Bass Reeves wrote: » well I am glad you are not my CFA. I have gone through the costs to put children through college already in this thread. It will cost in the region of 75K/child. By opening an investment in a child's name and putting money into it it will help to fund college. While most young adults work while going to college they will not use up all there tax Credit. As well some of the the money can be extracted into a normal account pre college. Even if you leave some money in the account till college there highest rate of tax is 20% Opportunity investment is where you keep saving in a cash form to invest when a down turn happens. This may be into stocks or into property. Last Apri/May If you invested in the Irish banks your return would be above 200%. If you had cash in 2012/2013 you could have bought apartments for the price of a midrange new car today such apartments are worth 4-5 time the cost then. Even as late as 2015/16 you could have bought houses in mid sized county towns for 50-80K that are worth 50% more than that now and you still have to add rental income to the return. Very little investment is passive. You have to actively look at all investment.
JimmyVik wrote: » I have used up the allowance each year of €2540 so no CGT tax payable of it so far anyway. I will keep using the CGT allowance each year to reduce any tax payable.
Bass Reeves wrote: » Even if you leave some money in the account till college there highest rate of tax is 20%
JimmyVik wrote: » I dont buy into that he is the only one running that company at all. What i like about them is that they are very transparent. But I think ETFs are probably a better way to go once you have enough invested in shares to use up your yearly cgt allowance.
Trigger Happy wrote: » I was whupped during the dot com bubble and have stayed well clear of direct investments since then. At an extreme I would see putting spare cash in to direct investments as opposed to paying back the mortgage as borrowing to gamble (extreme- I know). My pension does not need any extra funds so I happily put any extra cash against the mortgage. It suits my current risk appetite and will help me achieve my goal of retiring early and funding the mini me through 3rd level. I can see why others would do differently and no harm in that - but I am happy with my own strategy.
[Deleted User] wrote: » Avoid, in anyway possible paying interest only on your mortgage.
McGaggs wrote: » Your CGT allowance is only used up by disposing of the shares. Taxes are higher, and administration more onerous on ETFs for Irish investors.
McGaggs wrote: » What are you doing to use up the allowance?
Bass Reeves wrote: » I have gone through the costs to put children through college already in this thread. It will cost in the region of 75K/child. By opening an investment in a child's name and putting money into it it will help to fund college. While most young adults work while going to college they will not use up all there tax Credit. As well some of the the money can be extracted into a normal account pre college. Even if you leave some money in the account till college there highest rate of tax is 20%
thesimpsons wrote: » where do you get this figure from ? I've had 3 children through college now and didn't pay anywhere near 75k per child. I paid accommodation and fees and they all had part time jobs in college and during summers which helped towards their personal and living costs, but there is no way it all came up to 75k per child.
[Deleted User] wrote: » This is an awfully funny thread. People get very defensive if anyone doesn't follow their instructions. I can only speak for myself, but I have a retired neighbor, who used work with mortgages in one of the main Irish Banks. He drives a very nice car, retired at an early age, and has, what I would consider a very comfortable life. He offered advice one evening, and I gladly listened to him. Bear in mind, I started with a 30 year mortgage of approx €350,000. 4 years fixed rated at 2.6% His advice, in simplistic terms was: 1. Max out your pension contributions if you can afford to 2. Have no more than 6 months of salary easily available - rainy day fund (Anyone more is not working for you) 3. If you can find an investment that has a return of greater than 5%, then invest in it 4. If you can't be sure of a greater than 5% return, then put that extra money into overpaying your mortgage Avoid, in anyway possible paying interest only on your mortgage.
2lazytogetup wrote: » just slightly going off topic... but what about not getting a mortgage. just renting and putting money into a pension and investments. i find homes money pits. need to replace the boiler every few years. new gutters, roof to be fixed. kitchen needs to be replaced. house prices could potentially drop.
Nicely put together
Good advice. Prioritise any higher interest rate loans or credit first. Then build up savings and pension so you don't need future short term loans with higher rates.
Mortgage is cheapest interest rate you will ever have.
While I agree largely with this last point, I'd also counter it with the potential savings to be made on interest on debt that some of which will be 20+ years old by the time it eventually gets paid off.
I took out a mortgage 8 years ago next month over a 20 year term, and have been consistently overpaying it off such that at our current overpayment rates it will be clear in 11 months, so we've reduced our term from 20 years to 8 years & 11 months. The interest calculated for the 20 year term was about €81k, and by the time we're fully paid off the total interest we'll have paid will be around €31k, so I'm seeing the benefit of our overpayments as a €50k saving in interest I would have otherwise paid the bank.
Which is the loan you'd want to pay off quicker? €150k over 20 years @ 3%, or €20k over 4 years at 6.9%?
I guess it also depends on inflation including salary inflation and what % of my income is going into the mortgage and interest in 10 years.
Best approach here is to pay off the 6.9% loan of 20k first. After that is completed, start paying off that 3% loan with the overpayment amount as well as the amount you were previously paying for the previous loan.
No, I have not even maximized my pension contributions yet. IMO, there is no point in clearing a cheap mortgage early if you have any other way to profitably invest your money.
Is it though?
3% APR on €100k is €3,000 & 6.9% APR on €20,000 is €1,380, so although it's a higher interest rate, in the grand scheme you'd be paying more interest on the lower interest rate loan as it's 5 times larger than the 6.9% loan. Now I know eventually the capitol amount on the larger loan would reduce to the point where it would then make more sense to concentrate the overpayments on the higher interest loan, but that figure would be around €46,000 as I see it.
Weird a lot of people here are not overpaying their mortgage because they aren't getting it taken off the principle. They are prepaying their regular mortgage and not getting the benefit of overpaying.
The mortgage rate is so low at the moment it makes no sense to over pay. I couldn't get a loan at the value of my mortgage rate so I am better off not paying it at the moment and use the money to improve the house. I am only paying €600 in interest a year and close to the end.
I took out a 30 year mortgage and have my morgage nearly 30 months now. It was 330k at 2.6%. Initial payment was 1321. Payment now 1054. In another 30 months it should be down to about 780.
I'm saving a ton on interest and will have it paid off in ten years. I lived through that last recession in and out of jobs like a yoyo and the pleasure I get knowing I'll be comfortable if it happens again is enough to keep me going on with the overpayments.
Currently paying the max 10% overpayment, has a negligible impact; when the fixed rate expires I intend to change it to a 25% overpayment. Have a pension already.
I kept the payment much the same when I got a significant rate cut (4.lots% to 3.9%) by taking a full year off the term to begin with; and did so again when remortgaging (3.9% to 2.25%) so I should have it all paid off in May 2029 rather than January 2033 even without increasing it again.
Overpaying by roughly 60%
![Photo of [Deleted User]](https://w5.vanillicon.com/v2/5029bac657ae68f2ca4b7fa18994db0d.svg)
![Photo of [Deleted User]](https://we.vanillicon.com/v2/e0a528cbc0a6c66fda22b51f3da0d9d1.svg)
