Lump Sum Investment Advice

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peepee

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(Please don't post if your advice is to contact a financial adviser)

Im early 40's, two young children, I have 750k, homeowner, no debts, no mortgage, BUT no pension.

We are both part time self employed and happy with that, very modest income, about 30k total.

We live a simple life and are risk averse.

Best investment option with this scenario????
 
Interesting scenario.

There is obviously no "right" answer to your question but I think if I was in your shoes, I would do something along the following lines:
  • I would use ~€200k to buy a rental property;
  • I would invest ~€300k in a diversified portfolio of global equity investment trusts;
  • I would invest ~€200k in 5-year State Savings certificates; and
  • I would put the remaining ~€50k in an instant access savings account with Rabo.
 
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Do I understand correctly that you have €750k in the bank ?

I would largely agree with Sarenco, with perhaps a bit more into rental property, a bit less in state savings.

However, can you get a tax benefit from putting some money into a pension every year.
 
Yes, at the moment its in the bank. Combination of some previous good luck in shares from a company I used to work for and an inheritance.
Unless I am in the higher tax bracket I can see no benefit to a private PRSA; too costly.
I guess what I am looking for is to have enough for my wife and I to live fairly simply through to retirement and on.
I'm not interested in leaving my children a lot of money. They will get a good education and the family home ultimately.
Rgds global equity investment trusts, where do I start when researching these?
 
Sarenco why would you go for a rental property? Seems like a lot of hassle and you've argued before here the yield is not worth it , would 200k into a REIT not be better ?
I'd avoid the investment property myself, seems like a second job for minimum gain.
 
Marc said:
I'm speaking at a conference of over 50 Financial Planner professionals on Thursday with a representative from the Central Bank and the Financial Ombudsman's office in attendance.

One of the questions I will be putting to the floor is this; why is it that the level of trust is so low around Financial Advice in Ireland that someone who clearly needs Independent Financial Advice has absolutely no interest in obtaining it and prefers to seek out unregulated and uninsured, often anonymous opinions in preference to written, professional, regulated and insured advice?
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Not a trust issue but rather a Cost issue, i would hazard.

Your question should be " why is the cost of obtaining independant financial advice so prohibitivly high resulting in individuals seeking out free advice on forums?"
 
Jim that's a very good point.
Research from Vanguard estimates that the value a competent (I know) financial planner adds is about 3%pa compared to an average DIY investor.
So, under those conditions for most people on average, not engaging an adviser is a substantial opportunity cost.

Google: Vanguard Advisor Alpha
 
Marc said:
I'm speaking at a conference of over 50 Financial Planner professionals on Thursday with a representative from the Central Bank and the Financial Ombudsman's office in attendance.

One of the questions I will be putting to the floor is this; why is it that the level of trust is so low around Financial Advice in Ireland that someone who clearly needs Independent Financial Advice has absolutely no interest in obtaining it and prefers to seek out unregulated and uninsured, often anonymous opinions in preference to written, professional, regulated and insured advice?
Click to expand...

For me, it's the country in general there are very few professions that act in the best interest of a client, even a doctor is probably getting a back hander for prescribing certain drugs. Ultimately is there anyone that cares more about my money than me ? Probably not.
Like every profession you have great people but a few bad eggs , risking my net wealth with the chance I get a bad egg is a big risk, I'd rather try myself or ask here.
When you post on a forum and someone gives you bad advice it's likely someone else will point that out . If I'm sitting in an advisors office there is no one to point out that to me.
There is also the cost element , if I can do it myself I save on these ongoing or one off costs.
 
Marc said:
One of the questions I will be putting to the floor is this; why is it that the level of trust is so low around Financial Advice in Ireland that someone who clearly needs Independent Financial Advice has absolutely no interest in obtaining it and prefers to seek out unregulated and uninsured, often anonymous opinions in preference to written, professional, regulated and insured advice?
Click to expand...

Insured? Please explain how a 'professional's' financial advice to me is insured?
 
Financial Advisers are required by the Central Bank of Ireland to hold professional indemnity insurance so that you can make a claim against an insurance policy if the advice you receive is incorrect. [broken link removed]

If you receive incorrect advice on the internet, you have absolutely no come back at all.
 
