# 37 year old , just received inheritance where to next?



## confsued (29 Jul 2017)

Age: 37
Spouse’s/Partner's age: 37

Annual gross income from employment or profession: _*€22,800 after tax *_
Annual gross income of spouse:_*€22,500 after tax*_

Monthly take-home pay - _*combined after tax €3480*_

Type of employment: e.g. Civil Servant, self-employed
_*Both civil servants*_
In general are you:
(a) spending more than you earn, or
(b) saving? *saving a small amount €300-400 a month which we can use for holidays etc.*

Rough estimate of value of home _*€280,000*_
Amount outstanding on your mortgage: _*€180,000*_
What interest rate are you paying? _*ECB +1%*_

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

Do you pay off your full credit card balance each month? _*No cards currently*_
If not, what is the balance on your credit card?

Savings and investments:
_*€14,000 in civil service credit union
€5,000 in bank accounts 
€350,000 split* across 3 accounts  (*bank guarantee )*_

Do you have a pension scheme?
_*Both will have civil service pensions ( I assume as we have worked here since leaving school). *_

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

Ages of children:
*6&10*

Life insurance:
*We have life insurance with the mortgage *

What specific question do you have or what issues are of concern to you?
_Hi guys , thanks if you have read this far. Myself and my wife are job sharing hours in civil service , as such we do not have childcare expenses. Our mortgage payments are very manageable and we where getting by no problems. 

We unexpectedly received a windfall in the form of an inheritance in 2016, everything in relation to tax and whatever else was sorted and the net result was just over 350k been transferred to our joint account last year. 

We have done nothing since but ponder what to do. I realise these problems are very much first world problems, any direction guidance or advice be much appreciated.  My wife suggested a rental property but I am wary with the regulations around rent controls.

Thanks in advance._


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## Open air (29 Jul 2017)

You can as father ted said leave it "rest in my account"......ha! Enjoy your windfall and spend or invest wisely!


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## noproblem (30 Jul 2017)

Different experts will no doubt be on here telling you different avenues you can go in order to maximise your savings. The An Post certs with tax paid are as good as you'll get over different time periods, eg, 16% over 10 years but that's quite a long time because it's impossible to know what's going to happen. You would get €17,500.00 tax free over the next 5 yrs for a 5 yr saving cert in An Post at the moment for the €350k. If you don't need the money for a while i'd stick it in there for the 5 yrs and see the lie of the land then. Others may not agree, my option is State guaranteed (sort of) I don't know who guarantees the state though.
I've had great luck and returns with the An Post Certs over the years but even though the returns may not be great at the moment compared with years ago, i'd say they're going to decrease the return again one of these days. Get in NOW if you want to avail of the present rates.


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## galway_blow_in (30 Jul 2017)

the current an post savings option to me is unambitious to the point of being outright depressing , its a pitiful return , its a terrible waste of so much capital to simply leave it in a savings account earning less than 1% each year 

my widowed mother had a sizeable sum in an post from 2010 for a few years and if memory serves correctly , the return was close to 4% per annum  , those were very different times indeed


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## tallpaul (31 Jul 2017)

I would suggest that, if you do not intend to move house in the short term, you should clear your mortgage in the first instance. No bank deposit will give you a return equivalent to what you are paying in interest. You will be mortgage free and still have pretty much half of your inheritance. Your monthly cashflow will also improve greatly making it less likely that you will eat into your savings. A nice way to be!!


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## confsued (31 Jul 2017)

Thank you all for advice , plenty to think about.


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## Thirsty (31 Jul 2017)

They have a good tracker rate, is clearing the mortgage the best option?


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## shweeney (31 Jul 2017)

Thirsty said:


> They have a good tracker rate, is clearing the mortgage the best option?



there's a few variables there - if they're planning to move in the future then it might be worth holding onto the mortgage to transfer it to the new property, but that assumes that their bank allows transfer of tracker mortgages for someone not in negative equity. Also if wherever they buy costs < 450K then they could just buy with cash after selling their current home. 

If they're not planning to move then paying off the mortgage is probably a good option as savings rates are so low; they'd still have a decent amount left if they also wanted to invest in something more high risk, or put it in a pension, or blow it on cocaine and blackjack.


