60k Savings - what to do with it?

Jemser0410

Through a redundancy, some inheritance and savings I have a lump sum of 60k. I also have a secured loan against another 20k I have which I am paying off at a rate of 1k a month so in another 15 months will have that 20k freed up too.

What I'm wondering is how I should invest it? I already own my family home which is on a variable rate mortgage with AIB at a rate of 3.1%. There is 147k owing on it over another 25 years (was 170k over 30 years, I went with a long term as its family home and I wasn't in as good a financial situation when I took it out).

I also have an investment property which was 200k over 20 years. There is 11 years left on it and 117k. It is easily in positive equity as another house in the same estate is currently for sale at 220k. Interest rate is tracker rate.

It brings a lot of headaches but another property is a runner. I can buy a good 4 bed house like the one I already have in the local town Virginia for 220k. It is fast becoming a commuter town to Dublin and prices went up by 13.8% in Cavan last year.

I know people may not want to advise here but that's another question I have, who could I approach to get decent advice re my situation and what to do? I've been winging it myself up to now.

Amirani

I'd personally probably reduce leverage somewhat, not on the tracker though obviously. What sort of rate are you paying on the 20k loan?

I'd be weary about over exposing yourself to Irish property too, so I'd aim to diversify rather than buy a 3rd property.

What's your pension situation like?

JackieChan

I would advise to have a holistic approach to your finances and question your current position.

1) What interest rate are you paying on the 20k. If you pay this off now, you are effectively getting this rate for the 20k.
2) Do you have a rainy day fund of 3-6 mths(depending on your situation)?
3) How is your pensions? One option is to place the remainder into kick starting this or giving it a boost.
4) Make a regular payment to your pension and medium/long term savings goal.

Professional advice > Online advice from strangers.

Good luck.

Jemser0410

Amirani wrote: »

I'd personally probably reduce leverage somewhat, not on the tracker though obviously. What sort of rate are you paying on the 20k loan?

I'd be weary about over exposing yourself to Irish property too, so I'd aim to diversify rather than buy a 3rd property.

What's your pension situation like?

The rate on the 21k loan is very low as its a secured loan. It was originally a 5 year loan where I am paying 366 a month so I'd end up paying 59 instalments of 366 = 21,594. I am paying it off in 20 months though as paying 1k a month so will pay a minimal amount of interest.

RoboKlopp wrote: »

Professional advice > Online advice from strangers.

Good luck.

I agree and that's why I have asked at the end of the post where should I seek professional advice.

Amirani wrote: »

I'd personally probably reduce leverage somewhat, not on the tracker though obviously. What sort of rate are you paying on the 20k loan?

I'd be weary about over exposing yourself to Irish property too, so I'd aim to diversify rather than buy a 3rd property.

What's your pension situation like?

Pension is pretty much non existent but I do have two kids and I'd like to try and build something towards their futures too. I'm still quite young at 33 and started a pension last year where I save 150 a month.

BrokenArrows

Id definitely put a portion of it into your pension.

If you put 10k into your pension now an average return of 6% per year would return to you around 60k in 30 years. You will also get tax relief on this 10k so it would actually be more (assuming you can make 6% on average which should be easy enough).

Personally i would be inclined to put 30k into your pension. You need to catch up a bit since you have left it pretty late to start the pension and are only putting in 150 a month at the moment.

Jemser0410

BrokenArrows wrote: »

Id definitely put a portion of it into your pension.

If you put 10k into your pension now an average return of 6% per year would return to you around 60k in 30 years. You will also get tax relief on this 10k so it would actually be more (assuming you can make 6% on average which should be easy enough).

Personally i would be inclined to put 30k into your pension. You need to catch up a bit since you have left it pretty late to start the pension and are only putting in 150 a month at the moment.

I wouldn't see it that I have left my pension late. I bought an investment property that I'll have paid off by the time I'm 44. That to me was better than investing in my pension. I'm only 33 so have another 30 years of working. Some of my friends have only recently settled into full time jobs or finished college!

