# Review of our financial status



## Blackrock1

My wife and i have just bought our (hopefully) forever house. Most of our savings have gone into it. I thought it would be a good time to get a view on our financial situation. 

Ideally i would like to have the mortgage paid off by the time my daughter starts college, so gives me 16 years or so, an over payment of 1k a month would just about get me there.

We are both chartered accountants and have been fortunate and hard working enough to earn decent salaries all along. In the future the hope is that we will have more kids and my wife will cut back, ideally offset by a continuing increase in my own salary, but who knows.

Appreciate that we have a relatively high lifestyle spend and car cost, but my opinion is that there is no point working hard and earning a decent salary and then not getting some enjoyment out of it!

So in the format that i have seen elsewhere

Age: 36
Spouse’s/Partner's age: 36

Annual gross income from employment or profession: 143,000 (plus bonus 20-25k)
Annual gross income of spouse:82,500 (plus bonus 5-7k)

Monthly take-home pay pre bonuses 10,500

Monthly expenses: 9.4k
Mortgage: 2.7k incl protection
Childcare: 1.3k
Car finance – 500
Family living expenses (i.e. monthly DDs, groceries etc): 1.4k
Lifestyle money: 3.5k
Mortgage overpay / savings – 1,100

Bonuses - ideally we would get around 50k back into our savings as a buffer and then bonuses will be used in part to pay down mortgages and in part for family holidays, life style expenditure

Type of employment: *both private sector*

In general are you:
(a) spending more than you earn, or BREAKING EVEN
(b) saving?

*Saving*

Rough estimate of value of home *1m*
Amount outstanding on your mortgage: *600k – 29 years*
*What interest rate are you paying? 3.1*

Other borrowings – car loans/personal loans etc *Car PCP 500 per month*

Do you pay off your full credit card balance each month? *YES*

Savings and investments: *Cash on deposit 20k*

Do you have a pension scheme? 83,500 in a self-managed scheme with Davy. I pay 5% of my salary monthly into my pension. I need to check the details of my wifes, I think she pays 2.5% and so does her employer and has done for the past 12 years so maybe a similar ish amount in her pot


Do you own any investment or other property? NO

Ages of children: One daughter aged 2, one or two more planned

Life insurance: Mortgage protection, policy that pays 4-6x salary on death, looking at serious illness cover


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## Sarenco

Hi Blackrock

First off, congratulations on getting yourself into such an enviable financial position at a relatively young age.  Very impressive.

Your mortgage is obviously substantial but at roughly 2.5 times your joint income it should be quite manageable, even if we do see interest rate hikes in the relatively near future.

I think your idea of rebuilding your cash reserve back to ~€50k (roughly 6 times your household's normal monthly expenditure) looks sound.

However, I would be inclined to boost your pension contributions substantially before paying down your mortgage ahead of schedule.  Not everybody will agree with that suggestion but I would expect a moderately assertive investment portfolio to produce a real return comfortably in excess of the interest payments on your mortgage over a 30-year holding period.  

Once you start maxing out your pension, I definitely agree that you should use any available after-tax income to start repaying your mortgage ahead of schedule before making any other (taxable) investments.

Are you comfortable with the investment approach that you are taking with your pension savings?  Given your ages and circumstances, I would have thought that you have the ability to take an aggressive (equity-heavy) approach at this stage.  It also makes sense to align your own approach with your wife's retirement investments.

I think you should definitely consider taking out adequate PHI cover as a matter of priority.  It's expensive but not really optional given your circumstances (IMO).

Have you written your wills, EPAs etc.?  They really should be put in place once kids start arriving on the scene.

Finally, I think you should brace yourself for some critical comments re your lifestyle spending! 

Hope that helps.


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## Dr.Debt

Well done OP, not bad at all.

My own circumstances were very similar to yours about ten years ago.

In my view your borrowings are a little on the high side. Sooner or later it may become apparent that either yourself or your wife will want (or need) to stay at home full time when the kids are at a certain age (at least that was my experience and the experience of our friends) and it really would be prudent to design your finances around a single income. Two parents working full time with a nest full of children can be difficult to manage and for many can become stressful and ultimately result in a deteriorated lifestyle for everyone.


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## gnf_ireland

Firstly, agree with the other posters and congrats regarding your current financial position. Had I known that chartered accountants would make 170k back in the day when I studied accounting I may have stuck with it instead of moving to IT 

In general your circumstances are not too dissimilar from my own a few years ago, although my debt is lower as I bought in 2011.

As a family with two pre-school children and both parents working, I have to admit it is pretty difficult at times. Getting two kids out in the morning and making it into work at time puts everyone under massive time pressure in the morning. We are looking to see if we can reduce my partners working week from 4 days to 2.5 days for a better work life balance and overall lifestyle

I don't know what family support you have locally, but it will make a big difference in general to you. If you have no family support, you will need to factor in childcare expenses for the next 13 odd years, between creches, after school etc. This should not be under estimated. If you have more than 1 child in creche at the same time, you will notice the financial drain, even with your level of income.
BTW 1300 seems high for childcare, but depends on the type you use.

If you are planning on having 2 more kids, you will really need to assess if it is practical for both parents to work, even one part time. 


Dr.Debt said:


> Two parents working full time with a nest full of children can be difficult to manage and for many can become stressful and ultimately result in a deteriorated lifestyle for everyone.


Agree completely with this statement !


What consideration have you given to schooling? I assume you are in Blackrock, and there is no obvious choice for girls school here. Options you may wish to consider include Andrews, Loretto Foxrock, etc etc. However, most around here (and on your salaries) would be sending their kids to fee paying secondary schools (say 7.5k a year * 6 years * 3 children = 135k). Any consideration given to private national school (I don't personally agree with it, but each to their own).  




Blackrock1 said:


> Appreciate that we have a relatively high lifestyle spend and car cost, but my opinion is that there is no point working hard and earning a decent salary and then not getting some enjoyment out of it!



I am all for reasonable lifestyle expenses, but I have to say I think yours are on the high side. I would love to know what you are spending 3500 a month on in lifestyle expenses at the moment with a 2 year old at home  I know my lifestyle expenses were seriously curtailed when our two arrived within 20 months of each other !



Blackrock1 said:


> Bonuses - ideally we would get around 50k back into our savings as a buffer and then bonuses will be used in part to pay down mortgages and in part for family holidays, life style expenditure


Your bonuses are ~30k and you again use the words lifestyle expenses here in terms of spending !

Have a look at this thread also, as a comparison (my linking does not appear to be working):
http://www.askaboutmoney.com/threads/views-on-our-financial-position-please.200863/


Finally, I do think your debt is a little too high, especially if you are planning to have more kids, and I think your pension is low given your salary and years of contributions. It appears you are putting in ~600 euro a month into the pension fund.
If I was you, I would reduce 1k a month off the lifestyle budget, and pay an extra 1k (500 net) into the pension fund and 500 extra against the mortgage. I would also question if a self managed pension is right for you at the moment, and maybe 'PSRA' type one would make more sense until you have a higher pension value that would allow you to maximise the benefits of a self managed one


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## Gordon Gekko

I would echo Sarenco's point...you need to do more on the pension side of things.

gnf_ireland's reference to Barbara Bunter's thread is an astute one. The numbers are broadly analogous. You should have a detailed read of those pages.

Barbara and her husband are doing a lot on the pensions side of things from memory.


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## Steven Barrett

Hi Blackrock

You are a classic HENRY - High Earner, Not Yet Rich  Life is good, you are earning good money but life is getting more expensive. You still want to enjoy that great lifestyle but now you have a big mortgage and a kid. More kids will arrive (HENRY's usually have 3 kids) and so costs go up but your wife has cut back on her job. So you have more costs, less income but what about that lifestyle you really enjoy? You don't really want to give that up. Talking about private school is usually the tipping point. €6,000 plus in school fees plus everything else. 

You need to get control on your spending and redirect it for a better use. As it's the end of the year, print out all your bank credit card statements and see where all your money went in the last year. Ask yourself if you everything that you spent your money on (everyone buys stuff they don't need). Then ask yourself what do you really want to do/ spend your money on in the next 5 years. You need to redirect that cash from spending it on stuff to don't need to spending/ saving it on things that are really important to your family. 


