have a car loan of €4200 per annum (3 yrs remaining).
We recently spoke with an independent broker about to get advice so would like to get opinions on this. We were advised to invest €100,000 and monthly savings of €2000 into Zurichs easy access fund to be invested in Prisma 5 Fund for the next 5 years.
We have cash savings of €122,000 sitting in deposit accounts. We are hoping to get on the property ladder in Dublin the next 18months and also looking to get married within 18-24months.
I currently don't a pension scheme set up but will be prioritising this once i start in new company. Employer does not contribute towards this.
No,no,no, no,no. Get the house. Get the mortgage down to a comfortable level and then worry about contributing to a pension.
You should start a pension immediately to take advantage of the tax relief and compound interest over the next 50 years, even if only making small contributions.
I forgot. Compound Interest only applies to investments. It does not apply to mortgages.
Long-term return on equities is almost certainly greater than the interest rate on your mortgage.
Your house also depreciates.
They'll have their mortgage paid off in 30 years. A 31-year old will likely be relying on equity returns in 50 years still.
So you would recommend to people to borrow money to invest in equities?
I think that the long term return on residential property has been and is likely to be very good. There is physical depreciation, but the increase in value is far higher.
I am not sure what point you are making here. If he buys a house he will still be benefiting from it in 30 years and in 50 years.
Where there is a genuine choice involved, I would always prioritise maximising pension contributions over paying down a mortgage ahead of schedule.
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