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Where to invest €150k

  • 05-01-2022 5:03pm
    Registered Users Posts: 610 ✭✭✭

    Hi all,

    Ill be coming into the above amount shortly, post CGT.

    Current situation:

    50 years old. Employed in private sector, reasonably sure of continued employment for next 5 years. Looking to take early retirement 7 or 8 years from now.

    Approx 800k in the markets - have been returning on average 18% annualised since 2009 - but this fund is closed to new contributions. Plan to change investment classes to lower risk, lower yielding in 2 years. Expect this to hit 7 figure in the next 3 years.

    2 rental properties, no mortgage, grossing approx 33k pa.

    Cash on hand €100k.

    Have mortgage balance on home of 95k, but on a tracker rate interest at 1.1%

    Upcoming expenses: potential house repairs, potential car replacement.

    I'm not interested in any more real estate.

    It hard to justify paying off the home mortgage at the low rate, but not really sure where else to put the money.

    I'm averse to Crypto and individual stocks - much prefer wide ranging mutual funds.

    Part of me says to pay off the mortgage, and install significant solar PV to offset future energy bills, but I realise this may not be best use of funds.

    Would love to hear any inputs.


  • Registered Users Posts: 1,915 ✭✭✭Andrea B.

    Would bank be open to a favourable reduction in outstanding mortgage to get tracker off their books?

  • Registered Users Posts: 2,416 ✭✭✭embraer170

    You're 50 in a secure job, 800k in the markets returning 18%, 2 rental properties grossing more than what many earn, a house almost paid off, and 100k cash in the bank. You haven't mentioned your family situation and potential children education costs, but wouldn't start thinking of even earlier retirement? From watching my parents and their generation, they were infinitely healthier and better able to do things in their 50s than their 60s.

    You won't be able to take your wealth to the grave.

    Now to answer your question. Have you looked at Fundsmith?

  • Moderators, Category Moderators, Home & Garden Moderators, Recreation & Hobbies Moderators, Social & Fun Moderators Posts: 22,284 CMod ✭✭✭✭Pawwed Rig

    Pile the cash into a pension if you haven't maxed it out. Maximise your annual contributions. I know you said you were averse to crypto but a small amount of bitcoin would be a food idea imo (2 or 3%).

  • Registered Users Posts: 2,554 ✭✭✭Irish_rat

    I think your situation is very healthy and wouldn't be a bad idea to pay off the mortgage just for peace of mind.

    The returns in the stock market would be much larger than the 1.1% but I think you have enough assets to cover you long term.

    Worth increasing the pension contributions also as mentioned.

  • Posts: 0 [Deleted User]

    Fair play to you on your wealth accumulation.

    It's worth noting that ECB rates might rise this year and the next, due to inflation getting out of hand.

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  • Registered Users Posts: 610 ✭✭✭MakersMark

    Thanks all for your comments.

    I want to be as diversified as possible, which although hard work has worked for me in the long run. Scary times though back in 2008/9, when I had 14 years work and savings almost entirely wiped out.

    There's a lot to think about. Would anyone have a recommendation of a Financial Advisor?

  • Registered Users Posts: 854 ✭✭✭erlichbachman

    Way too healthy a financial situation, go out and blow the 150k lad, you'll thanks me later

  • Registered Users Posts: 12 Healy92

    If you want diversification, could potentially looking into an accumulating ETF.

    Degiro allows you to invest in some of these without commission

  • Registered Users Posts: 20,410 ✭✭✭✭dxhound2005

    This calculator will work out how much can be saved by increasing monthly mortgage payments, or paying in a lump sum. Also how many years would be taken off the loan. All providing of course, that the lender will allow it, and any charges.

  • Registered Users Posts: 6,892 ✭✭✭circadian

    I wouldn't be investing these sums through Degiro. I used them years ago and they were great, but the last year I've had serious issues withdrawing funds (currently 15k in there that I can't get out and they're silent on the issue).

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  • Moderators, Category Moderators, Home & Garden Moderators, Recreation & Hobbies Moderators, Social & Fun Moderators Posts: 22,284 CMod ✭✭✭✭Pawwed Rig

    A mortgage rate is what? 2 or 3%. A pension contribution is an immediate gain of 40% with any subsequent uplift tax free.

    Given that the OP is 50 pension age is not that far in the future.

    If he can make more than the mortgage rate anywhere else then he shouldn't pay off his mortgage

  • Registered Users Posts: 20,410 ✭✭✭✭dxhound2005

    Their rate is a tracker of 1.1%, and €95K to pay off. The unknown factor is the time remaining on the mortgage. Increasing monthly repayments and/or paying in lump sums is not just about matching the 1.1% against other alternatives. It will reduce the term of the mortgage, and bring down the overall cost. No harm in having a look at the figures anyway.

  • Registered Users Posts: 6,892 ✭✭✭circadian

    I get a message a day or two later saying the payment failed. The most I've gotten out of support is "not sure why" and that they're investigating it.

