@noose It was a joke really. Honestly fair play to you, reading that portfolio was an absolute dream. I'm really glad you and your family are in such a position
@technetiumm Thanks. We bought our house at a good time which obviously helped but we worked our asses off too, took 3-4 foreign students 6-8 months of the year while both working full time. This allowed us to get married and renovate the house debt free. We switched mortgages 4 times getting 2% cash back each time. I drive a car most people would be embarrassed to be seen in!! I’ve only been earning the salary I’m on now for the few months
@noose The only thing I’d do different (but not necessarily smart) is to reduce payments instead of term of mortgage, in the end you pay more interest but reduce your current outgoing cash flows, what make your emergency fund safer, and your life less income dependent
@takkula My way of looking at it is I know I will be working for the next 14 years and I don’t currently have a cashflow problem so by paying off my mortgage as soon as possible remove a €1300 per month outgoing permanently by the time I’m 50 and coming to a stage where I could be looking to retire and would want to be less income dependant
@noose Yeah, makes sense, I guess it is more a matter of taste. Where I come from it is quite rare to have a stable income (like working more than 5 years continuously), then reducing outcomes now have a high value
@noose as everyone else has said it sounds like you're well on top of things, so not much to add here. But as to your question on maxing your pension contributions, given that you are 37 (guessing from the figures), the maximum you can contribute tax free is 20% of your salary per annum up to a max of €115k. It often makes sense to max this out if you can since the tax benefit provides such a major benefit from day one. You might want to check with your employer and the details of your existing scheme, but if your employer is contributing 12% towards it this can sometimes be counted towards the 20% limit, but sometimes not also depending on the details of the scheme. So, in short, you may actually already be deemed to be contributing too much to get the full tax benefit, or else you may have scope to increase by a further 10%. (sorry a long-winded answer, but hope its some way helpful!)
@farmerdex The employer contribution doesn’t count towards my 20% limit in an occupational scheme from the research I’ve done. I think I will increase my contributions up by the equivalent of what I’m investing privately. I think I will then switch the €280 a month I’m saving for the kids college fund into the Vanguard Lifestrategy fund given it’s 14 years before I will need this
@noose Depending on how much you're overpaying your mortgage by and with any willingness to invest in individual company shares, you may be better investing the overpayment amount.
That invested money should be worth more by the time you're 50 than the benefit of paying off the mortgage early through overpayments. Especially if you go down the value investing route.
I'm assuming a mortgage rate of 2.5-5% is what you have. Thats a very very modest investment return. With the right investments, worst case may be the return will match the mortgage %.
Best case, you could have the mortgage paid off before 50 if things go very well with investments.
@treybud20 My current mortgage rate is 2.95% and I am in the process of remortgaging which will reduce the rate to 1.95%. After tax on investments is taking into consideration I need a 3-5% return to match that. While I would be confident of beating that investing in the market, between my pension and DEGIRO I’m currently investing c€30k p.a almost 100% into equities. So for me the over payment of the mortgage gives me a very low risk effective return of c3-4% and is a bit of a comfort if the equities don’t go as planned. Not saying it’s the best strategy but I feel it’s the right one for me
@noose Does your employer offer any benefits ie APSS or SAYE plans?
This might be of more short term benefit but as already pointed out you’re well covered financially.
I assume you have suitable insurance coverage for your family needs? That would be the other area I’d look at if you have more disposable income, particularly given your wife isn’t working full time.
@memberofthebodyofchrist Employer doesn’t offer any other benefits. We have mortgage cover with specified illness, I have a Zurich life assurance policy for c€350k and my death in service cover with work is pretty good, I think my spouse would be c9x my annual income to buy a pension
@noose I would agree with others max out the pension contributions, including your wife's. I would then focus on paying off the mortgage with anything left over as it's guaranteed tax free return.
Also have you lookined into investment trusts,berkshire hathaway and eiis schemes, it's worth considering these due to tax treatment.
Also are you sure your comfortable with calculating etf tax for monthly purchases i.e you will need to do 12 independent calculations in year 8 and pay GCT, with no loss off setting. It's a bit of a pain the rules
@janetq Yea I’m going to max out mine. Not sure there would be a benefit to paying into my wife’s as she’s currently paying minimal tax? On the deemed disposal I’m comfortable enough with this, especially with my chosen fund the Vanguard Life-strategy allows me to invest in one single ETF and maintain my chosen stock/bond allocation without having to hold multiple ETFs and rebalance. So it should just be a matter calculating the average costs price in year 1 and calculating the gain (hopefully) versus the price in year 8 and then repeating each year.
