I claim the full civil service rate for lunch every day. It may not be in accordance with the letter of the law but I defy any civil servant to point this out.
Since you're asking for perspective: I went to look at your recent posts to see what other threads you were talking about and I saw this post from a couple of weeks back -
So you probably have an as yet unquantified tax bill building up for yourself as well if you're playing fast and loose with your self-employed expenses...
"As you will see from other threads I don't believe that investing in more property is the way to go,"
And in Feb :
http://www.askaboutmoney.com/showthread.php?t=185648
Confusing.
You have a sizeable amount of savings despite several property investments so clearly you have been doing something right. I think what you need to do is really planning. As you say you are at a point where you are looking at your children possibly starting third level education so you would probably not want to tie up all your cash in illiquid assets or potentially volatile short term equities but at the same time you are probably not making much in cash savings and they attract DIRT and PRSI. I think you need to start thinking in in terms of what your short, medium and long-term goals are. Set them all down on paper and attempt a costing on them, you might have a clearer idea of what you need.
Also if you are currently spending more than you are earning you will bleed yourself dry so perhaps you need to look at why. Is it a short term bump or a long term trend? Is there any way to rebalance your expenditure and income?
As a self employed person you are supposed to have receipts for all expenditure.
In practice this can be difficult or impractical for small one off items, like lunch. I often don't even get a receipt unless I specifically ask, and when I do I have to keep this in my pocket, until I can file it.
I have taken the view that this is impractical and charged reasonable amounts based on the civil service rate.
A Revenue audit 2 years ago raised no objection.
Conversely for diesel expenses, which I get a monthly account in the post the Revenue inspector disallowed 20%, despite my having full documentation.
In my experience Revenue are happy to accept expenses which are reasonable in their view.
Really lucky to have been audited, to me that means you've now got confirmation from revenue that you are running a tight ship, so if you continue you should never have a problem. How did the revenue guy come to the 20% decision on diesel?
In the past we had a higher income and got used to a certain standard of living. While we certainly have cut back and looked for better value we have not cut to the bone. It is hard to say no holiday this year when you have the cash to pay for it.
On investment properties, Interest only is fine, generally.What is the game plan in relation to the 2 interest only properties. Not a fan personally of IO. Don't see the logic. In 18 years, you have to pay them back. Would it be better to use the rental income profits to pay down capital now. You will be 66 and 69 when these mortgages have to be paid down. At that stage you will be presumable 'retired.'
If I can borrow at 4% to get a return on 8%, that is good investment.
Would he not be better repaying the capital in order to have the properties guaranteed to be paid down so that on retirement he has an income stream or the option to sell?
College
How much is this going to cost you?
Any chance one of those properties are in a location where the kids will go to college?
So you're maybe clearing 10K as extra income.
What's the term on the BTL 4?
What is the game plan in relation to the 2 interest only properties.
What happens if we are in a Japan scenario, I'm not discussing house prices, but one has to consider all options, what if in year 18 property prices mean you don't even have enough to repay those loans from selling at that time. Would like to be in a scenario where the bank comes looking at your assets and you lose an income producing stream.
Retirement
What are you going to live on in retirement.
Are you entitled to state pension, is your partner? How much will your pension pot pay out?
Paying off the car loan seems clear
Your three mortgaged buy to let properties
These are extremely profitable due to the low cost trackers and should not be sold. Buy to let 4 is very profitable.
You should be maxing your pension contributions
I assume BTL2 and BTL3 are BoSI mortgages. There is a fair chance that you will get a deal on these at some stage in the future.
What risks do you need to guard against?
Interest rate rises. With net borrowings of €550k a 2% rise would cost you around €10k a year. You can handle this. If it happens, you might need to reassess your strategy.
Rents falling and or a sustained fall in property prices. With €810k in property, you are probably overexposed to it. By selling the BTL1, you will reduce this risk somewhat. Even if you think that property prices and rents are going to rise, you should still sell BTL 1, as you will still have almost €700k invested in property after the sale and so will benefit strongly from any increase in property prices
Bank or state default.
What is the CGT position if you sell BTL 1?
So what should you do with your savings?
You should buy around 5 blue chip shares directly with your cash.
Originally Posted by Brendan Burgess http://www.askaboutmoney.com/showthread.php?p=1380897#post1380897
You should be maxing your pension contributions
Do you recommend this even though I will effectively using savings to make the pension contributions?
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