Steven 
www.bluewaterfp.ie


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## PGF2016

Blackrock1 said:


> Appreciate that we have a relatively high lifestyle spend and car cost, but my opinion is that there is no point working hard and earning a decent salary and then not getting some enjoyment out of it!


Firstly, kudos on the enviable position you've gotten yourself into. 

The one change that will make you actually rich as opposed to potentially rich is getting away from the notion that you have to spend lots of money to enjoy yourself. Your lifestyle spend isn't 'relatively high' but is astronomical at ~1k a week. 

I'd recommend preparing for losing your spouse's salary. How about living off your salary and saving hers? You should be able to get by on ~170k a year. 

My wife and I live very well off one salary. It'll do wonders for your financial position and will give you a great cushion / safety net. 



Sarenco said:


> Finally, I think you should brace yourself for some critical comments re your lifestyle spending!


I'd like to think the criticism is constructive!


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## Blackrock1

I would like to thank everyone for their contributions, really appreciate it and a lot of food for thought.

The 'plan' in broad terms is this, one or two (id be happy with one ) more kids, my wife cutting back to 3 days within 5 years and maybe more as time goes on with a focus on me continuing to push ahead with my career. i have continued to progress by actively moving roles once i have got all i can from one and trying to identify where opportunities are. im not content with where i am at currently and will continue to try and increase my earnings, although i accept there is no guarantee of that, and if i were made redundant tmrw getting another job on the same salary isnt a sure thing either. the one saving grace is that generally with my experience and background, worst case scenario on the job front is still not too bad.

in my head i am happy that were i to die suddenly my wife and child will be ok, if i take out PHI and get seriously ill we should be ok, if things go south for us we have enough equity in the house (hopefully) to be ok and to sell and downsize, basically we have tried to skip a step and bought the house that should do us for life and as a lot of you have correctly pointed out we need to make some some sacrifices now!





Sarenco said:


> think you should definitely consider taking out adequate PHI cover as a matter of priority. It's expensive but not really optional given your circumstances (IMO).
> 
> Have you written your wills, EPAs etc.? They really should be put in place once kids start arriving on the scene.



Thanks PHI will be taken out in Jan, sorry whats EPA and do i need a will if im happy for everything to goto my wife?




gnf_ireland said:


> If you are planning on having 2 more kids, you will really need to assess if it is practical for both parents to work, even one part time.



Absolutely, we realise this, 3 may not be an option given our age and conceiving hasnt be straightforward so it may be 2, but we dont want our kids going from school to after care 5 days a week so hopefully my wife can cut back to 3 days in a few years



Gordon Gekko said:


> gnf_ireland's reference to Barbara Bunter's thread is an astute one. The numbers are broadly analogous. You should have a detailed read of those pages.



yes have started to read through, they appear to have similar circumstances altho enviable childcare costs, higher debt and more pension contributions, but lots of pertinent info there for me



SBarrett said:


> You need to get control on your spending and redirect it for a better use. As it's the end of the year, print out all your bank credit card statements and see where all your money went in the last year. Ask yourself if you everything that you spent your money on (everyone buys stuff they don't need). Then ask yourself what do you really want to do/ spend your money on in the next 5 years. You need to redirect that cash from spending it on stuff to don't need to spending/ saving it on things that are really important to your family.



our spending isnt out of control, it was a decision we jointly made on how much we would take for personal use and now is probably the time to revisit that. all of our earnings are split equally so we made a decision to split the circa 4k that was left after everthing else (including the savings for the deposit on our house) for each others personal use. we have enjoyed it, travelled well, bought nice clothes, watches, jewellery, handbags etc, but probably time to grow up a little now. of all the things we have spent it on my watches are actually quite liquid and in the main worth more than i paid for them, so another potential source of liquidity should it all turn to dust!



PGF2016 said:


> Your lifestyle spend isn't 'relatively high' but is astronomical at ~1k a week.



i disagree that its astronomical, 500 a week each is comfortable, id easily spend more if i had it


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## Sarenco

Blackrock1 said:


> ...sorry whats EPA and do i need a will if im happy for everything to goto my wife?



Sorry, it's an Enduring Power of Attorney - basically allows you to appoint another individual (usually your spouse or another close family member) to look after both your personal healthcare and financial affairs in the event that, for any reason, you lose your mental capacity in the future.  It might sound a bit OTT but it's worth putting in place at the same time as your will.

Yes, it's prudent to put wills in place for a number of reasons.  If you die intestate (without leaving a will) your wife won't be able to deal with your estate until she secures a grant of probate which takes time.  You can also provide for circumstances where your wife predeceases you and address the guardianship of your kid(s) in the unfortunate event that you both pass away - is there a particular relative or friend that you would want your kid(s) to live with in those circumstances? 

These are relatively standard form documents that a competent solicitor could draw up in an afternoon.


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## Blackrock1

Sarenco said:


> Sorry, it's an Enduring Power of Attorney - basically allows you to appoint another individual (usually your spouse or another close family member) to look after both your personal healthcare and financial affairs in the event that, for any reason, you lose your mental capacity in the future.  It might sound a bit OTT but it's worth putting in place at the same time as your will.
> 
> Yes, it's prudent to put wills in place for a number of reasons.  If you die intestate (without leaving a will) your wife won't be able to deal with your estate until she secures a grant of probate which takes time.  You can also provide for circumstances where your wife predeceases you and address the guardianship of your kid(s) in the unfortunate event that you both pass away - is there a particular relative or friend that you would want your kid(s) to live with in those circumstances?
> 
> These are relatively standard form documents that a competent solicitor could draw up in an afternoon.



thank you for that, something else for the list!


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## Mrs Vimes

Blackrock1 said:


> Thanks PHI will be taken out in Jan, sorry whats EPA and do i need a will if im happy for everything to goto my wife?



If you die intestate then your wife will *not *get everything - one third of your estate will go to your child(ren) so if you are happy for everything to go to your wife then put that in writing as well as what Sarenco said about who will look after the child(ren) if you both die.


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## cremeegg

Blackrock1 said:


> with a focus on me continuing to push ahead with my career. i have continued to progress by actively moving roles once i have got all i can from one and trying to identify where opportunities are. im not content with where i am at currently and will continue to try and increase my earnings, although i accept there is no guarantee of that, and if i were made redundant tmrw getting another job on the same salary isnt a sure thing either. the one saving grace is that generally with my experience and background, worst case scenario on the job front is still not too bad.



The pyramid narrows as you get older. What is the ratio of 46 year olds and 56 year olds to 36 year olds earning good money in your company/industry. The worst case scenario is worse when you are 47 than 37.

I have no real financial advice arising from that, except perhaps tilt the balance away from spending toward saving.

The decisions you are making now will make little difference to the 37 year old you will become, the effect on the 47 year old, or older, you will become are much greater. That person will have a different view on life.

While obviously you have enjoyed success in your career, and that comes from effort and ability, the comment about the watches strikes me as naive.  Have you ever tried to sell one ?


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## PGF2016

Blackrock1 said:


> i disagree that its astronomical, 500 a week each is comfortable, id easily spend more if i had it



Astronomical and comfortable are not mutually exclusive. If Warren Buffet was spending 100k a week that would be astronomical but he can comfortably afford it (as can you at 1k a week).

I consider 52K a year leisure spending astronomical as that's a very decent salary for the majority of the population. You're spending that after having already paid mortgage, car, creche, food, bills etc.

That's an observation rather than a criticism.


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## Blackrock1

cremeegg said:


> While obviously you have enjoyed success in your career, and that comes from effort and ability, the comment about the watches strikes me as naive.  Have you ever tried to sell one ?



not naive in the slightest, i have bought and sold dozens of watches in the 5 figure bracket so i have a reasonable handle on what each one is worth. Obviously its all in the buying, if i walked into weirs in the morning and paid retail for a breitling for example, i could legitimately expect to get 40% less the next day selling it privately. by the same token if i could walk in and buy a new rolex daytona i could sell it to a UK pre owned watch company for a 30% premium.


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## Sarenco

PGF2016 said:


> You're spending that after having already paid mortgage, car, creche, food, bills etc.



...and income tax, USC and PRSI...


