# Fork in the road



## rollingstone (11 Jan 2016)

*Age:* 43, single male, no child dependants

*Annual gross income from employment or profession:* €112,000 as senior manager in multinational

*Monthly take-home pay:* c.€5,226

*In general are you: (a) spending more than you earn, or (b) saving?*
Saving.  I do not make  a regular savings deposit because of the interest rate environment. I retain a minimum €3k in my bank of Ireland current account to avoid excessive bank charges, and to pay occasional outlays (motor tax and insurance, property taxes, payment for parents private medical insurance etc.). I also transfer funds on an ad hoc basis to my equity account and Rabo savings.

*Rough estimate of value of home:* €190,000

*Amount outstanding on your mortgage:* €139,000, repaying c.€922 a month. Original mortgage taken out in 2003 with EBS. Switched to Bank of Ireland in October 2011 (€157,500 mortgage), currently 17 years to run on mortgage.

*What interest rate are you paying?* 4.25% variable rate. I realise this is not the most competitive rate I can currently get. I need to address this point (the usual Irish inertia applies to my delay in doing so).

*Other borrowings – car loans/personal loans etc.:* None. In early 2015 repaid outstanding balance, from savings, on car loan with credit union.

*Do you pay off your full credit card balance each month?* Yes.

*Savings and investments:* savings €32,500 - €25,000 on deposit with Rabo savings a/c (1.25% gross interest), €2,500 in credit union savings, €5,000 in BoI.

Equity investments (with Goodbody) - €115k. Portfolio consists of mainly US technology, with additional investments in Irish stocks – BoI, Ryanair and CRH. Excluding the purchases of Irish shares over the past 18 months, I have held the other equities for c 6 years and they have performed very well. However the overall value has decreased by €10k in the past month.

*Do you own any investment or other property?* No

*Do you have a pension scheme? *Yes, defined contribution occupational scheme. The latest fund value is €165,627 (investment option in full - equities). Per the pension admin projections, based on current estimates I could have a pension of €27,300.00 p.a. and a Retirement Lump Sum of €153,700.00 if I retire at age 65. I stopped making monthly AVCs about 2 years ago as I felt that putting the spare cash into equities that i select myself would yield a greater return.

*Life insurance:*  guaranteed mortgage protection plan with Zurich, taken out in 2011. Taken out based on 22-year term for home mortgage. Mortgage protection and serious illness cover of €157,500 reducing over a term of 22 years to match the mortgage. Monthly premium - €47.
I also currently have death (lump sum of 4 times my salary at date of death plus the value of my retirement savings account) and disability (2/3 salary less social welfare entitlements) cover via my job. 


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


As the thread title suggests, I feel I've reached a fork in the road in my life (classic case of middle age I suppose).

*Financial *- my priority is making the best of what I have, and ideally retire younger than 65 to be able to live a comfortable life. I grew up in a large family and we didn't have much, therefore I have a very conservative view towards the money that I have accumulated, on the back of working very hard and the huge sacrifices that my parents made to enable me to have what I do have today.
I'm currently at a stage/age that I feel I need to make some strategic decisions, my considerations currently include:

(a) Use my savings to make a lump sum AVC to the pension, maximising the tax relief threshhold.
(b) I currently live in a three bed semi in a large housing estate. Living on my own means that this is perfectly adequate. However I've always wanted to live in the countryside, and don't like the clausterphobic nature of a housing estate, including for example where you can hear it when your next door neighbour flicks the light switch. Such is general modern living these days I know. A detached rural property in my area (Cork) would cost minimum €350k.
As above, I have c €50k equity in my current home. I could sell it, or rent it out - no shortage of demand, monthly rent €850-€950 attainable.
(c) Invest in a 2-bed seaside apartment in my original homeplace down Kerry way - current asking price €160,000.  Apart from the investment, it would give me somewhere to stay when needed down home direction and a long term option to live there some day. Given it's location, there would be regular demand for short term occupancy. Estimated total annual rental income €13k between the months of March and September (likely there would be demand Oct-Dec, but again I'm taking a conservative approach). Estimated cost of mortgage 10k per annum based min 75% financing over 20 years (that's a quick and dirty calculation, taken from Bonkers.ie). Of course there would be additional overheads and administration (time an effort advertising and arranging bookings).
(d) use my savings to reduce my existing mortgage balance.
(e) reduce my stake in equities and hold in cash for the time being. I'm invested in the long term in equities but the current market sentiment seems to be bearish. As stated above I've lost a bit on my portfolio recently, wondering if it's time to stop the bleeding.
(f) severance - the company I am working with is currently going through a period of restructuring through the group. I do not believe that I am being considered for the programme, but could possibly make it happen voluntarily (uncertain about the chances of it being accepted, but obviously need to manage the situation very carefully). Based on my length of service and current redundancy terms, I would get a net c €60k.