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## galway_blow_in (31 Jul 2017)

i would not pay off any loan with an interest rate below 3.5% , its not often someone has a hefty amount of capital at their disposal , its all very well being ultra conservative and paying down debt and using terms like " risk reward on an adjusted basis " but no one ever grew their wealth by always choosing the most safe option , you need to have higher ambitions than simply not going broke , you should put your money to work in some shape or form IMO though take your time and perhaps study your options for six months , the interest on your current mortgage wont break you over six months even you decide at that time to pay down some of said existing  mortgage


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## noproblem (31 Jul 2017)

galway_blow_in said:


> i would not pay off any loan with an interest rate below 3.5% , its not often someone has a hefty amount of capital at their disposal , its all very well being ultra conservative and paying down debt and using terms like " risk reward on an adjusted basis " but no one ever grew their wealth by always choosing the most safe option , you should put your money to work in some shape or form IMO



So, your suggestion is?????????


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## galway_blow_in (31 Jul 2017)

noproblem said:


> So, your suggestion is?????????



there in my post !

consider options for the next number of months but dont rush to pay off a very low interest loan if able to service it !


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## confsued (31 Jul 2017)

Thanks guys , we did consider paying off the mortgage but at 1% its cheap money. We have considered options for a year now and spoke to a couple of family members in the finance field. Between advice received here and our own research it was a toss up between buying an investment property or the 5 year State Savings. 

My wife suggested we visit a financial adviser but I wonder what they could bring to the table aside of what is mentioned here.


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## Sarenco (31 Jul 2017)

Hi Confsued,

Here's what I would do with the €350k windfall if I was in your shoes:-

1.  I would pay off the mortgage balance.  However, I would leave the mortgage protection policy in place - it's cheap life assurance and, when coupled with the civil service death in service, it should provide adequate cover.

2.  I would leave ~€20k in an instant access savings account and use ~€50k to buy 5-Year State Savings Certificates.

3.  I would then use the balance (~€100k) to buy shares in a global equity investment trust (something like Foreign & Colonial Investment Trust plc).  

That would leave you mortgage free with an investment portfolio that should generate modest growth over the medium to long term.

However, only you can decide what you want to achieve with your windfall and how much investment risk you are willing and able to bear.  

Hope that helps.


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## Meath Lady (31 Jul 2017)

I would also bear in mind that if both yourself and your wife are joBsharing over an extended period you may not be entitled to a full pension


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## RedOnion (31 Jul 2017)

I would second @Sarenco 's advice.

You've obviously got a risk-averse outlook if you're talking about 5 year state savings.  Obviously your tracker is 'cheap money', but there's no point borrowing at 1% to lend it back at 0.98% fixed.  If ECB rate goes up at all in the next 5 years, you'll be losing even more money.
The best 'risk free' return you can get on your money is to pay off the mortgage.

Once you've paid off the mortgage, set up a standing order for the same amount as your mortgage was, and build up a nest egg to invest if you so wish.

Just one point re investing.  If you are to continue to job share, you are both in the lower Tax bracket.  The usual advice is to invest for capital growth rather than dividends as it's more tax efficient, but in your case, if I've done my maths right, you can earn close to 10k per year currently at 20% tax bracket.  It's worth having a look at what's the most efficient from a tax point of view.

Good point re pensions from @Meath Lady .  I don't know the first thing about Public Sector pensions, and I'd question if it's worth putting extra salary into a pension when you're only getting relief at 20% rate - it all depends on how long you both plan to be in the lower tax bracket.  Once you've mortgage paid off it'll give you lots of options.


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## galway_blow_in (31 Jul 2017)

confsued said:


> Thanks guys , we did consider paying off the mortgage but at 1% its cheap money. We have considered options for a year now and spoke to a couple of family members in the finance field. Between advice received here and our own research it was a toss up between buying an investment property or the 5 year State Savings.
> 
> My wife suggested we visit a financial adviser but I wonder what they could bring to the table aside of what is mentioned here.



I'd buy a commercial property myself , with that kind of money , you could afford something worth near half a million were you to put a hundred grand of debt on it , half a million will buy you a commercial property in any of the main cities with an income of close to 50 k per annum in many cases , even you just bought a property to the value of your cash available and put no debt on it , you should easily get somewhere delivering over 25 k per annum


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## confsued (31 Jul 2017)

Some very interesting posts thanks all , going to have a read up on Investment trusts and commercial property. I was reading about property investing and came across IRES- REIT , I can't find the yield on this? , does anyone recommend these as an alternative to purchasing a property directly ?