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## Bronte

Blackrock1 said:


> Bonuses - ideally we would get around 50k back into our savings as a buffer and then bonuses will be used in part to pay down mortgages and in part for family holidays, life style expenditure



I don't understand why the bonuses would pay for holidays or life style expensive if you are already spending 3.5K a month on this or 42,000 a year.  In fact that is in any man's book is astronomical (unless you are as others said Warren Buffet)

If you want to do what you expressed in your OP then you will have to tackle this spending.  There is nowhere else for the money to come from.

I can't help but feel that you pointed out yoru spending to stop us being too hard on you but maybe you'd prefer if we were.  Not in a nasty way but in a cop yourself on way.  If you didn't have the financial aspirations you profess to then it wouldn't matter.

- I think the point about private education is very pertinent.  And important.

- You should aim to have excellent pensions.

- you should underestand that not everybody keeps their earnings high - life can throw a curve ball at you, another poster told you this and I'll tell you the same thing

- this I consider 'fritteries' _travelled well, bought nice clothes, watches, jewellery, handbags - _or _stuff_, you don't need them.  And I suspect the car goes into this category too.


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## Blackrock1

cremeegg said:


> The pyramid narrows as you get older. What is the ratio of 46 year olds and 56 year olds to 36 year olds earning good money in your company/industry. The worst case scenario is worse when you are 47 than 37.



agreed on the pyramid, however most executives are in their 40s, and in my company my boss for example has 12 years on me and earns a lot more, if he left in the morning its likely i would take his role, my expectation and hope is to move up the food chain to CFO level in the next 5 years, but who knows if that will happen


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## aristotle

I don't like big levels of debt. When interest rates rise the cost goes up which you obviously know about being in Finance.
With a mortgage of 600k at 3.1% you will pay back over 300k in interest over 29 years, if rates go up to 5.1% it will be over 500k in interest, all paid with after tax money. I would be diverting the overspend on "lifestyle" into paying down the mortgage asap.

As mentioned life doesn't always go to plan so you need to be able to survive on lower or one salary for example and you can only do that my having low debt. You or you wife might want to cut back on work with your children for example.

Your pensions should be higher given the high income as well. Overall with the excellent income you should review in detail your spending and 1) increase pension, 2) lower mortgage.


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## Blackrock1

Bronte said:


> I don't understand why the bonuses would pay for holidays or life style expensive if you are already spending 3.5K a month on this or 42,000 a year.  In fact that is in any man's book is astronomical (unless you are as others said Warren Buffet)
> 
> If you want to do what you expressed in your OP then you will have to tackle this spending.  There is nowhere else for the money to come from.
> 
> I can't help but feel that you pointed out yoru spending to stop us being too hard on you but maybe you'd prefer if we were.  Not in a nasty way but in a cop yourself on way.  If you didn't have the financial aspirations you profess to then it wouldn't matter.
> 
> - I think the point about private education is very pertinent.  And important.
> 
> - You should aim to have excellent pensions.
> 
> - you should underestand that not everybody keeps their earnings high - life can throw a curve ball at you, another poster told you this and I'll tell you the same thing
> 
> - this I consider 'fritteries' _travelled well, bought nice clothes, watches, jewellery, handbags - _or _stuff_, you don't need them.  And I suspect the car goes into this category too.



42k a year makes it sound more than it is , in reality its €400 a week per person to cover lunch, eating out, clothes and other sundries, yes lots of scope to cut it down, but i dont think im living like a millionaire!

Private education for second level is a given, whatever it will cost will be less than childcare.

i understand not everyone keeps their earnings high and i dont take it for granted, but at the same time i am in a sphere where my reasonable expectation should be to keep going, not stand still or go backwards. i havent got to where i am by luck and i can see where i can get to looking at my peers or those 5 -10 years ahead of me. thats not to say ill get there but there is a reasonable chance.

the same on the house, i thought it better to get the best we can now, in the hope we never have to move again, potentially saving us money in the future.

to put things in perspective we wanted to stay in the general are we are in, we have sold our apartment for over 500k, obviously on that basis a house with more space is going to cost us quite a lot more. sure i could move miles out and live mortgage free or close to it but we like where we live, have a lovely standard of living and imo earn enough to own the house we have bought.

understand everyone wont agree, and appreciate all of the suggestions and comments


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## moneybox

Blackrock, you doing mighty and fair duce to you. You have posted a number of times today so I guess you must have a handy enough number


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## Steven Barrett

You need to: 


Protect your income. If you can't work, everything goes out the window. I look after an accountant who was on her way to becoming a partner but got MS and hasn't worked in 30 years. Get income protection
Work out how much life cover you need. What kind of lifestyle do you want the surviving spouse to have if one of you is gone. Take into consideration the mortgage will be paid off. 
Build up you emergency fund, €20k isn't enough for the level of expenditure. 
Build up medium term assets by investing some of your income - you can use this for private school for kids instead of having to take everything from cashflow. No point in you doing all the heavy lifting when it comes to your money. Get the markets to grow it for you. 
You will need to think about pension funding. 7.5% between the two of you is not enough to be able to maintain your lifestyle into old age. 

Steven
www.bluewaterfp.ie


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## Blackrock1

moneybox said:


> Blackrock, you doing mighty and fair duce to you. You have posted a number of times today so I guess you must have a handy enough number



you guess wrong



SBarrett said:


> You need to:
> 
> 
> Protect your income. If you can't work, everything goes out the window. I look after an accountant who was on her way to becoming a partner but got MS and hasn't worked in 30 years. Get income protection
> Work out how much life cover you need. What kind of lifestyle do you want the surviving spouse to have if one of you is gone. Take into consideration the mortgage will be paid off.
> Build up you emergency fund, €20k isn't enough for the level of expenditure.
> Build up medium term assets by investing some of your income - you can use this for private school for kids instead of having to take everything from cashflow. No point in you doing all the heavy lifting when it comes to your money. Get the markets to grow it for you.
> You will need to think about pension funding. 7.5% between the two of you is not enough to be able to maintain your lifestyle into old age.
> 
> Steven



thanks steven,

income protection is being arranged currently, life cover is adequate i think, the fund will be built up to circa 50k next year, turns out my wife has 10.5% going into her pension pot, so better than i had hoped, i do need to up mine however.

point taken on medium term assets


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## gnf_ireland

I have re-read the post and all the follow-up commentary today, and the one thing that comes across is a clear desire from the OP to 'plough ahead with his career' to ensure he makes the highest salary as quickly as possible. While admirable it does come at a high cost also, including
   - it is likely you will be working long hours to achieve this. I wonder how much of your child(ren) you would see during the week
   - it also appears that for you to achieve this, your wife will have to take the slack if the kids are sick, off school etc. This might be fine, but I do think it is something you need to sit down and agree as a couple. It is likely your wife has invested in her career also over the last 15 plus years, so taking a step back while sounding great will not be easy to do
   - you talk about going to a 3 day week in 5 years. Realistically, if you want to achieve a better work life balance, this will need to be considered as your child(ren) start school. Ideally there should be a level of contact between the parent and the school/teacher, which means one/both parent doing their share of school drop-offs. Lots of schools don't open until 8:50, making it difficult to get into work at a reasonable time.
   - I also wonder will you miss school plays, parent/teacher meetings, after school activities as you focus on your career. Most people I know who are on that 'career focused' route have a terrible work/life balance in that respect
I also wonder whether after this massive career push for 30 years, you will wake up in your early 50's and wonder where the last 20 years of your life went, and why your teenage kids think you are only an ATM & taxi.

Maybe I am being a bit harsh here, but I think most people will know people who are like this, and while they have a great lifestyle materially, being happy is a different matter. As was once said to me in a bar in Kerry at 3 am "I have yet to meet a man who on his death bed said I wish I worked more in my life"


Its all about choices. We all have to make them no matter how much we earn. Personally, I think you are still living the early 30's lifestyle with high disposable income, and not yet adjusted to life as a parent with future commitments. I think you adjusted your spending habits for your mortgage application, and then reverted to 'true form' straight away again. For people who are naturally spenders, saving is something that is really hard to get into the mindset of.

I think you would benefit sitting down with a financial planner to go through your life goals, projected cash flows etc and see where you end up. I think it would be a wise 1k-1.5k spent in your case.


