Investing €150000

newcavanman

Im in my early 50s, self employed and, frankly doing OK moneywise, at last.
Im putting into a pension, and trying to make up for my inability to do so through my 30s and early 40s.. Between savings and an inheritance I have almost €150k to invest. I have considered getting a small mortgage and buying an apartment to let out, but I think I may have missed the property boat.
I know my pension advisor would recommend putting the lot in to my pension, but he has a vested interest, and im trying to think about some diversification to cover myself in the event of a market downturn. Any suggestions?

Rackstar

I would get some independent advice from a financial advisor. I would put my efforts into finding a well recommended advisor rather than looking at investment choices myself.

Deub

A person in finance told me that a good diversification is 30% in property, 30% in saving accounts, life insurance and 30% in stock market. I would be interested if other people agree with this ratio.
I would be in your shoes, I would do a summary of what I have and use the 150K to be close to whatever ratio is the best.
Do you know how much currently will you get per month when you retire?
If you don't think it is enough to keep your lifestyle, maybe don't invest in something risky (for an appartment, you need 1 bad tenant for things to go very wrong).

FernandoTorres

If you're a higher rate taxpayer then maxing out your pension contributions is definitely the best option. I'd be getting some independent advice on your pension product though to ensure you're getting the lowest fees and best options. Other than that it really depends on your risk appetite. Markets are looking pretty overvalued at the moment, including the Irish property market so personally I'd be waiting for a better time or just start drip-feeding it in.

wordofwarning

FernandoTorres wrote: »

Markets are looking pretty overvalued at the moment, including the Irish property market so personally I'd be waiting for a better time or just start drip-feeding it in.

What makes you think the Irish property market is overvalued? OP is looking to invest. He is not trying to speculate by buying a house today, hoping it doubles in 2/3 years. If he is looking to buy and it own it for the next 30 years, buying now makes sense. The rental yields in Dublin are still massive, which indicates property is not overvalued. OP could wait 5/6 years for property prices to fall by say 20% and possibly forgo about 50% of the properties value in rent waiting for that fall.

The litmus test of the property market being overvalued is whether the yield on a 10 year Government bond exceeds the rental yields on property. This can be seen in NYC, Tel Aviv etc at the moment. When the average yield on an Irish property is like 7.5% and Government bonds at 0.7%. Im finding it hard to believe that property is in fact over valued in likes of Dublin

wordofwarning

wordofwarning wrote: »

What makes you think the Irish property market is overvalued? OP is looking to invest. He is not trying to speculate by buying a house today, hoping it doubles in 2/3 years. If he is looking to buy and it own it for the next 30 years, buying now makes sense. The rental yields in Dublin are still massive, which indicates property is not overvalued. OP could wait 5/6 years for property prices to fall by say 20% and possibly forgo about 50% of the properties value in rent waiting for that fall.

The litmus test of the property market being overvalued is whether the yield on a 10 year Government bond exceeds the rental yields on property. This can be seen in NYC, Tel Aviv etc at the moment. When the average yield on an Irish property is like 7.5% and Government bonds at 0.7%. Im finding it hard to believe that property is in fact over valued in likes of Dublin

^^

This is the stuff people were saying during the bubble. Bad advice.

OP, don't listen to this and get professional advice.

gavmcg92

Look at self directed pensions. You will be able to invest in property and take in the rental income tax free.

ouxbbkqtswdfaw

Invest in rental property? Only if you are thick skinned. It's a mugs game. Tenants take over your property, and you have very few rights.

AndrewJRenko

newcavanman wrote: »

I know my pension advisor would recommend putting the lot in to my pension, but he has a vested interest, and im trying to think about some diversification to cover myself in the event of a market downturn. Any suggestions?

He won't have a vested interest if you are paying him for advice. For an investment of this size, pay a fee of a couple of hundred quid to an independent financial advisor to avoid any vested interest.

Pension would probably be the best option - huge tax relief, and at your age, you can probably get your hands on the money pretty much any time you like.

FernandoTorres

wordofwarning wrote: »

FernandoTorres wrote: »

Markets are looking pretty overvalued at the moment, including the Irish property market so personally I'd be waiting for a better time or just start drip-feeding it in.

What makes you think the Irish property market is overvalued? OP is looking to invest. He is not trying to speculate by buying a house today, hoping it doubles in 2/3 years. If he is looking to buy and it own it for the next 30 years, buying now makes sense. The rental yields in Dublin are still massive, which indicates property is not overvalued. OP could wait 5/6 years for property prices to fall by say 20% and possibly forgo about 50% of the properties value in rent waiting for that fall.

The litmus test of the property market being overvalued is whether the yield on a 10 year Government bond exceeds the rental yields on property. This can be seen in NYC, Tel Aviv etc at the moment. When the average yield on an Irish property is like 7.5% and Government bonds at 0.7%. Im finding it hard to believe that property is in fact over valued in likes of Dublin

The average yield you've quoted is taking into account plenty of properties which were bought when prices were rock bottom. We're now in a broken market where both prices and rents are reaching unaffordable levels. The OP wants to buy a property now, have you any examples offering a 7% yield? That's before you get into the taxes payable, maintenance fees, furnishings, time spent on it and the large risk of the value falling considerably or you getting bad tenants that take 6 months to kick out. I certainly wouldn't be going anywhere near Irish property.

650Ginge

RoboKlopp wrote: »

^^

This is the stuff people were saying during the bubble. Bad advice.

OP, don't listen to this and get professional advice.

Theres was no property bubble. House prices were expensive but affordable when we had jobs. The crash was nothing to do with house prices. It was a global recession. People lost their jobs on mass, no mortgage is affordable in that situation. No one could borrow, no one could buy, removing demand.

Loan to salary ratios aren't near international norms yet.

ZeroThreat

cryptocurrency is the only way to go.


(if you want to be a multi-millionaire, that is)

FernandoTorres

650Ginge wrote: »

RoboKlopp wrote: »

^^

This is the stuff people were saying during the bubble. Bad advice.

OP, don't listen to this and get professional advice.

Theres was no property bubble.  House prices were expensive but affordable when we had jobs.  The crash was nothing to do with house prices.  It was a global recession.  People lost their jobs on mass, no mortgage is affordable in that situation.   No one could borrow, no one could buy, removing demand.

Loan to salary ratios aren't near international norms yet.

Of course it was a bubble! As you say they were affordable while people had jobs. People lost the run of themselves, overextended and believed that the good times were there to stay. Meanwhile in reality we always have economic downturns and in this case it was a particularly bad one. Bubbles don't just burst themselves, they always require a catalyst.

BailMeOut

OP with a little reading, research and patience you can create your own portfolio without an advisor. It is not that difficult and based your situation you sound like you are smart individual.

Diversity and a trading strategy of the key thing and none of it is rocket science. Financial Advisors for the most part are no good as they are mostly just peddling some product they get commission on however if you want to get some financial advice go to someone who you pay by the hour for it. Most will do a first free consultation so you can talk to a few first and then decide.

I am in IT and I have been managing my own pension for over 15 years and it is doing really well. A few years ago I did pay an advisor to review everything and the only advice I got was to change nothing and keep doing what I was doing!

I believe everyone should manage some aspect of their own finances and always would recommend that everyone owns at least one stock as having some skin in the game makes you a lot more aware of the financial world.