 Finally, from a non-financial perspective - I feel weary, due to feeling burn-out from the job and other personal matters which I have gone through over the past decade or so. If I had the courage of my convictions, I would probably take a year out to go travelling/work abroad, life is short. However I fear that I would not get anywhere near the salary level on my return and at the age I would be, opportunities would be scarce enough. Maybe this is a case of far away hills are always greener.
I have not given up hope of having a family, but at the moment the above is my situation. 

Something, I think it was Brendan said on here once, resonated with me - there's no point in living like a pauper to die a millionaire.
Thank you for taking the time to read this. I would greatly appreciate not just your financial recommendations but your life experience recommendations. Go raibh mile maith agaibh.


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## Brendan Burgess (11 Jan 2016)

rollingstone said:


> (b) I currently live in a three bed semi in a large housing estate. Living on my own means that this is perfectly adequate. However I've always wanted to live in the countryside, and don't like the clausterphobic nature of a housing estate, including for example where you can hear it when your next door neighbour flicks the light switch. Such is general modern living these days I know. A detached rural property in my area (Cork) would cost minimum €350k.
> As above, I have c €50k equity in my current home. I could sell it, or rent it out - no shortage of demand, monthly rent €850-€950 attainable.



*Point 1*
You have plenty of money and a high income. So you seek to buy a house in the area you want to live. With €145k as a deposit, you should be able to borrow €200k easily to buy a new home.



*Point 2*
After you buy your new home, you should sell your existing home and pay down the mortgage. You don't need the hassle of an investment property.

*Point 3 *
You can't have everything.  If you want to live in a €350k house, you will have to have the income to service the mortgage. If you want to quit your job, then you should stay in your present house. The only one who can make that decision is you.

If quitting your job is reasonably likely, then stay in your present house. You can pay off your mortgage and then you would be absolutely free to do as you please.

*Point 4 *
If you decide to stay put, then you should pay off your mortgage. 
You are effectively borrowing money at 4.25% to invest in the stock market. That is not a good idea.


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## RichInSpirit (11 Jan 2016)

Hi rollingstone. I read a book called the Alchemist about following your dream.

I say quit the job, travel the world and maybe find that wife.


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## rollingstone (11 Jan 2016)

Thank you both for the feedback - food for thought.

Richin Spirit - if I had the cojones, I should take your advice . As a starter, I might get that book....


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## Sarenco (11 Jan 2016)

Strongly agree with Brendan on point 4 above - investing in equities outside of a pension wrapper is a very high risk strategy while carrying debt @ 4.25%. 

I would suggest taking some risk off the table by liquidating at least some of your stock portfolio and substantially paying down your mortgage while you decide what you want to do in the longer term.  I can't see your current home ever making a good rental property at that financing rate/projected yield so I don't see any downside to paying down your mortgage ahead of schedule.


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## Brendan Burgess (11 Jan 2016)

Sarenco said:


> I don't see any downside to paying down your mortgage ahead of schedule.



In my first draft of the answer, I said - "Sell your shares today and pay off your mortgage". But then I realised that the downside is that if he decides to buy another house, it would be helpful to have the €145k deposit available to him.  That is a very important timing consideration.


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## Sarenco (11 Jan 2016)

Brendan Burgess said:


> In my first draft of the answer, I said - "Sell your shares today and pay off your mortgage". But then I realised that the downside is that if he decides to buy another house, it would be helpful to have the €145k deposit available to him.  That is a very important timing consideration.



Fair point but I suppose rollingstone better pray the stock market doesn't crash while he is making up his mind!

I would have thought the safer course would be to sell his current home at the same time as he purchases his preferred house (or, if that is impractical, sells his current house first and then rents for a brief period).


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## Brendan Burgess (11 Jan 2016)

Sarenco said:


> Fair point but I suppose rollingstone better pray the stock market doesn't crash while he is making up his mind!