My plan was to go big on my pension from age 35 to be honest.

deathtocaptcha

Jemser0410 wrote: »

I already own my family home

There is 147k owing on it over another 25 years

So you don't own the home then... the bank own you until you pay every last cent of that debt off.

I also have an investment property... There is 11 years left on it and 117k.

So in total, you're €264,000 in debt and wondering what you should do with €60k in savings?

If it were me, I'd sell the investment property (strike while the iron is hot), put any profit towards you get paying off the mortgage on the family home, plus put a large chunk of that €60k in to paying off mortgage on the family home too.

I'd invest the rest in to ICNX which is a cryptocurrency index fund, then forget about for 5-10 years.

Thargor

deathtocaptcha wrote: »

So you don't own the home then... the bank own you until you pay every last cent of that debt off.



So in total, you're €264,000 in debt and wondering what you should do with €60k in savings?

If it were me, I'd sell the investment property (strike while the iron is hot), put any profit towards you get paying off the mortgage on the family home, plus put a large chunk of that €60k in to paying off mortgage on the family home too.

I'd invest the rest in to ICNX which is a cryptocurrency index fund, then forget about for 5-10 years.

Jaysus!

Deub

Like said another poster it would be good to diversify.
A rule that I've seen several times is: 1/3 in liquid asset (fund for rainy days that you can access immediately), 1/3 in property and 1/3 invested long term (life insurance,etc).

Prezatch

Thargor wrote: »

Jaysus!

Hahaha, it was all reading very mature and prudent until the crypto bombshell was dropped! :eek:

Jemser0410

Jemser0410 wrote: »

Through a redundancy, some inheritance and savings I have a lump sum of 60k. ...............I already own my family home which is on a variable rate mortgage with AIB at a rate of 3.1%. There is 147k owing on it over another 25 years.......................

At that rate you'll pay just over €60k in interest over the next 25 years.
If you overpaid your residential mortgage by €500/month you'd reduce that interest payment to €28k and have the mortgage paid off in 12 years as opposed to 25 years.

You would than have no residential mortgage when you are 45.

I think buying a 3rd property in Virginia or anywhere near it is lunacy at the moment. Look at the prices compared to 3 or 4 years ago, you've missed that boat IMO and you have enough of your money in property.

Someone else suggested to sell the investment property that you own €117k on that might fetch €220k, not a bad idea potentially but probably not a runner for you as you seem property focussed.

Anyway, if I was you I'd consider overpaying the residential mortgage by either €500/month (or more) or maybe throw €20k at it now and keep up your existing payments.

At 33 regardless of what your friends are up to €150/month into a pension is really low, going big at your pension from 35 on sounds great and I do that myself but I'm throwing close to €20k/year into mine. Now I hope to have the option to retire very early.

So, I'd suggest, overpaying residential mortgage, getting an idea of what you need to do with a pension to get what you want/need back out of it in the older years and throw the bulk of the €60k somewhere safe while you consider all options

And don't buy a 3rd property.

Jemser0410

Augeo wrote: »

At that rate you'll pay just over €60k in interest over the next 25 years.
If you overpaid your residential mortgage by €500/month you'd reduce that interest payment to €28k and have the mortgage paid off in 12 years as opposed to 25 years.

You would than have no residential mortgage when you are 45.

I think buying a 3rd property in Virginia or anywhere near it is lunacy at the moment. Look at the prices compared to 3 or 4 years ago, you've missed that boat IMO and you have enough of your money in property.

Someone else suggested to sell the investment property that you own €117k on that might fetch €220k, not a bad idea potentially but probably not a runner for you as you seem property focussed.

Anyway, if I was you I'd consider overpaying the residential mortgage by either €500/month (or more) or maybe throw €20k at it now and keep up your existing payments.

At 33 regardless of what your friends are up to €150/month into a pension is really low, going big at your pension from 35 on sounds great and I do that myself but I'm throwing close to €20k/year into mine. Now I hope to have the option to retire very early.