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## galway_blow_in (31 Jul 2017)

confsued said:


> Some very interesting posts thanks all , going to have a read up on Investment trusts and commercial property. I was reading about property investing and came across IRES- REIT , I can't find the yield on this? , does anyone recommend these as an alternative to purchasing a property directly ?



i would be slow to invest in REIT,s , its really the same as buying a stock but you are entirely in one sector , you would never know how much the managers of the trust were awarding themselves , yields are very low in the irish ones , they are very new to this country , if your only getting 3% , you might as well just invest in a broad based fund which delivers the same yield but with proper diversification

IRES is a residential REIT , GREEN is the reit which focuses on commercial property , hibernia is another one , it has a mix of both , think friends first have a reit too


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## RedOnion (31 Jul 2017)

Re IRES-REIT, have a look here https://www.bloomberg.com/quote/IRES:ID
12 month total return is c. 23.5%, and dividend gross yield 3.66%

Without getting into a discussion about specific shares, one of the benefits of a REIT investment over investing directly in property is that it's spread over several properties.  You're not dealing with the risk of a single tenant not paying rent, void periods, or any of the general stress of being a landlord (but you are paying someone else to do it for you).

One of the downsides is that while the value has moved in the same direction as the property market, they haven't increased as much as general property prices.

One of the rules of a REIT structure is they have to pay a certain amount of their rent income as dividend each year - in your case you'd only be paying 20% tax on this at the moment, but if you get into higher tax bracket it'll be taxed at the higher rate.

Do a search on the forum for REIT and you might find other discussions.  As with all investments, you'll need to be comfortable that you could lose some of your capital value.



galway_blow_in said:


> i would be slow to invest in REIT,s , its really the same as buying a stock but you are entirely in one sector , you would never know how much the managers of the trust were awarding themselves , yields are very low in the irish ones , they are very new to this country , if your only getting 3% , you might as well just invest in a broad based fund which delivers the same yield but with proper diversification
> 
> IRES is a residential REIT , GREEN is the reit which focuses on commercial property , hibernia is another one , it has a mix of both , think friends first have a reit too


Some mixed messages there?  You're advising now against investing in a single sector, but a few minutes ago you'd borrow even more money to buy a commercial property.  I understand concerns about management fees, but unless you've enough money to invest in a fairly large property portfolio I'd consider it a good way to get some exposure specifically to property without taking on massive risks?


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## galway_blow_in (31 Jul 2017)

RedOnion said:


> Re IRES-REIT, have a look here https://www.bloomberg.com/quote/IRES:ID
> 12 month total return is c. 23.5%, and dividend gross yield 3.66%
> 
> Without getting into a discussion about specific shares, one of the benefits of a REIT investment over investing directly in property is that it's spread over several properties.  You're not dealing with the risk of a single tenant not paying rent, void periods, or any of the general stress of being a landlord (but you are paying someone else to do it for you).
> ...



no mixed  message , investing in REIT,s is investing in the financial markets and the yield on those irish REIT,s is no better than many funds which are of course diversified across many sectors , im advising against investing in a single sector in the financial markets

a real property can deliver three times that yield if the OP goes commercial , he can also take on some debt to buy the property he wants , big difference

those irish REIT,s have underperformed the real property market for the last number of years


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## RedOnion (31 Jul 2017)

galway_blow_in said:


> a real property can deliver three times that yield if the OP goes commercial , he can also take on some debt to buy the property he wants , big difference


There is no property investment delivering 10% rental yield that isn't without huge investment risk.


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## Sarenco (31 Jul 2017)

galway_blow_in said:


> no mixed  message , investing in REIT,s is investing in the financial markets and the yield on those irish REIT,s is no better than many funds which are of course diversified across many sectors , im advising against investing in a single sector in the financial markets



Sorry but your advice is completely contradictory.

You are objecting to investing in REITs because they represent a concentrated bet on a single market sector (listed real estate represents around around 3% of the public equity market) and yet you are happy to recommend an ultra-concentrated, ultra-illiquid, high-risk investment in a single commercial property.  And you want the OP to leverage that investment with expensive debt!  Nuts.