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## Bronte

I agree with you GNF that he would be well advised to go to an advisor.  Steven, who is an advisor, posted just before you and gave him some pertiment advice. 

Also your points on life etc, totally agree.  I knew a man married to his job, when he retired his wife divorced him and he died within a couple of years never really having a life other than the job, he even used to come back to the job to meet people, totally lost without it.


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## Blackrock1

gnf_ireland said:


> I have re-read the post and all the follow-up commentary today, and the one thing that comes across is a clear desire from the OP to 'plough ahead with his career' to ensure he makes the highest salary as quickly as possible. While admirable it does come at a high cost also, including
> - it is likely you will be working long hours to achieve this. I wonder how much of your child(ren) you would see during the week
> - it also appears that for you to achieve this, your wife will have to take the slack if the kids are sick, off school etc. This might be fine, but I do think it is something you need to sit down and agree as a couple. It is likely your wife has invested in her career also over the last 15 plus years, so taking a step back while sounding great will not be easy to do
> - you talk about going to a 3 day week in 5 years. Realistically, if you want to achieve a better work life balance, this will need to be considered as your child(ren) start school. Ideally there should be a level of contact between the parent and the school/teacher, which means one/both parent doing their share of school drop-offs. Lots of schools don't open until 8:50, making it difficult to get into work at a reasonable time.
> - I also wonder will you miss school plays, parent/teacher meetings, after school activities as you focus on your career. Most people I know who are on that 'career focused' route have a terrible work/life balance in that respect
> I also wonder whether after this massive career push for 30 years, you will wake up in your early 50's and wonder where the last 20 years of your life went, and why your teenage kids think you are only an ATM & taxi.
> 
> Maybe I am being a bit harsh here, but I think most people will know people who are like this, and while they have a great lifestyle materially, being happy is a different matter. As was once said to me in a bar in Kerry at 3 am "I have yet to meet a man who on his death bed said I wish I worked more in my life"
> 
> 
> Its all about choices. We all have to make them no matter how much we earn. Personally, I think you are still living the early 30's lifestyle with high disposable income, and not yet adjusted to life as a parent with future commitments. I think you adjusted your spending habits for your mortgage application, and then reverted to 'true form' straight away again. For people who are naturally spenders, saving is something that is really hard to get into the mindset of.
> 
> I think you would benefit sitting down with a financial planner to go through your life goals, projected cash flows etc and see where you end up. I think it would be a wise 1k-1.5k spent in your case.



i agree with a lot of what you are saying, im not making these decisions alone dont worry, my wife and i have discussed them at length, we cant prioritise both careers so we have decided on mine and she is happy to take a step back, in fact in a lot of ways she already has (leaving on time every evening to pick up from creche is a change from working until 8 or 9) and she is happy with this.

both my father and my father in law worked very hard and have great relationships with their kids, i am aiming to the do the same. i have been given the tools to have a successful career through my own dads hard work and sacrifice so i will focus on that for the next 10 years at least see where it gets me.

i wont sacrifice everything for this however and its something im very conscious of.


----------



## 52andout

FYI as mentioned a few times : Dublin private school fees oct 2014 cannot post link yet


Alexandra College Dublin –  €6,785
Rathdown School Glenageary – €6,552
St. Andrews College – €6,400
St Columba’s College – €10,353
St. Kilian’s German School – €4,500
Sandford Park School – €7,000
The Teresian School €4,675
The High School – €5,500
Wesley College – €6,000
The Institute of Education – €6,800
St. Joseph of Cluny, Killiney – €4,200
The King’s Hospital – €6,700
Mount Anville – €5,250


----------



## Blackrock1

thanks, cheap compare to creche then


----------



## JamesN

I think it’s fantastic that you are on such good wages at a relatively early part in your career. Well done you have worked hard to get there!


I know it doesn't feel like this right now but it’s very easy to lose a job. It’s easy then for a few months to go by and realise you  have to take one at 1/3 the salary you were on, as younger people just as well qualified start to undercut you. It has happened to people I know. It sounds like you feel invincible in your career, maybe you are, maybe not but plans for a time in your life where you are not earning so much would be a sensible thing to do now. External factors too can take control, eg deteriorating economy etc. Accountancy is a good earner but it’s not a specialised unique skill that only few can do.


You got some advice to cut down on discretionary spending  but you don’t feel you need to. Fair enough, but I can tell you from experience that you don’t need to spend a lot to enjoy yourself. But really this is down to everyone’s individual view on life. Parenthood for me made me realise this. I went with my daughters to the park yesterday and we spent a lovely time making my wife a ‘bouquet’ of dried leaves. The girls had so much fun doing it and it was so lovely watching them do this, my wife was bowled over when they presented it to her with big smiles on their faces.


My thoughts would be very simple, get your mortgage down (or build up a large pot of money) while the sun is shining and make it that your home will never be taken away from you in unforeseen circumstances.


----------



## Blackrock1

JamesN said:


> I think it’s fantastic that you are on such good wages at a relatively early part in your career. Well done you have worked hard to get there!
> 
> 
> I know it doesn't feel like this right now but it’s very easy to lose a job. It’s easy then for a few months to go by and realise you  have to take one at 1/3 the salary you were on, as younger people just as well qualified start to undercut you. It has happened to people I know. It sounds like you feel invincible in your career, maybe you are, maybe not but plans for a time in your life where you are not earning so much would be a sensible thing to do now. External factors too can take control, eg deteriorating economy etc. Accountancy is a good earner but it’s not a specialised unique skill that only few can do.



thanks, of course i could lose my job, i have been with a company that went into receivership before, so i know what its like, that said, my downside is more like a 30% drop in salary rather than 66%, there are different types of accountants


----------



## gnf_ireland

Blackrock1 said:


> both my father and my father in law worked very hard and have great relationships with their kids, i am aiming to the do the same.


I fully accept this. But your parents generation, like my own, had a very different view of parenting and especially fatherhood. Its highly likely your father was even at your birth, and definitely would not be expected to go to a school play. His role would clearly have been the main breadwinner. That has changed, and it does need to be taken into account



Blackrock1 said:


> thanks, of course i could lose my job, i have been with a company that went into receivership before, so i know what its like, that said, my downside is more like a 30% drop in salary rather than 66%,


Absolutely fine - you know your industry/role better than most. However, you currently live off  a joint salary of around 250k. In the event your wife gives up work completely (which is not unheard of for someone with 2-3 children), and you take a 30% cut in salary, your combined income is now in the region of 120k. This would force a major lifestyle change, and one which would be magnified by your current lifestyle spending.

I actually thought about all CxO level people I know working for large companies, and I could not think of a single one where both parents worked (where kids were involved). This was across technology, finance, product, sales etc. 

A company I used to work for closed their London office a few weeks ago. The people I knew there were highly skilled senior people who led multi-million euro/pound/dollar programmes. They were all let go, and now need to find new roles. However, roles at this level are hard come by, and you normally have to take a step backwards to get your foot in the door and then be internally promoted within a company. But once you get to CxO level, the attrition/turnover rate appears to be much higher than the level below that - especially for 'outside' acquired talent. Its just something to keep in mind




JamesN said:


> Fair enough, but I can tell you from experience that you don’t need to spend a lot to enjoy yourself. But really this is down to everyone’s individual view on life. Parenthood for me made me realise this.


Absolutely support this. The best form of fun any child can have is to have other children around to play with. The excitement when they are down at the local park/playground and bump into one of their friends from creche/pre-school and get to play together for a while is worth more than anything else.


----------



## gnf_ireland

Gordon Gekko said:


> There are people who are "bulletproof" from an employment perspective and whose earnings are more likely to double, triple, or quadruple rather than fall.



Absolutely agree. I would put a medical doctor en route to being a consultant in that category - and I am sure there are a few more.

However, whether the OP wishes to accept this or not, as you move towards the top of the career pyramid the level of opportunity seriously narrows. Certain companies prefer 'home grown' talent for their senior roles, while others prefer to acquire it in. Either way, many people end up plateauing from a career perspective in their early 40's and have to wait patiently for a more senior role to open up for them.

