32 year old, hopes to semi retire by 40

Discussion in 'Money makeover' started by peterpanics, Jul 5, 2009.

  1. Raskolnikov

    Raskolnikov Frequent Poster

    That link is a little fluffy.

    This one is a little more extreme, but very interesting - www.earlyretirementextreme.com
  2. peterpanics

    peterpanics Registered User

    Hi DerKaiser,

    "Spending €50k per annum is far from frugal.
    You'd be able to knock at least €6k off that on the difference between dublin and country rents." -> I agree far from frugal, I assume €50k per annum in the long term with spending creeping upwards with children balanced out by lower expenses outside of Dublin. Saving still but slowing down faster than I expected recently!
    "A gross income of €55k is about €41k after tax, anyone without massive debts should be able to live on that." -> Agree if it works out.
    "Why not just do it whilst you're still young and have the energy?
    Otherwise you'll keep pushing it out and waste most of your life dreaming about it." -> I plan to transition from current living situation to ideal slowly by using the extra 'youthful' energy to prepare for our future and invest while still working. I reckon another 5 years of full time work in IT if I can while working towards my other goals part-time will be the right balance.
  3. Fella

    Fella Frequent Poster

    Very interesting read in 32 myself and looking to retire/semi retire by 40 myself it's really hard to think of how much money you will need from like 40 onwards.

    I've saved just over 250k I've a wife and 2 kids I've spent 80k doing the house up last 2 years but back saving about 60-100k a year now.

    Are you on course for hitting your target of retirement at 40? For me it's more about not having to work than retiring. I don't like the idea of doing nothing would probably go to college or find some hobbies to keep me occupied.

    Congrats on your savings so far really impressive stuff .
  4. Protocol

    Protocol Frequent Poster

    You are 32, married, with 2 children, saving 60k-100k per year.


    Assuming this is savings after debt repayment?

    You must have a huge gross income, at least 200k pa.

    To earn 200k at 32 is unreal.

    I am guessing two doctors married to each other.
  5. Fella

    Fella Frequent Poster

    I don't include my wife in that she does her own thing with her cash spends on clothes and whatever else. She just pays half the mortgage every month and I pay for bills shopping and eating out and entertainment.
    All the money is in my accounts don't have joint accounts thank God!

    I've a tracker mortgage that is cheap 700 ish a month I owe about 200k but I put 100k into house in the form of extension and totally refurbished inside.

    I'm not that lucky to be a doctor :( I work part time in civil service 2 days a week and trade sports and other gambling edges in my spare time - want to leave work but haven't the gonads!! I average about 12k tax free a month but I spend a lot eat out and generally just impulse buy . my job pays me 1400 a month take home so that covers mortgage , told wife I wanna leave work and trade sports full time she says no your not solid civil service job you d be mad etc etc and everyone says same. So I said I'll save a million by 40 then I'm leaving and she agreed so that's my plan. I know I can do it my target will be 150k saved in 2014 . I don't see the point in paying off mortgage costs me like 360 a month wife paying half and about 15 years left of that.

    This young man in this thread is doing well hopefully 1 million by 40 and I'll have loads to retire on or just leave work and do what I want go to college is my ambition now but that might change.
  6. dub_nerd

    dub_nerd Frequent Poster

    Similar to what I did. "Retired" last year, mid forties, with savings. I'm studying a life long interest and hope to have a degree and start postgraduate studies next year. After that? ... might do some work, might not. Preferably something charitable. There no shortage of things to do.
  7. mandelbrot

    mandelbrot Former user

    Not to rain on your parade, but are you sure this income from sports trading is tax free? Have you taken professional advice or sought a ruling from Revenue that you're not carrying on a trade that's liable to tax. Definitely something you need to consider, or you risk finding yourself in a very messy situation at some point down the line... (www.taxandlegal.ie/ITRJune2010.pdf)
  8. Fella

    Fella Frequent Poster

    It's just gambling ,betting at bookies and Betfair there's no tax on that otherwise everyone in the country who ever won would have to declare it and pay tax.
  9. mandelbrot

    mandelbrot Former user

    If you're clearing 12k a month at it consistently it doesn't sound very much like gambling - you must have difficulty getting a bet on in a bookies - did you read the article in the link I provided?

    Anyway, I didn't express an opinion other than to warn you that at some point the mismatch between your visible income and your actual means / wealth is going to pop on someone's radar somewhere, and you'd be better off (figuratively and literally) to be absolutely clear on what your position is, well in advance of a letter landing in your door.
  10. Fella

    Fella Frequent Poster

    Yeah I read the article it said those that engage in spread betting should be aware that what they do might be considered a trade, I don't do spread betting.

    Theres no tax on gambling winnings didn't Bertie say he won money gambling to avoid tax lol

    Can't post a link but from Irish statute book 613 article
    (2) Winnings from betting (including pool betting), lotteries, sweepstakes or games with prizes shall not be chargeable gains, and rights to winnings obtained by participating in any pool betting, lottery, sweepstake or game with prizes shall not be chargeable assets.

