What to do with additional 150k p.a.?

AGoodLife

Registered User
Messages
38
Warning long post - It was a very useful exercise for myself to write this out, and if you are reading this, I would encourage you to do one yourself.

I wanted to do one of these for years, but always felt too shy. Finally I decided to do it under a new account.

I would really appreciate feedback.

Age: Early 40s
Spouse’s/Partner's age: same

Annual gross income from employment or profession: ~375k
Annual gross income of spouse: ~50k (works part time)

Monthly take-home pay: (varies, depending on bonuses and shares)

Type of employment: Both private sector employees

In general are you:
(a) spending more than you earn, or
(b) saving?

Saving, have saved all my life. Parents didn't come from wealthy families, so I guess this was ingrained young.

Rough estimate of value of home: 800k (Dublin)
Amount outstanding on your mortgage: 275k, about 20 years left, paying 17k per year, regularly overpay.
What interest rate are you paying? 2.3% fixed with UB, plan to renew at 2.2 or switch to Avant at 1.95 or pay it off.

Other borrowings – car loans/personal loans etc: none.

Do you pay off your full credit card balance each month? Yes.
If not, what is the balance on your credit card?

Savings and investments:

shares in my company: 250k (probably 30% of this value would be liable for CGT)
Bank deposit: 220k

Do you have a pension scheme?
Yes. We max out contributions.
410k (2/3 in occupational pension, 1/3 in a Davy PRSA)
spouse: 50k over two occupational schemes, maxes out the higher rate relief.

Do you own any investment or other property?
300k value. mortgage 60k, ecb+.6%, ~750p.m, rent 1500pm

Ages of children:
From early primary school to university.

Life insurance:
~700k mortgage policy decreasing balance
~600k work policy

Background info
We realise we are very lucky, fortunate, and are in an extremely privileged situation. I'm actually embarassed to write about our very fortunate position in this post. I don't think friends and family know how comfortable we are. And externally, other than owning an expensive bombsite, we certainly don't 'look' or 'act' wealthy. Although, now that I write it, I am not really sure how wealthy looks and acts.

Earnings have increased exponentially over the last 5 years. Pessimisitically, I am probably topping out now, and If I lost my job, earnings might drop to 100-200k.

We are careful with our money, and have always lived below our means, we don't 'outsource' much work. We are happy, and don't feel like that we are sacrificing today for a better tomorrow. But we are fairly ruthless on managing the costs of the things we have, have always been on the lowest mortgage rate, always price around for cheapest suppliers for utilitiies, insurance etc., Have rented out rooms when younger. Have invested since I was 18, and saved since before my communion. But have also used spent my communion money long ago!

We have good health insurance. (from work). Some disability insurance from work too, but I don't know the details.

I am holding a lot of money concentrated in my employer's shares. Historically this paid off very well. I occasionally sell off a load and pay down the mortgage. Currently holding some cash in preparation for renovation.

I am comfortable with stock market ups and downs, tax returns etc., I am willing to take risk, and to invest for long term.
I am also relatively comfortable dealing with tenants and tradesmen, and am somewhat handy, but right now I would rather have more free time!

Spending
Our total outgoings are about 65k per year (includes 10k on rental mortgage, and 16k on ppr mortgage, and childcare. Exclude pension contributions).

Lifetime goal:
I have had a lifetime goal to be comfortably financially independent (i.e. have enough assets that could comfortably cover our expenses till death, without relying on an employer, and without living on beans on toast). I'd like to hit this goal ASAP.

My 'plan' was to own my own home mortgage free, and one or two 'average' rental properties, which should deliver about 30-60% of the 'average' wage, and then to have an equity portfolio (in pension first) covering the rest, and eventually the state pension.

We will accumulate roughly 150k of cash (& company shares) per year after tax a year. Hard to get an exact number but in that region. Net worth increased about 225k over the last 12 months (additional 75k was from pension and shares growth).

Upcoming Large Expenses.
Big job on the house. Not sure what this will cost. I am guessing 2-400K. The cash in bank is for this (and probably some or all of the current shares).
Replace a car, budget 10k.
Potentially pay off the mortgage 300k.
College - I assume the kids will live at home, and that our current childcare budget will cover it.

