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

Blackrock1

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First off well done, you are in a great financial position.

Few things come to mind, one thing the lockdown as brought home to me is that your home important, if you can improve it or get a better one do that. If you are planning a major renovation itll be more like 400k than 200k.

Secondly, and you have alluded to this yourself, make sure you are enjoying yourself, holidays, gadgets, a car, stuff for the house, whatever it is that floats your boat, because you cant take it with you.

Thirdly, does your wife want to work, or is she just doing it because she can earn a reasonable income working part time? we had a similar decision to make (albeit my wife was still working full time) and we decided to forego the 80-100k she earns a year so that one of us can be with the kids full time, now my earnings had increased over the previous 2-3 years to effectively take up the slack once we took the childcare costs out but it meant i was earning a lot more for us to stay still effectively, but we still think its a good use of our resources! My kids are younger so it may not be as important in your case.

And lastly, again depends on your outlook, but personally i enjoy working, once i get my mortgage squared away itll take the pressure off a little and im not beholden to anyone as such, but do you want to be financially independent to meet a goal you set for yourself or do you really want to leave what you are doing in the longer term?
 

Blackrock1

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My advice is to vote or campaign for a left wing party, maybe Sinn Fein. A more equitable taxation system would mean more equitable distribution of wealth and alleviate some of your problem.

you realise that once he earns over 36k everything else is taxed at 52%, so the state takes more than the worker, how much more equitable would you like it to be?
 

Allpartied

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you realise that once he earns over 36k everything else is taxed at 52%, so the state takes more than the worker, how much more equitable would you like it to be?

I was only joshing, well slightly.

Taxation is about distribution and fairness. In the Eisenhower era tax rates went up to 90%, because it was fairer. And they were scared of Communism.

If someone's " problem" is " I really haven't got a clue what to do with 150k ", every year, then they have to expect a bit of a ribbing.
 

Bronte

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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.
I don't think a cushioned year abroad is quite the same. And I know plenty of people who used a property to house their college going children and rented to other friends of theirs. Generally the propety would be of a better quality. Don't think you can use the rent a room scheme though.

And no I wasn't suggesting it as a plan to increase the rental market. LOL. I've actually considered it myself. But I can't do it otherwise I would have. Financially it makes sense as you wouldn't have to pay rent out of taxed income. But my point was actually not about money but instead about what was better for your children. It's better they get independence and make their own mistakes and decisions away from you and their mother.

Agree with spending to create memories. You can't take the money with you.

I think you're underspending is fine. I was like that too. I had to learn to spend and I quite like it actually. My family used to give out to me about how tight I was.

The only reason I said not to renovate was because of the stress. But now you've said you'll rent, plus you're both happy where you are than absoluely stay put.

And please don't buy a Tesla. But I'm sure you could spend 20K on a car. My own tin can, that I love, is 16 years old and is my pride and joy. And is the despair of the entire household as I don't even have a radio in it. But I can find my way around without a GPS !! One thing I do know, and NRC said it, you never know what ill health can do to you. Or how life can throw a curve ball at you.
 
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Blackrock1

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I was only joshing, well slightly.

Taxation is about distribution and fairness. In the Eisenhower era tax rates went up to 90%, because it was fairer. And they were scared of Communism.

If someone's " problem" is " I really haven't got a clue what to do with 150k ", every year, then they have to expect a bit of a ribbing.

while that is technically true, those rates only impacted single earners earning over $200k or couples over $400k, adjusted for inflation that was $1.7m and $3.4m USD.....

the rates that most workers paid were far lower.
 

EmmDee

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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.

Hi,

I'm in a situation not dissimilar to yours. You already have a number of suggestions relating to mortgages / build or buy / investments etc already. I don't think I can add much to that. But I can suggest a couple of "lifestyle" comments...

- We have a really good cleaner who has been with us for almost 10 years. We also have an equally good gardener. Neither need any form of supervision or tracking. They come and do their job and maintain the place seamlessly. The cost is not large but the time and hassle saving is well worth it - weekends aren't about chores or looking at an overgrown garden. We have continued to pay them through the lockdowns - it's in our interest.

- On holidays, I'm not that into doing multiple holidays a year or some of the more ostentatious stuff that you see sometimes. But I would recommend thinking of a special "experience" holiday every 2 or 3 years - especially with the kids at the age where they can get a lot out of them. One time we did a three week trip to Costa Rica with stops in various environments (rain forest, cloud forest, pacific ocean). Another time we did an "all in" holiday in Mauritius. In between we had pretty simple holidays. But the kids remember the "big" holidays more than anything else.