    I've since asked them to just close the account and send me a cheque for the amount.

    Considering going to regulators to get it resolved.

  • Registered Users Posts: 4,793 ✭✭✭enricoh

    We need to hook up- call me!!

    I'd buy a 1980's Ferrari n stick it in the garage. It'll look well n appreciate in value!

    I know a lad who buys new Lamborghini n Ferrari's etc. Some premier league player , sheik etc See's one n wants one, only problem is there's a 12 month waiting list. That's where this guy comes in, it'll be delivered in the morning for 100k extra. A day or twos wages for the footballer so a non issue.

  • Registered Users Posts: 1,024 ✭✭✭RainInSummer

    How does he get around the year long waiting list?

  • Registered Users Posts: 5,828 ✭✭✭daheff

    presume hes bought ahead a year ago and is selling to desperate footballers who don't want to wait the year.

  • Registered Users Posts: 10,894 ✭✭✭✭phantom_lord

    I'd recommend this:

    i don't think it makes sense to reduce mortgage. Just invest the money in the broad market and think about your most valuable asset, time.

  • Registered Users Posts: 1,522 ✭✭✭older by the day

    I was thinking of investing maybe around 20k. My first time. I was going to back the 3 Irish banks, aib, boi, tsb. Then glanbia, Kerry group, Smurfit kappa. Not making anything in the bank. I saw the degiro adverts and taught about joining. But read some bad reviews about there app. First time advice? List my mistakes

  • Registered Users Posts: 1,615 ✭✭✭El Tarangu

    If anything happened in Ireland, your goose would be cooked -what happens if Sinn Fein are in the next government and start 'taking on "big corporations"'?

    You were on the right track with DeGiro - if you have hesitations about them, there are others (Keytrade is a bank, for example).

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  • Registered Users Posts: 1,522 ✭✭✭older by the day

    thanks el. Sinn Fein will probably fall into line when they have to balance a budget. I know it's the finance section but I don't think there is any party fancy joining with them. Would I be better off maxing my pension every year and maybe looking out for a good value property. And borrow say 100k and let it out. I have savings credit union 0.00 interest and two other bank accounts the same it's fairly thankless

  • Registered Users Posts: 2,045 ✭✭✭silver2020

    Why does this ridiculous question come up every now and then?

    Banks are borrowing at zero or negative interest rates.

    The tracker is 1.1%

    It is performing and the mortgagee is as good a risk as you get

    It would be utterly stupid for a bank to offer even one cent off.

    For about 6 months back in 2011 banks were paying high interbank interest rates which were higher than some low trackers.

    The ECB intervened and started to buy bonds from banks at very low rates and from that point in all trackers were profitable.

    That's over ten years ago!

  • Registered Users Posts: 2,045 ✭✭✭silver2020

    In the op's case I'd probably look at paying off the mortgage.

    Usually I'd say max pension, but op is in a very good place for the twilight years.

    Whilst the investment argument is not great, the psychological argument is compelling knowing that you 100% own the house.

    It also frees up a monthly amount that can add luxury to the op's lifestyle.

    Sometimes you need to start enjoying yourself

  • Registered Users Posts: 1,915 ✭✭✭Andrea B.

  • Registered Users Posts: 610 ✭✭✭MakersMark

    There's no way I'd be taking a loan out to buy an investment property. On the contrary, I'm getting out of properties - I'm only keeping the 2 I have as the mortgages are cleared.

    I'm a firm believer in 3 income streams (historically for me that been a job, rental income and diversified market income), but there's simply too many rules stacked against a small landlord now to even contemplate small buy-to-lets.

  • Registered Users Posts: 1,615 ✭✭✭El Tarangu

    Agree with the previous poster - investing all of your money (plus some additional debt, to boot) and putting it all on a single bet is an even worse idea. Take a look at some of the threads in the Accommodation & Property of landlords trying to get non-paying tenants out of their investment for over a year.

  • Registered Users Posts: 310 ✭✭FromADistance

    I'd have to disagree... a mortgage at 1.1% is not going to cost the OP a major amount of interest over the remaining term. If I had 100k at 50, I would be looking at ways to maximise reducing my tax bill such as AVC's or maybe invest in an EII fund. Keeping a certain amount of unrestricted cash is never a bad idea either. But I definitely would not pay off the mortgage (well certainly not entirely anyhow).

  • Registered Users Posts: 1,665 ✭✭✭uli84

    Sorry if that’s a stupid question-what is an Ell fund?

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  • Moderators, Category Moderators, Home & Garden Moderators, Recreation & Hobbies Moderators, Social & Fun Moderators Posts: 22,284 CMod ✭✭✭✭Pawwed Rig

    Basically a business start up investment. It is not something I would recommend too often as a number of clients have had issues with them where Revenue disallow them for arbitrary reasons but where they work it is a good tax saving.