Money and Savings Makeover!

B

BradyHawks

Guest
Age: 33
Spouse’s/Partner's age: 30

Annual gross income from employment or profession: 80k
Annual gross income of spouse: 34k

Type of employment: e.g. business consultant/admin manager

Rough estimate of value of home €260k
Amount outstanding on your mortgage: €121k
What interest rate are you paying? €729 with 4.9% tracker

Other borrowings – car loans/personal loans etc
Me: NO LOANS
Spouse: CAR LOAN - 15k left

Do you pay off your full credit card balance each month? Yes
If not, what is the balance on your credit card? NIL

Savings and investments:
Bank: €4,500

Do you have a pension scheme? NO but my wife does


Do you own any investment or other property? No

Health insurance:
Me: €50 pcm - child included.
Partner: €50 pcm - child included

We have 2 kids under 4 and creche costs pcm @ the mo are €400pcm and will rise to €790 in 2 months time.
No more plans for have more......well, not at the mo!

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

I know i'm in good shape - but i have little saved.
I've just paid off a 16k car loan with savings to get rid of that.
What i want to do now is grow wealth......and quickly over the next number of years. My career does not give me much job security so i've got to save well while making the money.
I can put away 2k pcm in savings but whats the best way to save it well and solidly.
I have no pension at the mo, but whats the best pension to start?
Also, i'd like to be in a position to be able to buy a investment property in 1 or 2 years when prices bottom out......so what the best advice in this area?
anything else i sohuld consider to gather up savings and wealth to ensure a solid future for me and my family.
Any help/experience is most welcome.
Thanks.
 
I think your first objective should be to pay off the car loan. It's probably quite expensive. If your money is separate from your wife's, lend her the money to pay off her car loan.

It might also be a problem if by paying off the loan, your spouse thinks "Well now I have no loan, I can borrow €20k and buy an 08 car". If that is his way of thinking, then you should probably leave her with the car loan.

A pension is the best form of long term saving. When your car loan is paid off, you would be well placed to start a pension. Check out the pensions forum for the best way to do this.

You may trade up your home in the medium term, but you have enough equity in your current home to allow you to trade up. If you are planning to trade up soon, then I would defer starting the pension until after the trade-up.

Investing borrowed money in property or any other asset is risky. But you can afford to take that risk when you judge that the time is right.

How secure is your income? If it's not too secure, then you should probably save up some money in a savings account before starting a pension. You can always put this in a pension fund later. I would invest this in an equity fund as that provides the best long term return.

I don't like "What i want to do now is grow wealth......and quickly over the next number of years."

Wealth accumulation is a slow process. There is no hurry. The problem with hurrying is that you may take excessive risks and blow what you have already accumulated in your home.

Brendan
 
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