What to do with €800k?

ThirstyLizard

Registered User
Messages
30
Good day chaps,

Myself and my wife have recently come into some money.

Problem is, we don't know what to do with it, so hoping to get some ideas from you folk. We will be meeting a financial planner at some stage too, however it never hurts having more opinions!

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Age: 30
Spouse’s/Partner's age: 30

Annual gross income from employment or profession: 0 - unemployed for the short-term
Annual gross income of spouse: 0 - unemployed for the short-term

Monthly take-home pay: 0 - unemployed for the short-term

Rough estimate of value of home: 360k
Amount outstanding on your mortgage: 250k
What interest rate are you paying? 3.3%

Other borrowings – car loans/personal loans etc - None

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:

Savings: 800k
Investments: None

Do you have a pension scheme? No

Do you own any investment or other property? No

Ages of children: N/A

Life insurance: None - Mortgage protection insurance of 260k


What specific question do you have or what issues are of concern to you?

We'll be enjoying the use of some of the money to go on holidays, and generally enjoy ourselves before returning to work, but that can't last forever!

So, the questions;

1. Should we pay off our mortgage? Are there any arguments AGAINST paying it off?

2. We would ideally like to have this money working for us, rather than sitting in a bank earning zero interest. Income generating investments are of particular interest (real estate, dividend stocks, p2p loans etc). Any advice around income investing would be appreciated.

3. Is there anything else that we're not thinking of?


There are obviously a lot of options out there, which is great, but we are unsure of what is the best way forward!

Cheers AAM!
 
Vegas m'man, Vegas :cool:


On a serious note - pay off the mortgage pronto and if you are both able to work then address this next. Possibly learn a new skill / trade but avoid slpurging on a new business unless you are very savvy.
 
Hi ThirstyLizzard

Things seem to have changed quite dramatically for you since your last post -
https://www.askaboutmoney.com/threads/30yo-looking-for-best-way-forward.200039/

Would it be rude of me to enquire whether the €800k is the proceeds of a business sale? I assume you have taken appropriate tax advice and that you have split the €800k across a number of financial institutions.

In answer to your questions:-

1. Should we pay off our mortgage? Are there any arguments AGAINST paying it off?

Yes, but you won't get a better risk-adjusted return on your money after you take investment costs and taxes into account.

2. We would ideally like to have this money working for us, rather than sitting in a bank earning zero interest. Income generating investments are of particular interest (real estate, dividend stocks, p2p loans etc). Any advice around income investing would be appreciated.

Is there a particular reason why you are particularly interested in generating income (as opposed to capital growth) from your investments? An income focused strategy might make sense if you intend to remain in a low tax bracket (i.e. if you intend to live off your investments on a long-term basis). If that is the case, then you might consider including a portfolio of income focused investment trusts (such as City of London IT) as part of the mix.

3. Is there anything else that we're not thinking of?

I don't know how to answer that question!
 
Pay your mortgage asap. With payments of 1k+ a month over 34 years you are lucky if half of what you pay is going to capital i.e. in one year alone you will pay 6k interest. Also you will be able to cancel the life assurance which I presume you had with them for the mortgage part at least.
 
Would it be rude of me to enquire whether the €800k is the proceeds of a business sale? I assume you have taken appropriate tax advice and that you have split the €800k across a number of financial institutions.
.

Yes, had a business in the farming/agriculture space that we sold. Couldn't face it anymore!

Yes, funds split between 4 joint accounts 200k each with various banks. Tax all sorted.

Have skills in digital marketing too which I'll hopefully put to use in the near future as consultant, or ecommerce.

Also you will be able to cancel the life assurance which I presume you had with them for the mortgage part at least.

Is there an argument here to continue with the mortgage protection insurance, as its a cheap form of life insurance?
 
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