32, need advice on how to maximize wealth

M

matrixworld

Registered User
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17
Age: 32
Spouse’s/Partner's age: n/a

Annual gross income from employment or profession: 84k

Monthly take-home pay: 4k after ESPP contribution

Type of employment: e.g. Civil Servant, self-employed: Private

In general are you:
saving: Save roughly 1.6k per month

Rough estimate of value of home: 340k

Amount outstanding on your mortgage: 140k

What interest rate are you paying: 2.1%

Other borrowings – car loans/personal loans etc: No

Do you pay off your full credit card balance each month? No credit cards

Savings and investments: 20k in stocks, 10k crypto, 5k commodities, 2k cash

Do you have a pension scheme: Yes, Zurich, 50k so far

Do you own any investment or other property?
No but this ties into my question, not sure wheter to invest in Ireland or abroad

Ages of children: 3

Life insurance: Mortgage protection

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

Recently purchased a house and am looking to maximize my ability/chances of getting somewhat wealthy. I have the 2 other beds rooms rented out for 14k per year and am saving nearly 2k per month. Here is my plan, any feedback is welcome.

* Build up emergency fund of 5k by March 2023 (low on cash after house purchase)
* Pay off mortgage by Jan 2027 (savings from salary and income from rent a room)

Once the above is complete i intend to aggressively save for the next investment, i realize i do not make a lot of money and my field/role is quite stressful and the ceiling on my salary potential is probably 120k without selling my soul. I also have a 3 year old son who i am investing 200e per month into Degiro.

My question is, for the next investment, should it be a property in Ireland or abroad? I fear Ireland may be going downhill and leftist policies may hamper investments. Despite Spain following similar policies, it seems like it could be more attractive investment wise. Perhaps buy a apartment/house and rent it out short term lets?

Honestly have no idea what i'm talking about but the thought has been there for a few weeks so just throwing it out there as i want to set myself up for my 40s as i think my hunger might wane in my career (it's a young mans game) and i don't fancy selling my soul climbing the ladder too far (i am a principal in my line of work but don't fancy director/executive route).

Apologies in advance for the stream of conciseness above, any advice is appreciated.
 
matrixworld said:
I have the 2 other beds rooms rented out for 14k per year and am saving nearly 2k per month.
Click to expand...
I presume that that's €14k in total for the two rooms in order to avail of the rent a room scheme?
matrixworld said:
Here is my plan, any feedback is welcome.

* Build up emergency fund of 5k by March 2023 (low on cash after house purchase)
Click to expand...
You already have an emergency fund.
matrixworld said:
Savings and investments: 20k in stocks, 10k crypto, 5k commodities, 2k cash
Click to expand...

matrixworld said:
My question is, for the next investment, should it be a property in Ireland or abroad?
Click to expand...
I would say probably neither.
You already have a big investment in property in the form of your house.
You need to diversify.
And being a landlord is not easy - just read some of the many threads about it here.
I also wouldn't hold shares in my employer unless there are compelling reasons to - otherwise you're putting too many eggs in one basket (your salary and some of your investments).
I would also question the prudence of gambling on crypto in your situation.
 

I would say a salary of 84k at 32 is very excellent money - a top salary of 120k at current prices the same.
I would be adding more to your pension before any more property investment
 
If you want to maximise your wealth, then press the pause button and learn about investing and how to construct a portfolio.

For instance, you don't invest in crypto, you speculate in a high risk currency. And while it is a good idea to have a small amount of commodities in a very large portfolio it is in appropriate in such a small portfolio as it is a high risk asset class. You don't tell us about you equities, but it would not surprise me to find that they are also high risk.

And then there is property, another high risk asset class and one in which you compound the risk by borrowing to invest and failing to diversify. And your next step is to add more risk and compound it by doing in a market in which you have very little knowledge.

In short you have a high risk portfolio which might to very well, but which could also wipe you out. The key to accumulating wealth is slow plod in which you make sure you don't loose the wealth you are in the process of accumulating and you do that by understand about investing and building a low risk portfolio.
 
matrixworld said:
Here is my plan, any feedback is welcome.

* Build up emergency fund of 5k by March 2023 (low on cash after house purchase)
* Pay off mortgage by Jan 2027 (savings from salary and income from rent a room)
Click to expand...

Why the rush to pay off the mortgage? It's quite a comfortable level relative to your income and the interest rate is extremely low. You'd be giving up some of the cheapest money you'll ever get at 2.1%.
 
Max out avc, and share scheme, increase your monthly mortgage top up / additional contribution if that’s allowed and then go off and explore life a bit more before your savings.
 
You need to take a strategic view of where you are going and then adapt the tactics to match.

matrixworld said:
i think my hunger might wane in my career (it's a young mans game) and i don't fancy selling my soul climbing the ladder too far (i am a principal in my line of work but don't fancy director/executive route).
Click to expand...

This is the key issue for you to work on. The finances follow this.

Are you in the right job? You enjoy it now but will you after 10 years? If you are not in the right career, then maybe you should change it now. It's easier to change career at 32 than at 52.

I get the impression that you want to maximise your wealth, so that you can quit your job. That is not the right approach. You are well off. You have a house. You can change job now and live on a much lower salary.

Alternatively, if you are enjoying your job, and will do so for ten years, then your objective, as Jim said, should be to preserve your wealth and not risk it all by trying to maximise it.

Get rid of the gambling stocks. Close your kid's account. Pay down the mortgage or maximise your pension with the proceeds.

Brendan
 
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