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I've sold my house, not buying another yet, what would you do with the money?

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  • 31-05-2020 7:15pm
    #1
    vmb
    Registered Users Posts: 140 ✭✭


    As the title says I did sell my Dublin house a few months ago. Now I am not finding anything interesting in the market and am getting quite nervous with so much money in the bank. I hope to find something interesting before christmas, so I don't feel comfortable investing the money in the current environment. Bonds would be an option but the current yield is awful.

    So I'm paying 1650 e pm in rent while and all my money is sitting in different saving accounts (0.01% interest). My savings are about 350k and the house I'm looking for would be between that and 450k

    What I do not want is buying something I do not like and being unable to sell it if the economic situation worsens significantly.

    TLDR: I have an important amount to invest and no risk tolerance and don't know if having the money in saving accounts is my best option.

    Am I crazy? I'm really bearish about the current economic situation in the medium/long term.
    Tagged:


Comments

  • Options
    #2
    bfa1509
    Registered Users Posts: 1,022 ✭✭✭bfa1509


    vmb wrote: »
    Now I am not finding anything interesting in the market and am getting quite nervous with so much money in the bank.

    Having so much money in the bank would make me the complete opposite of nervous.

    Why not have the money ready for a potential drop in house prices?


  • Options
    #3
    sasta le
    Banned (with Prison Access) Posts: 1,586 ✭✭✭sasta le


    Buy something cheap and basic and keep a lump of money to live.
    Your nervous about 350k in the bank?


  • Options
    #4
    bilbot79
    Registered Users Posts: 1,980 ✭✭✭bilbot79


    Reading comments from Citi, your cash position is enviable.

    https://www.google.com/amp/s/www.irishtimes.com/business/citigroup-warns-that-markets-are-out-of-step-with-reality-1.4266932%3fmode=amp

    Wait for the big drop them buy some stocks


  • Options
    #5
    Atlantic Dawn
    Registered Users Posts: 81,154 ✭✭✭✭Atlantic Dawn
    M


    Buy nothing, wait 18 months and buy complete cheap. Circulate your 350k in 4 banks as some could fold.


  • Options
    #6
    sasta le
    Banned (with Prison Access) Posts: 1,586 ✭✭✭sasta le


    Atlantic Dawn wrote: »
    Buy nothing, wait 18 months and buy complete cheap. Circulate your 350k in 4 banks as some could fold.

    You think the banks are in danger?


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  • Options
    #7
    Atlantic Dawn
    Registered Users Posts: 81,154 ✭✭✭✭Atlantic Dawn
    M


    sasta le wrote: »
    You think the banks are in danger?


    Irish banks yes. I see the government additionally running some class of a retained capture of deposits on them shortly, similar to Cyprus and Greece during the last recession. Every angle is being looked at.


  • Options
    #8
    Vestiapx
    Registered Users Posts: 985 ✭✭✭Vestiapx


    Atlantic Dawn wrote: »
    Buy nothing, wait 18 months and buy complete cheap. Circulate your 350k in 4 banks as some could fold.

    Step one is unquestionably this. Split your cash into four banks with less than 100k in each so you are covered under the deposit scheme.

    Next make your position known to estate agents in your preferred purchasing area and try to find out who is selling the distressed property

    Don't try to catch the bottom there is actually competition there the trick is to wait till about three months above the bottom and negotiate at that point. You should be looking to buy at 80 percent of build cost plus 40 percent of site cost.

    The German banks protect the euro against hyper inflation but be aware that you should be buying on the down turn before any quantitive measures erode your pot. I'd be thinking you should be moving towards closing next March.

    Good luck and hold fast you are in an excellent position.


  • Options
    #9
    sasta le
    Banned (with Prison Access) Posts: 1,586 ✭✭✭sasta le


    All good advice above be as ever who knows.You dont have money worries so a grwat thing to have off your back


  • Options
    #10
    Jim2007
    Moderators, Business & Finance Moderators Posts: 9,988 Mod ✭✭✭✭Jim2007


    vmb wrote: »
    As the title says I did sell my Dublin house a few months ago. Now I am not finding anything interesting in the market and am getting quite nervous with so much money in the bank. I hope to find something interesting before christmas, so I don't feel comfortable investing the money in the current environment. Bonds would be an option but the current yield is awful.

    So I'm paying 1650 e pm in rent while and all my money is sitting in different saving accounts (0.01% interest). My savings are about 350k and the house I'm looking for would be between that and 450k

    What I do not want is buying something I do not like and being unable to sell it if the economic situation worsens significantly.

    TLDR: I have an important amount to invest and no risk tolerance and don't know if having the money in saving accounts is my best option.

    Am I crazy? I'm really bearish about the current economic situation in the medium/long term.

    If you are not willing to have the money locked down for at least five years, then the bank is probably the best option.