Advice to self (from reviewing finances)
You should spend more money, especially to create some great memories, you could die tomorrow, what are you keeping it for?
You should outsource more work and even pay a little more to gain more time.

Questions:

1. What should we do with the additional 150k p.a?
I don't know how many more years I will continue to earn at this rate, I would like to invest the money wisely. The options I see are:
-pay off the mortgage, to do that over the next two years feels too safe, I would prefer to have the money work harder for me, I understand that is riskier, but I also have a 20-60 year timframe.
-contribute beyond tax relieft to pension (If I retire early, I understand that I might never be able to use the carried forward tax relief, but at least tax free growth)
-invest outside a pension (not very tax efficient...maybe a large basket of shares directly)
-buy a second rental property? and then a third?
-set up trusts or pensions for the kids (saw some threads here on that recently), and start using the 3k exemption per year? (we never had access to something like that growing up, and I think we benefitted from having to do it ourselves, and I fear they might just blow it, but houses are not cheap these days).
-Some of several of these?

2. How much of our wealth is, too much, to hold in my company shares?

3. Should we long term lease of the rental to the council?
They pay 80% of the market rent, there is less risk of non payment, less paperwork, and less time needed to manage it.

4. Should we bother switching to Avant 1.95% and fix for 3, 5, or 7 years or Should we Fix with UB for 2 years or 5 years.
Avant is .25%p.a. lower rate would lower interest by 700 per year, but would cost 1400 switching fess (1200 solicitor + 200 valuation). I would only starting save 700 per year in year three, and by that time, I would likely have a large lump sum to pay most of it down, so potentially no savings. If fix with UB for 2 years, and pay off the allowed 10% per year, that would be about the same interest saved as going to Avant, after the two years, the mortgages available with UB might not be very competivie, and the whole market might be less competive. If I fix with UB for 5 years, I can pay off half the remaining mortgage over the next five years, and that is sort of committing me to take more risk with my savings, and try to make them work harder.

5. Should we sell the bombsite, and buy a nice done up house in the same area? rather than committing to the stress and pain and one or two years of doing a large renovation?

I can't believe you read this far! Thanks for considering our case, and I'd appreciate any insights or suggestions you might have.
 

NoRegretsCoyote

Registered User
Messages
3,348
Some disability insurance from work too, but I don't know the details.

To me this is a bit of a blind spot. Your family's lifestyle is pretty dependent on your income, and would be even if you earned 1/3 of what you do now. Some kind of income continuance insurance might be worth looking into.

College - I assume the kids will live at home, and that our current childcare budget will cover it.

It might be nice to give the kids the chance to live away from home during college. I lived at home as an undergraduate and felt I missed out on a lot. One of my goals is to allow my kids to live away from home if they want to, and I think I'm on track. Are you on track to be able to fund an expensive taught masters or an expensive professional qualification?

-buy a second rental property? and then a third?

You would most likely buy in Dublin where yields are lowest, and promptly lose half of the profits on tax. I don't see it making sense. I appreciate that you are already maximising tax-relieved pension contributions. In your shoes I would probably just buy a bigger property and live in my wealth. At the same time people generally intend to downsize but rarely do. A big house can be expensive in the long run. Otherwise contributing beyond without tax relief shouldn't be taboo. Over 30 years the tax-free return on equities should be pretty good.

Finally, you are a bit vague on company shares, and I don't know how this really works, but I'm not sure if it makes sense to have all of your income and a lot of your wealth dependent on the fortunes of just one company.
 

bish123

Registered User
Messages
51
Luck favours prepared minds. Congratulations and well done for reaching a comfortable financial state at 40.

Agoodlife has two parts- earning and spending time/ money on things you love. You haven't mentioned spending on travel, holidays, hobbies etc.

If a house is worth 800k now, would adding another 400k bring its value to 1.2m? With that income and savings you could easily look for a house in 1.2- 1.3m range. Downsizing at later stage gives you option for early retirement ( say 60) to enjoy life or things like nursing homes.
 

