# making changes



## phoenix (7 Oct 2007)

Age: *45*
Spouse’s/Partner's age: *47*

Annual gross income from employment or profession: *80000*
Annual gross income spouse:*55000*

Type of employment: e.g. Civil Servant, self-employed - *both private sector*

Expenditure pattern: In general are you spending more than you earn or are you saving? *No and saving sporadically*

Rough estimate of value of home *1000000*
Mortgage on home *106000*
Mortgage provider: *NIB*
Type of mortgage: Tracker, interest only, fixed rate - *Tracker*
Interest rate

Other borrowings – car loans/personal loans etc *None*

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: €500 per month unitised with profit policy. €150000 in National Irish Bank Interest plus account. €20000 shares.

Do you have a pension scheme? *Yes one db and 2nd spouse dc. Looking to maximise dc to 25% contribution shortly.*

Do you own any investment or other property? *one. present value in UK €180000 (after CGT of 20%)- no mortgage*

Ages of children: *13 8 6*

Life insurance: *4 x salary on spouse 1 plus life cover on 2nd spouse*


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

*Spouse 1 would like to give up work to look after own children in the home. From above what moves would you make to try and let this happen?*


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## Brendan Burgess (9 Oct 2007)

You have €150k in a deposit account and €20k in shares. You are also saving €500 per month. How much is this worth? 

How did you build up these savings?
How did you buy the investment property and pay off the mortgage? 

This might give you an idea of how much you are saving each month. 

Do you have any idea of your current outgoings? Ignore mortgage repayments as you should probably be paying off the mortgage from your deposit account. 

What rental income are you getting from the investment property? 

You describe yourselves as saving sporadically. I think you are saving a bit better than that. 

If your current gross income is 135,000 and you are not currently saving much, then you will not be able to reduce to an income of 55,000 without pain. Financial planning will not compensate for such a drop in income. 

If you drop a salary of €80k, you will lose about €45k in net income or €4k a month. That means that you will have to run down your savings and later sell your investment property. 

Have you the possibility of moving to part time work instead of giving up work full-time? 

Brendan


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## phoenix (16 Oct 2007)

Hi

Thanks for reply Brendan.

€500 pm savings not currently worth too much as it is a continuation of ssia savings x 2.

€20000 shares came as a result of policies with companies which went public and policyholders got shares.  Also bought more shares at the time the company went public with some personal savings.

€150000 made up of proceeds of ssiasx2, profit from buying and selling an investment property quickly and some day to day savings.

Another investment property bought years ago when prices were very low.  Not living beyond our means and the proceeds of a savings policy allowed us to repay this mortgage quickly.  Not currently rented out as it is sometimes used as a holiday home by family members.  Could expect in the region of €600 per month (in the west) per month if rented.

We currently enjoy a situation where we do not worry about day to day spending but looking long term, spouse would like to spend more time with children.  We work hard to earn the money we earn.  

We are now reaching a stage in our lives where we feel there is more to life and do not want to regret not spending more time with the children while they are young.

We do not live a lavish lifestyle but I would say we waste money.  Meals out, weekends away, holidays.  We spend as we feel like it.  It is a lovely situation to be in and I'm sure others would feel  we have nothing to complain about and maybe they are right.  It just doesn't feel right.  Something is missing and I can't put my finger on it.

There is no doubt, we are anxious about losing a salary and while part time may be  a possibility I don't think it is.  

What I can't figure out is when is a sum of money enough?  How much do you have to have put aside to be ok?  Is there such a sum?

Would you clear off the mortgage?

REgards

Phoenix


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## ClubMan (16 Oct 2007)

phoenix said:


> €20000 shares came as a result of policies with companies which went public and policyholders got shares.


Bear in mind that where you got shares for free then the full value will be assessable for _CGT _so you need to factor in tax when estimating how much they are worth. For example if you received 1000 shares in a company now trading at €10 per share then your shareholding is valued at €10,000 but if you sold the shares then you would be liable for 20% _CGT _on the lot or €2,000 (from which you can then deduct your annual _CGT _allowance of €1,270 and perhaps other expenses or previously incurred losses). This means that the real value of the shares on liquidation is nearer €9,000.


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## Bronte (17 Oct 2007)

I think you need to see exactly what your montly expenditure is on the necessities.  Then you will be able to judge whether you can live on one income.  It also means you might have to cut back on holidays/restaurants etc - can you live with that?

Another idea is can you take leave of absence from the job for a year, might give you an idea of how you like it and if you can afford it.  You might not like it - being at home with the kids.


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## Flax (17 Oct 2007)

phoenix said:


> Something is missing and I can't put my finger on it.



Something is missing... from your life or your partners life?

If she quits her job and looks after the children, will something still be missing in your life?

Is it possible you focus too much on money/spending bringing happiness and are neglecting other things in life?

Regarding your plan, I say go for it. You can easily survive on 80k per year with a few small changes to your lifestyle. There are loads of families surviving on so much less...


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