Like effectively borrowing at 3.65% to keep c. €150K in cash/on deposit?
Moneymakeover My investment strategy is too messy
- Thread starter LLB123
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Yes, but that's temporary until I figure out what to do next!
I still think you should pay down your mortgage but I guess you ain’t for turning…
Turning to your original question, I agree that your after-tax investments look a bit erratic with no discernible overall strategy.
However, you haven’t told us how the €600k pension funds are invested.
If they were invested in a broadly diversified, global equity investment fund, I wouldn’t be too concerned about the shape of your after-tax investments. It’s perfectly fine to take relatively modest punts on gold, crypto, individual stocks or whatever if the overall shape of your portfolio is sound.
It’s important to look at all your accounts in conjunction with each other and not to focus on any individual account in isolation.
As an aside, your story looks a good example of why it’s a mistake to defer maximising the funding of your pension but I guess you are where you are…
Turning to your original question, I agree that your after-tax investments look a bit erratic with no discernible overall strategy.
However, you haven’t told us how the €600k pension funds are invested.
If they were invested in a broadly diversified, global equity investment fund, I wouldn’t be too concerned about the shape of your after-tax investments. It’s perfectly fine to take relatively modest punts on gold, crypto, individual stocks or whatever if the overall shape of your portfolio is sound.
It’s important to look at all your accounts in conjunction with each other and not to focus on any individual account in isolation.
As an aside, your story looks a good example of why it’s a mistake to defer maximising the funding of your pension but I guess you are where you are…
Yes, both are invested in the same fund - though weirdly OH's is slightly ahead of mine for some reason. I know naathing about de pensions...
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Its 600k....you better start learningI know naathing about de pensions...
You could be invested in very conservative funds, at your age you shouldn't be.
What fund(s?)?
What charges?
No, pensions advisor pointed out that there should be a heavy emphasis on equities since we started so late, it's a Zurich fund is all I know. The pension was put on the long finger, mostly because of the tax free element of my earnings which kept our combined taxable salary at the lower rate by design, but of course we missed out on the compounding over the years which was the major mistake, I get that now.
But I find when you're self-employed it's hard to squirrel funds away somewhere that you can't touch if times are lean - entirely a mindset issue, I know.
Still, I've no regrets really, since my primary goal over the last few years was working towards the forever home (and my precious mortgage!
which is finally done, so it's all good.Thanks so much, this has been a fun and very illuminating discussion and I appreciate you taking the time to engage with my contrarianism!
Which specific fund(s)?
What charges?
You are the complete opposite to me then, paying off my mortgage was priceless. A mortgage is a loan, it’s not your money. I hated being in debt. Personal finance is personal I guess!
Brendan Burgess
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You did not miss out on compounding.
If you invested the money outside your pension fund, it compounded as well.
Don't beat yourself up over a "major mistake".
Your in a good financial position. So you got most or all of the decisions correct. Sure there might have been a trick or two that you missed along the way. But so what?
Not clearing your mortgage now when you can is a mistake. It's not a major mistake. And if it goes wrong for you, you can handle the downside. And you might invest the funds in some great investment where the after tax, after charges return beats the risk-free, tax-free and charges-free return of clearing your mortgage, but you like the stimulation of taking risks.
The world would be very boring if we were all the same and followed the one path. I’m actually a bit envious of your approach and mindset, only wish I had the means!
It dawned on me that it might not be about risk-taking at all. OP is probably a creator… they hold a patent, renovated a house (maybe brought it back to life?), etc. He’s probably more likely to create a new business than invest in a fund imo. And that’s been totally overlooked in the advice offered, and that’s why he wants to hold capital over clearing the mortgage. Because he spots potential where others don’t. He’s not an investor, he’s an entrepreneur.
Brendan Burgess
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He gives no indication of wanting to set up a business. So I don't think you should attribute a motivation to him which he has not told us about.
If he is planning to set up a new business, then he would have/should have told us about it.
If someone posts "I have a mortgage of €300k and cash of €300k and next year, I am going to open a corner shop, should I pay off the mortgage?", the advice would be very different.
Agree and assumed it was a given when he mentioned this:
‘So when I DO manage to secure borrowings, I'm inclined to want to hold onto them. I'm happy to pay the mortgage off monthly since I view it as a utility as opposed to a liability (everyone pays for somewhere to live) while still having access to money I can use it for other opportunities, like the recent renovation without having to resort back to the bank cap in hand.’
He’s definitely using the cheap mortgage finance to fund other stuff he thinks will generate far more in future and more power to him. Though he needs to sort that dollar stash and I’m happy to help with that if he likes!
Exactly this and I feel stupid now as I assumed this was clear from my posts. My initial post wasn't even a money makeover, it was about how I'd been spreading my investments as they stand but I was asked to change it to a money makeover even though paying off the mortgage was never a consideration and did make this clear in that first post.
Absolutely no intention for the 100k to stay on deposit in the medium/longterm either, but was hoping for ideas on where best to keep it until I figured out what to do with it next! The USD account is something I've neglected over time and didn't realise how much had been building up.
Planning to invest that in same-currency denominated shares and meantime stick the 100k in Trade Republic and will rexamine all when the renovated property is sold. Thanks again and apologies for confusion!
Yes, but it seems odd that you're still getting figures wrong by a factor of c. 50% but also still seem resistant to taking on board sound feedback/advice given by several posters on your overall financial situation.