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## galway_blow_in (31 Jul 2017)

RedOnion said:


> There is no property investment delivering 10% rental yield that isn't without huge investment risk.



define huge risk please


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## galway_blow_in (31 Jul 2017)

Sarenco said:


> Sorry but your advice is completely contradictory.
> 
> You are objecting to investing in REITs because they represent a concentrated bet on a single market sector (listed real estate represents around around 3% of the public equity market) and yet you are happy to recommend an ultra-concentrated, ultra-illiquid, high-risk investment in a single commercial property.  And you want the OP to leverage that investment with expensive debt!  Nuts.





i didnt say anything about what kind of interest rate he might secure , so what if property is illiquid , thats  just text book orthodoxy , there is no inherent reason why a commercial investment property is " high risk " , the wrong type in the wrong location might well be but its broad brush to dismiss every commercial property as high risk , the OP has a lot of cash on hand , i said in an earlier post that even he didnt put any debt on a property , he should be able  to deliver an income of 25 k pretty handily

i own a commercial property ( now debt free and thanks for your advice on it again BTW ) and the yield is 10% , it cost 121 k all in including fees and charges , you probably view that asset as high risk too , i owe nothing on it now and it pays me a grand per month , i cant think of anything lower in risk relative to what its producing for me but then im a pragmatist rather than an idealogue when it comes to these things 

i think people can be far too orthodox and slavish to traditional  text book investing  principals tbh , there is more than one way to skin a cat , sticking the money in a savings account earning 15% over ten years comes across as incredibly lacking in ambition to the point of almost scorning a chance to create some proper wealth , if preservation is the best the OP can come up with , its a real shame i think , frankly i think that is NUTS !


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## Sarenco (31 Jul 2017)

An investment in a single commercial property - any commercial property - is by definition a high-risk investment strategy.  I appreciate that you don't understand how dividends work but I would have thought you would have understood why a concentrated investment is inherently risky.  Perhaps not.

We are not talking about your financial position on ths thread but I seem to recall that you owned your PPR free and clear - the OP doesn't.   Context matters.

My view is pretty straightforward - never take more investment risk than you have to and diversify wherever possible.  And income is just one element of return.


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## galway_blow_in (31 Jul 2017)

Sarenco said:


> An investment in a single commercial property - any commercial property - is by definition a high-risk investment strategy.  I appreciate that you don't understand how dividends work but I would have thought you would have understood why a concentrated investment is inherently risky.  Perhaps not.
> 
> We are not talking about your financial position on ths thread but I seem to recall that you owned your PPR free and clear - the OP doesn't.   Context matters.
> 
> My view is pretty straightforward - never take more investment risk than you have to and diversify wherever possible.  And income is just one element of return.



well its clear as crystal that you are deeply averse to risk and espouse an ultra conservative approach to investing , i believe your view that investing in a single commercial property is by definition  " high risk "  , to be just orthodox theory

i dont agree with that overtly  textbook view as it prevents people from taking advantage of specific situations , using your criteria , someone would have chosen not to spend 350 k on two houses in dublin 8 ( say inchicore ) in 2012 as in your book that would be too concentrated , only a slave to orthodoxy  would view not having done so as having been good business


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## Sarenco (1 Aug 2017)

Grand so.  Would you have given similar advice in, say, 2005?

It's always easy to be wise after the event but please don't confuse outcome with strategy.  The future is always uncertain, hence my advice is always to diversify widely across asset classes.

That's not particularly conservative advice.  It simply acknowledges the fact that I don't know what asset is going to outperform in the future.


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## RedOnion (1 Aug 2017)

galway_blow_in said:


> define huge risk please


Having read your previous posts over the past few months, I'm not going down that rabbit hole with you.


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## Gordon Gekko (1 Aug 2017)

If you think that owning a €120k commercial property that pays 10% doesn't constitute a high risk investment, there's very little point in going down any rabbit hole.


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## galway_blow_in (1 Aug 2017)

Gordon Gekko said:


> If you think that owning a €120k commercial property that pays 10% doesn't constitute a high risk investment, there's very little point in going down any rabbit hole.



in the strict text book definition of " high risk " , owning equities are high risk so owning an entirely concentrated asset like a commercial property is also by definition " high risk "

i think the OP needs common sense advice however rather than traditional  textbook theory on the subject  , a two story house is by definition riskier than a bungalow if you have a child under three , does it mean families will avoid houses with upstairs like the plague , no ! , yet an expert in insurance would say it is high risk going by the book to live in a two story house with young kids 