    If revenue wanna send me a letter I'll refer them to that.

    Thanks for tip off though actually reminds me I had this chat with someone few years back and looked up this info before.
  11. mandelbrot

    mandelbrot Former user

    Well if you're genuinely gambling then the likelihood is you'll end up losing it all back in the long run.

    From what you'd said (that you trade sports and other gambling "edges"), I assumed you were finding arbitrage opportunities or advantage gambling - a key characteristic of gambling is the inherent uncertainty, but I was assuming (rightly or wrongly) that you are placing your bets in a systematic way such that you can't lose; what you do would appear much closer to trading in financial derivatives than actual gambling for pleasure.

    Just to be clear, the legislation you quoted above simply confirms that betting winnings are not chargeable gains liable to CGT; there is no specific provision in relation to income tax - it very much depends on the facts of the individual case. Look at the 6 questions the Australian court considered in the Brajkovich case (page 3 of the article I linked):
    "1. whether the betting is conducted in a systematic, organised and ‘businesslike’ way;
    2. its scale: i.e. the size of the wins and losses;
    3. whether the betting is related to, or part of, other activities of a businesslike character, e.g. breeding horses;
    4. whether the bettor appears to engage in his activity principally for profit or principally for pleasure;
    5. whether the form of betting chosen is likely to reward skill and judgment or depends purely on chance;
    6. whether the gambling activity in question is of a kind which is ordinarily thought of as a hobby or pastime.”

    In your case it is possible (based on the very limited info you've posted) that the answer to all except question 3 would be the one that indicates a person effecting a taxable trade rather than an actual gambler. But that's based on very scant info - hence I suggested you take the precaution of paying a fraction of a month's winnings to get a proper expert opinion and have some assurance.
  12. Fella

    Fella Frequent Poster

    There is no income tax on gambling in Ireland it doesn't say it anywhere on revenue. All it mentions is that there is no chargeable tax on gambling. Why should I waste my time paying someone to find out what I already know based on a might be tax in Australia?? Like really?? Should everyone look at other countries laws to decide if they have to pay tax? There is no tax on gambling if there was the 90+ % of people who gamble and lose could leave revenue on a spot of bother.

    Your comment about losing it all eventually made me laugh its a comment I hear often. Every time I hear the bookie never losses I smile .
  13. TommyB

    TommyB Frequent Poster

    I'd agree. I thought about doing it pro for a while but it seemed a bit too much work and I had other things going on. It gambling money was income then all persons who have ever won a bet would have to declare it as income. It can't only be considered income if you win too much.

    I'd keep at it if you have your edge. My only fear is the future might see those edges disappear as the market change. I'd never rule out a tax change on winnings either. A part time civil service job is nice but it's not exactly irreplaceable.
  14. mandelbrot

    mandelbrot Former user

    Lads.... I'm gonna try this one last time!

    I never said there's income tax on gambling winnings, regardless of how much one wins.

    There IS income tax on the profits from carrying on a trade - whether or not a person is engaged in a trading activity is a question of the facts of the individual's case. Hence the 6 questions I referred to above.

    The Australian case law is not binding as precedent in Ireland, but if and when a similar issue comes before the courts here the Irish judges would be likely to give consideration to it - look at any High Court ruling and you'll see case law from other jurisdictions quoted.

    The question that you need to be VERY sure about, is quite simple - does the nature of your activities in betting markets constitute simple gambling, or does it possess the characteristics of a trade. The question is simple, but the answer may not be (as I said, and as the article indicates from relevant case law, it depends on the facts of the individual case).

    If you're happy that your money is at risk and what you're doing is actually gambling then that's fine, but if you're mainly making money from arbitrage, this is by definition not gambling, and you should have a careful think about what I'm saying, because you could be simply storing up trouble.
  15. Fella

    Fella Frequent Poster

    I think your confusing youself now lol!

    There is no tax on gambling profits in Ireland , we can't talk about Australia because it has nothing to do with Ireland , why not refer to America where they pay tax on winnings if you want to refer to other countries. There is no law to say you have to pay income tax on gambling winnings , Bertie and Gilligan both said in courts there money came from gambling , I didn't see the tax man taking it off them.

    You are looking for something thats not there , i'm not sure why.

    Arbitrage betting is not gambling is another joke thing to say , there is load of risks with arbitrage betting , bookies palping your bets price changes between backing and laying.

    I don't think you have the slightest inclination as to what its like been a professional gambler its not just Paddypower or Boylesports , I bet with over 700 individual bookmakers worldwide and and place tens of thousands of bets a month , how on earth would the revenue even start to look through all these books its totally impossible they would never even know them they are as far away as australia , I use e-wallets to get the money in and out , how could they look through 10k bets a month and find out if they were an Arb at the time of placing the bet?

    For some reason you are trying to convince yourself based on a case in Australia thats not even concrete that there is a gambling income tax in Ireland which there simply isint.