Hooverfish

Registered User
Messages
191
Well done! You must have great talents between you and your spouse. Perhaps think about a strategic investment in helping others through a charity that fits with your worldview? This might sound a bit American, but the combination of skills and cash that you have could provide both wonderful help and great satisfaction for you in a bit of philanthropy? I'm not dewy-eyed about the voluntary sector, there are some very badly run charities and some dubious personalities, but if there is something you care about, that motivates you, maybe think about what making a difference would provide you with in return for probably not much money and a little bit of time?
 

Bronte

Registered User
Messages
14,166
I second the view it would be better for your children to live away from home. It’s very beneficial to them. Would also advise to buy rather than renovate. You’ve been vague enough I haven’t figured out who you are! Also agree writing it all down is a good exercise.
 

AGoodLife

Registered User
Messages
38
Thanks for all the kind and considered replies - only had time to reply to @NoRegretsCoyote so far, have to go out to enjoy the simple pleasure of the sun now, but will reply more in the future.

To me this is a bit of a blind spot. Your family's lifestyle is pretty dependent on your income, and would be even if you earned 1/3 of what you do now. Some kind of income continuance insurance might be worth looking into.
Great point, I will check out the details of my employers policy. If I fall ill, or can't work that would have a very significant impact. Can I get insurance against losing my job?

We have a very wealthy family member who has repeatedly said, they would love to help, and from which there would likley be a very significant future inheritance. We prefer to be independent. But if the dark stuff ever hit the fan, this is a type of insurance policy too.

If I die, I think the situation is ok. Death insurance is ~1.3M, which would clear the mortgages, and leave 900k plus the rental income. at current expenditure of about 40k p.a. (ex. mortgages). That seems roughly fine to me.

It might be nice to give the kids the chance to live away from home during college. I lived at home as an undergraduate and felt I missed out on a lot. One of my goals is to allow my kids to live away from home if they want to, and I think I'm on track.
Interesting point, will think about it, and I see @Bronte has recommended it too. I lived at home during college, but spent a lot of time in friend's houses, and I agree lots of the fun and experience, and independence, (although the madness too) was in the rented student houses!

We think one or two might do a year abroad as part of college, which would at least give some taste of this.

Have also vaguely considered buying a suitable college property for them or potentially partially retaining ownership, and having them live there, use rent a room scheme, and rent out the rooms. Although maybe it would be too much to expect them to rent to their friends in college.

Are you on track to be able to fund an expensive taught masters or an expensive professional qualification?
At current earnings, I think this would be ok. How much do you think this could cost? The family member mentioned above, has offered to cover something like that for the kids.

You would most likely buy in Dublin where yields are lowest, and promptly lose half of the profits on tax. I don't see it making sense. I appreciate that you are already maximising tax-relieved pension contributions.
The though process is that when retired, our effective income tax rate would be lower. It would offer diversification and income stream, e.g. if stockmarket is dropping, we would not be forced to sell as much. I don't hold any bonds, I have 100% equity portfoilo.

In your shoes I would probably just buy a bigger property and live in my wealth. At the same time people generally intend to downsize but rarely do. A big house can be expensive in the long run.
Buying a bigger PPR conflicts with the life goal to be financially independent ASAP. The bigger house doesn't give us an income. We don't feel that we need more house that we have (or will have after renovation). I like the idea of a secluded large house overlooking the sea (what's not to like!). But I don't really want to commit to say 5 additional years of working to get the extra 800k that it would cost. (Costal Palace estimate 2M. current house .8, renovation fund .4)

When we bought the current house, total income was about 250k, and our intention was for it to be a forever home. The location didn't tick all the boxes we wanted, but it is very nice, and the neighbours are great, and perfect doesn't exist.

I have certainly disccovered that big gardens need a lot of time and effort to maintain, (or else pay someone to do it - we should really get a quote to outsource some of this work!).

I think a large house and large garden, with large upkeep costs would be stressful for me in later years. I'd prefer smaller house, and ability to help out kids, or more flexibility.