So, I'd suggest, overpaying residential mortgage, getting an idea of what you need to do with a pension to get what you want/need back out of it in the older years and throw the bulk of the €60k somewhere safe while you consider all options

And don't buy a 3rd property.

I think that is good advice. I had thought about paying 500 per month extra off the family mortgage and think that could be the best option.

It also means if my situation did change, I can just stop the extra repayment.

Re selling the investment property, prices in Cavan increased by 13% last year and I do believe Virginia is going to be the next big commuter town as it is now only 45 minutes drive from Blanch or the M3 Parkway, where the train will have you in town in less than 40 minutes.

BorneTobyWilde

Considering the push towards EV cars would it be wise to invest in the electricity sector.

dubrov

deathtocaptcha wrote:

If it were me, I'd sell the investment property (strike while the iron is hot), put any profit towards you get paying off the mortgage on the family home, plus put a large chunk of that €60k in to paying off mortgage on the family home too.

deathtocaptcha wrote:

I'd invest the rest in to ICNX which is a cryptocurrency index fund, then forget about for 5-10 years.

So ultra low risk, ultra low risk then maniacal high risk.

Love it.

deathtocaptcha

dubrov wrote: »

So ultra low risk, ultra low risk then maniacal high risk.

Love it.

It's not maniacal high risk if you're talking about a long term investment. Betting on one cryptocurrency to succeed long term is relatively risky, whereas betting on what is essentially an index fund on top cryptos is a safer move.

If you understand the technology, you'll know that cryptocurrency is not risky in the slightest. It's the safest, cheapest, fastest, most efficient way to transfer & store value digitally. Blockchain technology also provides undeniable proof of funds & transaction history which has use cases far beyond money.

In my opinion you're taking a bigger risk betting against it which is what you're doing by ignoring it or scoffing at it. Surely it's worth at least a few % points of a diversified portfolio if you actually believe in diversification.

Yes it's wildly volatile and unregulated but that's slowly changing. The reality is we're still in the very early stages of this technology and like any technology that has gone before it, it will have people laughing at it, writing it off as a niche / geeky thing, questioning it's value and finally starting to accept it as something that 'maybe' has value before they start using it and interacting with it on a daily basis and eventually being first to complain when the service goes down or isn't working as expected.

Simplest example of how this is going to change the world: Right now it takes days to process a bank transfer. It can only be done Monday-Friday and not on Bank Holidays. There's zero reason why this can't be automated and done in seconds, 24/7. It will happen thanks to cryptocurrency.

Ironically the way you invest will also change. All these middlemen taking cuts for doing feck all? Gone. They'll be the travel agents of the future. Wiped out by protocols, algorithms and decentralized platforms.

Thargor

deathtocaptcha wrote: »

It's not maniacal high risk if you're talking about a long term investment. Betting on one cryptocurrency to succeed long term is relatively risky, whereas betting on what is essentially an index fund on top cryptos is a safer move.

If you understand the technology, you'll know that cryptocurrency is not risky in the slightest. It's the safest, cheapest, fastest, most efficient way to transfer & store value digitally. Blockchain technology also provides undeniable proof of funds & transaction history which has use cases far beyond money.

In my opinion you're taking a bigger risk betting against it which is what you're doing by ignoring it or scoffing at it. Surely it's worth at least a few % points of a diversified portfolio if you actually believe in diversification.

Yes it's wildly volatile and unregulated but that's slowly changing. The reality is we're still in the very early stages of this technology and like any technology that has gone before it, it will have people laughing at it, writing it off as a niche / geeky thing, questioning it's value and finally starting to accept it as something that 'maybe' has value before they start using it and interacting with it on a daily basis and eventually being first to complain when the service goes down or isn't working as expected.

Simplest example of how this is going to change the world: Right now it takes days to process a bank transfer. It can only be done Monday-Friday and not on Bank Holidays. There's zero reason why this can't be automated and done in seconds, 24/7. It will happen thanks to cryptocurrency.

Ironically the way you invest will also change. All these middlemen taking cuts for doing feck all? Gone. They'll be the travel agents of the future. Wiped out by protocols, algorithms and decentralized platforms.