    If the revenue want to bring in a gambling income tax then fair enough I can decide what to do then , but they would have to give notice of it , you realistically think there is a gambling tax present at the moment that no one knows anything about ?? what about everyone daily that wins a bet or goes to horse racing or dog tracks and backs and follows horses should they all declare that ?

    Maybe your problem is jealousy im not sure , your comment you will lose it all eventually kinda suggested that was the reason.

    Im finished chatting about this now , not going to hijack this young mans thread and its not a gambling forum I don't want to get into the chat of gambling because i could go on forever , ive studied every aspect of it for years
  16. Jim2007

    Jim2007 Frequent Poster

    I just saw this.....

    I don't know where you are getting your advice, but unless they changed the law since I left, professional gambling is a trade/profession and is subject to income tax. A colleague and I represented a client before the Appeals Commissioners on this very point and lost! The client decided to settle rather than take it to the next level.

    All the Revenue need to show is that your material wealth can not be accounted for on the basis of your tax returns, it then becomes your problem to prove that it is legitimate and has been properly accounted for. There is no need for the Revenue to go through all the bets that were made as you seem to think.
  17. mandelbrot

    mandelbrot Former user

    I'm not confused at all

    The reason why, as I made very clear from the outset, was to alert you to the possibility that your arse is hanging out, and to urge you to make sure of your exposure.

    Again what you've just described doesn't sound like what most normal people would understand as gambling - it's systematic, volume based, and uses the identification of opportunities identified using skill and judgement rather than chance or luck, which is the essence of actual gambling. In reality, you're not gambling any more than a trader in any commodity who buys a product that they know the market price of, and risks the movement in this market price in the time it takes for them to get it to the point of sale.

    I'm not trying to convince myself of anything; I'm quite happy with my understanding of things - and I specifically said in my last post that there is no income tax on winnings from actual gambling, but that depending on the circumstances it is entirely possible that a person trading in betting markets, could be liable to income tax. I see Jim has confirmed that this is the case, but if you like you can dismiss his contribution too...

    Again, no, because there's an enormous difference between feeling lucky and putting on an impulse bet (or getting a tip and lumping on, or even sitting in your house all morning studying the form before hitting the bookies) and systematically scouring hundreds of markets globally for an edge in a market, and placing hundreds of bets a day

    My comment about losing it all was based on the general observation that gambling, actual bona fide gambling, as you well know involves requiring luck to overcome the bookie's edge, since the market is priced to include his profit - therefore since you can't be "lucky" in the long run, if you are genuinely gambling the expected return has to be negative. But you understand all that already, that's why you do what you do! And no, I'm not jealous - you're almost like my hero if I'm honest, as I would love to do what you do, but know I'd lack the discipline.
    My problem was, and remains, that you might be exposed and you don't know it - and I'd be genuinely concerned that if you made a million through your sports trading over 7 or 8 years, you could have most of it taken away if it was subsequently found to be taxable income - 50% of it being the tax, and the remainder being the accumulated interest and penalty.

    I'm finished chatting about it too - you can heed my advice or not - I've tried being helpful to you as you'll see I generally am in my posting on here - if you're going to stick your head in the sand it's your funeral. I'd wish you good luck, but you don't need it... ;)
  18. Bronte

    Bronte Frequent Poster

    Speaking of which, you're probably having an exceptional year as it seems there were too many favourites winning, and this has had a direct hit on the value of Paddy Power. My OH says he's enough money in the PP account to last until the Gold cup at least. Ultimately though, as I've been wont to inform him, the money always only seems to go one way, from our bank account to PP's bank account.

    The most famous professional gambler I've heard of is one JP McManus. So based on two posters here, his gambling is presumably trading, and therefore liable to income tax on profits of that trade. And his loses are also therefor presumably allowed to be brought against any other trading/business income he has.
  19. Fella

    Fella Frequent Poster

    I don't believe JP pays tax on his winnings.

    I was digging a bit deeper the closest I could find was uk where tax laws are similar to here and they say no tax which would be similar to here.


    So I rang revenue this morning and they told me there is no tax on gambling winnings , I said people are telling me if its my trade and my income and im making alot from it i am then operating a trade and have to pay tax , after been transferred around for half an hour finally spoke to someone who seemed to know alot about tax.

    The definitive answer was after speaking to managers and senior people in Revenue "there is no tax on gambling winnings in Ireland weather you make 10euro or 100000 euro a year you are not liable to pay tax on your winnings " there is nothing on there system for tax from gambling winnings"

    So I am doing nothing wrong , anyone can ring themselves and find that answer out.
  20. Bronte

    Bronte Frequent Poster

    You can get people in revenue to say lots of things. But you most certainly will not be able to rely on anything in a phone conversation. Send them an email or a letter. It will take them about a month or two to get back to you, that will clear this matter up.

    What evidence do you have to back up your 'belief' that JP doesn't pay tax on his bets? Do you think that Jim2007 is making up his story about the revenue appeals commissioners?