That said, as we are facing renovation right now, if we were going to buy a more expensive house, now would be the time to do it.


Otherwise contributing beyond without tax relief shouldn't be taboo. Over 30 years the tax-free return on equities should be pretty good.
I don't hear of many people actually doing this though? So I feel a bit unsure about putting in an extra unrelieved 150k a year into it.

Finally, you are a bit vague on company shares, and I don't know how this really works, but I'm not sure if it makes sense to have all of your income and a lot of your wealth dependent on the fortunes of just one company.
Sorry! Let me try to explain. The shares are included in my income estimate. The company guarantees that while I work for them, I will get x number of shares this year, y shares the next year, z the year after etc. And each year it makes an additional commitment to pay me a number of shares a year over the next few years. So there is always this 'pot of gold' in the future, that you will only get if you continue to work for the company. When the shares 'vest' they accumulate into my brokerage account.

I have sold them rarely, e.g. I sold a bunch of them to help fund the purchase of the PPR, and then a bunch more to pay down the mortage. I understand the best thing to do would be to sell them as soon as they vest, and diversify into other investments.

So my income estimate for this year, is based on the current share price, and the number of shares that will be give to me this year. If share price drops, my income will drop. About 50% of my income comes from these shares. I'd estimate the we are accumulating 65k cash a year in bank, and 85k of shares a year in the brokerage account. My past strategy was, when the share price was at some all time high, sell a load and pay down the mortgage.

And now that my mortgage is very comfortable, this is the 150 I am trying to decide what to do with.
 

NoRegretsCoyote

Registered User
Messages
3,348
Can I get insurance against losing my job?

Not really sure. If it exists it would be very expensive. I am more thinking about disability. I had health problems while young completely out of the blue back that basically make any kind of physical work impossible for me. It's not a financial problem as I have a sedentary job (as I guess do you). It still hammered home that unanticipated illness is not at all unlikely, and is worth insuring against.

I don't hear of many people actually doing this though? So I feel a bit unsure about putting in an extra unrelieved 150k a year into it.

If you invest today your median drawdown from your fund will be in thirty years or so. For me the expected tax-free growth on equities over the period would be worth it, but there will be ups and downs along the way. Your pension funds (combined) are big for your age, but relatively small relative to your income. So it's worth thinking about.

Have also vaguely considered buying a suitable college property for them or potentially partially retaining ownership, and having them live there, use rent a room scheme, and rent out the rooms.

I've always thought that this is a very good use of wealth if you have it. Paying after-tax rent on rent to someone else is a lot of money if you have the funds to finance an apartment near a university. But it doesn't make sense to buy I think until at least one or two kids are settled at third level.

I have sold them rarely, e.g. I sold a bunch of them to help fund the purchase of the PPR, and then a bunch more to pay down the mortage. I understand the best thing to do would be to sell them as soon as they vest, and diversify into other investments.
Yeah, this is conventional wisdom but I have friends for whom inertia takes over and they find themselves quite concentrated often in firms they no longer work for. I guess it makes sense to sell and buy something else when they vest, but this takes discipline.


Anyway the best of luck, you have a good set of choices:)
 

Brendan Burgess

Founder
Messages
45,337
You are wealthy, so your main objectives are the preservation of that wealth and to enjoy life.

You absolutely must sell off the shares in your employer as soon as you are free to do so. Don't worry about the CGT bill.

This is about the preservation of wealth and looking out for the risks which might cause you a problem. If your company suffers, you may lose your job and then suffer the double whammy of seeing your shares crash in value.

So the clear thing to do here is to sell the shares you are allowed to sell.
 

Brendan Burgess

Founder
Messages
45,337
You like your house and your neighbours.

That is more important than owning a bigger house and finding that you don't like the house or your neighbours.

Whatever you do involves moving and disruption.

But I don't think that anyone here can make that decision for you. Only you and your spouse can make that call.

Brendan
 
Last edited:

Brendan Burgess

Founder
Messages
45,337
Again, on the preservation of wealth theme - you should clear the mortgage on your family home before investing anywhere else.

You have two properties. You have a well funded pension scheme.

