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Next Savings Avenue

  • 02-07-2019 8:07pm
    #1
    oEmmao
    Registered Users Posts: 59 ✭✭


    so,

    our story is, (DINK)

    we have 25k in Credit Union, 5k in Peer to Peer Lending, are in the process of maxing our pensions, 25% and 20%

    one person full time employed, one person part time, owner outright on our home :p

    now what?

    what are my options for future investments/savings?

    i am not open to too much risk

    thanks :)


Comments

  • #2
    Static M.e.
    Registered Users, Registered Users 2 Posts: 3,088 ✭✭✭Static M.e.


    Nice position to be in, good for you both. This is the order that I'm working off.
    1. Pay off all debt (not sure if this has been completed) - Presume yes.
    2. 3-6 months emergency fund - 25k should be enough but you might want to increase that if you work contract work.
    3. Max retirement - in process and very important.
    4. College fund for kids - you didn't mention kids so may not be an option.
    5. Pay off home (Well done!) - yes.
    6. Invest in funds. - for low risk you could consider the State saving scheme 10 year bond.
    7. Consider giving yourselves a nice holiday, you seem to be in a great position. Well done.

    i'm sure some of the experts here will have better advice on the investing.


  • #3
    daheff
    Registered Users, Registered Users 2 Posts: 5,905 ✭✭✭daheff


    Fairly much what static says...but

    Pay off most expensive debt first, then others.

    Only pay off debt that you cant get a better return for that money elsewhere (eg stock market/investments). Also be aware that if you pay it off that could possibly be the last time you see that cash (Eg if you lost your jobs you might not be able to borrow if you need to).

    So definitely a case of having a sizeable nest egg (think 6 months expenditure for both of you) before making too many debt repayments. - Others might disagree with me, but this is my opinion. Money in the hand is better than not having it.



    other than that, well done! Wish i had my mortgage repaid.


  • #4
    Cute Hoor
    Registered Users, Registered Users 2 Posts: 1,788 ✭✭✭Cute Hoor


    Static M.e. wrote: »
    1. 3-6 months emergency fund - 25k should be enough but you might want to increase that if you work contract work.

    I'm wondering if this is a wise move.
    25k is a lot to be squirreling away for a rainy day with presumably virtually 0% return on it, for a rainy day that might never (hopefully) come. Would it not make more sense to open a credit union account and start putting away a little bit every week/month, if the emergency ever comes the CU will be only too delighted to give you a loan to cover it. Then you can use the 25k now for whatever.

    Views?


  • #5
    daheff
    Registered Users, Registered Users 2 Posts: 5,905 ✭✭✭daheff


    25k doesnt need to be immediately available.... maybe 1-2 months in liquid cash. The rest could be put into short term deposits (for a better return).. and anything else into shares etc.


  • #6
    Static M.e.
    Registered Users, Registered Users 2 Posts: 3,088 ✭✭✭Static M.e.


    Cute Hoor wrote: »
    I'm wondering if this is a wise move.
    25k is a lot to be squirreling away for a rainy day with presumably virtually 0% return on it, for a rainy day that might never (hopefully) come. Would it not make more sense to open a credit union account and start putting away a little bit every week/month, if the emergency ever comes the CU will be only too delighted to give you a loan to cover it. Then you can use the 25k now for whatever.

    I know what you mean however the idea is that you never have to take a loan again. You pay for everything out of your savings and you live within your means.

    The 25K, or 3-6 months expenses, is there as a security blanket for you and your family so that you know that;

    A) You learn how to save a sizeable amount of money - until I started I didn't think that I could.
    B) You know how long and hard it was to save that money so you don't spend it on frivolous activities - shiny new cars, 4K Tv, new gadgets.
    C) If there is an emergency then you don't have to take another loan, you cover the cost with the emergency fund and then start saving again until you reach your emergency fund number (25K - the number is different for everyone).
    D) Finally, it gives you financial freedom which allows you to now redirect your learned savings from your emergency fund into maxing your retirement fund before you move on to paying down your house etc.

    The order that I posted 1 - 7 is important to follow. I didn't post the very first step as the OP was way past it but the first step is just to save €1000 as your first emergency fund. Hope all the above doesn't sound preachy, it's not meant to be, it is just a way to think about your own finances and living within your means so that you end up with more money in your bank account. I started late to this party but I find now that I now know where my money is going where as previously I was just living paycheck to paycheck...The reality is that I still have loans but I am far more intentional with my money.


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