Moneymakeover MM - Setting priorities

figs365

figs365

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Personal details
Your age: 47
Your spouse's age: 45
Number and age of children: 1 x primary age

Income and expenditure
Annual gross income from employment or profession: €150k (incl bonus) + restricted shares.
Annual gross income of spouse/partner: €65k (incl bonus + family healthcare) part-time
Monthly take-home pay: circa €9k combined
Type of employment - Employee.
Employer type: private company – part owner.

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

Summary of Assets and Liabilities
Family home value: €1.2m
Mortgage on family home: €360k
Net equity: €840k

Cash: 10k
Defined Contribution pension fund: €360k (total of both)
Company shares: current €1.2M (Likely exit in time with CGT ER @ 10%)
Crypto: 40k

Buy to Let Property value: 0
Buy to let Mortgage: 0

Family home mortgage information
Lender: Avant
Interest rate: 3.6%
Type of interest rate: fixed yr 2 of 4.
Remaining term: 21yrs
Monthly repayment: €2060

Other borrowings – car loans/personal loans etc
Do you pay off your full credit card balance each month? yes
If not, what is the balance on your credit card?

Personal Loan – 70k remains 6 years @ 6.9% @ €1235pm

Pension information
10% contribution with 5% employer match. Some annual Employer one-off contributions in-lieu of shares.

12% contribution with 6% employer match
Value of pension fund: 200k + 160k spouse

Buy to let properties – n/a

Other savings and investments:
Shares €140k private company

EIIS investment 2025 – 200k with full 50% relief.

Shares public stock - 2k

Other information which might be relevant
Life assurance- both x 4 salary, Mortgage protection

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

Question really is what to prioritise, assuming pay down personal loans and max out pension contributions is the correct approach first. I imagine at this stage with the aims below, a financial planner would be worth considering.

Aims:
  • Need to figure out a pathway to retirement (or reduced hours), ideally mid 50’s, early 60’s.
  • Need to free up cash to pay down current expensive loan and max out pension contributions.
  • Save for child education / college.
  • House needs a retrofit to make it comfortable for next 20 years.
  • Diversify investments.
 
Yeah, clear the 70k personal loan as soon as you can. Max out AVC's in the meantime - you should really be able to do this via payroll with monthly income of 9k and just a 2k mortgage.

You're well on your way to early retirement but you are carrying a lot of risk with 1.2m tied up in your company shares, 140k tied up in a private company, 200k tied up in an EIIS scheme, and 40k available but it's in high-risk crypto. This needs to get balanced out asap, and probably the best way is via your AVC's into a global equities index fund. Let us know if any of the above are not actually tied up - if so, you should cash out some of them asap.

I don't really see why you need to save for college for one kid with your income levels. Unless you plan on sending them to an Ivy League university?
 
I hear you on the risk element with the company but unfortunately its nature of the beast for now. Will continue to try diversify out where I can.
The crypto is based on an interest but it may be time to fully de-risk there.
College - fair point but I suppose we have it on the radar as future expense.
I will look into AVs into global equities index fund.

Thanks for the input, appreciated.
 
figs365 said:
Other borrowings – car loans/personal loans etc
Do you pay off your full credit card balance each month? yes
If not, what is the balance on your credit card?

Personal Loan – 70k remains 6 years @ 6.9% @ €1235pm
Click to expand...
Sell the crypto and pay down the personal loan. Someone with your wealth doesn’t need to be paying interest at 7%.

For the rest you’re doing grand.
 
Do you mind me asking what your thinking was with the large investment in EIIS? Not often you see it on AAM!
Personally I would be maxing out tax relief in AVCs first.
 
@messyleo , no problem. it's a diversification route out of a company via dividend with also being able to take advantage of the tax relief. The EIIS opportunity itself is direct rather than through a broker/3rd party facilitator.
 
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