You should not be borrowing money to invest.

By investing while you have a mortgage, that is what you are doing.
 

Brendan Burgess

Founder
Messages
45,337
As you already have two properties which will be worth about €1.5m after renovations, you should not invest in any more property.

You may have been lucky so far in getting good tenants, but if you buy a property and get a bad tenant, you will find it consumes your life. You have a busy job, you should not be taking on an additional part-time job as a property investor.

You should invest your savings in a diversified portfolio of directly held shares in large companies. They should perform better than property over the long term and they will be a lot less hassle.

Shares are also a very flexible investment.

If one of your children wants to go to college away from home, it won't be much use to you, to have a property in some other city in a long term lease to the council.

If you want to buy a property in her college town , you can sell your shares and buy that property.

Likewise, after a few years, if you want to help your children get onto the property ladder, you can easily partially liquidate a portfolio of shares and use the proceeds.

If you have an investment property, it might not be easy or even possible to sell it. And you can't sell half an investment property.

Brendan
 

AGoodLife

Registered User
Messages
38
Another reply down - Thanks for the continued feedback. Still some more replies to get too! Might take a few days before I get through them all.

Luck favours prepared minds. Congratulations and well done for reaching a comfortable financial state at 40.
Thanks Bish! I agree with your outlook, there is luck/coincidence/happenstance, but you also have to fully grab the opportunies that fall in front of you.
Agoodlife has two parts- earning and spending time/ money on things you love. You haven't mentioned spending on travel, holidays, hobbies etc.
In my opinion we really don't spend much, in fact I think we probably spend less than most people we know, and we probably should spend and treat ourselves more. I have recently made a small fun budget for myself to encourage myself to spend a bit more, and it is helping. But after a lifetime of practising delayed gratification, old habbits die hard. "do you need this? will you use it regularly? Will you get the value from it? let's not buy it yet, and research it some more first".

We are not unhappy, and don't feel like we are sacrificing ourselves or our happines or being Ebenezer scrooge. I tend to agree with view that the more things you own, the more things own you. That said, I do like to have high qualty, long lasting, beautiful things.

I am not convinced that spending money on more or expensive things would make us significantly happier. I thought most people subscribed to the hedonic treadmill view of the world, where we quickly acclimitise to new things. So e.g. A new tesla, or a fancy sports car, or a lottery win will bring a bump in happiness, but then you will return to your original point. But the new tesla would require me to work for another year to save the money to pay for it. At the moment I would value retiring a year earlier higher than driving the tesla. And if I really wanted one, I would buy a 7 year old tesla. Maybe my attitude will change here more, as we approach have the house paid off and renovated. We have never owned a car that cost more than 10k, and usually it would be the cheapest car on the street!

To some degree saving money is a challenge/hobby in itself, and is enjoyable and brings satisfaction.

We don't have any really expensive hobbies, but we don't have a lot of time either! Exercising, being healthy, being outdoors, gardening, cooking, and kids take up most of the time. My biggest overarching hobby is learning & curiosity, which is fairly cheap as hobbies go.

I never really got or understood the travel bug. Might be because I never went abroad with my own parents when I was young, and am happy to spend time on my own, I can always entertain and occupy myself. We typically spend five weeks a year abroad with family, in family owned property, It is nice and enjoyable, but it is a bit repetitive, we probably should plan some holidays to make great memories, and mix it up a bit more.
If a house is worth 800k now, would adding another 400k bring its value to 1.2m? With that income and savings you could easily look for a house in 1.2- 1.3m range.

I think so, but hard to be sure. I know the standard belief is that you don't get back in price what you put into your renovation, and costs are expensive at the moment. But our house really is very very basic at the moment, so a renovation would be required by most before they would live in it, and to some degree is priced into the current value. Based on comparing to new builds, I would expect our finished product to be similar size (maybe a bit larger) & quality, but with much larger garden, parking space, and more privacy. It is very rare for a recently renovated comparable family home to sell, most of the things that sell, have only had cosmetic changes, or have been upgraded maybe 20 years ago and are not modern.