OK, we are getting there. 

rollingstone 

You should sell your shares and hold the proceeds in cash until you decide what to do. 
If you decide not to buy a house, then you should pay off your mortgage.

If you decide to buy a house, you will have the deposit to buy the house and won't need to sell your own until you have bought and moved in. 
I am not a fan of renting, so I think you should go sale agreed on your own home before putting your existing home on the market. 

It's nice to move from your current home into your new home without the hassle of renting, leases, etc. 

Brendan


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## Sarenco (11 Jan 2016)

Brendan Burgess said:


> I am not a fan of renting, so I think you should go sale agreed on your own home before putting your existing home on the market.



That's obviously another way of proceeding but it's not entirely risk free.  If rollingstone subsequently has any difficulty selling his current home he could find himself paying two mortgages for an extended period.


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## creditworthy (12 Jan 2016)

Hi , I can only comment on the " worn out and weary "line in your post ,  don't you deserve a break ? Who has earned your money ...You ! Pack, a bag and travel if that's what you'd really love to do , things always work out fine ...I think !   Good luck with your decisions , we're here for a good time , not a long time .


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## thedaddyman (12 Jan 2016)

You'd buy a heck of a house in rural Cork for €350k, especially if you are living on your own and your space needs may be less. I've seen plenty of good modern 3/4 bed bungalows in East Cork on the market for €250k and under.

Have you considered retraining or upping your skills with a part time college course, good way of meeting new people as well.


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## rollingstone (12 Jan 2016)

Sarenco/Brendan - I've been considering cashing in the equities for the past 2 years to offset it against the mortgage. The reason I haven't I suppose is that I've felt that having the liquidity of selling shares if I ever needed the money was an easier source of funds than having bricks and mortar (mortgage-free almost) but no comparative cashflow.
Based on your comments, I'm thinking it may be time to walk away from the equity table or at least significantly reduce my holdings, and retain some of the Irish shares for the long haul.

Creditworthy - I know there are plenty people much worse off than me in Ireland 2016 unfortunately, and I count my blessings every day, so I didn't want to come across on this thread as 'complaining'. But you're right - I have accumulated what I have through a lot of sacrifices and long hours over a long period of time. If I'm honest, what's holding me back is guilt (feeling that I'm letting other people down - parents), and fear that what I've accumulated will be eliminated, leaving me in a financial struggle later on in life.  Thank you for the encouraging words - in my heart, I know your advice is spot on.

thedaddyman - I'll check out East Cork. I would never say no to continuing education, but having spent 8.5 years (full time and part time) obtaining a professional qualification, masters and diploma, I couldn't face the it again soon. That being said, the path to pursuing a more fulfilling career choice may necessitate that. I've joined new groups recently alright to expand my social circle - something I also badly needed to address (almost all of my social circle are married with children, and I've gotten a bit slow to continue training with the junior Bs....).


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## Buddyboy (12 Jan 2016)

Well, more informed minds than mine are giving you good advice on the financial front......
I was glad to read your last post, where you have started to expand your social circle, as I was worried when I read that you wanted to move to the countryside (and potentially be isolated). 
This is on my mind as I just watched a TED talk last night -
*Robert Waldinger*
* What makes a good life? Lessons from the longest study on happiness *
Where they are studying over 600 men for the last 75 years, and what is making them happy?
The answer - not money or fame, but quite simply good relationships, with family, friends and partners. Its worth a watch.

And I was looking at all my relationships and social circle (I've just turned 50).  And which group of friends are always up for it, always turn up, always good fun......my ballroom dance class.  Just a suggestion.

Well done on questioning your life, you won't regret it.


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## creditworthy (12 Jan 2016)

Buddyboy, ill be taking a look at that link also ...thanks. .am currently going through a Whats it all about myself , love my job , have a good bit of savings and thankfully , no mortgage . I need to find my buzz !! 
Rollingstone....I  understand what you mean about not wanting to leave yourself without a good financial state in the years to come !