Marc said:
I'm speaking at a conference of over 50 Financial Planner professionals on Thursday with a representative from the Central Bank and the Financial Ombudsman's office in attendance.
One of the questions I will be putting to the floor is this; why is it that the level of trust is so low around Financial Advice in Ireland that someone who clearly needs Independent Financial Advice has absolutely no interest in obtaining it and prefers to seek out unregulated and uninsured, often anonymous opinions in preference to written, professional, regulated and insured advice?
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My money is my responsibility. It is up to me to educate myself about all the options available. By posting the above your are assuming that I am not going to go to anyone else and seek advice. You are also assuming that I will take any 'bad' advice I receive and not have the sense to do my own research. I believe if I walk into a financial advisers office with a clear idea of what I want and armed with knowledge I have from forums/friends etc I will make a good and informed decision. How is that a bad thing?

Marc said:
Financial Advisers are required by the Central Bank of Ireland to hold professional indemnity insurance so that you can make a claim against an insurance policy if the advice you receive is incorrect.
If you receive incorrect advice on the internet, you have absolutely no come back at all.
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Is this a joke? Good luck trying to prove anything other than the absolute worst advice is negligent.
By the way the first line of my thread is pretty clear about what advice I was soliciting.
You have hijacked my thread and made a base assumption re the advice here and my ability to make an informed decision.
How about you actually give a positive input and comment on the advice given here instead. You have actually turned me off
walking into a professional financial advisers office.
 
Peepee, at least you are awake and won't be sold a pup. Anyone thay classes themselves in this country are in the main only interested in their own pockets. That's from the biggest institutions to the smallest This post will be deleted if not edited to remove bad language holes out there.

If I put my story up here, all proven, people would run a mile, literally. I'm sorry Mark, you might mean well, but there is no level of honesty in this country. This comment is of no reflection on you.

The only alternative I can see, is by going to a Stock Broking Co, get a contact and tease it out with them. This is the only sector that is heavily compliant. The person you choose will in many cases treat the money as if its their own. Full compliance should be the order of the day.
 
I have a major issue with some of the stuff being posted here.

There are some excellent firms and advisors out there.
 
Gordon, If i put up my experiences with the biggest you would be shocked. I'm not embarrassed by this and should not me either. But believe me you will be shocked. PM me if you wish, then take a seat before you fall over.

I do agree with you, there are some good advisors out there now, but it cost me a seven figure sum and a very hard lesson. Central Bank know all about it, from the top of these companies to the bottom, but do zilch. I'm beyond tears at this stage, just want my pound of flesh.
 
peepee said:
(Please don't post if your advice is to contact a financial adviser)

Im early 40's, two young children, I have 750k, homeowner, no debts, no mortgage, BUT no pension.

We are both part time self employed and happy with that, very modest income, about 30k total.

We live a simple life and are risk averse.

Best investment option with this scenario????
Click to expand...

I would keep it simple;

100k in the bank for rainy day/emergencies
650k in 10 divident paying large blue chips.

Stay away from rental property. Its hassle, illiquid and not flexible enough to minimise your CGT.
 
sunnydonkey said:
I would keep it simple;

100k in the bank for rainy day/emergencies
650k in 10 divident paying large blue chips.

Stay away from rental property. Its hassle, illiquid and not flexible enough to minimise your CGT.
Click to expand...
100k is far too much for a rainy day in my opinion.
 
Marc said:
I'm speaking at a conference of over 50 Financial Planner professionals on Thursday with a representative from the Central Bank and the Financial Ombudsman's office in attendance.

One of the questions I will be putting to the floor is this; why is it that the level of trust is so low around Financial Advice in Ireland that someone who clearly needs Independent Financial Advice has absolutely no interest in obtaining it and prefers to seek out unregulated and uninsured, often anonymous opinions in preference to written, professional, regulated and insured advice?
Click to expand...

You have hijacked this thread, but you do raise an interesting point.

I wonder do you realise that many readers will find your tone in raising the point offensive.

Perhaps the simplest response to your question is that the regulatory authorities have not ruthlessly rooted out, misleading practices or even dishonesty in financial planning or financial services more generally.
 
Cremegg, now that's a post with purpose. The advisers in this country are only interested in one thing -- what's in it for them. And in the main, the bigger the company the more they'll slice and dice an investor.
 
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