No industry is truly bulletproof. I work in technology which is relatively stable. Outside of the two bubbles in the last 20 years, I have also seen smaller patterns of contraction based on outside influences that cannot be ignored. I have seen mergers & acquisitions have untold effect on some peoples careers, both positive and negative. All it takes is a different boss for someone to fall out of favour. Think of soccer players and managers if you want a reasonable analogy here.

Dublin is also quite small - one 'mistake' can grow legs and seriously impact a career. I am sure the 'Anglo tapes' guys would agree 



Gordon Gekko said:


> One issue with AAM is that many contributors take advice that's more pertinent for people who are struggling and replicate it for people who are doing well.


Absolutely agree with this comment, and I have suggested to the OP that maybe a financial planner would be more suitable to their needs.
However the general tone on this thread is more about reducing debt levels, increase the pension pot and don't assume 2 salaries. I have introduced a 'work life balance' aspect to it, as it is one I feel is important to consider especially when realistic financial options exist.


----------



## trasneoir

Blackrock1 said:


> 42k a year makes it sound more than it is , in reality its €400 a week per person to cover lunch, eating out, clothes and other sundries, yes lots of scope to cut it down, but i dont think im living like a millionaire!


Not to pile on, but I'm pretty sure you're spending more than most millionaires.
https://en.wikipedia.org/wiki/The_Millionaire_Next_Door



Blackrock1 said:


> Ideally i would like to have the mortgage paid off by the time my daughter starts college, so gives me 16 years or so


In your shoes, I'd prefer to be financially ready to retire (ie. do exactly whatever I want) in 16 years time. You've got the surplus income, and I know you can do the sums. Here's a primer if you've never thought about it: http://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/ it's a bit harder with today's interest rates and irish taxes, but still totally achievable with your income.

I'd also want to take plenty of time off during those 16 years - these are exactly the years where the kids will _want_ to spend time with their parents. I'd spend 2/3 months a year with family and friends camping in italy, sailing in the caribbean, and hurling in the back yard - with an emphasis on five star experiences rather than five star accommodation. 






gnf_ireland said:


> No industry is truly bulletproof. I work in technology which is relatively stable.


Very true. IT in Ireland is having it's hayday, but that could be ended at short notice by a tax change in Ireland, Europe, or the US. 
More broadly, the phenomenon of "machines taking our jobs" is coming soon to an industry/profession near you. Truck/bus/taxi/mail drivers should be running scared today, but as a programmer I'm looking over my shoulder too.


----------



## Blackrock1

trasneoir said:


> Not to pile on, but I'm pretty sure you're spending more than most millionaires.



the only thing ill say to that is that i have no interest in being a millionaire that lives frugally, that is something i don't see the point in


----------



## Gordon Gekko

I've also no interest in retiring early...it's a road to ruin. Your brain turns to mud, and you become one of those people who rant and rave about Eircom not calling around on time and the stress of supermarket shopping.


----------



## PGF2016

Some contrarian comments / alternative viewpoints. 



Blackrock1 said:


> the only thing ill say to that is that i have no interest in being a millionaire that lives frugally, that is something i don't see the point in



The frugal don't see the point in pissing 10k away on a Rolex Daytona when a 1k Seiko is every bit as functional. 



Gordon Gekko said:


> Your brain turns to mud, and you become one of those people who rant and rave about ...


The same comment could be said of working on late into life.


----------



## moneybox

Gordon Gekko said:


> I've also no interest in retiring early...it's a road to ruin. Your brain turns to mud, and you become one of those people who rant and rave about Eircom not calling around on time and the stress of supermarket shopping.



Reminds me of Victor Meldrew


----------



## Gordon Gekko

PGF2016 said:


> Some contrarian comments / alternative viewpoints.
> 
> 
> 
> The frugal don't see the point in pissing 10k away on a Rolex Daytona when a 1k Seiko is every bit as functional.
> 
> 
> The same comment could be said of working on late into life.



No, the exact opposite. In my view, the best approach is working a couple days a week forever.

Keeps you young as the saying goes...


----------



## Blackrock1

PGF2016 said:


> The frugal don't see the point in pissing 10k away on a Rolex Daytona when a 1k Seiko is every bit as functional.



So is a 7 dollar Casio 

Anyway if I could get my hands on a 10k Daytona I could sell it at a 25% mark up whereas the 1k seiko would be worth half that before I got to the door 

Who is pissing away money in that scenario


----------



## Gordon Gekko

The white gold Cosmograph Daytona is the one to go for in any event...€25k


----------



## Blackrock1

Stainless steel is where the money is bizarrely! You can get a pre owned gold one for less than the premium being charged on the steel

Crazy world


----------



## Rory_W

Each to their own as to how they spend their money but a few comments FWIW : 

- money is hard earned and easily lost and as mentioned before whilst now you feel bulletproof what happens if you lose your job when 52 and have 13 years to go on mortgage and just as kids are starting secondary school or college

- cut expenditure. Simple as. The L'Oreal because I am worth it (or want it) attitude should be modified

- save more and more again (you adjust your cashflows)

- cut expenditure again. leave credit card at home or be strict on usage. Take out say 200 euro on a weekend and use that as your walking around money for lunch and discretionary spends. Try 175 every second week. Be surprised when you survive and actually you are not having a miserable time.

- realistically look at your watch collection. Is it a vanity collection and do you really need it. If it was me I would sell them all and use funds more wisely to pay down debt. Holding them as a rainy day fund may not yield as much when needed if a fire sale is required.

- you live in South Dublin in Blackrock and there is probably pressure to keep up appearances re house and car and lifestyle but try to avoid such pressures. You have your dream house. Congratulations.

- pay down debt, pay down debt, pay down debt - cannot be over emphasised and whilst people may say debt is manageable, lower debt is even more manageable.

- there may be unforeseen work required to the forever house

- there may be nursing home costs for parents to be contributed towards

- look at all your policies (life, PHI, SIC etc) and start with blank page - if starting now what would I take out and for how much ? Look at cover on your wife as you would need to hire a nanny if something happened to her. Boost your own life cover whilst you are younger and it is cheaper. Don't mix up life cover and mortgage cover. Mortgage cover may clear the loan but there would be no nest egg for your wife to recover with if something happened to you.

- Think 10 years down the road, Be able to give yourself choices then as circumstances change. You may wish to downsize your own career and take a step back (for personal, health, family or other reasons)

- kids are expensive and not expensive at same time. (says he who has 19 month old twin girls and like you has just bought his forever house!) as they want time with you which costs nothing

As a CA I am surprised you need to ask for financial advise ! But given your love of lifestyle rather than trying to go cheap and get free advise on an internet forum, perhaps you should pay for and get professional advice. There are many people (including people on this forum who can advice you) and they are remunerated either by transparent fees or commission (which they should disclose and perhaps rebate a balance).  Don't be your own worst client - if it was a business decision would you not seek professional advise ?

The above is my morning ramble which may or may not be useful.

ps did i mention cut expenditure and save more ?


----------



## Blackrock1

Rory_W said:


> Each to their own as to how they spend their money but a few comments FWIW :
> 
> - money is hard earned and easily lost and as mentioned before whilst now you feel bulletproof what happens if you lose your job when 52 and have 13 years to go on mortgage and just as kids are starting secondary school or college
> 
> - cut expenditure. Simple as. The L'Oreal because I am worth it (or want it) attitude should be modified



- save more and more again (you adjust your cashflows)[/QUOTE]

if i lose my job at 52 ill get another one, i have moved around 5 times in the 13 years i have been working, as a partner in the accounting firm i trained at said to me a few years back after another move, there are itinerants that stick around longer than you 

Also im not sure if i said it already but my stated aim is to have our mortgage clear in 16-18 years by overpaying monthly, and also to have a 50k nest egg built up by the end of next year




Rory_W said:


> - realistically look at your watch collection. Is it a vanity collection and do you really need it. If it was me I would sell them all and use funds more wisely to pay down debt. Holding them as a rainy day fund may not yield as much when needed if a fire sale is required.
> 
> - you live in South Dublin in Blackrock and there is probably pressure to keep up appearances re house and car and lifestyle but try to avoid such pressures. You have your dream house. Congratulations.
> 
> - there may be unforeseen work required to the forever house



the forever house is new, so for now there wont be any work required i hope,

the other points you make, allow me to get something off my chest.

its a very irish thing to assume that someone with expensive jewellery, watches or cars, only have them to wind everyone else up, it isnt always the case. I have always been a car enthusiast and sold my pride and joy on the basis that we only need one car and something diesel and reliable was more sensible and it has proven to be the case. If i could get back into an e46 BMW m3 in the morning i would and im sure it wouldnt impress anyone given that its going to be 12-15 years old, unfortunately with 2k road tax, expensive servicing, expensive insurance and expensive repairs / tyres when anything needs replacing our current car is cheaper to run and more suited to family life. 

also re the watches, of course they are a luxury, if anyone needs to tell the time any 10 quid watch will do, but its a hobby and not one i do to impress anybody else. i cant remember the last time someone noticed a watch i was wearing, and i'm sure to most people on here, something like an IWC isnt going to mean anything to them. if i wanted to impress people id buy whatever the current iteration of the tag carrera or monaco is, anything else doesnt register on most radars.