OP , you need to ask yourself whether you are content to chose the absolute safest option on the table like the an post savings scheme which delivers 1% per annum of a return on your capital or invest in what in a book about investing , will label either a house ( even you pay in cash ) or a stock as high risk , you could buy something as hum drum as  a three bed house in much of dublin 9 today still for the kind of cash you have on hand and easily bring in a rent of 20 k per annum gross  , granted you might get a bad tenant but if you have no borrowings on the property , how anyone could consider putting same money in the post office for ten years is beyond me


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## confsued (1 Aug 2017)

Thank you all ,great diversity in opinions but that certainly helps. 
I was pencilling down a few things this morning, my wife really likes property so the REIT's seem a good compromise. 
We both like the look of this , which is based on a combination of opinions here so thanks again.

75k euro - Green REIT (exposure to commercial property) 3.13% yield 
75k euro - IRES REIT (exposure to domestic property) 3.66% yield
75k euro - City of london Investment Trust (high yield diversified portfolio of stocks) 4% yield
75k euro - Foreign & Colonial Investment Trust plc (highly diversified low yield ) 1.67% yield
50K euro - State Savings 5 or 10 year.


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## confsued (1 Aug 2017)

galway_blow_in said:


> OP , you need to ask yourself whether you are content to chose the absolute safest option on the table like the an post savings scheme which delivers 1% per annum of a return on your capital or invest in what in a book about investing , will label either a house ( even you pay in cash ) or a stock as high risk , you could buy something as hum drum as  a three bed house in much of dublin 9 today still for the kind of cash you have on hand and easily bring in a rent of 20 k per annum gross  , granted you might get a bad tenant but if you have no borrowings on the property , how anyone could consider putting same money in the post office for ten years is beyond me



While we'd love to earn a decent return , and 20 k a year gross sounds fantastic , I worry about having all our eggs in one basket. If the property had any major problems I would hate to then have to borrow to carry out repairs. I could go from a comfortable position to one of been in debt. I do welcome your opinion and my wife is keen on buying an apartment in the 200k range. It's easy to see what rent this would bring in but hard to measure the yield against a REIT accurately as its seems like there is an element in luck involved; good apartment , good tenants etc. If I am getting calls to fix or replace everything it really eats into profit. IRES at 3.66% is hassle free but there seems to be questions over management and if the stock price accurately tracks the house price values.


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## Early Riser (1 Aug 2017)

Some opinions expressed in this thread remind me of a friend/acquaintance who admonished my foolishness once for having money in a measly deposit account when instead I could "own the bank" (he meant a few shares but such were the bombastic ways the big risk takers spoke back then). Boy am I sorry now!(Not)


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## galway_blow_in (1 Aug 2017)

confsued said:


> Thank you all ,great diversity in opinions but that certainly helps.
> I was pencilling down a few things this morning, my wife really likes property so the REIT's seem a good compromise.
> We both like the look of this , which is based on a combination of opinions here so thanks again.
> 
> ...



better than putting it all in the post office anyway


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## Cervelo (1 Aug 2017)

confsued said:


> Thank you all ,great diversity in opinions but that certainly helps.
> I was pencilling down a few things this morning, my wife really likes property so the REIT's seem a good compromise.
> We both like the look of this , which is based on a combination of opinions here so thanks again.
> 
> ...



Can I ask what some people might seem as a stuipd question, Why are you not using some of the money to clear your mortgage ??
I would have thought this would be the smart thing to do, am I missing something that is obvious 
To me the idea of investing all the money for gain while you have a large debt is not smart thinking.


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## twofor1 (1 Aug 2017)

Even if it was not the most financially advantageous thing to do, I would clear the outstanding €180K of my low tracker mortgage, then worry about how to invest the remaining €170K of this windfall.

 There’s a lot of comfort in being debt free, each to their own though.


