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what should I do

  • 08-03-2022 10:08pm
    #1
    Registered Users Posts: 2


    Hi Everyone, Im new to this so please be patient!!

    shortly I will receive €130,000 from the sale of a house, I will have no CGT liability as I sold for excatly what I paid in 2008.

    My Question is what should I do with this money,

    My current situation is I am employed earning 40k p/a.

    I own a local rental property, currently earns 15k p/a. balance on mortgage 124k. current value 270k.. 1.75% tracker

    I own a rental property in Italy, currently rent 17k. mortgage balance 46k. value 250k.. 3.25%

    I, my wife and son live in the house we built, value 300k debt 64k.. 3% loan

    I Have no private pension or no money invested in the stock markets

    I like property but not sure its a great time to buy, stock market is maybe a more long term game, should i pay off either rental, a mix of both? if invest in the markets where??

    any advise would be great..


    Thanks

    Shaun



Comments

  • Registered Users Posts: 9,355 ✭✭✭Shedite27


    I'd invest in equities/bonds via your pension. Sounds like you've good Property exposure, and none of your debts are expensive.

    Depending on your age (guessing 40's/50's?), maxing out your pension contributions, will allow you invest 25-35% of your base salary tax free.

    I'm making up numbers, but say you earn €80k base, that allows you invest about €25k of your income tax free. The alternative is pay tax and have €12k after tax. If you need that €12k to live or mortgage repayments, take that from your €130k funds from the sale.

    So live for 11 years off the €130k sale funds, and you've invested €275k via your pension.

    You've just doubled your money.


    I'd sit down with an advisor who will take more of your scenario into account before you make any decision.



  • Registered Users Posts: 3,140 ✭✭✭ocallagh


    Agree with Shedite27 you should aim to max your pension and talk to an advisor, and just to add to that:

    Have a look at "special pension contribution" here https://www.revenue.ie/en/jobs-and-pensions/pensions/tax-relief-for-pension-contributions.aspx

    With zero contributions last year, you can make a special pension contribution and then claim tax back on that amount.

    You have plenty of exposure to property, so I would avoid further investment there. You could potentially pay off the 64k on your family home, but I think a well managed equity/bond portfolio would yield better returns long term vs the cost of the mortgage



  • Registered Users Posts: 17,858 ✭✭✭✭Thargor


    Where did you get all that property on 40k? Well done.



  • Registered Users Posts: 2 shaun66mcgee


    Ha, Im near 50 now and earned more in my early career plus made some money buying and selling properties.


    Framily home is 2 years into a 5 year fixed loan.

    I would like to pay off the house in Italy, but not sure if is the right plan, the current mortgage payment is over 600 p/m and has another 7 ish years to go? mortgage interest is the only tax deduction I would miss.

    any ideas?



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