Moneymakeover 29 Years old looking for next steps in financial journey.

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ipwnyounooblet

Registered User
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Personal details

Your age: 29


Income and expenditure
Annual gross income from employment or profession: €54000

Monthly take-home pay: €3000

Type of employment - Employee
Employer type: private company


Summary of Assets and Liabilities
Family home value: €17700 (Time of purchase 2022)
Mortgage on family home: Yes
Net equity: €40000


Family home mortgage information
Lender: BOI
Interest rate: 3.15%
Type of interest rate: fixed 5 years ending 2027

Remaining term: 22 years
Monthly repayment: €741.67 (Maxed additional payback ~€67)

Other borrowings – n/a

Do you pay off your full credit card balance each month?
No credit card

Pension information

Value of pension fund: €62000

Other savings and investments:
Cash savings: €10000
Interactive Brokers: €15000
Crypto: €2000

Alternative income:
Matched/Arbitrage betting: 5-8k per annum (essentially passive requires ~20 minutes of attention each day)

What specific question do you have or what issues are of concern to you?

Looking for my next financial move currently I've considered buying a buy to let property, land for renewable energy installation e.g. solar. Unsure what the next steps should be. Comfortably paying bills, savings, investments, maxed out pension contributions, not sacrificing enjoyment have regular holidays abroad etc. I understand my salary is under market rate for the job that I do but I am getting a promotion this year, I'm 100% remote which suits me and I enjoy it.

A house in the estate next to mine recently sold for 230k and in worse condition than mine, I have newly installed kitchen, sunroom, external insulation etc. I wonder can I extract equity here and use it to further a buy to let or something else. Just
trying to figure out my options for next steps.
 
At your age, what you want is flexibility. You want flexibility at all ages, but particularly when you start off in the housing market.

You might want to trade up -especially if you find yourself in a long-term relationship that might lead to children.

You do not want to be submerged in borrowings, even if a bank will give you the money.

So the right strategy is to max your pension contributions and use whatever is left over to pay down your mortgage.

Then, if you want to trade up after, say, 5 years, you will have lots of equity to put towards the new house.
 
Even apart from what @Brendan Burgess says above, if you were to buy a rental property then you would be concentrating even more of your overall net worth in a single asset class/geographic region (Irish domestic property) by owning your own home and a rental. Plus you'd be taking on all the burdens of being a landlord, something that make existing landlords seem to be getting out of due to the risks and changing regulations.
 
It's not that I can't fathom a house losing value, my goal is to look at ways of furthering my income outside of employment and making my money work for me. i have my investment brokers account that is well diversified and has been performing well but I understand that may not always be the case. My mortgage repayment is ~670 per month if I was to remove the additional contribution I would consider this a pretty low risk situation.

The buy to let was an example, as was mentioning the purchasing land to lease to solar companies. My ultimate goal is to step back from employment as soon as possible, and I'm trying to determine how can I expedite this as soon as possible.

Is the simple answer to max my pension which I'm already doing, maximise my income through promotions or job hops and all leftover cash post tax pump that into my IB?

Essentially what I'm looking for are other avenues to use my excess cash avenues. My timeline on this next move is ~2 years at the moment I'm trying to educate myself on what my financial goals are for the short-medium term. For a long time it was get myself in a position to purchase a house, then it was stabilise post house purchase now I'm looking for that next thing.

I'm totally open for it to be the boring middle of just pumping as much into IB and my pension and waiting, but my goal for this post was to explore what other options there are, even if the risk is higher.
 
mugsymugsy said:
Don't know your circumstances but would you consider renting a room don't know where you are in the country but you could get circa 6k tax free easily.
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You can get up to €14K tax free under the rent a room scheme.

Rent-a-Room Relief

This page overviews rent a room relief.
www.revenue.ie www.revenue.ie
ipwnyounooblet said:
I'm totally open for it to be the boring middle of just pumping as much into IB and my pension and waiting, but my goal for this post was to explore what other options there are, even if the risk is higher.
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Being a landlord could be a lot less boring than clearing your mortgage, boosting your pension and investing in equities outside of your pension. But not necessarily in a good way judging by the many posts here from landlords eager to get out of that business for various reasons including the imminent changes to regulation, the possibility of dealing with problem and overholding tenants, the perceived or actual bias of the RTB in favour of tenants etc.

But, even apart from that, concentrating a huge percentage of your overall net worth in a single asset class/geographic region (your home and a rental) isn't a good idea from a diversification point of view.
 
Yeah definitely agree with what you're saying around the landlord scenario, if I was looking to purchase a buy to let I've seen managed student accomodations where you have very little input as the owner of the property.

In Tralee for example I seen one that had a net return of ~8500 with the sale price of the apartment of only ~150k.