I agree with you on the potential of cryptocurrency, the problem is its so easy for a government or corporation or individual to set up their own blockchain for a specific purpose, all of the current cryptos have a strong possibility of being made completely obsolete by future developments, its a crazy high risk field to bet savings on, I have a good few BTC and ETH but its play money I can afford to lose, nobody knows whats going to happen.

deathtocaptcha

Thargor wrote: »

I agree with you on the potential of cryptocurrency, the problem is its so easy for a government or corporation or individual to set up their own blockchain for a specific purpose, all of the current cryptos have a strong possibility of being made completely obsolete by future developments, its a crazy high risk field to bet savings on, I have a good few BTC and ETH but its play money I can afford to lose, nobody knows whats going to happen.

If you agree on potential of cryptocurrency, then surely you agree a passively managed index fund of top cryptos makes sense as an investment? It's basically a bet that the total crypto market cap will increase over time, which imo is a no brainer as a long term (5 years+) investment.

Thargor

Nope, that ETF is made up of junk imo, the cryptocurrency that wins and starts being actively used by the man in the street for day to day transactions probably hasn't even been written yet.

deathtocaptcha

Thargor wrote: »

Nope, that ETF is made up of junk imo, the cryptocurrency that wins and starts being actively used by the man in the street for day to day transactions probably hasn't even been written yet.

That 'junk' is up 20% since I initially recommended it a week ago. People will say those sort of gains aren't sustainable and signs of a bubble etc... they've been saying it for years. And like a stopped clock, they are right and will continue to be right on occasion but when you're dealing with new technology that will change the world, you can expect growth, adoption, industry buy-in to be exponential over time.

indeq

Pensions, what about when the gov comes to raid them again?

Thargor

deathtocaptcha wrote: »

That 'junk' is up 20% since I initially recommended it a week ago. People will say those sort of gains aren't sustainable and signs of a bubble etc... they've been saying it for years. And like a stopped clock, they are right and will continue to be right on occasion but when you're dealing with new technology that will change the world, you can expect growth, adoption, industry buy-in to be exponential over time.

Yeah and its up zero since this day last month, plus I see a 3% management fee plus exit fees plus currency fees. It might be a lot more profitable to just copy their weighting yourself with your own account on an exchange, isnt that the whole point of crypto? Cut out the middleman?

Its pure gambling, my ETH are 120% up, they were 25% down after I bought them at one stage, these swings occurred in a matter of weeks, its fine to recommend this kind of stuff in a gambling or Bitcoin thread and the best of luck with it but this is someone asking what to do with their life savings.

deathtocaptcha

Thargor wrote: »

Yeah and its up zero since this day last month, plus I see a 3% management fee plus exit fees plus currency fees. It might be a lot more profitable to just copy their weighting yourself with your own account on an exchange, isnt that the whole point of crypto? Cut out the middleman?

Its pure gambling, my ETH are 120% up, they were 25% down after I bought them at one stage, these swings occurred in a matter of weeks, its fine to recommend this kind of stuff in a gambling or Bitcoin thread and the best of luck with it but this is someone asking what to do with their life savings.

Investing in any type of asset / currency / stock is gambling. Nothing guarantees a positive ROI over any length of time.

The guy is asking what to do with €60k when he owes more than 4 times that to other people. Which is why my first response was "pay off all debt first".

Crypto is only a risky investment if you need the cash in the short term, in which case you shouldn't be investing it in anything, period. But if you have anything left over after clearing all debt and want a long term investment punt, crypto should be right up there imo. In the very near future there'll also be crypto assets who's value is pegged to gold / silver / metals and even things like the SDR currency basket so there'll be options to reduce volatility / exposure to the likes of Bitcoin without ever having to cash out. All of that will mean an increase in trading activity, transactions, protocols etc... which means the whole space is just going to grow exponentially over time but I'll stop talking because I've just realised I'm wasting time and annoying everyone by sounding like a crypto door to door sales guy. I'm not, I'm just a good samaritan and hopefully time will prove it.