Financial health check please (high income, what to do with cash on deposit?)

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Evo10

Guest
Self - Gross income -€120,000 plus bonus of up to €60,000
Spouse - Gross income - €50,000

Jobs - self - paye Financial Sector
Spouse - Paye - motor industry

Ages - Self - 37
Spouse - 38

Mortgage
House - Value circa €525k
Mortgage bal - €377k
Monthly repayment - €2,040
First Active - ECB + .7%

Investments -

Property 1 - value circa €130k, mortgage €95k, income 4.5% guaranteed, shortfall of €225 per month. in France

Property 2 - value circa €265k, mortgage 175k, shortfall of €550 per month.

Savings - 30k on deposit

Other loans - car loan - 300 per month, bal of 5k.

Credit cards - bal cleared each month.

Pensions

Self - no employer scheme - contribute max 20% each year.
Spouse - no employer scheme - contribute max 20% each year.


Children - 3 yr old


Need advise on what to do with 30k and also have circa 1k a month excess funds
 
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Guest120

Guest
Re: Financial health check please

Pay off the car loan, then we'll talk about what you can do with the 25k.
 

John Rambo

Registered User
Messages
662
Re: Financial health check please

As Bluetonic has said, eliminate the car loan...I can't understand why you'd even have one given the healthy state of your finances. Personally, as your PRSA contributions are maxed out I'd look to start eating into the three mortgages in the most tax efficient way possible by overpaying. Look at the income that the two investments are generating and work out the tax relief situation. I do think at your level you should seek professional advice.
 
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Evo10

Guest
Re: Financial health check please

Thanks for the quick replies.

Had been thinking of paying off the car loan, we took out the car loan 3 years ago when our financial situation wasn't as good. New baby, new house and I wasn't earning at the same level.

Having been thinking about using some of the savings to invest in a BES windfarm company but need to get some tax/finance advice on this.
 

ClubMan

Registered User
Messages
44,630
Re: Financial health check please

Having been thinking about using some of the savings to invest in a BES windfarm company but need to get some tax/finance advice on this.
BES investments are generally at the very high end of the risk/reward scale. You should probably only consider them once you have created a more balanced/diversified portfolio covering other asset classes (you seem very concentrated on domestic Irish (?) property right now), risk/reward profiles, geographic regions, investment timeframes etc. and catering to your short, medium and long term goals and how these need to be financed.
 

RainyDay

Registered User
Messages
4,506
Re: Financial health check please

Personally, as your PRSA contributions are maxed out I'd look to start eating into the three mortgages in the most tax efficient way possible by overpaying. Look at the income that the two investments are generating and work out the tax relief situation.
Focus on repaying your PPR mortgage before the two investment mortgages to maximise your tax relief.
 

snowey

Registered User
Messages
13
Hi Evo10

As the other posters sid, pay off the car loan and keep some of the remaining €25k in a high yielding 'safety cushion' account.

Look at your investment properties - the large monthly shortfall suggests that they are repayment mortgages as opposed to interest only mortgages. It might be worth considering changing to interest only and thereby reducing how much you have to fund the shortfall.

Focus in the short term on reducing the mortgage on your PPR. Use your extra €1000 per month to this end. Keep about €120k on your PPR mortgage to maximise tax relief.

Then look at paying off your investment properties & investing in shares and possibly further properties down the line - if structed correctly, you could have a great Investment portfolio in 20 years time. Initially though my advice is pay off your home mortgage.

All the best!
 
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Evo10

Guest
Thank you for all the advice.

I have contacted my bank about clearing the car loan so thats a start.

I'm also going to get professional advice on our situation as ideally I would like to put a proper investment/financial strategy in place.
 

ubiquitous

Registered User
Messages
3,782
Re: Financial health check please

BES investments are generally at the very high end of the risk/reward scale.

Definitely the high end of the risk scale, sadly in most people's experience they're at the low end of the reward scale.
You should probably only consider them once you have created a more balanced/diversified portfolio covering other asset classes

I agree 100%
 

ubiquitous

Registered User
Messages
3,782
I think you should concentrate on reducing your €377k domestic mortgage. Its a big commitment, especially on top of your investment mortgage shortfalls/
 

ClubMan

Registered User
Messages
44,630
Re: Financial health check please

Definitely the high end of the risk scale, sadly in most people's experience they're at the low end of the reward scale.
Fair point - I guess the potential risk and reward profiles of an investment should be measured on separate scales!
 
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clubsandwich

Guest
Re: Financial health check please

Fair point - I guess the potential risk and reward profiles of an investment should be measured on separate scales!

??? there should be a direct relationship between risk and reward on any investment decision and the potential rewards should be measured DIRECTLY against the potential risks - not sure where you are going with your separate scales - sounds like comparing apples & oranges to me, not an enlighten investment appraisal method
 

Purple

Registered User
Messages
11,972
Evo10, you seem to have a good grasp on things. With two well funded pensions and investment properties you are, in effect, well invested in property and shares.

While you income is high it's not massive and you have substantial commitments. I hope you are enjoying life, going on holidays, eating out etc. Life can be short, have fun.
 
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Evo10

Guest
Purple,

There was me thinking an income of over 200k as a high enough one lol!!

We are having fun, usually manage 2 foreign holidays and a couple of mini-breaks in Ireland a year. As for eating out, well with a 3 year old that is easier said than done:D, but we manage to get out at least twice a month on our own.
 
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