Investing proceeds from sale of house

[DeBarr]

Hi all

We are soon to close on the sale of our house and after the mortgage is paid we will have in the region of €420K cash surplus. We are hoping to build a home in the near future but it will be at least a year before we start and will hopefully only need about 350K to complete. In the meantime we want to maximise the returns on the full amount and was wondering if anyone had any ideas. I guess cash deposits are the safest route for such a short term but said I throw the question out in any case.

We have 3 small kids and are both in our mid thirties, only one of us is currently working with the other at home looking after the kids. We already have cash savings of about 35K in a rainy day fund. I have maxed the pension up to last year….

Thanks
DeBarr

 

[capall]

You think that there are investment opportunities out there as safe as bank deposits but with twice the returns that no one is telling you about ?

 

[JR Rizzo]

Hi all

We are soon to close on the sale of our house and after the mortgage is paid we will have in the region of €420K cash surplus. We are hoping to build a home in the near future but it will be at least a year before we start and will hopefully only need about 350K to complete. In the meantime we want to maximise the returns on the full amount and was wondering if anyone had any ideas. I guess cash deposits are the safest route for such a short term but said I throw the question out in any case.

We have 3 small kids and are both in our mid thirties, only one of us is currently working with the other at home looking after the kids. We already have cash savings of about 35K in a rainy day fund. I have maxed the pension up to last year….

Thanks
DeBarr

Hi DeBarr,

One year return predictions are generally seen as far too risky in stock market for anyone at anytime,
and as far as the markets go we've had 4 years of gains, so a down year
could very well be due anyway.

whether you have got 1 million or 1 thousand euros to "invest" from the sale of a house to a lottery winning,
the same usual financial planning questions need to be asked
such as
what are your short-long term goals?
whats your risk profile?
who are your dependants?
when might you need access to the cash you invest?
etc etc


you are already actually invested in stocks via your pension
though you cant touch it till god knows when, and its probably not near e420k!

so I wouldnt worry about putting much cash in long-term investment funds, ie dont listen to any "professional investment specialists" who
are just after have their own vested interests (eg sales commisions )

if I were you I would put it all in high interest accounts (about 5% before D.I.R.T. - see all other threads)
and if you havent already, throw the e35k in as well!

if you get the time, try contact bank managers directly and ask them
whats the best rate they can give you,
but say you are not interested in any investment funds - ignore all their marketing spin and any sales pressure they might try apply (its their job!)

see if they will compete with each other over your lump sum,
and for simplicities sake, go with the best offer!
- savings accounts returns dont vary widely like stock investment funds

when it comes to buiding your own house, in short-term, the banks will
see this savings as high security "investment" and you may be able to
haggle better rates and insurance quotes as you will be very low risk,
but from what your saying, you will not even need to take out a mortgage
to build your new house!!

I think its very fortunate that your kids have "full time parent", and a great situation to be in,
but the tradeoff is you only have the one full time income and
with growing uncertinty over Irish economy, your short-term building
plans, and 3 kids to enjoy, I think you should control your own risk
and just play it safe

JR.

 

[ClubMan]

Deposits would seem to be the only option for the money required in about a year for the new house. See the Financial Best Buys forum and the various threads discussing the best lump sum and regular saver rates on offer. It's difficult to say given the partial information posted what would be the best option(s) for your "spare" €70K plus the €35K that you have already saved (where is this at the moment?). You might consider paying a good multi-agency intermediary or authorised advisor to do a comprehensive fact find/financial review with you and then see what they recommend in terms of short, medium and long term savings and investment options? Have you read the key posts and, in particular, the AAM and IFSRA guides to savings and investments?

Post crossed with JRR's.