# Savings Only - What next?



## civic (26 Nov 2007)

Age: 32
Spouse’s/Partner's age: 32

Annual gross income from employment or profession: Self Employed Contractor income 75k (45k Salary to self, 22.5k expenses, 7.5k stays in company)
Annual gross income spouse:65k - Radiographer

Expenditure pattern: In general are you spending more than you earn or are you saving? Savers - but not maxing the savings..

Rough estimate of value of home - N/A - Sold last december in Dublin to move down the country - Rent 800pm
Mortgage on home N/A
Mortgage provider: N/A
Type of mortgage: Tracker, interest only, fixed rate N/A
Interest rate N/A

Other borrowings – car loans/personal loans etc N/A

Do you pay off your full credit card balance each month? Yes, 1 card between us.
If not, what is the balance on your credit card? N/A

Savings and investments:
Northern Rock - €5k
Halifax Current account - 260k - Just pulled it out of Northern Rock earlier this week due to fears of not having access to it
Shares 3k - intel/vodafone
Shares 15k tied into company scheme for 2.5 more years to avoid tax
An Post Installment Savings - €500

Do you have a pension scheme? From previous employment ~20k
Spouse just started paying into company pension

Do you own any investment or other property? No

Ages of children: 
1 Due in March
Life insurance: 
No
Vivas only

*What specific question do you have or what issues are of concern to you? *
Having pulled the 250k from NR, I'd like to set myself up for the long term future but without a home yet I'm unsure what to do in the short term either. I'm thinking of only using 150k to buy a house of 350-400k but media has halted me buying. Then invest the rest but am not sure where. Contract job is only safe for ~9more months..


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## Brendan Burgess (26 Nov 2007)

The first financial priority is to buy your own home as long as you are fairly happy that you will be there for the next 5 years or so. House prices are impossible to predict. They may fall further. They may start to rise. You are one of the few people to be cash rich at the moment which makes you a very attractive buyer of houses. You won't have much competition, so if you know where you want to live, you may well pick up a bargain. 

If your employment situation means that you don't know where you will be living, then renting is fine. Your best long term investment is the stockmarket. There are a lot of sellers out there, which suggests that it is a good time to buy. You are not particularly loss averse. If the stockmarkets fall another 20% in the short term, you won't like it, but you can handle it. 

I would suggest that you invest in an equity fund with no entry or exit costs such as Quinn Life. Then if a house bargain appears suddenly, you can cash part or all of the investment. 

You should both be maxing your contributions to your pension funds of course. 

Why are you leaving €7.5k in the company? It's more tax efficient to pay it all out as salary. This is discussed elsewhere. 

Brendan


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## civic (27 Nov 2007)

Thanks for the advice... Is there a recommended spread for an investment portfolio - x% in Irish stock, x% in commodities, x% in savings, x% in US stock, X% in China stock?? and what would be the best way to administer this. I'm almost in the mode of save as much as I can for the next 2 years and then buy a house rather than buy and have a mortgage. - the thought being I don't see property going up for a few years and possibly going down by 10k per year for 2-3 years minimum.. 7.5k staying in company as an allowance for pension - should contract get renewed / tide company over should I be out of work for a while.. Paying as salary hits high rate of tax and putting it into pension immediately ties it up.


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