Sean Bateman
Registered User
- Messages
- 39
I admit that we have been reckless and have overstretched ourselves but between crèches etc and loans we are very tight at the end of each month. We have no savings.
Figures to doHello,
I need some advice and would be grateful for help.
My circumstances are:
- I'm 40 and my wife is 38
- We have three kids under 10
- She's on €70,000 a year in the public sector - She will get a DB pension
- My basic salary is €140,000 and I typically get a bonus of €50,000...I also get share options and have around €100,000 available for exercise in 2020...they pay our health insurance too
- My pension fund is worth €250,000 and is invested in a pretty cheap global equity option (0.2%). My employer contributes €14,000 a year and I contribute €28,750.
- We owe €700,000 on our home. The interest rate is 2.75% Variable with AIB.
- We own our previous home too. It is worth around €350,000 and we owe €180,000 at 0.55% to Pepper. It generates €1,750 of rent per month.
- We went overboard on the renovation of our home and have a hell of a lot of personal debt:
Credit Union - €30,000 (€570 a month)
Credit Union - €40,000 (€610 a month)
Bank - €26,000 (€352 a month)
Bank - €30,000 (€600 a month)
Other - €100,000 (Nil for the moment but can't stay that way forever)
Credit Cards - Nil
- I have €80,000 coming back to me from a private company investment that has unwound at breakeven. I plan to clear the €610 a month Credit Union loan plus the €600 a month bank loan plus €10,000 of the €100,000 loan (to show progress).
I admit that we have been reckless and have overstretched ourselves but between crèches etc and loans we are very tight at the end of each month. We have no savings. The plan is to use bonuses plus share option to repay the personal debts.
The $64,000 question is whether we should sell the investment property. Part of me thinks no, keep the head down for a few years and keep what's a solid investment plus it's on a tracker. Another part of me feels that I want to live life to the max and enjoy a large disposable income because I could be dead in 10 years.
Any advice and honest feedback welcome, no matter how candid!
Thank you.
Without looking at the rest of your circumstances, it's a fantastic investment.The $64,000 question is whether we should sell the investment property. Part of me thinks no, keep the head down for a few years and keep what's a solid investment plus it's on a tracker.
And wouldn't that be a nice worry to have?My worry is that a few years from now, we’ll be crying out for an investment like that property.
I like the idea of owning a Lamborghini, but I'm not taking out a loan for it. It's definitely not worth it if you're stressed.But I like the idea of having my pension fund, an emergency fund, defined benefit stuff, and an investment property.
It's really not as bad as it first looks.
If you liquidate the equity in the rental and the private company investment you could clear your personal debt in full and make a dint in that jumbo mortgage.
When you've done that you could use the increased monthly cashflow to really start paying down the mortgage to a more reasonable level, while maintaining your pension contributions at their current level.
Best of luck.
There would be no CGT. Our conundrum is whether to trade out of our cashflow issues or to solve them by selling the property. My worry is that a few years from now, we’ll be crying out for an investment like that property.
Employment is very secure (more than 12 years in the same place). Not impacted by Brexit and get headhunted reasonably regularly.
Those Credit Union loans are all net of savings. All of the bank/Credit Union loans have 8 years to run and average at 8%. I told them that the purpose was home improvements.
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