What to do with 1500 per month

C

coolaboola12

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Hi all
I'm maxing pension and mortgage free and fortunately generating 1500 a month surplus cash and would like opinions on what to do with it. I have a high 5 figure lump sum in AIB so don't just want to save it as cash

I can't decide what to do :

1. Go down the etf route with the taxes and hassle
2. Buy monthly investment trusts with the currency conversion and fees and CGT
3. Just pay into a standard life fund tracking the world index

Any opinions greatly appreciated
 
Just build up a diverse portfolio of shares directly.

No need to buy every month. Build up a lump of money and then buy one share. Then build up another lump and buy another share. etc.

Brendan
 
Is it generally people's opinion that the standard life route is a rip off and almost impossible to make money ?
 
coolaboola12 said:
Is it generally people's opinion that the standard life route is a rip off and almost impossible to make money ?
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I wouldn’t say it’s impossible to generate a reasonable return over the long term but tax and costs are certainly major headwinds.

How is your pension invested?

One approach is to keep your pension invested largely (or wholly) in equities and to just keep your after-tax savings on deposit.

Also, is there any work you could do on your home to make it more energy efficient?
 
Sarenco said:
I wouldn’t say it’s impossible to generate a reasonable return over the long term but tax and costs are certainly major headwinds.

How is your pension invested?

One approach is to keep your pension invested largely (or wholly) in equities and to just keep your after-tax savings on deposit.

Also, is there any work you could do on your home to make it more energy efficient?
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Pension is 100% equities. Just not sure what to do with the leftover monthly cash. I have 100k on deposit already . Home is rated A3 already
 
coolaboola12 said:
I suppose that's risky as I would only own a few stocks
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coolaboola12 said:
Pension is 100% equities.
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Again, you are making the mistake of silo thinking.

You have a portfolio - Home which is mortgage-free, pension fund and directly owned assets.

If you have a well diversified pension fund worth say €500k, then buying €20k worth of shares in one company is not changing your overall risk as it's probably about 2% of your total portfolio.

Brendan
 
And, as mentioned many times in such threads, you can always buy an already diversified conglomerate stock to avoid the burden of building your own diversified basket of shares. For example the likes of Berkshire Hathaway and similar "baby" Berkshire Hathaway stocks that take a similar diversified conglomerate approach to their business.
 
coolaboola12 said:
Is it generally people's opinion that the standard life route is a rip off and almost impossible to make money ?
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I don't think that anybody has claimed that - the SL funds are perfectly good products but it's much more cost effective and tax efficient to hold shares directly compared to invsting via a unit linked fund.
 
coolaboola12 said:
Hi all
I'm maxing pension and mortgage free and fortunately generating 1500 a month surplus cash and would like opinions on what to do with it. I have a high 5 figure lump sum in AIB so don't just want to save it as cash

I can't decide what to do :

1. Go down the etf route with the taxes and hassle
2. Buy monthly investment trusts with the currency conversion and fees and CGT
3. Just pay into a standard life fund tracking the world index

Any opinions greatly appreciated
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Does it look like you’ll hit the max pension threshold ? If so I’d start spending more to be honest
 
A global Investment Trust is a decent bet. Or build your own portfolio of global franchises. Clearly, that doesn’t mean throwing darts at start-ups.

If someone said to you, I’ve just invested €100,000 in, say, Microsoft, Apple, Diageo, Ryanair, JP Morgan, LVMH, Johnson & Johnson, BP, Nestle, Visa, Coca-Cola, Astrazeneca, Disney, McDonalds, and Nike, you wouldn’t be swinging for them.
 
ClubMan said:
I don't think that anybody has claimed that - the SL funds are perfectly good products but it's much more cost effective and tax efficient to hold shares directly compared to invsting via a unit linked fund.
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I think people in this thread mean standard 'Life' funds rather than "Standard Life" funds.
 
@coolaboola12
Have you ever completed a full money makeover? You tend to pose questions as very binary options, rather than looking at them holistically.

I remember you discussed pensions earlier in the year and had not been maximising AVCs previously. Do you have scope to make a 1 off AVC for 2022 before the end of this month? Earlier this year your pension 'pot' wasn't large relative to your non pension savings.

Don't completely discount the life assurance company route; for example I use one to transfer wealth to my children through a bare trust structure. Yes there are charges, but I set it up and forget about it for 18 years.
 
Gordon Gekko said:
A global Investment Trust is a decent bet. Or build your own portfolio of global franchises. Clearly, that doesn’t mean throwing darts at start-ups.

If someone said to you, I’ve just invested €100,000 in, say, Microsoft, Apple, Diageo, Ryanair, JP Morgan, LVMH, Johnson & Johnson, BP, Nestle, Visa, Coca-Cola, Astrazeneca, Disney, McDonalds, and Nike, you wouldn’t be swinging for them.
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Fcit has returned 30% over last 5 years, that's 6% a year. When you take into account costs, currency and CGT there is almost nothing left
 
RedOnion said:
@coolaboola12
Have you ever completed a full money makeover? You tend to pose questions as very binary options, rather than looking at them holistically.

I remember you discussed pensions earlier in the year and had not been maximising AVCs previously. Do you have scope to make a 1 off AVC for 2022 before the end of this month? Earlier this year your pension 'pot' wasn't large relative to your non pension savings.

Don't completely discount the life assurance company route; for example I use one to transfer wealth to my children through a bare trust structure. Yes there are charges, but I set it up and forget about it for 18 years.
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I did the 2022 avc already, thanks for that idea. I do like the thought of the standard life policy from an admin point of view but I suppose I'm just worried that with the charges plus the 41% then I'll actually lose money
 
coolaboola12 said:
Fcit has returned 30% over last 5 years, that's 6% a year. When you take into account costs, currency and CGT there is almost nothing left
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Without talking about the merits of a specific trust, the costs (broker charges, FX conversion) are only when you buy & sell. CGT is only payable when you sell, and is only taxed on the profit. If you don't sell, growth keeps compounding. The only ongoing tax will be on dividend payouts, taxed as income.
 
RedOnion said:
Without talking about the merits of a specific trust, the costs (broker charges, FX conversion) are only when you buy & sell. CGT is only payable when you sell, and is only taxed on the profit. If you don't sell, growth keeps compounding. The only ongoing tax will be on dividend payouts, taxed as income.
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So the trusts are a better idea than standard life ? Those two are the ones in most interested in I think
 
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