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## galway_blow_in (1 Aug 2017)

Cervelo said:


> Can I ask what some people might seem as a stuipd question, Why are you not using some of the money to clear your mortgage ??
> I would have thought this would be the smart thing to do, am I missing something that is obvious
> To me the idea of investing all the money for gain while you have a large debt is not smart thinking.



because the interest rate is very low and there is no problem servicing the debt , by paying it off now , you waste capital which could be used to aquire assets which can increase in value in the future ,debt is not inherently bad and something to be terrified of , if it was , no one would ever buy a house by way of a mortgage , im not sure a planning for the absolute worst possible scenario is anyway to increase ones wealth , the OP is on a very modest wage , no offense but its unlikely he will have other opportunities to create wealth , im not saying he put everything in a stock with a PE of 50 but the post office option smacks of conservatism to the point of being crippled with dread

were the OP to buy a second house with cash only , worst case scenario and he has mortgage trouble with his home  , he has an asset to sell , not much risk in that and none of this blather about lack of liquidity , you will always sell a house in dublin and you could be three lifetimes waiting for the crash we had from 2008 to 2012 again


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## Sarenco (1 Aug 2017)

confsued said:


> 75k euro - Green REIT (exposure to commercial property) 3.13% yield
> 75k euro - IRES REIT (exposure to domestic property) 3.66% yield
> 75k euro - City of london Investment Trust (high yield diversified portfolio of stocks) 4% yield
> 75k euro - Foreign & Colonial Investment Trust plc (highly diversified low yield ) 1.67% yield
> 50K euro - State Savings 5 or 10 year.


Hi Confsued

At a high level that looks like a perfectly reasonable, diversified investment portfolio.

I would personally pay off the mortgage on your PPR before investing outside a pension vehicle but that is a relatively fine judgment.  Ultimately it boils down to your need, willingness and ability to take investment risk.

However, a few additional points to consider before you pull the trigger:-

You already have substantial exposure to Irish property (by owning your PPR) so your proposed portfolio requires a strong conviction on the future prospects for this particular (sub) asset class.
The three Irish REITs all have significant acquisition and development pipelines so they are not purely income plays.  Also, they all carry material borrowings so investing in REITs while carrying a mortgage represents a double layer of leverage.

City of London is a fine choice for an income focused IT.  However, it is primarily invested in UK companies so that represents a substantial "tilt" away from the global equity market.  Also, a number of its largest holdings are high-yielding but have modest growth prospects (think tobacco stocks) so there may be an element of forgoing future growth in order to buy "jam" today.

To echo a point already made by Red Onion, I don't see the logic of borrowing at a floating rate of 1% while buying a fixed-income instrument (State Savings Certs) that pay a lower rate (however marginal), unless you need to retain liquidity. 

Bear in mind that we are currently living through a period of exceptionally low interest rates.  How would you feel if rates suddenly spiked and your monthly mortgage payments increased substantially while your stock investments simultaneously plummeted in value?


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## confsued (1 Aug 2017)

Guys I would like all these posts if I could but there is no like button for me maybe cause I am a new user ?? 
Anyway thanks a million, Sarenco thanks for that detailed reply.  
In regards paying off the mortgage I neglected to mention that our mortgage still qualifies for MIR @ 30%  as we bought in 2004. Would this influence the decision to pay off a tracker at 1%? 

But back to the drawing board and I feel like I/we are getting closer. 

Option A (as previously stated)
75k euro - Green REIT (exposure to commercial property) 3.13% yield 
75k euro - IRES REIT (exposure to domestic property) 3.66% yield
75k euro - City of london Investment Trust (high yield diversified portfolio of stocks) 4% yield
75k euro - Foreign & Colonial Investment Trust plc (highly diversified low yield ) 1.67% yield
50K euro - State Savings 5 or 10 year.


Option B 
180k - Clear mortgage 
40k euro - Green REIT (exposure to commercial property) 3.13% yield 
40k euro - IRES REIT (exposure to domestic property) 3.66% yield
45k euro - Foreign & Colonial Investment Trust plc (highly diversified low yield ) 1.67% yield
45k euro - Murray International Investment Trust (global equity and income ) 3.86% yield 

Option B does look more appealing now , I can earn a decent dividend yield that should only be taxed at 20%.


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## Cervelo (1 Aug 2017)

Option B looks more like what I would be thinking and there is another plus your not mentioning, your monthly disposable income will increase by the mortgage amount


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## confsued (1 Aug 2017)

Cervelo said:


> Option B looks more like what I would be thinking and there is another plus your not mentioning, your monthly disposable income will increase by the mortgage amount



Yes indeed Cervelo , and maybe I could treat myself to a Cervelo S5 (I'm a keen cyclist but not sure I could justify that price!). 