Similarly there is the scheme to lease property to local council for social housing for up to 25 years yes you wouldn't be getting full rates and this may be affected by inflation but you don't have to deal with the tenants that's managed by the council as well as repairs.
 
ipwnyounooblet said:
In Tralee for example I seen one that had a net return of ~8500 with the sale price of the apartment of only ~150k.
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According to whom? The seller perhaps? That's a gross yield of c. 12% which seems very optimistic.

In any case the diversification issue is the key one here in my opinion.
ipwnyounooblet said:
Family home value: €17700 (Time of purchase 2022)
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I presume that this should be €177K? So if you then bought a rental for €150K (with leverage?) then that's €327K in Irish domestic property which would be the vast majority of your overall net worth (plus leverage) concentrated in one asset class/geographic region. This is risky.
 
Indeed. Wanting to cease employment at 30ish sounds unusual and arguably unrealistic. I wonder if this is someone who has been sold a pup by the FIRE zealots on Reddit or the Indo or something like that...? :confused:
 
ClubMan said:
According to whom? The seller perhaps? That's a gross yield of c. 12% which seems very optimistic.
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Links to the property I seen at the time.
https://www.propertypriceregister.ie/Website/npsra/PPR/npsra-ppr.nsf/eStampUNID/UNID-85689778CD69B18E8025897300602C32?OpenDocument
www.myhome.ie

P5 Kingscourt, Manor West, Tralee, Kerry - Ger Carmody Estates - 4645169 - MyHome.ie Residential

P5 Kingscourt, Manor West, Tralee, Kerry, 4 Bed, asking price €135,000, brought to market by Ger Carmody Estates, Residential - 4645169 (rated D1)
www.myhome.ie www.myhome.ie

Actually sold for 125k, the reason I was familiar with this is a friend of the family was telling me about his apartment here before, so I know these figures are ball park accurate.


ClubMan said:
Indeed. Wanting to cease employment at 30ish sounds unusual and arguably unrealistic. I wonder if this is someone who has been sold a pup by the FIRE zealots on Reddit or the Indo or something like that...? :confused:
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Ceasing employment at 30ish wasn't what I said, it was that I was looking to step back from employment as soon as possible. Age of retirement in ireland is 64-66 if I can set myself up now to retire at 50 I want to exhaust all avenues to achieve that if it happens earlier fantastic, if it happens later so be it. I feel it's negligent given my current situation to not take advantage of my situation to the fullest.

I don't have the all the information and I don't know my next step yet. My hope with this thread was to identify potential alternative investments to maximise my financial journey.


messyleo said:
You are only 29. There is another option here of finding a new career path.
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My salary is definitely an area I'm looking to improve, as I mentioned above I'll likely get a promotion this year which will bring my salary up to around 70k+ as I'll be stepping into a management role with a clear path to further growth. The flexibility and freedom my job offers with the 100% remote and low stress is a big factor in me.

If there's any thoughts on additional avenues as why or why not they are good or bad avenues I would appreciate as that was the initial goal for this thread.

Other things I've looking into previously was EIIS, Letting commercial/private property via a ltd company and paying a directors pension, Forestry grants, solar farm grants etc.
 
ipwnyounooblet said:
Other things I've looking into previously was EIIS, Letting commercial/private property via a ltd company and paying a directors pension, Forestry grants, solar farm grants etc.
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You would be better off sticking to the "boring" options in my opinion - and experience.
ipwnyounooblet said:
I'm totally open for it to be the boring middle of just pumping as much into IB and my pension and waiting
Click to expand...
 
_OkGo_ said:
The biggest changes for me at 28-35 was getting married, buying a PPR and having 2 kids.
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At 28 I was single, no kids, and was renting a houseshare. I was vaguely saving to buy an apartment.

At 35 I was married, had three kids and owned a house with my wife.

My work situation had also changed hugely and for the better.

Firm plans at this age are unwise.
 
_OkGo_ said:
This will be your biggest blocker to any future plans requiring finance. Gambling is a major red flag for loan approval and you will struggle to get approval. I understand the concept of arbitrage but as far as a bank is concerned, they will just see transactions on your bank statements to multiple gambling sites.
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Yeah in purchasing my house I stopped this for 6 months before approaching a broker/bank. I recognise this as something I'll need to do.


_OkGo_ said:
The biggest changes for me at 28-35 was getting married, buying a PPR and having 2 kids.

You haven't mentioned anything about a partner or life plans (and you don't have to) but if that is something you want then flexibility as Brendan mentioned should be your priority.
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100% this is certainly a consideration I'll have to take into account in the next few years, I have a long term partner who is self employed and doing very well, the reason I didn't mention was we have little to no crossover beyond splitting bills and food costs.

The flexibility is something that I will take on board as it something I didn't immediately think about. So I appreciate that comment from yourself and Brendan.

Luckily where I am right now is a 4 bedroom, short walk into town in a large county town with good links to the cities train,bus etc.
 
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