Downsizing at later stage gives you option for early retirement ( say 60) to enjoy life or things like nursing homes.
I think we would be unlikley to downsize, I think we would like the space for kids to visit with their kids (even if only occasionally), and would like to keep roots in the neighbourhood. I wouldn't want to plan on downsizing as part of my financial future, it would be ok as a fallback.

When I am considering early retirement, I am think more along the lines of before 50. Originally I would have targetted well before 40, but then my earning power has increase a lot, and we have comitted to a more expensive house.
 
Last edited:

AGoodLife

Registered User
Messages
38
Well done! You must have great talents between you and your spouse.
Thanks Fish! I think a lot of it was, luck, right time, right place, coupled with research, dilligence, curiosity and hard work at the right times. I still pinch myself regularly.

Perhaps think about a strategic investment in helping others through a charity that fits with your worldview? This might sound a bit American, but the combination of skills and cash that you have could provide both wonderful help and great satisfaction for you in a bit of philanthropy? I'm not dewy-eyed about the voluntary sector, there are some very badly run charities and some dubious personalities, but if there is something you care about, that motivates you, maybe think about what making a difference would provide you with in return for probably not much money and a little bit of time?
My spouse would be extremely interested in this. I would be mildly interested, but i accept the repeated philosphical view, that contributing to something larger than yourself brings meaning, purpose and fulfillment to life, and would be willing to try in the future. The main issue at the moment is lack of time.

I too am cautious about the percent of a financial donation that gets eaten in admininstration costs etc.,

How would you recommend to get involved in something like that? Do you have any experience doing something like that?
 

AGoodLife

Registered User
Messages
38
I second the view it would be better for your children to live away from home. It’s very beneficial to them.
Thanks Bronte. We will consider it. You are not just saying that to increase the rental market are you ;-)

Would also advise to buy rather than renovate.
Would you mind expanding and be explicit on your reasoning on why?

We have discussed buy vs renovate today in some more details, and talked about new builds that we have viewed over the past few years.

The main reason we choose the buy & renovate route, is surprise, surprise, because it looked like it was better value. Even today, when we look back at comparble priced new builds over the last few years i.e. 1.2M (800+400renovation), while the houses were nice and BER ratines are high, they generally have (in order of concerns for us) tiny gardens, limited privacy (denser and closer to neighbours houses), limited parking space, management fees. Often they have not enough storage space, too many bathrooms, and would not be easy to re-organise, and two staircases (not necessarily great for later life).

These are the reasons pushing us to renovate, even though that probably means a year of rental somewhere else, and a lot of heartache.

You’ve been vague enough I haven’t figured out who you are!
Good! Although my alter ego is probably not as famous as yourself.

Also agree writing it all down is a good exercise.
I can't recommend this strongly enough. I always had a rough life and financial plan in my head, and always had goals I was working towards, but writing down the money makeover really helped. And I have got some very interesting insights from others too!

@NoRegretsCoyote @Brendan Burgess it might take me a day or two to get back to your latest messages, but I will get back.

I think my burning question is still where is best to invest the 150p.a, but I'd appreciate all other answers to Question 1-5.
 

MugsGame

Frequent Poser
Messages
2,691
Use the 150k p.a. to "subcontract" your work abroad and "retire" early ...

But in all seriousness, I assume you work for a FAANG or similar? How is your work-life-balance? Would you ever consider "downsizing" to a less financially rewarding but potentially less demanding job?
 
Last edited:

presidenttttt

Registered User
Messages
126
I am also always curious to hear about the role or employers providing such excellent packages. Well done anyway.

Someone guessed you are in tech, an industry where some are suggesting a share price bubble, but whichever, any share and any industry can run into a crisis, so the risk needs to be diversified via some form of portfolio as an alternate.

You mention being financially independent is the goal. I think Brendan nails this in his response, you are essentially there or on the home straight, so this is about protecting wealth.

You could approach this my doing an exercise to establish your cost of living, post mortgage repayments, required to maintain the standard of living you want, or in other words your desired retirement income. I think you have done this loosely, but put some actual numbers on it yourself. In an ideal world that number equals the your passive income, plus annual growth of pension and equity portfolio, with no need to sell anything ever. That may well be achievable for you given your income and youth.

