# Starting out in the Game of Life!



## Itchy (4 Sep 2008)

Hi guys, usually I feel I am on top of my finances but I just feel I lack direction going into the next 5+ years and I was looking for a bit of advice to get me thinking. 

I am 23 and am a civil servant. Gross salary €28,000 rising to €41,000 in February. I am saving approx. €1,000 p.m. +/- 10%. I don’t have any liabilities and asset wise have €6,500 on deposit €5,500 (€1000 loss) in Quinn/Rabo funds.

I don’t have any major expenses bar my monthly phone bill but I am enjoying the rest of my paycheck over the course of the month! The only major monthly expense I can foresee is rent and I will not have to start paying that for the next year/year and a half. 

*Short term:* I hope to buy a car in January, and have budgeted up to €10,000 (car, tax insurance). *Medium term:* I would also like to get on the property ladder before the end of the slump so I have given myself a two year time frame by which time I hope to have €20-30,000 in funds available to me. My ability to borrow in the short term seems to be limited so I may have to have a larger sum than this to get started. *Long term:* I would like to go into business either buying a business or starting one, I would like to have a financial basis for that.

As for additionals, I have a DB pension scheme which I will be able to access at age 50 (AFAIK it is index linked but will it be a significant amount in 2035? I don’t know). I can see myself changing careers in 15+ years so I realise that starting a new pension late 30's is not ideal, do I need to address this issue now? I plan to up my savings rate to €1,700 p.m. from next year which should yield €20,000 p.a. while being able to finance my lifestyle at the same time. I plan to grow my portfolio (!) in the New Year by investing directly in the market and other diversification.

I realise these figures are rough but I feel they are realistic for the next year or so. I suppose I am asking; if you were starting out again what would you do different?


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## Brendan Burgess (4 Sep 2008)

Hi Itchy

You are doing well. You seem to have an admirable, old-fashioned, attitude. Save up before buying something. 

Your strategy of preparing to take advantage of the housing market before it takes off again is good. It's impossible to time. 

You have the right overall balance. You are spending and saving. 

When the car is sorted and you are investing, I would buy shares as I think that they are generally undervalued at present. They may well fall, but you can handle any fall and they are much more likely to rise. 

Brendan


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## BoscoTalking (8 Sep 2008)

Hey there - life is good for you - for a start your wages are great for a 23 year old, and for a second you have the concept of saving before spending down so thats it. i think you are probably getting tired  of the whole waiting until the savings mount up to allow you to spend big on the house / nice car / posh holiday etc - and I am afraid that normal! 
 One piece of advice is to enjoy your time before you regret saving so hard for so long - enjoy spending time with people you like doing stuff you like - like a hobbie or taking weekends away with mates etc.


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## Valhalla (9 Sep 2008)

Rethink the car expense. At your age I was still driving an old Jap import that cost a fraction of what you are looking to spend. At the same time my friends were spending between 10-15k on their first and second cars and were loosing money on both end of the deal. They were afraid to buy private so would go to a garage and pay 2-3k over the odds and would usually end up trading in the old one because they didn't want the hassle of selling private either. This usually meant an extra loss regardles of what the nice salesman was telling them. Then there was the interest payments (if using finance) and the depreciation on the newer car. Also, i've seen people loosing even more on their "nice" car beacuse of insurance companies. One friend was forced to accept a percentage of liability to get the claim processed quick and so lost when the car was valued for far less that what he owed the finance company. He had to do this as his car was written off and he had no other cash to buy without the claim money.

When a friend asked me once how I had a nice lump in the bank I told and proved to him how it was the difference between our car transations over a 3-5 year period. 

When it comes to cars

Buy older cars that hold their value
Always buy private
Always self finance
Always sell private
Find a good local mechanic for nixers! (Avoid main dealers)


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## Caveat (9 Sep 2008)

Itchy said:


> I am 23 and am a civil servant. Gross salary €28,000 rising to €41,000 in February.


 
Nice hike Itchy! Is this correct?