- Flexibility is a major thing for us. We treated the fact that my "salary man" status gave my partner the flexibility to do more flexible work or do things not based on earning a certain salary. That has a big impact on the stress of the household. So, the idea of doing something charitable or socially minded would fall under that. Also allows location flexibility - a couple of summers we rented a place on the west coast of France for a couple of months on AirBnB - big discount because of the months and length of time. Was easily accessible which meant my partner was based there with a couple of trips back, I could go over and back a couple of times.

Otherwise, like you, we haven't a lot of overheads or status symbols. Car is 10 years old, house is mid-size and suits us, outlays are low. As with you, if I lost my job, I don't think I could achieve the same revenue - so am conscious of not digging myself into a hole by ramping up general expenditure without reason
 

Bronte

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14,166
Yes OP needs to hire a gardener. But having said that gardening is healthy. But I couldn't live without my housekeeper.
 

Blackrock1

Registered User
Messages
737
Hi,

I'm in a situation not dissimilar to yours. You already have a number of suggestions relating to mortgages / build or buy / investments etc already. I don't think I can add much to that. But I can suggest a couple of "lifestyle" comments...

- We have a really good cleaner who has been with us for almost 10 years. We also have an equally good gardener. Neither need any form of supervision or tracking. They come and do their job and maintain the place seamlessly. The cost is not large but the time and hassle saving is well worth it - weekends aren't about chores or looking at an overgrown garden. We have continued to pay them through the lockdowns - it's in our interest.

- On holidays, I'm not that into doing multiple holidays a year or some of the more ostentatious stuff that you see sometimes. But I would recommend thinking of a special "experience" holiday every 2 or 3 years - especially with the kids at the age where they can get a lot out of them. One time we did a three week trip to Costa Rica with stops in various environments (rain forest, cloud forest, pacific ocean). Another time we did an "all in" holiday in Mauritius. In between we had pretty simple holidays. But the kids remember the "big" holidays more than anything else.

- Flexibility is a major thing for us. We treated the fact that my "salary man" status gave my partner the flexibility to do more flexible work or do things not based on earning a certain salary. That has a big impact on the stress of the household. So, the idea of doing something charitable or socially minded would fall under that. Also allows location flexibility - a couple of summers we rented a place on the west coast of France for a couple of months on AirBnB - big discount because of the months and length of time. Was easily accessible which meant my partner was based there with a couple of trips back, I could go over and back a couple of times.

Otherwise, like you, we haven't a lot of overheads or status symbols. Car is 10 years old, house is mid-size and suits us, outlays are low. As with you, if I lost my job, I don't think I could achieve the same revenue - so am conscious of not digging myself into a hole by ramping up general expenditure without reason
some excellent advice here, especially around the cleaner and gardener and special family holidays.
 

EmmDee

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Messages
724
Yes OP needs to hire a gardener. But having said that gardening is healthy. But I couldn't live without my housekeeper.

I know. But there's a big difference between pottering in the garden for enjoyment versus realising you're going to have to spend all Saturday afternoon hacking back the jungle that has appeared
 

Bronte

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Messages
14,166
I know. But there's a big difference between pottering in the garden for enjoyment versus realising you're going to have to spend all Saturday afternoon hacking back the jungle that has appeared
I look at the ivy infestation into the hedge and despair. I tried bribing two of the children. They gave it a go and gave up uppaid. Lawnmower is serviced and ready to be collected, but I don't think we can face another year doing the hedge ourselves, that would be me keeping the ladder steady and DH cutting it.
 

AGoodLife

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Messages
38
Re: Children living away from home, rather than at home while going to college in same city

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 don't think a cushioned year abroad is quite the same. And I know plenty of people who used a property to house their college going children and rented to other friends of theirs. Generally the propety would be of a the better quality. Don't think you can use the rent a room scheme though.

And no I wasn't suggesting it as a plan to increase the rental market. LOL. I've actually considered it myself. But I can't do it otherwise I would have. Financially it makes sense as you wouldn't have to pay rent out of taxed income. But my point was actually not about money but instead about what was better for your children. It's better they get independence and make their own mistakes and decisions away from you and their mother.
Thanks. This is not something we considered. And the additional rental+living costs would put me off. We will consider it.