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## LS400 (12 Jan 2016)

Rollingstone, I don't mean this to sound harsh, but your having this midlife crisis about 10 years to early. I take it your folks invested substantially in your career and as you say, they did make sacrifices. Your only 43 for heavens sake. I know if I were to approach my folks with the prospect or giving it all up to take time out, knowing it's unlikely you will have the same deal when you get back from "finding yourself " in a year or so, I would get a swift kick up the Arsenal from them.
And rightly so.
A few fings surprise me though, your earning good money, yet your living in a modest home, your taking home 5k a month into the hand, apart from  paying €900 mortgage, and your investments, which you have built up very nicely, I would have thought you would have had more cash savings with a good salary like that. 
Your biggest problem the way I see it, is you just need more excitement in your life at the moment. It's time to start spending the dosh on yourself now. Let the investments run their course and earn their own way without further funding, move to a nice home that you like, get a Tesla motor, take your folks away on a holiday of a life time. If possible rent out your present 3 bed with an agency who look after everything keeping you at arms length from the hassle, when you sell it to travel the world in 10 years with your (hopefully) new partner you will enjoy the spoils all the more.
Don't kid yourself that everyone loves their job, you say your working hard, burning out, need a break, well there are plenty who earn alot less but work just as hard, you have the time and funding to improve your situation. So as you can see, from my point of view, the Shirley Valentine approach to throwing caution to the wind doesn't sit with me.
if you came back at 53, my opinions would be quite different. 
Best of luck.


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## rollingstone (13 Jan 2016)

Buddyboy, thanks for sharing the link. Watched it last night, very good.

LS400 - thanks for the feedback, don't think it's harsh at all, the reason I came on here was to get people's advice regardless of what it is. The only point I'd revert to you on is I think I've said earlier that I realise how fortunate I am, therefore I don't believe that everyone loves their job/doesn't work hard/don't suffer burnout/are financially comfortable - I don't come from a privileged background so fully appreciate people's hardships. I take your point about maybe deferring my actions for another 10 years, and perhaps taking it easier then having built up more of a nest egg during that time, while as you say, in the meantime getting more excitement in my life  Thanks.


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## Brendan Burgess (13 Jan 2016)

LS400 said:


> your having this midlife crisis about 10 years to early....Your only 43 for heavens sake.



We don't discuss medical issues on askaboutmoney, but just to clarify this factual issue.  This is a common age, if not the most common age, for a man to hit a mid life crisis. 

Brendan


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## mtk (13 Jan 2016)

Interesting thread.
1. Re job No way of knowing what decision  is best but be aware -  staying in job  is also a decision .
If travel you could rent your  house out .
2. If there are redundancies now - will there be more in future ......is status quo going to continue ? You may have decision made for you at some stage In the future . As you well know I presume Multinationals rarely have much sentimental attachment to the emerald  isle  or to their staff if you cease to be "useful".
3   could you get leave absence for a year - given redundancies employer 
 may be delighted (costs reduction) to say yes ? Low risk option it appears to me ?


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## LS400 (13 Jan 2016)

Its always good to get other peoples perspective on the trials of life.  
Glad to see your not taking offence to my comments, as it also stems from myself not having had a privileged background, and as things are quite good these days, I am of the opinion not to walk away from something I have striven hard for,   and I do wish you the best of luck in the future.


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## Ihana (13 Jan 2016)

I think leave of absence is a good idea too.  You definitely deserve a break.
You don't really have enough to retire on and if you stick at current job you are likely to be able to retire sooner.  Id also be looking at increasing the level of savings from that take home pay.


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## cormacol (13 Jan 2016)

I'd also agree with leave of absence - even three months. You would be amazed how refreshed you will feel after it plus you can see if the reality of travelling is as good as you imagine.


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## Marion (13 Jan 2016)

Your biggest obstacle is to forget about your background. You have done very well due to hard work and intelligence and perhaps luck. Move forward. 

Enjoy your life. Spend some money on yourself -this might mean booking a holiday home to invite your family to an exotic location. You will pay for your parents. 

Nobody will want to remember you as the guy who did well but didn't enjoy life.

Take care of number1.

Marion


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## annR (15 Jan 2016)

Many employers do recognise that people need a break.  You can do it without throwing it all away.  Look into the leave of absence or sabbatical options.  It feels like a big step to take but it's not a big deal.  
My other advice would be to look at your interests outside of work.  Now is the time to look at that thing that you'd love to do but never got around to . . . there are loads of opportunities to travel combining it with some sort of interest.  There are singles trips, culinary trips, archeology field trips, volunteer conservation trips, hiking trips in the Himalayas ...  you name it.  THis might help you decide how much time off you want to take.  Professionally I think this sort of thing looks good on a CV!
I don't believe you should put off all this by 10 years as who knows what will happen tomorrow and it's best to think things through while you're in the frame of mind for it which you seem to be.


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