Also im pretty comfortable with how to go about liquidating them, and if and when i need the money, its easily done.




Rory_W said:


> - look at all your policies (life, PHI, SIC etc) and start with blank page - if starting now what would I take out and for how much ? Look at cover on your wife as you would need to hire a nanny if something happened to her. Boost your own life cover whilst you are younger and it is cheaper. Don't mix up life cover and mortgage cover. Mortgage cover may clear the loan but there would be no nest egg for your wife to recover with if something happened to you.



yes, one thing that has come out of the thread (barring spend less save more ) is the need for income protection. i am getting cover for both me and my wife at the max available (75%) and we both have policies through work that pay 4-6 times salary on death as well as mortgage protection, so for now we have reasonable cover.




Rory_W said:


> As a CA I am surprised you need to ask for financial advise ! But given your love of lifestyle rather than trying to go cheap and get free advise on an internet forum, perhaps you should pay for and get professional advice. There are many people (including people on this forum who can advice you) and they are remunerated either by transparent fees or commission (which they should disclose and perhaps rebate a balance).  Don't be your own worst client - if it was a business decision would you not seek professional advise ?



no harm in soliciting some opinions, i am comfortable in looking after my own finances and what various products do and mean, but does that preclude me from garnering some opinion in a sub forum specifically designed for that?

i may speak to some financial advisors in the new year, ill admit im a little sceptical about what they can bring to the table for someone like me (apart from spend less save more!), but that wont prevent me from exploring it.


----------



## Rory_W

Don't get me wrong, as I say it for everyone to spend as they wish. I have a hobby which is photography and I have over the years spent a fair chunk of change of equipment which other people might say is a waste of money as the iPhone can take a photo. But for me it was discretionary expenditure and what I decided to spend money on and each year I would buy myself one item.  

Now that the kids arrive, all the photos are generally taken on the iPhone of the kids. 

re 50k nest egg, is that enough ? What is current net needed to live on for you and pay all bills (ignoring savings). I would try to have 6 months of this as a nest egg. Some people may say that that is too cautious and that only 3 months is needed but I always felt comfortable knowing that 6 months was there. If something unforeseen happens you can always tighten the belt and 6 months may stretch to 7-9 months.

re your luxury items, I didn't say you had them to "wind people up" and if that is how it was read, it wasn't intended. 

re the car, i do sympathies re the "getting something sensible" when your child arrived - but with careful planning you can have your dream car again when they grow up !

re overpaying mortgage, depending on who it is with, check whether you can get the money back if you needed it so you have the benefit of lower mortgage but option of Plan B of getting funds if needed in a hurry. 

Moving around 5 times in 13 years would be during the years of 23 (our of college I presume) to 36 (now). The next 10 years are critical for positioning yourself for the balance of your career but you probably know that anyway. It is not meant in a bad way but having been ok getting jobs in past does not mean that that will always be the case. It is a hell of a lot easier to get a job in the 23/36 age bracket than it is in the 50/60 age bracket. The save money, spend less is so that if god forbid the unthinkable happens and you end up unemployed or having to downsize your career that you don't have as large a financial noose around your neck at that time.

re PHI, SIC, and other policies - whilst they are important, care should be taken not to over insure either  

re soliciting opinions on a forum like this, don't get me wrong, absolutely take all the views and opinions you can get. My concern was that if your circumstances were such that you should get professional advise that you may not and may solely rely on opinions given here. By the sounds of it you are already family clued in to your requirements and coming on here is more confirmation of what you were thinking rather than being a revelation for you. 

Wishing you good health, continued success and every happiness for the future whatever you decide and also some sleep filled nights when/if number 2 (and 3?) arrives !


----------



## Blackrock1

Rory_W said:


> Don't get me wrong, as I say it for everyone to spend as they wish. I have a hobby which is photography and I have over the years spent a fair chunk of change of equipment which other people might say is a waste of money as the iPhone can take a photo. But for me it was discretionary expenditure and what I decided to spend money on and each year I would buy myself one item.
> 
> Now that the kids arrive, all the photos are generally taken on the iPhone of the kids.
> 
> re 50k nest egg, is that enough ? What is current net needed to live on for you and pay all bills (ignoring savings). I would try to have 6 months of this as a nest egg. Some people may say that that is too cautious and that only 3 months is needed but I always felt comfortable knowing that 6 months was there. If something unforeseen happens you can always tighten the belt and 6 months may stretch to 7-9 months.
> 
> re your luxury items, I didn't say you had them to "wind people up" and if that is how it was read, it wasn't intended.
> 
> re the car, i do sympathies re the "getting something sensible" when your child arrived - but with careful planning you can have your dream car again when they grow up !
> 
> re overpaying mortgage, depending on who it is with, check whether you can get the money back if you needed it so you have the benefit of lower mortgage but option of Plan B of getting funds if needed in a hurry.
> 
> Moving around 5 times in 13 years would be during the years of 23 (our of college I presume) to 36 (now). The next 10 years are critical for positioning yourself for the balance of your career but you probably know that anyway. It is not meant in a bad way but having been ok getting jobs in past does not mean that that will always be the case. It is a hell of a lot easier to get a job in the 23/36 age bracket than it is in the 50/60 age bracket. The save money, spend less is so that if god forbid the unthinkable happens and you end up unemployed or having to downsize your career that you don't have as large a financial noose around your neck at that time.
> 
> re PHI, SIC, and other policies - whilst they are important, care should be taken not to over insure either
> 
> re soliciting opinions on a forum like this, don't get me wrong, absolutely take all the views and opinions you can get. My concern was that if your circumstances were such that you should get professional advise that you may not and may solely rely on opinions given here. By the sounds of it you are already family clued in to your requirements and coming on here is more confirmation of what you were thinking rather than being a revelation for you.
> 
> Wishing you good health, continued success and every happiness for the future whatever you decide and also some sleep filled nights when/if number 2 (and 3?) arrives !



That's a good point about getting the money back if overpay is that an option with some banks? Ideally I'd love to have an offset mortgage but we may not see those again, but a facility like that would give that benefit if in a bind 

Appreciate you taking the time to make two long posts, thank you


----------



## GirlTuesday

Blackrock, I'm in a similar position to you income wise/profession and we are expecting our second baby. One thing I thought I'd mention may or may not be of relevance to you. I'm from a working class, rural, background and most of my friends are from professional, middle class Dublin backgrounds. It appears that they were all supported financially by their parents well into their professional working lives (by monthly allowances/cars bought/holidays paid for) and received significant (I mean €200k/€300k) lump sums when buying their homes, extremely expensive weddings paid for and expect to inherit further. It just seems standard. You may or may not want to factor this into your future financial planning. Best of luck. You both are doing a great job to date.


----------



## Rory_W

Blackrock1 said:


> That's a good point about getting the money back if overpay is that an option with some banks? Ideally I'd love to have an offset mortgage but we may not see those again, but a facility like that would give that benefit if in a bind
> 
> Appreciate you taking the time to make two long posts, thank you



Ask whoever your mortgage is with if they offer it. 

I have heard of EBS in the past. 

With AIB who I have my loan with, if you make an additional payment you have to write to say "take it off the capital" and they readjust the ongoing repayment due. 