  • Options
    #11
    Vestiapx
    Registered Users Posts: 985 ✭✭✭Vestiapx


    sasta le wrote: »
    All good advice above be as ever who knows.You dont have money worries so a grwat thing to have off your back
    All my posts should come with the disclaimer "this is my opinion , please do your own research,"


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  • Options
    #12
    Mad_maxx
    Registered Users Posts: 13,505 ✭✭✭✭Mad_maxx


    post office max

    deposit account in all the bank accounts you need to the max

    prize bonds

    short term government bonds assuming irish one year bonds are not below zero ?

    sit back


  • Options
    #13
    JustAThought
    Registered Users Posts: 5,323 ✭✭✭JustAThought


    No risk wanted and cash rich, but burning 1,600 a month on rent????

    Reevaluate the renting and find somewhere half that price - even of you have to share or take a hit on a commute and petrol costs. That is the best immediate thing you can do for risk free cast appreciation. It will also allow you to breathe and take your time while you wait to see what the market is doing .


  • Options
    #14
    vmb
    Registered Users Posts: 140 ✭✭vmb


    Thank you all, I've already split my money into 4 different bank accounts. My main concern is helicopter money or an aggressive form of quantitative easing from the ECB.

    I'll stay vigilant. I'm monitoring inflation indicators and have considered move the money to an inflation-linked bond if situation turns inflationary.

    It's reassuring that you see my approach is adequate. My first idea was to talk to a financial adviser, but I think that if I do that I'm going to be pushed to invest, regardless what is better for me.

    @JustAThought what is worse is that my OH and me are currently working from home, we could work anywhere with internet connection, but my OH does not agree about another temporary move.

    Thank you all again!


  • Options
    #15
    codrulz
    Registered Users Posts: 369 ✭✭codrulz


    Banks aren't going anywhere & you'll have plenty of time to see any uptick in inflation before it grows its horns, if it does.


  • Options
    #16
    Mad_maxx
    Registered Users Posts: 13,505 ✭✭✭✭Mad_maxx


    vmb wrote: »
    Thank you all, I've already split my money into 4 different bank accounts. My main concern is helicopter money or an aggressive form of quantitative easing from the ECB.

    I'll stay vigilant. I'm monitoring inflation indicators and have considered move the money to an inflation-linked bond if situation turns inflationary.

    It's reassuring that you see my approach is adequate. My first idea was to talk to a financial adviser, but I think that if I do that I'm going to be pushed to invest, regardless what is better for me.

    @JustAThought what is worse is that my OH and me are currently working from home, we could work anywhere with internet connection, but my OH does not agree about another temporary move.

    Thank you all again!

    zero chance of so called " helicopter " money , germany wont allow it

    more chance of the irish government raiding deposit accounts in ireland to fund spending


  • Options
    #17
    Anjunadeep
    Registered Users Posts: 221 ✭✭Anjunadeep


    What about all the wage subsidy schemes in the various European countries to handle the fall out from the corona... surely thats helicopter money?


  • Options
    #18
    HamSarris
    Registered Users Posts: 109 ✭✭HamSarris


    The next six months will see deflation so just leaving it in cash could give you returns in real value (in deflation the people that lose the least win). Especially if you are looking to buy in Dublin then there could be a significant fall in the next six months – the flow of economic migrants to Dublin will reduce with more people WFH and the big hedge funds will pull out of the market.

    You just need to wait a bit for the economic reality to set in for sellers – first there’s a sense of denial – everything will go back to normal, my house is in a great location etc. – then a panic can start when prices drop and sellers don’t want to lose any more – don’t buy in this panic stage as you can never judge how low prices go – let sellers become despondent and let the market get a floor and bounce around there for a while.

    I wouldn’t be worried about inflation in the short term simply because the velocity of money in the system is so low. The ECB could print 10 trillion more euros but if no one is taking out loans and consumers aren’t buying, prices could still reduce.

    In the long-term inflation is a big big problem for cash holders. First the currencies of developing economies will start to hyperinflate, then the Euro, Yuan, Pound etc., the dollar and the Yen will be strong for a while – there’s so much dollar denominated debt there will be huge demand for USD. But once money velocity gets going around the world, no currency will be safe.


  • Options
    #19
    BrokenArrows
    Registered Users Posts: 7,500 ✭✭✭BrokenArrows


    vmb wrote: »
    Thank you all, I've already split my money into 4 different bank accounts. My main concern is helicopter money or an aggressive form of quantitative easing from the ECB.

    I'll stay vigilant. I'm monitoring inflation indicators and have considered move the money to an inflation-linked bond if situation turns inflationary.

    It's reassuring that you see my approach is adequate. My first idea was to talk to a financial adviser, but I think that if I do that I'm going to be pushed to invest, regardless what is better for me.

    @JustAThought what is worse is that my OH and me are currently working from home, we could work anywhere with internet connection, but my OH does not agree about another temporary move.

    Thank you all again!

    Pay a financial investor who only accepts a fixed fee and does not get comission from anything they recommend.
    Then it won't matter if you keep it in cash or invest, doesn't matter to the advisor.


