Can't see the wood from the trees... please help

WaterWater said:
I totally agree with this statement.

I was in Brown Thomas restaurant today having a coffee and cake. The only reason I was there was because I was given a gift card and wanted to use it up. They were selling Portugeuse custard cakes, Pasteis de Nata, for about €4.50 each. I buy these in Dunnes Stores at 4 for €3.
I just couldn't bring myself to pay the price asked.

I have a house with no mortgage worth about €1.5m and circa €600k in savings and nil borrowings. I can well afford to pay the price asked.

I eat well. Travel lots but know the value of money.

The question I will ask you rboyddd is.....would you have spent €4.50 0n the custard cake without hesitation?
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Sorry, but that is nonsense. Paying €4.50 for a cake will not make any difference to whether you can live comfortably or not in retirement. It's the big purchases that make a difference. Does the OP want to live in a wealthy community with a big, expensive house. And have to fund the lifestyle of people in the area...€100k car, €30,000 for golf club joining fees.

If he bought all his clothes in Brown Thomas, there would be questions to ask but not spending €4.50 on a slice of cake.


Steven
www.bluewaterfp.ie
 
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rboyddd said:
so I need to hold that property for another 18 months... as a loss maker.
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Make sure you're doing things for the right reasons.

Property 1 is not making a loss. You have rental income of 15,600 Vs interest expense of 7,000. That's profitable in my book.
Its cashflow negative because you are repaying capital.

However, I would still get rid (obviously only when you crystallise the loss to offset).
After expenses and taxes, you're probably netting a little over 3k on it. But paying 6,600 interest in your PPR. So it doesn't make sense to keep in those circumstances.

I assume you've structured your income earning assets to fully utilise your wife's lower rate tax band?
 
rboyddd said:
using a blunt rule of thumb, if one had a DB fund of €1m, that should provide a €40K annual income
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I suspect a pension that pays €40kpa from the age of 55 would have actuarial value well in excess of €1m, particularly where a surviving spouse continues to receive benefits.

I would have thought that establishing the level of pension that you would receive if you retired early would be the first area to investigate.
 
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The investments look nicely balanced because they are paying for themselves

You're getting 48k per annum income

Outgoings 30k when second property paid off

Not sure what your tax bill is

You have 15k in interest to reduce your tax bill
Add repairs, management fees, insurance. All helps to reduce tax liability

Down the line, if you retire, your tax rate will reduce as your income drops
 
noproblem said:
Ah come on, where's your sense of humour Steven? Anyway, "Let them eat bread" :)
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Was it supposed to be a joke? If so, it went way over my head :(

Got mixed up with all the other examples on here of people who walked out cafes because they didn't want to spend €4 on a scone.

By way of disclosure, yesterday I went to my local coffee shop and got a big sausage roll (€4) and a coffee (€2.80) and finished off reading my book. I'd had a really busy morning and it was a great way to take a break. The €6.80 spent was totally worth it :)


Steven
www.bluewaterfp.ie
 
SBarrett said:
Was it supposed to be a joke? If so, it went way over my head :(

Got mixed up with all the other examples on here of people who walked out cafes because they didn't want to spend €4 on a scone.

By way of disclosure, yesterday I went to my local coffee shop and got a big sausage roll (€4) and a coffee (€2.80) and finished off reading my book. I'd had a really busy morning and it was a great way to take a break. The €6.80 spent was totally worth it :)


Steven
www.bluewaterfp.ie
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Keep eating big sausage rolls you need to be retiring before 55 to get any value from your pension pot,;);)
If you make it to 55,
 
RedOnion said:
Make sure you're doing things for the right reasons.

Property 1 is not making a loss. You have rental income of 15,600 Vs interest expense of 7,000. That's profitable in my book.
Its cashflow negative because you are repaying capital.

However, I would still get rid (obviously only when you crystallise the loss to offset).
After expenses and taxes, you're probably netting a little over 3k on it. But paying 6,600 interest in your PPR. So it doesn't make sense to keep in those circumstances.

I assume you've structured your income earning assets to fully utilise your wife's lower rate tax band?
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Thanks RedOnion. I fully agree with your assessment. #1 is going once we are in a position to reduce the CGT bill. With respect to my wife's tax credits, I believe so, but will put this question to my accountant shortly.
 
Sarenco said:
I suspect a pension that pays €40kpa from the age of 55 would have actuarial value well in excess of €1m, particularly where a surviving spouse continues to receive benefits.

I would have thought that establishing the level of pension that you would receive if you retired early would be the first area to investigate.
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I should have clarified, €1m should provide a €40Kpa pension from the age of 65+.... the immediate question is, the best way to fund getting to 65 without necessarily disposing of all/most of the performing assets.
 
SBarrett said:
A rare treat. Everything in moderation ;)
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I'm a firm believer in being careful with money and saving for a pension, but not at the expense of living life a little.

Don't listen to him. What would life be without an occasional sausage roll.
 
huskerdu said:
I'm a firm believer in being careful with money and saving for a pension, but not at the expense of living life a little.

Don't listen to him. What would life be without an occasional sausage roll.
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Worth every clogged artery. :D

Usually eat fruit for a snack and work out 5 days a week, so I think I can afford a little treat here and there
 
@rboyddd

A few pieces of advice on the portfolio:
  • Get a better rate on your PPR. There are threads on this.
  • The tracker properties should be the last thing you sell, I would think not before the expiration of the trackers.
  • You seem a bit ambivalent about being a landlord, although it is an easy option for someone in semi-retirement. If you want to be a landlord you should look for yield. One- and two-bed apartments in unfashionable places carry nearly double the yield of your current portfolio.

Can't answer your bigger questions. I think you have a relatively expensive lifestyle (more power to you - you can afford it!) but you would need to think hard about what you would cut back on with less income.
 
SBarrett said:
Was it supposed to be a joke? If so, it went way over my head :(

Got mixed up with all the other examples on here of people who walked out cafes because they didn't want to spend €4 on a scone.

By way of disclosure, yesterday I went to my local coffee shop and got a big sausage roll (€4) and a coffee (€2.80) and finished off reading my book. I'd had a really busy morning and it was a great way to take a break. The €6.80 spent was totally worth it :)


Steven
www.bluewaterfp.ie
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The important thing is, you enjoyed it.
 
I go to the Algarve regularly and there and only there do I indulge in those delicious custards tarts and only at 50 cents a pop
 
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OP, with such a high income job, I presume you have acquired some valuable skills.
It might be worth exploring options to change career to something less stressful that would provide a reasonable salary up to retirement.

With the economy in full employment and many industries experiencing labour shortages, now might be an ideal time for such a change.
 
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lledlledlled said:
OP, with such a high income job, I presume you have acquired some valuable skills.
It might be worth exploring options to change career to something less stressful that would provide a reasonable salary up to retirement.

With the economy in full employment and many industries experiencing labour shortages, now might be an ideal time for such a change.
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...interesting thought. Maybe contract work. I wonder would my age work against me (49 yo). Probably a topic for a different thread.
 
rboyddd said:
...interesting thought. Maybe contract work. I wonder would my age work against me (49 yo). Probably a topic for a different thread.
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With the snowflakes I see being interviewed lately, a bit of grey hair can absolutely be an asset.
I don't know enough about contract work to comment.
 
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