenders cash.... if you had saved it then i would be of the mind to invest it as its borrowed i think you should do yourself a favour and pay down the loan.

I had a fixed mortgage that just finished i was paying €2500 per month now the repayment figure is €1800 but i told the bank to leave it at €2500, moral of the story pay your debts back as quickly as poss to avoid paying more in the long term.

irish_bob

rugbyman wrote: »

Irish Bob,
I have read of your problems, in your posts , of the appartment in Hungary( think it was) . I am now facing a potential similiar situation in another country and wonder if i could /can face taking the loss.

Regarding your situation, and the decision you have to take, both the above comments are factually true, repaying debt with available capital is wise rather than investing it for interest. the interest paid would be greater than that gained.

HOWEVER, and I am not recommending you gamble, had you not enquired on here, and put all of your 95,000 on INM two weeks ago it would now be up by 30,ooo and your debt on property would be 20,000, not 50,000.

greater gains could have been made on AERLINGUS,

Should you have done it, I dont know, would i have advised it?, not to such an extent,
The word IF is one we all plague ourselves with.

the belief of most of the conservative people on here is that stock markets WILL rise but that the safest way to gain is via funds and ETFs.

I havent looked at pocketdoozs annual thingy lately but i think it may be up 30 % in 3/4 of a year.

Your saga in Hungary has gone on for three years or so now, but if you pay down that loan and pay the 50,000 loss over say, ten years, a hundred a week plus interest !

Investing (gambling) on the stock market and NEEDING to win is a bad position to start from, I am just pointing out how INM or AERLINGUS could in two weeks have halved your debt. Did anyone know that for sure, NO.

Regards, Rugbyman

had i put that money in inm , it would have tanked , i am bad luck on legs , anyway , i decide to pay off the debt today , my manager told me my level of interest will begin to decrease in the next few years so i should pay of the remaining 50 k reasonably easy

thanks to everyone for thier advice , regarding hungary , the hungarian property boom like the rest of eastern europe was based on an entirely false premise , it was nothing but a spin off from the property boom in ireland and the uk, thier were no home grown factors which contributed to it so when our bubble burst , so did theirs , i firmly believed that no one who bought over there since 2003 made any money , sure thier were a few who got in at the start of the decade who made money , mostly be selling on to other irish people but that was long before visiting overseas property exhibitions became party of many midde class familys sunday afternoon , i had a tennant for the 1st two years but none for the last year but the whole experience was plagued with hassle , hungary is not a nice place , the people are very unpleasant and openly hold foreigners in contempt , everyone from taxi drivers to retailers to managment companies are trying to rip of westerners at every turn , the managmen companies invent add on charges by the month for the simple reason that you the paddy absinetee landlord is open to exploitation three hours away on a plane , i do not see the place as having any kind of future , its too cynical towards foreign investment , decades ago when ireland was itself poor , we courted foreign investment and openly appreciated it , this is not at all the case in hungary , i see it as a place going nowhere fast and i am glad i got out

irish_bob

stepbar wrote: »

Well if your going to be stupid, at least diversify your investment. Sticking 95k on one share is beyond mad.

never said i was planning to put all on black

rugbyman

Well IRISH BOB, you have choosen a route to take.
i Followed your journey in Hungary and the problems you encountered , and the bits of narkyness from posters about it at the time.

Lucky colm suggestion is quite good. Obviously you were able to pay the payments on 145,000 with little or no rent coming in. now you may have surplus to invest , and there never has been a better time to invest.

have a go at something, you obviuosly had the get up and go to buy something in hungary in the first place.

Good Luck

Rugbyman

lucky-colm

you have done the right thing bob you cut your losses and ran. there is alot of people who invested in the same thing as you did but now cannot sell or refuse to sell in case they are left with a debt and are foolishly holding on to the property(s) with the belief that they will rise in value. this thinking is seriously flawed because as you rightly said their boom was driven by our boom and the irish selling to the irish.

you now find yourself in a more comfortable position than you were a few mths ago and have a few options available to you which i outlined in my previous post, one other that i forgot was to stay paying at the same rate as you were and you could finish the loan in a couple of years.

onwards and upwards bob
onwards and upwards

irish_bob

lucky-colm wrote: »

you have done the right thing bob you cut your losses and ran. there is alot of people who invested in the same thing as you did but now cannot sell or refuse to sell in case they are left with a debt and are foolishly holding on to the property(s) with the belief that they will rise in value. this thinking is seriously flawed because as you rightly said their boom was driven by our boom and the irish selling to the irish.

you now find yourself in a more comfortable position than you were a few mths ago and have a few options available to you which i outlined in my previous post, one other that i forgot was to stay paying at the same rate as you were and you could finish the loan in a couple of years.

onwards and upwards bob
onwards and upwards

having watched vincent browne tonight and seen the front page of tommorrows newspapers , im begining to regret i didnt hold on to about 5 k of my 95 and stick it in shares , i expect thier will be huge gains in the next few days but any surge will be relativley short lived , btw , can you set up an account with goodboddies online and does it take long before you are up and running and ready to buy , i fancy buying around 1000 worth of shares a.s.a.p, if i have to wait a few days to get going , its probably not worth it, perhaps thier are other brokers which allow you to start up quicker ????

pirelli

rugbyman wrote: »

Irish Bob,
I have read of your problems, in your posts , of the appartment in Hungary( think it was) . I am now facing a potential similiar situation in another country and wonder if i could /can face taking the loss.

Regarding your situation, and the decision you have to take, both the above comments are factually true, repaying debt with available capital is wise rather than investing it for interest. the interest paid would be greater than that gained.

HOWEVER, and I am not recommending you gamble, had you not enquired on here, and put all of your 95,000 on INM two weeks ago it would now be up by 30,ooo and your debt on property would be 20,000, not 50,000.

greater gains could have been made on AERLINGUS,

Should you have done it, I dont know, would i have advised it?, not to such an extent,
The word IF is one we all plague ourselves with.

the belief of most of the conservative people on here is that stock markets WILL rise but that the safest way to gain is via funds and ETFs.

I havent looked at pocketdoozs annual thingy lately but i think it may be up 30 % in 3/4 of a year.

Your saga in Hungary has gone on for three years or so now, but if you pay down that loan and pay the 50,000 loss over say, ten years, a hundred a week plus interest !

Investing (gambling) on the stock market and NEEDING to win is a bad position to start from, I am just pointing out how INM or AERLINGUS could in two weeks have halved your debt. Did anyone know that for sure, NO.

Regards, Rugbyman

Good point Rugbyman.

Also it depends on how long you intend to invest. Now is a good time to day trade and to make fast money by looking to lock in profits at every opportunity.I.E If you had INM it would be better to sell and buy BOI after the nama haircut.

GTXO went up 250% today on a new business deal. These thing happen every day and if you know the right people they will let you know and bang you have made a profit. I heard about GTX0 when it was just taking off...but i have to do DD.

Day trading is the best way to make money and that means locking in profits and not sacrificing your investment so you can sell at a moments notice even at a small loss if their is something exciting happening.

lucky-colm

it would take a few days to set up an online a/c with goodbody by the time you get your paper work into them and your check clears a week would surley have passed.

i think yoiu don't have to have an a/c with share watch not to sure how you get money into them do and someone said on another thread it cost €50 per trade.

you could also walk into your local aib branch and do a transaction over the counter on the spot but i think this costs €100 per transaction.