Personal Bond. Leave it or draw it?

agentcalm

Hi all. Nooobie here and I know NOTHING about investing. So whats the beef with newbie?
This is a long scenario guys so my apologies in advance.
Well a few years back the company i worked for lost a contract and a new company came in. The new guys signed us employees over to them. A guy in the pension firm told me i didnt have to sign over the pension but could put it in a personal bond and simply start a new pension with the new company. I took this advice and now have about 60K sitting in this bond. And of course its doing absolutely nothing there. Because I am now over 50 I can draw this down and get really really drunk. And i would probably do something that stupid. But what could i do with this money to make me money instead of just letting it sit there? Can I say at the outset that I am not interested in anything that involves putting money somewhere for X number of years. A couple of reasons why.
1: These deposit accounts etc only seem to pay about 3%.
2: At 52 I dont have time on my side to wait 5 years to get my money.
3: And most importantly, I am going under at a rate of knots and need to see my money making more money on a monthly basis.
Does my situation sound familiar to any of you? USC, PRSI, Mortgage on a variable which keeps going up, property tax, 700 a year road tax on the car, credit card maxed out at 5 grand and a wonderful water charge on the way. Yep, guess there's a few of you out there in my position. So as you can see, some deposit account or government bond scheme for 5 years is a non runner.
Is buying and trading shares the way to get your money bringing in some badly needed funds on a regular basis? There's a crowd called GetWiseFX currently advertising such a system. There is a thread on this company already guys so i wont go into here.
Does the buy - buy - sell -sell like you see in the movies involve constantly being in front of your computer watching the ticker tape? sorry this so long guys. Thanks guys .

SBarrett

When you say "just sitting there" what do you mean? Your money in the bond is invested somewhere and has been working for you. Or have you invested it in cash and are getting no return?

If you cash it in, your options are limited

1. Take tax free cash based on a % of salary and purchase an annuity with the remainder.
That just leaves the tax free cash to invest.

2. Tax 25% as tax free cash and invest remainder in AMRF
If you don't have a guaranteed income of €12,700, you have to put the 75% of your fund into an investment policy under you are 75. You can only access the growth.

It sounds to me that you are looking for day trading in the hope of making big bucks to get you out of a hole? As you don't really know what you are doing, it's likely that you will lose all of your money, unless you are lucky. But rely on luck isn't really a strategy to start off with, Maybe keep the fund where it is for the moment?

Steven

agentcalm

hi Steven. Thanks for the reply. No i haven't invested any of it to be honest. i guess what i mean by sitting there is that it's probably just earning very little in terms of interest rates.
You're right, i am badly stuck for income and my salary is not covering all the various taxes etc. A pay rise would actually put me into the next tax bracket so I'd end up with even less money. You're also correct when you mention luck. I dont want to rush in and just draw it down because it could all get lost or spent very easily. But i need to look into what kind of options are out there that i should learn about. You mentioned a thing called "day trading" so maybe that's what i should start to learn about. Or find a financial company that can do this even though it would mean paying them a fee.
Thanks again for the tips.

RainyDay

agentcalm wrote: »

hi Steven. Thanks for the reply. No i haven't invested any of it to be honest. i guess what i mean by sitting there is that it's probably just earning very little in terms of interest rates.

For a start, you need to be clear about where the money currently is. If your money is in a buy out bond, it is most likely being invested in an equity fund, so it is probably earning significant return, particularly over the past few years as the markets recovered. Check the paperwork or get onto the broker and find out what fund the money is invested in for a start. Check what fees apply to the current fund, and what your options are to moving to a different fund.

agentcalm wrote: »

You're right, i am badly stuck for income and my salary is not covering all the various taxes etc. A pay rise would actually put me into the next tax bracket so I'd end up with even less money. You're also correct when you mention luck. I dont want to rush in and just draw it down because it could all get lost or spent very easily. But i need to look into what kind of options are out there that i should learn about.

Ask them about options for early retirement too, which would allow you to draw down some of the money early, though this could put you into the next tax bracket.

agentcalm wrote: »

You mentioned a thing called "day trading" so maybe that's what i should start to learn about.

Really? You might as well put it all on the 2.35 race at Listowel tomorrow. It's just gambling.

agentcalm wrote: »

Or find a financial company that can do this even though it would mean paying them a fee.

If it is invested in an equity fund, that is exactly what is happening. You are paying a fee to an investment company to manage your money.

agentcalm

Thanks Rainy.
Actually, this evening this is exactly what I was doing. Getting out all the paper work on the pension so i can call the company and get the latest figures etc.
Yeah the early retirement is something I couldn't afford to be honest but good point you make on asking about moving it or even some of it to other funds. Apparently as you get older like me, they move your money into less risky funds.
What you say about putting it on a donkey is probably the advice i really need. Does anyone make good money on that sort of thing or is it only for those who are already rich and can afford donkey races? i sent a mail to Davy select and they said they dont deal with anyone with less than 100K. Well, correction, they wont advise anyone with less than 100. Anything less than that and you're on your own. That's a great help. I pick the donkey and they put my money on it for me. And i really wanna do that because?