Long time lurker first time posting! I’ve read and used advice from here for years but find myself a little lost at the moment and hoping for some guidance/ advice
Age: 41
Spouse’s/Partner's age: 42
I’m currently self employed and own one third of the business. The company is doing well, profitable and good turnover and the cash (200k) in the bank grows on a monthly basis. We worked our way through the last recession, grew the business and now have 10 employees and all the advantages and headaches that goes with that.
I treat myself as a PAYE worker as outlined below and in recent years when there has been bonus and profit sharing I have taken this as wages and used the cash to aggressively pay down our mortgage. Reading more and more on AAM has made me start to question my strategy and I’m now convinced that I’m not benifitting fully from being self employed and contributing to my pensions etc.
I’ve a lot of variables in my situation but have done my best to be open and honest here in the hope of getting some sensible advice.
Annual gross income from employment or profession: €65k + profit share/bonus last P60 €91k
Annual gross income of spouse: part time 3 day week €20k + bonus of about €5k last two p60 show – approx €25k
Monthly take-home pay
€4000 + €1500 = 5500
Type of employment:
Me: self-employed (SME with 10 employees) 1/3 owner of company/director. Take PAYE salary monthly + bonus/profit share
Wife: employed by my company part time
In general are you:
(a) spending more than you earn, or
(b) saving?
Would generally be savers, modest lifestyle and more inclined to save than spent. Tend to save for things like replacing a car, home renovations or holidays than look at borrowing. In general saving about 1/3 of wages each month.
Rough estimate of value of home:
€400K
Amount outstanding on your mortgage:
~€104K
€56340 fixed for one year (due to review August 2020) 2.99% BOI 12 years remaining €466 monthly but overpaying by 544 – totally monthly €1000 (I allowed the fixed rate to elapse, started variable rate and then fixed at lower interest rate at higher over payment, this seemed like a good idea because the max over pay on a fixated rate with is 10% or €65 whichever is higher.
I viewed this as a guaranteed 2.99% return on my cash rather than having savings?
23103 fixed for one year (due to review August 2020) 2.99% BOI 12 years remaining €191 +€65(over payment)
24197 fixed for one year (due to review Feb 2020) 2.99% BOI 4 years remaining €534 + €65 (over payment)
Total mortgage payments including over payment €-1750
What interest rate are you paying?
Monthly :as outlined above
Other borrowings – car loans/personal loans etc
0% interest car loan from wife’s Dad. Paid €50 weekly (€200 month) by standing order. €2400 outstanding (loans was never needed and could be cleared instantly if required. I’m not fully sure why we have this but I think it’s because we were buying a car and her dad wanted to help out and since there was no interest involved I was ok with it) part of me thinks this is happening because it’s nice for parents in law to have a €50 top up on their state pensions every week)
Do you pay off your full credit card balance each month?
Have CC but paid in full each month. It’s basically used as a means of easily tracking spending but is never used for credit.
If not, what is the balance on your credit card? N/A
Savings and investments:
€20k in prize bonds this is the emergency fund and would cover about 6 months of expensive (possibly a year if required as we can be frugal) we also tend to use this to fund small scale renovations to the house and incedentais but tend to cover these through “current spending” and put the extras or left overs back into bonds ASAP. Savings had been higher until recent works at home and we are currently working to grow the cash savings again
Do you have a pension scheme?
Company pays in €300 per month for me and currently neither me or my wife make any other contributions.
My pension currently sits in two FF/Aviava funds.
40k in a mix of stocks/cash/property etc
21.5k I discovered this week is sitting in a cash account with Cantor Fitz doing nothing (it lost €500 in 18 months due to fees and minus interest rates I’m currently trying to move this money to something else but struggling to understand how the SDIO system works and I’m not getting answers for Aviva.
Do you own any investment or other property? I’m a 33% share holder in my company but take the view that the value here comes from being self employed rather than a tangle cash benifit.
Ages of children: no kids
Life insurance:
Life cover in excess of mortgages for both lives
Me: Death in service for me to 4x salary
Some policy that means if I die the company gets enough money to buy my shares from my wife should she wish to sell.
What specific question do you have or what issues are of concern to you?
Am I making a mistake by using all spare cash to pay down the mortgages? At this stage should it be going into pension funds/savings instead.