If, we decide go down the route of kid(s) doing college away from home, I think we would try to buy something suitable for rental. Will discuss this more with my spouse. At the moment, my frugal side could only get on board with this, if we could make the thing pay for itself, or come to close to that. Potentially this could be part of some form of inheritanc planning too.
 

AGoodLife

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Re: Selling shares as soon as possible

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.

You are wealthy, so your main objectives are the preservation of that wealth and to enjoy life.
I agree we have wealth, but we haven't yet hit the financial indepence goal, so for the moment, I don't yet see myself in protection mode. I would still like to take some risk.

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.
Thanks for taking the time to reply Brendan.

I am aware of the risk here, and I have stayed concentrated with my eyes wide open. And so far, it has paid off very handsomely. I sometimes kick myself for already selling the amount that I did (for purchase and to pay down mortgage). Even though I know it was technically correct to sell, I would be a lot better off today if I had took more risk and held them for longer!

In, fact, the risk today, is even worse than shown here. On top of the .25M of shares I own today, the company has promised me a number of shares over the next few years, with a current market value of .5M (These will be paid to me as part of my income, and taxed over the next few years, Assuming I stay in the compay, it means that today I have .5M (.25+.5*48%) of wealth exposed to the share value. And as new future promises arrive annually, I would expect to always have a future 'unvested' after tax exposure of about .25M. But if the share price drops, or the company is not doing well this could obviously drop.

The existing shares are earmarked for the renovation.

But, I am not happy to just setup a program to automatically sell additional new shares and sit in cash. This is the essence of my Question 1. What to do with the additional cash+shares we will accumulate.

(will reply to your suggestion on what to do with the cash soon!)
 
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ATC110

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you realise that once he earns over 36k everything else is taxed at 52%, so the state takes more than the worker, how much more equitable would you like it to be?
The 52% headline tax take is less when tax credits are taken in to account
 

ATC110

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375
Hi AGoodLife,

As a slight aside, I do not have private health insurance preferring to have created my own fund by saving the would-be premiums in a dedicated account to be drawn upon when necessary.

This has worked effectively for over 25 years, with a tiny fraction spent on private healthcare compared to the premiums saved.

You're in a strong financial position so I would consider this if you haven't already done so.
 

AGoodLife

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There are timers, so I had to wait about 15 minutes before I can post this one, will continue to work through the posts. Keep the feedback coming!

Re buying an upgrade vs renovating

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
Thanks. They are indeed important factors.

The only reason I said not to renovate was because of the stress. But now you've said you'll rent, plus you're both happy where you are than absoluely stay put.

After discussing and checking what we could get for a comparable total spend (assuming renovation can come in under 400k), I think we will end up with an overall nicer home from renovation.


Another crazy (?) idea we played with was that if we renovate, we will have to rent somewhere for a year (our existing rental property would not work for us). The rental costs would equate to about 3-5% of the purchase price.

We could purchase a third place (at 3-5% discount). We could potentially get a long term fixed home loan rate on it, as we would be living it. We would live in it during the renovation. And then rent it out after our renovation was complete. And use future savings to pay down the mortgage.

I would need to do the maths more precisely to see if this was feasible. As pointed out already, the future yield here would not be as high as possible elsewhere, but if the mortgage rate was at home loan rate, maybe it would still be interesting. Although it would tie up capital and make it harded to execute other possible options (e.g. rental unit for kids to leave away from home for college).
 

AGoodLife

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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.
I was coming from the view, that with high income, and reasonable wealth, and decent knowledge/experience of market cycles. I can afford to take some risks, and wait for the return in the long term.

If I spend all the current cash+shares on the renovation, and then clear the mortgage, It would be three years before I could make further investments (beyond the max pension ones which I would continue).

As you already have two properties which will be worth about €1.5m after renovations, you should not invest in any more property.
1.2M of that, I will not really be considering an investment though, I will be considering that my lifetime home, with no plans to ever sell. And I can't get any return out of it, other than living in it, or renting out a room. Whatever happens the property market will not matter here, until we die, or can only manage something smaller.

Assuming the renovation takes a year and costs 400k
After renovations in a year, I can imagine we could look like this
Home: Value 1.2M, Mortgage 260k

Investments:
Rental 300k, Mortgage 52k
Pensions ~525k (will increase by 40k contributions a year, and I've assumed 5% gain)
Cash 75k (will increase by 75k p.a.)
Shares 75k (will increase by 75k p.a.)