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## spreadsheet (9 Sep 2008)

I'd agree with the above poster regarding the car. There are huge and ongoing savings to be made by being a little bit frugal. Especially if your goals include buying your first home in the near future.

In my opinion, you need another source of income outside of your day job. This might not suit everybody, but you have mentioned an eagerness to set up a business. A good way of getting into business is to try a some nixer's of some sort at evenings or weekends. This might lead to a business idea down the line. You sound like you have some spare time on your hands. If I was to 'do it all again' i'd grasp the opportunity to convert my spare time into a few extra quid and some great life experiences into the bargain.


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## BoscoTalking (9 Sep 2008)

Caveat said:


> Nice hike Itchy! Is this correct?


trainee to qualified perhaps


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## budapest (9 Sep 2008)

Absolutely agree with the posters above.  If you can get away without buying a car for another few years, do so.  It'll put a huge dent into your potential to save every month.


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## mell61 (9 Sep 2008)

Hi Itchy,
Nice to hear someone who apparently has their head screwed on straight...
I'll agree re the other posters about the car, unless you are doing high mileage, lot of driving, a good 2nd hand car should do you, I'd agree with going japanese (only cars that never gave me a smidgen of trouble).   Also keep to a small engine, at your age the insurance could be a crippler, so small engine and try and get the llicense.  It should be worth checking out a few cars now, drive them see if you like them, check how much they will cost to insure, so that you get a realistic picture.
Can I ask about the rent?  you say you won't need to pay for next year or 2, are you still at home?    Maybe you need to rethink that one, perhaps your elders have said no, but why not insist, its showing respect for them supporting you all along!
If they really don't want it, why not put aside something each month and buy then a weekend away or a weeks holiday.     Its not all saving the way you want to, but you'll get brownie points (and they bragging rights go way up).
Good luck


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## PaddyW (9 Sep 2008)

Buy from the north or England if you have a mate with contacts there for the car maybe? My dad got a really good car, 2002 I think, toyota corolla which does I think nearly 80 miles to the gallon and he got it for less than 500 sterling! Well worth some investigation for you I think!


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## Complainer (4 Oct 2008)

Itchy said:


> As for additionals, I have a DB pension scheme which I will be able to access at age 50


Are you certain about being able to access the pension at 50? I thought that all recent joiners to the civil service could only access pension at 65?


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## diroche (4 Oct 2008)

Brendan said:


> Your strategy of preparing to take advantage of the *housing market before it takes off again* is good. It's impossible to time.



I don't know where to start with this comment....

- I thought discussion of housing prices was banned (or is this only when its negative talk?)
- You are assuming (like the rest of the building industry vi's) that if we take a deep breath and stick our head in the sand for a year or two the housing boom will take off again.
- Even Tom Parlon, Ken McDonald et al haven't started talking about prices 'taking off again' yet!


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## GeneralZod (4 Oct 2008)

diroche said:


> we take a deep breath and stick our head in the sand for a year or two the boom will be even boomier again.



To be fair, you're reaching well beyond what was written when ascribing the "even boomier" bit.


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## Kemo_Sabe (6 Oct 2008)

Brendan said:


> When the car is sorted and you are investing, I would buy shares as I think that they are generally undervalued at present. They may well fall, but you can handle any fall and they are much more likely to rise.
> 
> Brendan


 
I might hold off on this one until markets stabilise a bit

I'd also avoid Irish shares like the plague and suggest buying into broad-based Eurozone equity funds instead.


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## MrMan (6 Oct 2008)

diroche said:


> I don't know where to start with this comment....
> 
> - I thought discussion of housing prices was banned (or is this only when its negative talk?)
> - You are assuming (like the rest of the building industry vi's) that if we take a deep breath and stick our head in the sand for a year or two the housing boom will take off again.
> - Even Tom Parlon, Ken McDonald et al haven't started talking about prices 'taking off again' yet!



If you highlighted the last line in that post it would provide a different sentiment. 'Impossible to time' would suggest that Brendan wasn't making assumptions as to when the market would stabilise or move on again.


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