A plan for the future

[Abitlost]

Looking for opinions on a strategy.

Income 55k private
Mrs lost 70k public service
Monthly nett €6,500
Both 40
No kids

Home mortgage paid off last month
Cars paid for.
Investment property €165k
o/s loan €65k income tax about €5k per annum.

Have about €1,500 spare per month so going to restart the pension with €1,300 per month net cost €780 so €700 left.

Question is?
another investment property
or equities
or REIT
Or an investment fund.

With two houses probably not inclined to go for another!

 

[Sarenco]

Congratulations on getting to the position where you own your home outright at 40 - that's some achievement.

I think you are absolutely right to maximise your pension contributions from here but what you invest in through that vehicle will, to a large extent, determine what strategy you should have for your after-tax income. For example, if you were to invest your pension contributions 100% in equity funds then you might well take the view that you should be more conservative with your after-tax investments.

What is the interest rate on the investment property mortgage? Given how low rates are on deposits and bonds at the moment, it might be worth directing any free cash towards paying that mortgage ahead of schedule, even if you are on a tracker.

In any case, you should definitely maintain a decent cash reserve to address any unexpected expenses that might arise - particularly with the rental property. Maybe as much as 6 months' net income (including net rental income) should be simply held on deposit.

Are you comfortable that you are appropriately insured, in terms of life cover, income protection, etc.? Good financial planning is as much about protecting yourself from unexpected life events as trying to maximise the return on your savings for a given level of risk.

Hope that helps.

 

[Firefly]

40 with no kids and no mortgage....I would build up my holidays & travel extensively.