The other "problem" is what to do with the extra disposable income each month  , maybe the guy that said more money more problems had a very valid point. I do really appreciate how lucky we are to be in this position especially coming from a low income household as a child and still relatively speaking low income household. My hobbies are mostly cheap or free, walking ,cycling ,hiking , so I will struggle (for want of a better phrase) to use any more than necessary. With that in mind I will probably transfer the same amount out to some form of savings account be it for kids future / to cover some emergencies that are unforeseen etc.


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## Cervelo (1 Aug 2017)

imho the R5 is a better bike but I like your thinking


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## Sarenco (1 Aug 2017)

confsued said:


> In regards paying off the mortgage I neglected to mention that our mortgage still qualifies for MIR @ 30% as we bought in 2004. Would this influence the decision to pay off a tracker at 1%?



Yes, it would certainly be a relevant factor in the decision as your effective mortgage rate (after MIR) is currently only 0.7%.  However, we know that MIR is going to phased out on a tapered basis over a three-year period from the end of the current calendar year so I wouldn't give it too much weight.  Also, you won't currently find a variable rate deposit account (the only real comparator from a risk perspective) that pays anything like 0.7% after DIRT.

I would also prefer your Option B to Option A.  Personally, I would carve ~€20k off each REIT holding and use that sum to buy 5-Year State Savings Certs but we're very much in the realm of personal preferences here. 

Ultimately what matters is that you choose a reasonable allocation and then stick with it through thick and thin.  If you are not comfortable that you will be able to maintain your allocation in the face of increased market volatility, then you need to think about dialling down the risk exposure.

I wouldn't worry too much about the increased cash flow once the mortgage is gone - I'm sure your kids will find plenty of uses for your additional disposable income!

Best of luck.


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## Gordon Gekko (1 Aug 2017)

I would keep circa €50k in cash. Then I'd take the other €320k, invest it in the cheapest MCSI World US ETF that I can find, and forget about it for at least 10 years.


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## Purple (9 Aug 2017)

You have two small children; bring them on some amazing holidays and create priceless memories that you can share for the rest of your life.
You have a good income, short hours, excellent job security and what sounds like a good quality of life.
You don't need the money for anything in particular so use some of it to make special moments. Try spending €10,000 a year for the next 10 years to take your kids to Disney World, a tour of the Far East, a Safari in Botswana, zip-lining through the canopy of a rain forest in Costa Rica etc..


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## confsued (3 Oct 2017)

I just want to update this have a mini rant and then close off how it went for me for anyone else in similar situation. 
I took a week or two thinking time and myself and wife looked at opinions expressed here which we are very grateful for. We decided first thing was to clear the mortgage and here is where my mini _rant _is going to come in. 

So I rang the bank (I won't name them but one of the main Irish banks) I got my mortgage correspondence out to get the account number , there was a phone number on the side which I rang , I later realised I had rang the number that was for people with _trouble paying their mortgage_ . I cheekily asked what we owed and would the bank be willing to except 90% payment . I know the bank aren't doing deals but hey no harm in asking. His answer both surprised and annoyed me , he said the department he was in and that I had rang was the _collections department_ he said the official bank line is no we are not doing deals but he would take a look at my account. He said to me you have never missed a payment and are not in arrears so your not likely to get a deal. I probed further and said half jokingly " So if I stop paying my mortgage for a few months I'll probably get a good deal?" to which he replied .....Probably so. 

It's annoying to think that there is an easy way to cheat the system , myself and my wife well we are not that kind of people , I rang the correct number for mortgages requested to pay it off - a redemption figure was posted out to me and I transferred enough money in to clear it off. It feels great to have it clear , I kept 50k in an instant access account and invested the rest in the stockmarket. I set up a standing order to send half of the money which would have been used to pay the mortgage to go to my stockbroker account and the other half into a savings account which will be used for memorable holidays as _Purple _suggested.

Thanks again.


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## Purple (3 Oct 2017)

You are both 37 with a young family and are now mortgage free. You have two young kids and a good though not spectacular income. Basically you are positioned to enjoy a comfortable if not spectacular life. Well done. Enjoy!


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## RentingD (6 Oct 2017)

How lovely. Enjoy!


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## noproblem (6 Oct 2017)

Well done Confsued. Sometimes the best advise is to do what feels right for yourself and I do hope your life is good. Enjoy and good health to you and your family.


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## Canysant1 (6 Oct 2017)

This is my all-time favourite thread in here. Feels like a happy ending! Delighted with what you've decided on Confused, enjoy the holidays and the peace of mind that comes with being debt free


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