# Aged 40 - Own home outright - recently inherited €300k



## Monsterxyz123 (22 Dec 2020)

I'm am 40.
2 young kids 
Own my home outright.
Good steady income.
Small pension.
State job. 30k 
Recently inherited 300k.
Wondering how best to invest/deposit.
Thank you


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## D_2021 (27 Dec 2020)

hi 

financially you are in a really good place, no mortgage, stable income. the fact you inherited such a large amount. you really need professional advice like a financial adviser to walk you through your options. 

but just in my opinion: 

- start your retirement plan you have about 25 yrs investing until you reach 65. 
- check out this article on how investments in s&p500 index has done over 20yr period: informeddecisions.ie - Blog 97


but again a financial adviser would be the best place to start & formulate a plan for your money.


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## Brendan Burgess (27 Dec 2020)

Hi Monster

Are you married? Does your spouse have an income? 

If your total income is €30k, then you are not paying any income tax, so contributing to a pension fund is not a good idea. 

If your spouse is working and you are paying tax at the top rate, then contributing to a pension fund/AVCs to a level to use up the 40% tax rate would be a good start.

After that, assuming you have no need for the money in the short or medium term, you should invest in the stock market either through a diverse portfolio of shares held directly or through a fund. 

Given that you are not paying the top rate of tax,  shares which pay high dividends would be a good idea. Capital Gains will be taxed at 33% while most of your dividends would be taxed at 20% at most.

Brendan


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## Brendan Burgess (27 Dec 2020)

Anyone got any ideas for a fund or vehicle where most of the returns are subject to income tax?  

Brendan


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## Sarenco (27 Dec 2020)

In the OP’s shoes, I would probably invest €200k in a global equity investment trust like F&C Investment Trust plc and I would buy 5-Year State Savings Certificates with the remaining €100k.

Dividends from an investment trust are subject to income tax at your marginal rate, USC and PRSI and capital gains are subject to CGT.  Interest payments on State Savings Certs are tax free.

Another option to explore is whether a home renovation project to increase its BER rating would be worthwhile.

I’ve assumed that €30k represents the total household income and purchasing notional service is not a relevant consideration.


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## Marc (27 Dec 2020)

Brendan

another possible fall out from Brexit is that U.K. investment trusts could go the way of non-EU ETFs.

at present they are regulated as AIFM with an EU Kid document but post 1/1/21 they are going to be treated as a “complex instrument” by some EU trading platforms.

We won’t know for sure until March when the equivalence regime is confirmed but it’s definitely in the balance.

Our solution is to introduce a Discretionary Investment manager which allows continued access to non-EU ETFs via an Irish regulated investment platform.


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## Monsterxyz123 (2 Jan 2021)

Thank you all for great advice. Currently researching all advice and will seek a professional for advice also.


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## Monsterxyz123 (14 Jan 2021)

I have been doing a small bit of research into investment options...just one question...is it time to hold onto cash and see what happens as most of the options look seriously over priced. Not much value. I'm in a good position if a bubble does pop. I can buy up at a lower price.? If so I cant lock money into long term investments but aware keeping it in regular savings i  am losing money.


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## Steven Barrett (14 Jan 2021)

Monsterxyz123 said:


> I have been doing a small bit of research into investment options...just one question...is it time to hold onto cash and see what happens *as most of the options look seriously over priced*. Not much value. I'm in a good position if a bubble does pop. I can buy up at a lower price.? If so I cant lock money into long term investments but aware keeping it in regular savings i  am losing money.



Just wondering if you can point at the times over the last 45 years when they were underpriced? People invest with the expectation that the value of the stock will increase over time. So that future price will be higher than the price that you think is too high today. There will be ups and downs in the markets, that's what happens but trying to time the market is a game of luck and you might leave a lot on the table in doing so.


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## NoRegretsCoyote (14 Jan 2021)

SBarrett said:


> People invest with the expectation that the value of the stock will increase over time.



People tend to forget that, despite massive increases in recent years, equities still have close to unlimited upside.