  • Options
    #20
    Mach 3
    Registered Users Posts: 233 ✭✭Mach 3


    Atlantic Dawn wrote: »
    Irish banks yes. I see the government additionally running some class of a retained capture of deposits on them shortly, similar to Cyprus and Greece during the last recession. Every angle is being looked at.

    Is this Public knowledge, rumour or an opinion?


  • Options
    #21
    Mach 3
    Registered Users Posts: 233 ✭✭Mach 3


    HamSarris wrote: »
    The next six months will see deflation so just leaving it in cash could give you returns in real value (in deflation the people that lose the least win). Especially if you are looking to buy in Dublin then there could be a significant fall in the next six months – the flow of economic migrants to Dublin will reduce with more people WFH and the big hedge funds will pull out of the market.

    You just need to wait a bit for the economic reality to set in for sellers – first there’s a sense of denial – everything will go back to normal, my house is in a great location etc. – then a panic can start when prices drop and sellers don’t want to lose any more – don’t buy in this panic stage as you can never judge how low prices go – let sellers become despondent and let the market get a floor and bounce around there for a while.

    I wouldn’t be worried about inflation in the short term simply because the velocity of money in the system is so low. The ECB could print 10 trillion more euros but if no one is taking out loans and consumers aren’t buying, prices could still reduce.

    In the long-term inflation is a big big problem for cash holders. First the currencies of developing economies will start to hyperinflate, then the Euro, Yuan, Pound etc., the dollar and the Yen will be strong for a while – there’s so much dollar denominated debt there will be huge demand for USD. But once money velocity gets going around the world, no currency will be safe.

    At the moment, some home builders are still trying to squeeze as many units as they can on existing projects (Dublin).
    Watching to see if they take on new projects or not is the bellwether.


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    #22
    Philo62
    Registered Users Posts: 29 ✭Philo62


    vmb wrote: »
    As the title says I did sell my Dublin house a few months ago. Now I am not finding anything interesting in the market and am getting quite nervous with so much money in the bank. I hope to find something interesting before christmas, so I don't feel comfortable investing the money in the current environment. Bonds would be an option but the current yield is awful.

    So I'm paying 1650 e pm in rent while and all my money is sitting in different saving accounts (0.01% interest). My savings are about 350k and the house I'm looking for would be between that and 450k

    What I do not want is buying something I do not like and being unable to sell it if the economic situation worsens significantly.

    TLDR: I have an important amount to invest and no risk tolerance and don't know if having the money in saving accounts is my best option.

    Am I crazy? I'm really bearish about the current economic situation in the medium/long term.

    I would buy fast, negotiate hard, banks will go bust & Gov guarantee will be worthless as country will go broke if we carry on taking advice from civil servants


  • Options
    #23
    Empty_Space
    Registered Users Posts: 227 ✭✭Empty_Space


    Buy some Gold, a great hedge against inflation.
    I wouldnt leave 350k sitting in banks.


  • Options
    #24
    dxhound2005
    Registered Users Posts: 20,490 ✭✭✭✭dxhound2005


    Philo62 wrote: »
    I would buy fast, negotiate hard, banks will go bust & Gov guarantee will be worthless as country will go broke if we carry on taking advice from civil servants

    It is not a government guarantee. It is a fund maintained by the participating institutions.

    If you want a government guarantee then choose NTMA products. They have an unconditional guarantee, limited only by the maximum amount which can be invested. For instance a new purchaser of Prize Bonds will be limited to €250K, but in the past it was unlimited. So anyone with millions of Euros in Prize Bonds from the old days has an unconditional guarantee.

    Anyone who was around in 2011 and saw the sort of mad predictions back then which never came to pass, will know that the current scaremongering is of the same quality.


  • Options
    #25
    Jimbobjoeyman
    Registered Users Posts: 807 ✭✭✭Jimbobjoeyman


    Empty_Space wrote: »
    Buy some Gold, a great hedge against inflation.
    I wouldnt leave 350k sitting in banks.

    Is it really ?

    I've been reading a lot of research that makes really strong arguments to the contrary as of late - or at the very least its not a particularily effective hedge when compared to equity over the long term.


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    #26
    codrulz
    Registered Users Posts: 369 ✭✭codrulz


    Jimbobjoeyman wrote: »
    Is it really ?

    I've been reading a lot of research that makes really strong arguments to the contrary as of late - or at the very least its not a particularily effective hedge when compared to equity over the long term.

    Silver & Platinum are the flavours of late for many.


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    #27
    ShineOn7
    Closed Accounts Posts: 4,550 ✭✭✭ShineOn7


    You think the banks are in danger?

    Atlantic Dawn wrote: »
    Irish banks yes. I see the government additionally running some class of a retained capture of deposits on them shortly, similar to Cyprus and Greece during the last recession. Every angle is being looked at.


    Aren't all Irish bank accounts insured by the Government upto 100K?


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