It seems you enjoy your house but other than that your family are not driven by materialism, multiple posh cars and posh holidays. Even if you decide to start taking an extra holiday, it won’t be a major cost in the scheme of things, unless you go totally mad.

It seems you enjoy your house but other than that your family are not driven by materialism, multiple posh cars and posh holidays. Even if you decide to start taking an extra holiday, it won’t be a major cost in the scheme of things, unless you go totally mad.


My instinct would be pay off the non trackers, max pensions, and get a diversified equity portfolio. decide or clarify if the “financial independence” is also about a very serious objective to retire early, or just a position in life so you always feel you have the comfort and choice. If retirement as early as possible is the goal then there are probably some threads on here too; you don’t need to live frugal but would want to watch your monthly costs don’t go creeping way up just because your earnings do, or things like your renovation are well managed and enjoyed but don’t become a total money pit.

I would also add given the sums involved that it’s worth taking proper advice about retirement planning and risk management.
 

Hooverfish

Registered User
Messages
191
How would you recommend to get involved in something like that? Do you have any experience doing something like that?
The accountability bit is here: https://www.charitiesinstituteireland.ie/our-blog/2021/1/6/how-to-choose-a-charity-to-support but you also need to decide what you care about, and do a good bit of online searching on any candidate organisations - what's their social media/press and PR approach and do you agree with it? Check out any employee reviews on Glassdoor. Meet people who work for them if you can. I once worked briefly for a charity that I later discovered from a client had been the target of substantial embezzlement a decade previously. This had led to a belt-and-braces regulation and documentation approach that got in the way of the charity's intended activities, and diluted the effect of donations. I think myself it's better to support a particular project and be involved in the strategy and in measuring the effect, than in supporting the whole organisation. But that's time-consuming and it sounds as though you've enough on your plate.
 

AGoodLife

Registered User
Messages
38
Disability Insurance

To me this is a bit of a blind spot. Your family's lifestyle is pretty dependent on your income, and would be even if you earned 1/3 of what you do now. Some kind of income continuance insurance might be worth looking into.

Not really sure. If it exists it would be very expensive. I am more thinking about disability. I had health problems while young completely out of the blue back that basically make any kind of physical work impossible for me. It's not a financial problem as I have a sedentary job (as I guess do you). It still hammered home that unanticipated illness is not at all unlikely, and is worth insuring against.
Thanks for this insight. Yes, my job is sedentry, and I have had some minor experiences to remind me how much we take our health for granted.
I do try to take looking after myself, and eat fairly healthily, and exercise to mitigate the sedentry job. We don't drink much, don't smoke and are in decent shape. But you never know the when illness may strike.

I checked out my work's disability insurance. It is a bit difficult to model the exact effect, roughly my total income (including shares) would ramp down over several years to 110k p.a. If the insurance product didn't pay out, my income would drop about 50% after a few months, and then would ramp to 0 over a few years (As the future promised shares vest).

If I had 0 income, given outgoings of 40k+25k mortgage, and gross income of spouse 50k+18k rental, If we paid down the mortgages using my reducing income stream and some shares or cash, then we could live on spouse income+rental.

If I am too sick to work, but somehow didn't qualify for the insurance, that would be annoying, but not the end of the world. Would it be worth taking an additional income protection policy to mitigate against this? I guess not. But I don't know how different the payout clauses are on different policies.

Given I hope to be financially independent in a few years, this would mitigate the risk too.

Overall, this looks ok to me, in a disability scenario, family would still be comfortable, we might not be able to help kids out as much in the future without committing to downsizing.
 

MugsGame

Frequent Poser
Messages
2,691
If the insurance product didn't pay out, my income would drop about 50% after a few months, and then would ramp to 0 over a few years (As the future promised shares vest).

If you're considering the risk that the insurance doesn't pay out, isn't there also a risk that your employment is terminated (on grounds of ill health), and that therefore your RSUs won't continue to vest?
 
Last edited:
Top