Not so with bonds, which have have a natural limit in prices as interest rates go closer to zero.


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## dereko1969 (14 Jan 2021)

Monsterxyz123 said:


> I have been doing a small bit of research into investment options...just one question...is it time to hold onto cash and see what happens as most of the options look seriously over priced. Not much value. I'm in a good position if a bubble does pop. I can buy up at a lower price.? If so I cant lock money into long term investments but aware keeping it in regular savings i  am losing money.


You still haven't answered the questions about marriage and total family income? That is key in determining where tax comes into it.


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## Monsterxyz123 (14 Jan 2021)

Single person. 50k annual disposable income. State job plus 3 rental properties.


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## RedOnion (14 Jan 2021)

Monsterxyz123 said:


> Single person. 50k annual disposable income. State job plus 3 rental properties.


So, you are a higher rate tax payer?

Are the rental properties all paid off completely?


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## _OkGo_ (14 Jan 2021)

@Monsterxyz123 , you are not going to get any useful advice without providing reasonably accurate information.

50k disposable income & 3 rental properties is significantly different to 30k state job in your initial post. Your best bet is to copy and paste the Money makeover template and provide as much detail as you can, particularly on your rentals, e.g interest rates and mortgage balance. Otherwise you are not going to get relevant advice/opinion






						Key Post - Basic information required for the "Money Makeover" forum
					

It can be difficult, but please try to use a meaningful title in your thread  For example "27 year old with mortgage arrears".  You will get a much better and much more coherent answer if you give as much information as possible in your first post. For example, if you give your mortgage rate, it...



					www.askaboutmoney.com


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## Monsterxyz123 (14 Jan 2021)

Will do thank you.


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## Clueless Clive (20 Jan 2021)

@Brendan - Why is the 'go to' suggestion here to invest in a stock market at record highs, rather than a housing market which can have guaranteed returns, vs the share / ETF route which isn't guaranteed and (statistically at least) is due a correction?


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## NoRegretsCoyote (20 Jan 2021)

Clueless Clive said:


> rather than a housing market which can have *guaranteed returns*



How did that strategy work out if you purchased an apartment in 2007?


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## Clueless Clive (20 Jan 2021)

Should have clarified, renting to council on a 10-25 year lease for 85% market value. My calcs in some town you’re still getting 7-8% before tax, (guaranteed) vs 4-6% in a market that looks toppy


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## NoRegretsCoyote (20 Jan 2021)

The yields are strong but there is still risk to the business model. National policy may change, councils may no longer need the type of property you own, etc.

I just don't think the term "guaranteed" here is justified.


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## Clueless Clive (20 Jan 2021)

Ok, if given €500k without any other investments or pension - do you: purchase an accumulating world ETF, or a few properties which you rent to the council?


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## NoRegretsCoyote (20 Jan 2021)

Clueless Clive said:


> Ok, if given €500k without any other investments or pension - do you: purchase an accumulating world ETF, or a few properties which you rent to the council?




Personally an ETF, as I wouldn't be interested in the hassle of being a landlord to three low-end properties even with a local authority in the middle.

Both have risks. I would say risk of capital losses is greater with equities, risk of something going wrong with the whole business model greater with landlording.


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## Clueless Clive (20 Jan 2021)

NoRegretsCoyote said:


> Personally an ETF, as I wouldn't be interested in the hassle of being a landlord to three low-end properties even with a local authority in the middle.
> 
> Both have risks. I would say risk of capital losses is greater with equities, risk of something going wrong with the whole business model greater with landlording.


Fair enough. I’m torn to be honest. Trying to gauge what the sensible thing to do is, so appreciate your feedback.
The hassle of being a landlord is non existent with the 80% council lease only structural problems are yours, council are obliged to handle the rest. You’ve no empty months, broken dishwashers etc to handle.

plus you can tie in for 25 years, so even if policy changes it won’t take effect until after the agreement ends. And the underlying assets (should) appreciate in that time also.

wondering at what yield you would say it makes sense for you?


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