Money Makeover opinions - Savings building up

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sidzer

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Savings built up - any suggestions for investment options:

Looking for some investment options for my wife. She currently has @250k. (100k in Prize Bonds and 150k in savings.)

No mortgage on family home.


Personal details

Age: 53
Spouse’s age: 51

Number and age of children: 2
Ages 16 and 14 - all in good health TG.
(both have money coming at 18 from a RTA / which will cover college expenses)


Income and expenditure
Annual gross income: 71K
Annual gross income from employment or profession: @95K (Basic 70 + overtime 25k) Spouse


Type of employment:

Education
Medical / HSE - Spouse

(both permanent)

In general are you:

saving -


Summary of Assets and Liabilities
Family home / farm worth €700k with no mortgage
Cash of €150k
Prize Bonds €100k

State pensions:
Pension will be full at 60 - currently buying back notional service 11 yrs / 28% of gross salary
Pension will be full at age 60 (Basic pay is €70k) Spouse


Family home mortgage information

None

Other borrowings – car loans/personal loans etc

No borrowings


Buy to let properties

Buy to Let Property worth €420k with no mortgage - Rent = €1100 / PCM -(spouse) - take home approx. €550 after taxes and repairs etc.
Buy to let Property worth €220k with no mortgage - Rent = €800 / PCM - take home approx. €400 after taxes and repairs etc.

Have a holiday home which is sale agreed - bought + renovated for @ €120,000 - sale agreed for €160,000 but sale has not yet gone through - no mortgage

Other savings and investments:

Do you have a pension scheme? Yes - State pensions - see above

Do you own any investment or other property? see above

Other information which might be relevant

No Life Assurance (Tried to get the GP to sign papers and she never did it despite numerous requests)


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

My wife has 100k in Prize Bonds and 150K in a regular savings account. She is looking for ways / products to invest into to get a better return than a bank account. She won't go for high risk options and we have had our fill of property and are not interested in buying a house etc.

Any suggestions would be most welcome.

Thanks
 
sidzer said:
She won't go for high risk options
Click to expand...

Then she should get out of prize bonds and cash. They are too risky. They are steadily falling in value as inflation exceeds the interest she is getting.

There is no risk-free option.

She should invest in a portfolio of shares.

With total assets of €1.7m - excluding the huge capital value of your pensions - €250k represents 15% of your wealth.

Even if you bought €250k of shares in just one company and it fell to zero, you would be losing just 15% of your wealth. So you don't need the normal diversification which most investors do.

She should pick 5 large companies and buy €50k each of their shares and then forget about them.

Brendan
 
sidzer said:
Buy to let properties

Buy to Let Property worth €420k with no mortgage - Rent = €1100 / PCM -(spouse) - take home approx. €550 after taxes and repairs etc.
Click to expand...
That's a 3.1% gross yield. Is it in an RPZ?
sidzer said:
Buy to let Property worth €220k with no mortgage - Rent = €800 / PCM - take home approx. €400 after taxes and repairs etc.
Click to expand...
That's a 4.3% gross yield. Is it in an RPZ?

Just to zoom in on your property assets here, you are getting a real poor net return on your capital invested given the risk involved.

If you want to be a landlord you should probably sell up and start again and buy properties not subject to rent controls where you can get something like a 10% yield for apartments outside Dublin. There may of course be a CGT gain to be crystallised but as it stands the BTLs are a poor use of your wealth.


sidzer said:
Family home / farm worth €700k with no mortgage
Click to expand...
Do you have any farm income?
 
NoRegretsCoyote said:
That's a 3.1% gross yield. Is it in an RPZ?

That's a 4.3% gross yield. Is it in an RPZ?

Just to zoom in on your property assets here, you are getting a real poor net return on your capital invested given the risk involved.

If you want to be a landlord you should probably sell up and start again and buy properties not subject to rent controls where you can get something like a 10% yield for apartments outside Dublin. There may of course be a CGT gain to be crystallised but as it stands the BTLs are a poor use of your wealth.



Do you have any farm income?
Click to expand...

Yes - both houses are in RPZs. Good tenants but hardly worth the effort after costs and taxes are paid I know.

No real income from farm - it's only a small holding 20 acres - 50 sheep. I spend a hundred I make a hundred.....


Brendan Burgess said:
Then she should get out of prize bonds and cash. They are too risky. They are steadily falling in value as inflation exceeds the interest she is getting.

There is no risk-free option.

She should invest in a portfolio of shares.

With total assets of €1.7m - excluding the huge capital value of your pensions - €250k represents 15% of your wealth.

Even if you bought €250k of shares in just one company and it fell to zero, you would be losing just 15% of your wealth. So you don't need the normal diversification which most investors do.

She should pick 5 large companies and buy €50k each of their shares and then forget about them.

Brendan
Click to expand...

What companies sell or would advise on a portfolio of shares?

Thanks for the replies
 
Brendan Burgess said:
She should pick 5 large companies and buy €50k each of their shares and then forget about them.
Click to expand...
Or perhaps just buy shares in one company - a Berkshire Hathaway style diversified conglomerate, or even Berkshire Hathaway itself. Google for info about such stocks and how they can give you diversification and something akin to an ETF/index tracker without the drawbacks of the tax treatment of most ETFs or unit linked funds.
 
ClubMan said:
Or perhaps just buy shares in one company - a Berkshire Hathaway style diversified conglomerate, or even Berkshire Hathaway itself. Google for info about such stocks and how they can give you diversification and something akin to an ETF/index tracker without the drawbacks of the tax treatment of most ETFs or unit linked funds.
Click to expand...
Thanks. CM
 
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