I have known self employed people to overpay their mortgage and then draw down the money again in November to pay their tax and in meantime getting a better return on savings (i.e. effectively at their mortgage interest rate)


----------



## Rory_W

another thought is re life cover, no need to read small print. You can't be half dead, So lowest premium applies. Most if not all life companies do price match so you can get the lowest premium with the life company of choice. 

Aviva have an add on benefit called best doctors which is available at no extra cost 

http://www.aviva.ie/broker/lifepensions/protectionfeatures/bestdoctorssecondmedicalopinion/

Benefit available to 

you,
your spouse / partner
your children up to the age of 18 (or 23 if in full time education).
your parents and your spouse’s / partner’s parents
You hopefully never need to use it but as an added (free) extra worth having

Aviva will also reduce the premium (which they have already matched the lowest) by a further 20% from memory if the broker waives commission so a once off fee could save thousands over life of policy. 

As a ballpark, EUR 1 million cover over 20 years for a 36 year old non smoker (subject to application and underwriting) would cost 67 euro. 20% of this is roughly 13 euro so cost is down to 54 per month. 

The 13 euro saving x 12 months x 20 years = 3120 (time value of money ignored) and if indexation is selected or conversion option is selected then savings are more as premiums would be more. 

Add this saving for your wife's policy as well and savings are adding up overall. 

Even if you have life cover elsewhere its worth having an Aviva policy in back pocket to have the Best Doctors safety net

And if looking at overall requirements then maybe consolidating and replacing existing policies with an Aviva one may make sense

Re Death in Service that you mention, one comments is that if you or your wife leave the employment (which you've done 5 times in 13 years!) then this cover is gone so i would tend to consider treating this cover as "bonus cover" and maintain your own cover separately 

(Note to Mods - if I am not meant to mention Aviva or their products feel free to amend the post)

(Note - I don't work for Aviva in case you are wondering why I mention them above)


----------



## Blackrock1

Rory_W said:


> another thought is re life cover, no need to read small print. You can't be half dead, So lowest premium applies. Most if not all life companies do price match so you can get the lowest premium with the life company of choice.
> 
> Aviva have an add on benefit called best doctors which is available at no extra cost
> 
> Benefit available to
> 
> you,
> your spouse / partner
> your children up to the age of 18 (or 23 if in full time education).
> your parents and your spouse’s / partner’s parents
> You hopefully never need to use it but as an added (free) extra worth having
> 
> Aviva will also reduce the premium (which they have already matched the lowest) by a further 20% from memory if the broker waives commission so a once off fee could save thousands over life of policy.
> 
> As a ballpark, EUR 1 million cover over 20 years for a 36 year old non smoker (subject to application and underwriting) would cost 67 euro. 20% of this is roughly 13 euro so cost is down to 54 per month.
> 
> The 13 euro saving x 12 months x 20 years = 3120 (time value of money ignored) and if indexation is selected or conversion option is selected then savings are more as premiums would be more.
> 
> Add this saving for your wife's policy as well and savings are adding up overall.
> 
> Even if you have life cover elsewhere its worth having an Aviva policy in back pocket to have the Best Doctors safety net
> 
> And if looking at overall requirements then maybe consolidating and replacing existing policies with an Aviva one may make sense
> 
> Re Death in Service that you mention, one comments is that if you or your wife leave the employment (which you've done 5 times in 13 years!) then this cover is gone so i would tend to consider treating this cover as "bonus cover" and maintain your own cover separately
> 
> (Note to Mods - if I am not meant to mention Aviva or their products feel free to amend the post)
> 
> (Note - I don't work for Aviva in case you are wondering why I mention them above)



That's great advice Rory !

So I could replace my mortgage cover with something like this maybe 

I've had dis in my last few jobs and will insist on it if I move again


----------



## Dan Murray

Anyone know whether individuals can become members of "best doctors" in Ireland and the cost - seems like this is an option in Trumpland.


----------



## Rory_W

Blackrock1 said:


> So I could replace my mortgage cover with something like this maybe



Yes if you wanted to - see other post for policies that are covered


----------



## Rory_W

Blackrock1 said:


> That's great advice Rory !



you're welcome !


----------



## Bronte

Black rock did you ever consider giving up the day job to deal in watches?

Life cover is better earlier in life when you are fit and healthy so that you don't have to have a medical etc.


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## cremeegg

I have been thinking about your original post, looking for an overview of your financial affairs, and accepting that you have an income of nearly €250k per annum, which you expect to continue.

Taking that level of income on a continuing basis as a given, which in fairness you have said clearly is your position, I suggest that the opinions given here have been too cautious.

I suggest that you should borrow as much as possible, and invest it. That is the best use of your excellent earning capacity. You will need to invest in property to be able to borrow.

You should find the largest property investment that you can comfortably cashflow, over a 20 year capital and interest basis. If the return on the investment is greater than the borrowing cost, you will make a profit on the bank's money. Such investments are widely available in Ireland today, the capacity to raise the finance to buy them is not. You may have that capacity, you should put it to use.

I suggest that this would change you from a prosperous worker to a wealthy man.


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## gnf_ireland

interesting view @cremeegg 

I think if the OP is to consider this option, they need to considerably increase their pension contributions into a self administered pension scheme and borrow through that mechanism. This will allow them to keep all the rent made, effectively tax free, until retirement. They should be able to retire at say 55 in that case, with the money available from then.

Anyone know of any banks currently lending for property within a 'small' pension fund? I was talking to my broker last year and they said not really ! What size deposit would one need to undertake this sort of investment - I am assuming at least 30% for the banks to entertain it?

My view is this is the issue the OP has - because they are living for the moment, they don't have the available capital to consider opportunities such as this.


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## Sarenco

I am personally familiar with a significant number of high income professionals that similarly thought that leveraged real estate would be their path to riches.  Many subsequently had to defer their retirement and/or seriously down-size their lifestyles.  And they are the lucky ones…

In any event, I struggle to see how leveraged residential rentals currently make any financial sense for individuals given current yields, BTL mortgage rates and our personal tax code.

It seems to me that Blackrock1 is going to need investable assets materially north of €1.5m (in 2016 terms) to maintain anything like his current lifestyle in retirement.  I would suggest that his best chance of accumulating that level of wealth is by maximising any available, tax-deferred, pension space and investing in a diversified, unleveraged, portfolio of assets.


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## gnf_ireland

Sarenco said:


> It seems to me that Blackrock1 is going to need investable assets materially north of €1.5m (in 2016 terms) to maintain anything like his current lifestyle in retirement.



@Sarenco  to put this into perspective, what type of monthly contribution are you talking about over a 25-30 year period to hit this type of pension pot ?


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## Sarenco

gnf_ireland said:


> @Sarenco  to put this into perspective, what type of monthly contribution are you talking about over a 25-30 year period to hit this type of pension pot ?



Well, it really depends on what assumptions you use but if you assume a constant real (after-inflation) annual growth rate of 3.5%, after all investment costs, it would take nearly 27 years for an annual contribution of €36,000 to hit €1,500,000.


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## Dan Murray

Of course, an annuity of €1.5m will, as we all know, provide an annuity of €24,000 p.a.


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## gnf_ireland

Sarenco said:


> it would take nearly 27 years for an annual contribution of €36,000 to hit €1,500,000



Given the OP is putting in around 6000 euro into a pension fund per annum, I think its safe to say they will need to review this element of their financial plan as a matter of urgency !


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## mtk

cremeegg said:


> I have been thinking about your original post, looking for an overview of your financial affairs, and accepting that you have an income of nearly €250k per annum, which you expect to continue.
> 
> Taking that level of income on a continuing basis as a given, which in fairness you have said clearly is your position, I suggest that the opinions given here have been too cautious.
> 
> I suggest that you should borrow as much as possible, and invest it. That is the best use of your excellent earning capacity. You will need to invest in property to be able to borrow.
> 
> You should find the largest property investment that you can comfortably cashflow, over a 20 year capital and interest basis. If the return on the investment is greater than the borrowing cost, you will make a profit on the bank's money. Such investments are widely available in Ireland today, the capacity to raise the finance to buy them is not. You may have that capacity, you should put it to use.
> 
> I suggest that this would change you from a prosperous worker to a wealthy man.



