# what to do with 30,000



## SpagMonster (8 Jun 2008)

Age: 41
Spouse’s/Partner's age: 39
Annual gross income from employment or profession: 80,000
Annual gross income of spouse: 2,400 (my wife intends to return to teaching once the kids are a little older)
Type of employment: e.g. Civil Servant, self-employed (third level lecturer)
In general are you spending more than you earn or are you saving? no
Rough estimate of value of home 500
Amount outstanding on your mortgage: 162,000
What interest rate are you paying? See below (NIB LTV tracker)
not sure of the difference between the web quoted %
Interest on debit balance: 4.500 % 
Nominal annual rate of debit interest: 4.577 % 
Other borrowings – car loans/personal loans etc
no
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: 300,00 (anglo 7%) reg saver , matures oct
i deposit about 1,500 a month (its joint with my spouse)
Do you have a pension scheme? Standard gov 6% through work
Do you own any investment or other property? no
Ages of children: 3,6,8
Life insurance: only for mortgage amouny

What specific question do you have or what issues are of concern to you? 
Property or funds or mortgage
Funds (option 1)
I was thinking of using my 30,000 or so on a labroker execution only approach, although i am no expert i learn fast.
 I would cover a few funds including the Fidelity India Fund , maybe 6 in total but I want to avoid china.
I have got concerns about future a major upset, although india is less impressive option I feel it is more steady in my view (I travel to both on a regular basis)
As far as i know rabo has more expensive ongoing/exit/entry fees am i correct?
Property (option 2)
buy a property near work, I have one advantage, as I deal with postgrads and could possible avoid the first years etc bye getting more mature students. Is there section 32 type option I should consider, and interest only loan would be the best I suppose but that still leaves me with money to invet.

Mortgage (option 3)
pay may savings into my mortgage (I think the least best as I have a relly good rate)


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## so-crates (9 Jun 2008)

What is your attitude to risk? Currently from what you have posted here you have a low-risk approach to managing your money (mortgage, no additional borrowings, savings) but it sounds like you want to take all of your current savings and start potentially playing high risk with them having little or no experience. 

What are your short, medium and long-term goals with respect to savings and investments? Have you considered what you want to achieve with this money? 

A few things to think about, have you considered increasing your input to your pension or making an AVC with some of your lump sum? Is it DC or DB? As it provides the best tax incentive it ought to be considered in your savings and investments.

On property, probably your best bet would be to investigate what the rental returns would be. Would the rent cover the cost of interest, general upkeep, taxation and periods where the property is lying unoccupied? What is your local rental market like? Are there many properties available for rent to the same group you are looking to target? As for the tax incentives, I think you meant Section 23 relief. I think that for student accommodation the equivalent was Section 50 relief but I know no more about it than that. 

In terms of taking a punt in a new arena that you have no experience in, if you decide to start investing in funds and shares I would suggest perhaps using a proportion of your money rather than the whole amount. As this appears to comprise all of your current savings it may be wise to keep some on deposit to cover the unexpected. 

As you say you can comfortably afford your mortgage, it would be worth your while however estimating how much interest over the term of the mortgage will be saved if you used some of your savings to pay that off.


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## SpagMonster (9 Jun 2008)

I do usually play safe but, as my job is secure and my mortgage is pretty small, I thought I might allow myself some risk on this 30,000.

Its a defined benefit scheme. I will be on a full pension when I retire I thought AVC were only used to topup if you were missing years am I wrong? Is there a limit to the amount I can put into my pension?

When will the property market bottom out as I suppose thats the right time to buy?


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## DrMoriarty (9 Jun 2008)

SpagMonster said:


> When will the property market bottom out as I suppose thats the right time to buy?


Please read the posting guidelines: .

Timing the market is a M_ _ S  G _ M _.


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## so-crates (9 Jun 2008)

SpagMonster said:


> I do usually play safe but, as my job is secure and my mortgage is pretty small, I thought I might allow myself some risk on this 30,000.


I think perhaps before you do that, you need to sit down and set out some goals for the money, look at what sort of return you want from it, what sort of accessibility you might need to it and what sort of time frame your investment will be over and set some goals. I would suggest that maybe you should split your money and have some on deposit earning the best interest rate you can find for it and a smaller fund to "play" a little more riskily with. In other words, I wouldn't start by trying to invest the 30k as a whole but rather do it in a more planned approach.



SpagMonster said:


> Its a defined benefit scheme. I will be on a full pension when I retire I thought AVC were only used to topup if you were missing years am I wrong? Is there a limit to the amount I can put into my pension?


 I had written the first few questions and then realised that you may well be on a defined benefit scheme. I don't know very much about those, my questions were based on an defined contribution.



SpagMonster said:


> When will the property market bottom out as I suppose thats the right time to buy?


If you find the crystal ball to predict that one, buy it, you would be then able to live happily off selling it's information! I doubt anyone will be able to answer this one. Obviously the best time to buy property is when you get the most for your money, the devil is always the "when". Again, the important thing is doing your homework on costs and return. As I suggested, find out about the current market, both in terms of houses for sale and in terms of people to let to, sit down and work out what sort of return you would expect and what sort of mortgage you would need.


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