In three years after the renovation (so four years after today) the situation would like this (rough back of envelope numbers, would need to check the mortgage paydowns a bit more carefully)

Home 1.2M, Mortgage: 240
Rental 300k, Mortgage 28k
Pensions ~700k
Cash & Shares 600k

When I look at if from this angle, sinking a fair amount of the cash+shares into a second rental property doesnt seem crazy, and the cash flow from a secod property would help us ride out any potential future long term stock market crash.


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.
I agree. I think I will just enter a long term lease with the council, and if I got a second one, I would plan on the same.

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.
In a tax free pension fund or directly?

If directly, I think US stockexchange companies are off limits due to their estate taxes, so I guess this is companies on european or uk stock exchanges?

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
I agree, can't beat the flexibility and easy of management of shares vs a property.
 

AGoodLife

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Use the 150k p.a. to "subcontract" your work abroad and "retire" early ...
If only! Have you read Tim Ferris' 4hr workweek? That is a model from his book.

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?
Yes. Overall, in my area work life balance is reasonably good to be honest. Might be better than my spouses, even though they are part time. My area takes that seriously, and realises that burning people out, and alienating them, and losing them to competitors, is not conducive for creating long term value.

Most of the pressure is self imposed pressure, as doing well, is well rewarded. That said, there are some busy periods which can require digging in a bit.


(the post limit timer is certainly slow me down here, no more replies tonight, have a nice evening everyone!)
 

Blackrock1

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Yes. Overall, in my area work life balance is reasonably good to be honest. Might be better than my spouses, even though they are part time.
which brings me back to my point, unless your spouse really wants to work would everyones life not be better if they didnt?
 

MugsGame

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If only! Have you read Tim Ferris' 4hr workweek? That is a model from his book.

No, but it looks useful, added to my ever-growing backlog :)

I was inspired by the memorable tale of a developer who missed his calling as a remote engineering manager:
Evidence even suggested he had the same scam going across multiple companies in the area ... Quarter after quarter, his performance review noted him as the best developer in the building.
 
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_OkGo_

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Another crazy (?) idea we played with was that if we renovate, we will have to rent somewhere for a year (our existing rental property would not work for us). The rental costs would equate to about 3-5% of the purchase price.

We could purchase a third place (at 3-5% discount). We could potentially get a long term fixed home loan rate on it, as we would be living it. We would live in it during the renovation. And then rent it out after our renovation was complete. And use future savings to pay down the mortgage.

I would need to do the maths more precisely to see if this was feasible. As pointed out already, the future yield here would not be as high as possible elsewhere, but if the mortgage rate was at home loan rate, maybe it would still be interesting. Although it would tie up capital and make it harded to execute other possible options (e.g. rental unit for kids to leave away from home for college).

I'm not suggesting that you should do this but the same thought occurred to me and it would be interesting to work out the actual cost to you. The amount of capital tied up will depend on what you can find that would be suitable for your family needs.

If you decided that a property worth €400k was adequate (with an eye on future yield), this would probably cost you €24-32k to rent for the year. Your suggested alternative would involve stamp duty, purchase costs and mortgage interest. It would tie up €80k of capital (20%) and you would borrow €320k. If you use a cashback offer, you could have an effective interest rate of ~1%. All in, it should cost you about €10k to do this and it keeps most of your capital available for funding the renovation.

The other advantage of doing this is being your own "landlord". If renovations stretch to 18 months, its not a problem for you and stays significantly cheaper than the rental option. At the end, as you suggested, you could switch and fix at a very favorable rate which then becomes your BTL.

Not many people could do something like this but your wealth/income makes it an easy option for you. Although if you want to stay living in the same area (purchasing at €600-800k), it is probably not a good candidate for long term rental and would not be as clear cut a decision for you. In this case, renting is probably just as easy.

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.

Have you exhausted all options with your employer for additional ER contributions. Is there an option to have your bonus/performance paid as ER pension contributions? Care would have to be taken that it is not deemed a salary sacrifice and taxed as a BIK. My understanding is that it has to be at the employers discretion to choose the type of payment, i.e. you cannot request it to be paid as a pension contribution or it would be deemed a salary sacrifice. Some contractual renegotiation would be required
 
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