This is a windup I assume ! 
see his satirical post in shooting the breeze forum !


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## Blackrock1

gnf_ireland said:


> Given the OP is putting in around 6000 euro into a pension fund per annum, I think its safe to say they will need to review this element of their financial plan as a matter of urgency !



More like 15-16k between my wife and I including portions of bonuses but I agree we need to put more in


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## gnf_ireland

Blackrock1 said:


> More like 15-16k between my wife and I



Sorry, I just see now that you have updated to say your wife is putting in 10.5% of her wages in, as opposed to the 2.5% originally stated

Do keep in mind that your wife is talking about cutting back on her working week, or giving work up altogether. This will dramatically impact your pension as she currently pays in more than you do (assuming your numbers are correct)

Your contribution is currently 5% which equates to 600 euro per month. 

What people are trying to say is - you will struggle to maintain your existing lifestyle into retirement, as it is dependent on a continual high income. The minute this drops, for whatever reason be it illness, retirement, redundancy etc, your lifestyle will come crashing down. People are just saying that you should average it out a bit better. But it is completely up to you

I agree that this thread is probably run its course, so good luck OP and hope it all works out for you in the long term.


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## Blackrock1

update on this, as much for myself to keep tabs as anything else!

Age: 38 (in a few weeks)
Spouse’s/Partner's age: 38

Annual gross income from employment or profession: 160,000 (plus bonus 30-50k)
Annual gross income of spouse:85,500 (plus bonus 5-7k)

Monthly take-home pay pre bonuses 11,280

Monthly expenses: 9.5k
Mortgage: 2.7k incl protection
Childcare: 850 (ECCE has kicked in)
Car finance – 650
Family living expenses (i.e. monthly DDs, groceries etc): 1.65k (increase related to two income protection policies totalling 250 a month)
Spending money each per month : 1,850 (3.7k in total)
Mortgage overpay / savings – 1,750

Type of employment: *both private sector*

In general are you:
(a) spending more than you earn, or BREAKING EVEN
(b) saving?

*Saving*

Rough estimate of value of home *1.15m*
Amount outstanding on your mortgage: *490k – 20 years*
*What interest rate are you paying? 2.5% 5 year foxed*

Other borrowings – car loans/personal loans etc *Car PCP 650 per month*

Do you pay off your full credit card balance each month? *YES*

Savings and investments: *Cash on deposit 20k*

Do you have a pension scheme? 83,500 in a self-managed scheme with Davy. I pay 5% of my salary monthly into my pension + 4% employer. wife pays 5% and so does her employer and so does her employer and has done for the past 12 years so maybe a similar ish amount in her pot


Do you own any investment or other property? NO

Ages of children: One daughter aged 4, one more due shortly

Life insurance: Mortgage protection, policy that pays 4-6x salary on death, looking at serious illness cover


So we have managed to get the mortgage down from 600k to 490k mostly related to savings and a once off bonus related to a liquidty event. Keeping the payments the same and switching to UB for the best rate has brought the term down. Pension needs attention but for the next 2 years will focus on the mortgage plus my wife will be on maternity for a year (getting paid for 7 months of it) so some of this will have to be covered. 

Prettier picture than the last post appreciate still not to everyones taste in terms on the spending etc!


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## gnf_ireland

First of all, congratulations on the pending arrival. I am sure you are all looking forward to it, and your 4 year old in particular. It will be great for your wife to have a 'little helper' 
Regarding the mortgage, kudos for switching for a better rate. If you done nothing else it will make a big difference in the long term. A 490k mortgage should be perfectly manageable on your salaries. 
I think you need to increase the emergency pot a little bit more, to give you a little bigger buffer. I am not sure how long your wife is planning to spend on maternity leave, but from her point of view I am sure she would look to take some unpaid leave at the end. This may eat into your reserves in the short term, and something to be careful of.
Regarding the PCP - when does the car(s) financing end and are you planning to pay the balloon payment or re-PCP again for a further window?
Pensions as you say are low (in comparison), so think you should consider being creative with your bonus. If I was you, I would pay for a family holiday from it, put 50% of the remainder against the mortgage and the other 50% (net) into the pension fund. This is particularily important if the government reduce the tax inventives for paying into a pension from marginal rate to 20-25%, as muted. You can still pay into the pension fund for 2017 - although not for much longer. The limits for a 38 year old is 20% of your salary.


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## Blackrock1

yes she is she cant wait ! and is old enough to get properly involved.

We actually switched the mortgage twice, initial signed with EBS, got 2%, then moved to BOI another 2% and then to UB to get the cheapest rate on a 5 year fix so that was a useful exercise. 

Emergency pot needs to be more like 40k. Mat leave will be 13 months or so, so 6 months unpaid.

PCP is for another 2 years, will probably do the same again (roll into another) unless things change and we need two cars, in that case i would get out of the PCP arrangement and buy two older cars outright most likely. for as long as we only need one im happy to continue financing in this way.

have prioritised the mortgage over pension for now and probably will for the next couple of years, if i can get to a position where i can see a path to be mortgage free by 50 then ill start to prioritise pension.


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## Blackrock1

I am going to update this annually, to keep me honest if nothing else. Not looking for advice really rather its a useful exercise for me to do every now and again. Main target over the next 5 years is pay down the mortgage, aim to be mortgage free by 45/46 and max pension contributions where possible.

Age: 39
Spouse’s/Partner's age: 39

Annual gross income from employment or profession: total including bonus 375k (large portion is bonus related, has been paid this year and will be paid next year but who knows after that.
Annual gross income of spouse:82,500 (plus bonus 5-7k) - will probably take a long career break later this year.

Monthly take-home pay pre bonuses circa 9k once my wife departs the work force

Monthly expenses: 9k
Mortgage: 2.7k incl protection
Childcare: 450 - monthly allowance for camps, activities etc
Car finance – 750
Family living expenses (i.e. monthly DDs, groceries etc): 2,250
Lifestyle money: 2.8k
Mortgage overpay / savings – 0

Type of employment: *both private sector*

In general are you:
(a) spending more than you earn, or BREAKING EVEN
(b) saving?

*Saving*

Rough estimate of value of home *1.2m (but who knows now!) *
Amount outstanding on your mortgage: *457k – 18 years (have been paying this down)
What interest rate are you paying? 2.5 (UB high value fixed for another 3 years)*

Other borrowings – car loans/personal loans etc *Car PCP 750 per month*

Do you pay off your full credit card balance each month? *YES*

Savings and investments: *Cash on deposit 70k with 30k or so earmarked to pay off mortgage*

Do you have a pension scheme? 93k in a self-managed scheme with Davy and 50k in an irish life scheme through employer. I have been maxing my pension contributions the last few years.

Do you own any investment or other property? NO

Ages of children: One daughter aged almost 6, and one under 2, no more planned.

Life insurance: Mortgage protection, policy that pays 4-6x salary on death and also have income protection cover.


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## JSnowWinterfell

Congratulations! 

Did you change job / promotion for the large increase in salary?


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## Blackrock1

JSnowWinterfell said:


> Congratulations!
> 
> Did you change job / promotion for the large increase in salary?



nope same role, same company, a lot of the increase is bonus / incentive driven. Co is doing well and i have a big team now. I also make sure to bargain hard at pay review time, one thing i have learned is that generally people will pay you as little as they think you will accept.


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## Sarenco

@Blackrock1 

I think if I was in your (very fortunate) position, I would ask my employer to direct all (or substantially all) of the bonus to your pension.  

Bear in mind that your employer's contribution to your pension don't count towards your maximum relieved contributions (assuming your pension isn't a PRSA).

Also, with such a high income, you should definitely set a goal to be mortgage-free by 50 at the very latest.


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## Blackrock1

Sarenco said:


> @Blackrock1
> 
> I think if I was in your (very fortunate) position, I would ask my employer to direct all (or substantially all) of the bonus to your pension.
> 
> Bear in mind that your employer's contribution to your pension don't count towards your maximum relieved contributions (assuming your pension isn't a PRSA).
> 
> Also, with such a high income, you should definitely set a goal to be mortgage-free by 50 at the very latest.




it is a PRSA, im guessing this is something i should look to change?

hoping to clear the mortgage in next 5/6 years so thats the priority for now.


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