Moneymakeover Career change money makeover

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Sr. Tayto

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Personal details

Your age: 37
Your spouse's age: 38
Partner's age if not married:

Number and age of children: twins 2 years old


Income and expenditure
Annual gross income from employment or profession: 100k
Annual gross income of spouse/partner: 30-35 k

Monthly take-home pay: Between us it's about 6k after tax and contributions

Type of employment - e.g. Employee or self-employed. - Employee
Employer type: e.g. public servant, private company. - Private

In general are you:
(a) spending more than you earn, or
(b) saving?

I put 1.5k a month into stocks.


Summary of Assets and Liabilities
Family home value: 300k
Mortgage on family home: 110k remaining


Cash: 10k
Defined Contribution pension fund: 150k in AVCs pension. I would be offered about 115k to leave my DB pension (or 5k a year on retirement, according to chatgpt)
Company shares : 60k
Buy to Let Property value: 240k
Buy to let Mortgage: 0

Stocks : 250k (90% ETFs)

Total net assets: around 700-800k


Family home mortgage information
Avant variable 3.1%

Remaining term: 17 years
Monthly repayment: 800e


Pension information

Value of pension fund:

Buy to let properties
Value: 240k
Rental income per year: 18,600
Rough annual expenses other than mortgage interest : 1000

Inherited house, would like to keep it.


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

Have been contemplating a career change. Have had this high paying job for a few years, got into it during Covid and it's been great for my financial situation, pension etc. but I'm not satisfied with the job and there's little scope for progression and the industry is not interesting to me (operator in biopharma plant). Have completed a masters in another field but it is ripe for a shakeup with AI - the planning industry.

I'm fairly sure I want to leave my job, but I'm just trying to run the numbers to make sure I'll be a decent situation financially.

Essentially, I will drop my salary down from 120k to about 40k starting off. Because I invest such a large portion of my income, I think that this should still be viable. Is there something I'm blatently missing?
 
Sr. Tayto said:
Inherited house, would like to keep it.
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Nostalgic attachment? Was it the family home and you want to retire there or what other rationale do you have to keep it? If you added its value to your ETF portfolio you could accelerate compounding until the end of your days and a comfortable retirement in your 50s. If I was you with that salary I would keep maxing out my AVCs and stay where I was, aim to retire late 50s.
 
@ClubMan apologies, yeah I got a 20k bonus last year, wasn't sure whether to put it in or not. Most years I get around 100k.

CharlieMac said:
Nostalgic attachment? Was it the family home and you want to retire there or what other rationale do you have to keep it?
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Family home, in a good location if my kids wanted to use it for university. Decent yeild, good tenants.

Premos said:
No point of being miserable for 15 years to retire early.
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My thoughts exactly. Life is way too short.
 
Would you consider using your stock invested in ETFs to pay off the remainder of your mortgage?

Then you have loads of scope to change jobs as you'll have derisked your financial situation and a drop in salary will feel less as you also won't have a mortgage payment.

You say you invest 1.5k a month also, between that and a mortgage payment I presume you're living on about 4k a month as a family, so changing jobs sounds like it wouldn't materially change your day to day, if you're not longer spending €2k+ on mortgage/investment.
 
Sr. Tayto said:
Family home, in a good location if my kids wanted to use it for university. Decent yeild, good tenants.
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I understand where you are coming from - your former family home, it is well located, you have good tenants and are making a bit of money from it.

The risk, of course, is that by the time the children go to college, the tenants could have a permanent right of residence on a low rent (entirely possible with the current direction of travel) or may drag out the eviction process for years.
 
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Abalone said:
Would you consider using your stock invested in ETFs to pay off the remainder of your mortgage?
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I would consider it yeah. I suppose my thinking behind not paying it off is a bit of hedging. I reckon I can have better returns vs the interest rate on the mortgage, especially if I drop down to mostly a lower tax band. It's a low monthly payment that would be finished at roughly the time the kids would need to go to Uni if they go that route.

Greenbook said:
The risk, of course, is that by the time the children go to college, the tenants could have a permanent right of residence on a low rent (entirely possible with the current direction of travel) or may drag out the eviction process for years.
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Yeah, I'm watching closely the route the next few governments take for sure. At the moment it's a professional couple who live there, I've worked with the girl in the past and I suspect they will either buy a house soon or go travelling. By choosing your tenants carefully I think it can work to our advantage, but like any investment, it carries risk.
 
I would be offered about 115k to leave my DB pension (or 5k a year on retirement, according to chatgpt).

That ratio seems way too high imho …. My own ratio and I am much closer to retirement is much lower around 15 … worth getting real indicative transfer value if relying on that number .
 
mtk said:
That ratio seems way too high imho …. My own ratio and I am much closer to retirement is much lower around 15 … worth getting real indicative transfer value if relying on that number .
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Ok, nice one for that! The 5k a year is correct but the 115k seemed way too high, would be a no brainer at that price I think.
 
mtk said:
I would be offered about 115k to leave my DB pension (or 5k a year on retirement, according to chatgpt).

That ratio seems way too high imho …. My own ratio and I am much closer to retirement is much lower around 15 … worth getting real indicative transfer value if relying on that number .
Click to expand...
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