Moneymakeover My investment strategy is too messy

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LLB123

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Here's how things look this year after maximising pension contributions, no loans:

Gold 52k - bought during covid at half the price and just kept it
USD 50k - built up over the years from putting bits and pieces into a USD account we use to pay family expenses when we travel over there.
EUR 100k - emergency fund sitting in AIB account.
Etoro 11k - bought a couple of Voo ETFs last year after asking advice here.
Revolut 35k - individual tech stocks, mostly Nividia, again bought during covid and just left them.
Bitcoin 2.5k - just because.
Trade Republic 25k - Accumulating ETF (would prefer to put the 100k in this but conscious of protection limits and that it's a fintech (with terrible customer service apparently)
Cash 10k - again just in case.

Looking at it laid out like this, there's no real strategy here and I don't 'need' any of it touch wood, so I'm wondering how to make everything a bit more streamlined as it feels all over the place.

I have a mortgage @ 2.5k per month but don't want to pay this off because finance is so hard to get when self-employed and I'm too old to borrow again!
 
Brendan Burgess said:
This is the main and obvious error. When you have plenty of liquid assets you do not need an emergency fund as you can just sell some shares if the emergency happens
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Agreed but what to do with it when I don't want to pay off my mortgage and have maxed out my pension contribution limits ...
 
LLB123 said:
I have a mortgage @ 2.5k per month but don't want to pay this off because finance is so hard to get when self-employed and I'm too old to borrow again!
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How long is left on your mortgage?

I have heard people arguing that they did not want to repay their mortgage early but if you have only 6 or 7 years left, then you are going to be clearing it anyway.

Do you really expect to be borrowing again if you are "too old" to borrow?

If you might, join a Credit Union and they will lend you money if you need it.

Brendan
 
Sarenco said:
Why don’t you want to pay off your mortgage?
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I always have to jump through insane hoops and reams of paperwork to get any borrowings and always viewed mortgage as a utility, kind of like putting petrol in the car? Dunno, I'm neurodivergent too which might also explain why I'm not really run of the mill about this stuff...
 
Personal details

Age: 48
Spouse’s/Partner's age: 47
Number and age of children: 1 @ 15yrs

Income and expenditure
Self-employed company directors, so yearly salary varies but we try to keep as average:
Me: €100k (inc €50k tax exempt)
Spouse: €65k

Monthly take-home pay: Pay ourselves monthly for mortgage/household expenses as opposed to a set amount, and were putting the rest into PRSA until the new salary limit restrictions.

Type of employment: Both self-employed directors of limited company. €50k of my yearly income is tax exempt (patent royalty).

Pension fund: €300k x 2. PRSAs started just 3 years ago. Was accelerating payments to make up for starting late, but now yearly contributions are limited by salary so now addressing that going forward.

Family home: €1.75m with a €440k mortgage - repayments €2.5k pm approx.
Lender: AIB Green mortgage
Interest rate: 3.65%
If fixed, what is the term remaining of the fixed rate? 2028

Other borrowings – car loans/personal loans etc None

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

Do you have a pension scheme? Yes, as above

Do you own any investment or other property? Yes, 50% of another unmortgaged property just on market @ €900k

Other information which might be relevant: Life Assurance - €250k
Life insurance: Mortgage protection insurance €450k decreasing term

Savings:
Gold 52k - bought during covid at half the price and just kept it
USD 50k - built up over the years from putting bits and pieces into a USD account we use to pay family expenses when we travel over there.
EUR 100k - emergency fund sitting in AIB account.
Etoro 11k - bought a couple of ETFs last year after asking advice here.
Revolut 35k - individual tech stocks, mostly Nividia, again bought during covid and just left them.
Bitcoin 2.5k - just because.
Trade Republic 25k - Accumulating ETF (would prefer to put the 100k in this but conscious of protection limits and that it's a fintech (with terrible customer service apparently)
Cash 10k - again just in case.

My query relates entirely to the savings element. Looking at it laid out like this, there's no real strategy per se and I don't 'need' any of it touch wood, so I'm wondering how to make everything a bit more streamlined as it feels all over the place. Mostly because I'm trying to be mindful of government guarantee amounts in the individual institutions whereas I'd rather put a lump into an ETF and be done with it, but the deemed disposal is a big consideration.

I really don't want to pay off the mortgage, primarily because finance is so hard to get when self-employed, and I'm too old to ever get another one!

Thanks.
 
Why would you want another mortgage?

Are you thinking of trading up?

The reason mortgages are more difficult at your age is because people don't have long enough working income left to pay the mortgage. So the banks are wise not to lend more to you and you are wise not to borrow it , if you found one who wanted to lend to you.

LLB123 said:
Family home: €1.75m with a €440k mortgage - repayments €2.5k pm approx.
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LLB123 said:
Do you own any investment or other property? Yes, 50% of another unmortgaged property just on market @ €900k
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This seems very clear.

Pay all your savings against your mortgage.

When you sell the other property clear the balance of your mortgage.

You will still have a lot of cash.

Caveat:
If the sale is imminent, it might be better to not sell anything else which would trigger a CGT liability.
 
Brendan Burgess said:
Pay all your savings against your mortgage.

When you sell the other property clear the balance of your mortgage.
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I hear you but I'm truly loathe to do this since it's so hard to secure, and the cheapest financing you'll ever get. Inflation eats away at the repayments too, same as it does cash, which is of course my issue at the moment. Trying to find ways to grow those savings at a rate higher than 3.65% which shouldn't be too difficult. Yet I dislike tinkering which I feel I'm doing now with all these bits and bobs!
 
Brendan Burgess said:
But why might you want finance in the future?
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Maybe a second property down the line for my child, holiday home in retirement, or any other investment opportunities that might arise, since my age and employment combined will negate further borrowing.
For example, the other property is a restoration that was entirely self-financed. I wouldn't have been allowed to borrow for that, so owning my house outright would have been a disadvantage since I'd have had no capital to put towards the project.
 
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LLB123 said:
USD 50k - built up over the years from putting bits and pieces into a USD account we use to pay family expenses when we travel over there.
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There are many many issues with your investment strategy, so I’ll just pick one of them.

If your earnings and expenditure are both in euros, you should only keep cash in euros. There is no point in random punters like me or you taking on currency risk. Just convert your cash when you were going on holidays and aim to get the best rate with the lowest commission. The last six months or so have seen you lose about €5,000 in currency depreciation due to your strategy. I hope this is a teachable moment as the Yanks say themselves!
 
LLB123 said:
Maybe a second property, holiday home or any other investment opportunities
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With €1.75M in property already why would you think that concentrating even more of your overall net worth (in a leveraged basis) in the same asset class and maybe geographic region (e.g. Irish residential property) would be the most appropriate investment option for your overall needs? In my opinion that's just concentrating risk instead of mitigating risk through diversification.
 
ClubMan said:
why would you think that concentrating even more of your overall net worth (in a leveraged basis) in the same asset class and maybe geographic region (e.g. Irish residential property) would be the most appropriate investment option for your overall needs
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Isn't using savings to pay off my mortgage effectively doing the same? For as long as I can afford the repayments, keeping the funds to hand instead means I have far more options to diversify. I suppose I just can't see the value in sitting in 1.75m house with nothing left to play with!
 
LLB123 said:
Isn't using savings to pay off my mortgage effectively doing the same?
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You need a home to live in. Paying the mortgage on that isn't the same as investing in a rental etc.

But if you want to pursue your point then maybe you should trade down because that will give you more money to invest elsewhere?
 
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