Age: 36
Spouse’s/Partner's age: 36
Annual net income from employment or profession: 135,000
Annual net income of spouse: <10,000 (ad hoc / part time)
Monthly take-home pay: 11,000
Type of employment: Private sector in middle east
In general are you: Saving ca. 75,000-80,000 per year
Rough estimate of value of home: n/a
Amount outstanding on your mortgage: n/a
What interest rate are you paying? n/a
Other borrowings – car loans/personal loans etc: n/a
Do you pay off your full credit card balance each month? n/a
If not, what is the balance on your credit card? n/a
Savings and investments:
Do you have a pension scheme? No
Do you own any investment or other property? No
Ages of children:
Two children:
- 2.5
- <1 year old
Life insurance:
- Employer scheme: 500,000 against me; 50,000 against spouse
- Private insurance: 400,000 against first death
Question / Topic I need help with:
My approach to personal finance has been conservative until now: Save a lot, invest in low cost diversified funds, and avoid consumerism.
Above all, I have been pathologically opposed to debt of any kind, to the extent that I always envisage myself paying cash for everything -- including a house in the future.
Very recently however, I wonder if my aversion to debt is inhibiting the growth of my net worth.
Specifically, I feel I am being left behind in terms of property prices in Ireland. With my cashflow and the dry powder that I have, I could get a mortgage(s) of 300-400k and easily meet and even significantly exceed the repayments. If I add to that the income from renting out the property, it seems a no brainer that I should borrow now while my cash flow is so good, in order to rapidly acquire property.
Now, why am I thinking to acquire property? I know that it is an illiquid, costly investment, especially compared with passive ETF investing. However, when I relocate to Ireland in 6-9 years, my ETF strategy will not be viable there. For better or worse, property is the major vehicle for wealth in Ireland.
In terms of the types of property I'm looking for, I'm on the hunt for my future home (a detached house). I don't mind having tenants in it, either permanently or sporadically, while I'm in the Middle East (so, for the next 6-9 years).
I am also open to / strongly considering purchasing an apartment somewhere in Cork (a city I am very familiar with), with the idea of having this exclusively as a rental income stream for when I repatriate in 6-9 years' time.
I am aware that letting the house (+ apartment) from abroad would be a tiresome and perhaps turbulent experience. I am also aware it would be taxable.
However, as I would not be depending on the rental income while I am in the Middle East, the idea of it lying idle for 30-50% of the time doesn't trouble me, because the longterm objective is to have my home + a rental property fully paid off by the time I relocate to Ireland, at which time I would pay maximum attention to the rental property as a source of regular income.
If I boil it down, I can easily absorb the cost of a mortgage when I am in the middle east. It seems it would be easy and, based on my savings and current income stream, stress-free to pay down the mortgage(s) over the next 3-4 years or so. On the other hand, my cashflow will be greatly diminished when I move back to Ireland, so it seems a once in a lifetime opportunity to acquire these now, rather than later.
The masterplan would be to return to Ireland in 6-9 years with
- family home 100% paid off
- rental property 100% paid off
- a portfolio of stocks and bonds worth ca. 600-700k.
To answer anticipated questions:
- do I know where I will want to live? Yes.
- why not invest in a REIT? I think it would be preferable to have bricks and mortar that would be entirely mine.
- Is my job stable? Yes.
- Is spouse of a similar mindset? Yes.
Spouse’s/Partner's age: 36
Annual net income from employment or profession: 135,000
Annual net income of spouse: <10,000 (ad hoc / part time)
Monthly take-home pay: 11,000
Type of employment: Private sector in middle east
In general are you: Saving ca. 75,000-80,000 per year
Rough estimate of value of home: n/a
Amount outstanding on your mortgage: n/a
What interest rate are you paying? n/a
Other borrowings – car loans/personal loans etc: n/a
Do you pay off your full credit card balance each month? n/a
If not, what is the balance on your credit card? n/a
Savings and investments:
- Self-managed ETF portfolio with a value of 400,000 (adding 6.5k to this every month)
- Guaranteed end-of-employment package of 35,000 (adding 8k + per year)
- Cash – none to speak of but cash flow from salary is very strong and I could liquidate ETFs any time
Do you have a pension scheme? No
Do you own any investment or other property? No
Ages of children:
Two children:
- 2.5
- <1 year old
Life insurance:
- Employer scheme: 500,000 against me; 50,000 against spouse
- Private insurance: 400,000 against first death
Question / Topic I need help with:
My approach to personal finance has been conservative until now: Save a lot, invest in low cost diversified funds, and avoid consumerism.
Above all, I have been pathologically opposed to debt of any kind, to the extent that I always envisage myself paying cash for everything -- including a house in the future.
Very recently however, I wonder if my aversion to debt is inhibiting the growth of my net worth.
Specifically, I feel I am being left behind in terms of property prices in Ireland. With my cashflow and the dry powder that I have, I could get a mortgage(s) of 300-400k and easily meet and even significantly exceed the repayments. If I add to that the income from renting out the property, it seems a no brainer that I should borrow now while my cash flow is so good, in order to rapidly acquire property.
Now, why am I thinking to acquire property? I know that it is an illiquid, costly investment, especially compared with passive ETF investing. However, when I relocate to Ireland in 6-9 years, my ETF strategy will not be viable there. For better or worse, property is the major vehicle for wealth in Ireland.
In terms of the types of property I'm looking for, I'm on the hunt for my future home (a detached house). I don't mind having tenants in it, either permanently or sporadically, while I'm in the Middle East (so, for the next 6-9 years).
I am also open to / strongly considering purchasing an apartment somewhere in Cork (a city I am very familiar with), with the idea of having this exclusively as a rental income stream for when I repatriate in 6-9 years' time.
I am aware that letting the house (+ apartment) from abroad would be a tiresome and perhaps turbulent experience. I am also aware it would be taxable.
However, as I would not be depending on the rental income while I am in the Middle East, the idea of it lying idle for 30-50% of the time doesn't trouble me, because the longterm objective is to have my home + a rental property fully paid off by the time I relocate to Ireland, at which time I would pay maximum attention to the rental property as a source of regular income.
If I boil it down, I can easily absorb the cost of a mortgage when I am in the middle east. It seems it would be easy and, based on my savings and current income stream, stress-free to pay down the mortgage(s) over the next 3-4 years or so. On the other hand, my cashflow will be greatly diminished when I move back to Ireland, so it seems a once in a lifetime opportunity to acquire these now, rather than later.
The masterplan would be to return to Ireland in 6-9 years with
- family home 100% paid off
- rental property 100% paid off
- a portfolio of stocks and bonds worth ca. 600-700k.
To answer anticipated questions:
- do I know where I will want to live? Yes.
- why not invest in a REIT? I think it would be preferable to have bricks and mortar that would be entirely mine.
- Is my job stable? Yes.
- Is spouse of a similar mindset? Yes.