Thanks
Age: 41
Spouse’s/Partner's age: 42
I’m currently self employed and own one third of the business. The company is doing well, profitable and good turnover and the cash (200k) in the bank grows on a monthly basis. We worked our way through the last recession, grew the business and now have 10 employees and all the advantages and headaches that goes with that.
I treat myself as a PAYE worker as outlined below and in recent years when there has been bonus and profit sharing I have taken this as wages and used the cash to aggressively pay down our mortgage. Reading more and more on AAM has made me start to question my strategy and I’m now convinced that I’m not benifitting fully from being self employed and contributing to my pensions etc.
I’ve a lot of variables in my situation but have done my best to be open and honest here in the hope of getting some sensible advice.
Annual gross income from employment or profession: €65k + profit share/bonus last P60 €91k
Annual gross income of spouse: part time 3 day week €20k + bonus of about €5k last two p60 show – approx €25k
Monthly take-home pay
€4000 + €1500 = 5500
Type of employment:
Me: self-employed (SME with 10 employees) 1/3 owner of company/director. Take PAYE salary monthly + bonus/profit share
Wife: employed by my company part time
In general are you:
(a) spending more than you earn, or
(b) saving?
Would generally be savers, modest lifestyle and more inclined to save than spent. Tend to save for things like replacing a car, home renovations or holidays than look at borrowing. In general saving about 1/3 of wages each month.
Rough estimate of value of home:
€400K
Amount outstanding on your mortgage:
~€104K
€56340 fixed for one year (due to review August 2020) 2.99% BOI 12 years remaining €466 monthly but overpaying by 544 – totally monthly €1000 (I allowed the fixed rate to elapse, started variable rate and then fixed at lower interest rate at higher over payment, this seemed like a good idea because the max over pay on a fixated rate with is 10% or €65 whichever is higher.
I viewed this as a guaranteed 2.99% return on my cash rather than having savings?
23103 fixed for one year (due to review August 2020) 2.99% BOI 12 years remaining €191 +€65(over payment)
24197 fixed for one year (due to review Feb 2020) 2.99% BOI 4 years remaining €534 + €65 (over payment)
Total mortgage payments including over payment €-1750
What interest rate are you paying?
Monthly :as outlined above
Other borrowings – car loans/personal loans etc
0% interest car loan from wife’s Dad. Paid €50 weekly (€200 month) by standing order. €2400 outstanding (loans was never needed and could be cleared instantly if required. I’m not fully sure why we have this but I think it’s because we were buying a car and her dad wanted to help out and since there was no interest involved I was ok with it) part of me thinks this is happening because it’s nice for parents in law to have a €50 top up on their state pensions every week)
Do you pay off your full credit card balance each month?
Have CC but paid in full each month. It’s basically used as a means of easily tracking spending but is never used for credit.
If not, what is the balance on your credit card? N/A
Savings and investments:
€20k in prize bonds this is the emergency fund and would cover about 6 months of expensive (possibly a year if required as we can be frugal) we also tend to use this to fund small scale renovations to the house and incedentais but tend to cover these through “current spending” and put the extras or left overs back into bonds ASAP. Savings had been higher until recent works at home and we are currently working to grow the cash savings again
Do you have a pension scheme?
Company pays in €300 per month for me and currently neither me or my wife make any other contributions.
My pension currently sits in two FF/Aviava funds.
40k in a mix of stocks/cash/property etc
21.5k I discovered this week is sitting in a cash account with Cantor Fitz doing nothing (it lost €500 in 18 months due to fees and minus interest rates I’m currently trying to move this money to something else but struggling to understand how the SDIO system works and I’m not getting answers for Aviva.
Do you own any investment or other property? I’m a 33% share holder in my company but take the view that the value here comes from being self employed rather than a tangle cash benifit.
Ages of children: no kids
Life insurance:
Life cover in excess of mortgages for both lives
Me: Death in service for me to 4x salary
Some policy that means if I die the company gets enough money to buy my shares from my wife should she wish to sell.
What specific question do you have or what issues are of concern to you?
Am I making a mistake by using all spare cash to pay down the mortgages? At this stage should it be going into pension funds/savings instead.
Thanks