castronaught
New Member
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Shouldn't this be higher?Income and expenditure
Annual gross income from employment or profession: 140k + 75k equity
Annual gross income of spouse: 47000 (this is on half time)
Monthly take-home pay: 8400
i would also agree with this sentiment, and its what we did a few years back, thankfully i have been in a position to aggressively pay down our mortgage and decrease the monthly committment aswell but i wouldnt still like to have to pay over 3k a month, decreasing it has given us options around my wife taking some time out to look after the kids etc.Not so much a financial response, just a reflection from my own experience.
You are young, things are going well, it maybe financially challenging but it is not excessive, go for it. You have to believe in yourself and your family's future.
In 10 years time, your age will be against you and the whole primary school stage of your kids life will be gone.
Restricted Stock Units as a part of compensation, they're treated like salary but they "vest" a couple of times a year, rather than being added into your monthly wages. They can be sold immediately and converted to cash, or held onto to sell later. 52% get sold to cover tax obligations.3k a month is a lot. When you say 75k equity in your salary info what do you mean?
Yep you're right, about the 1.2m mark max.Are you looking to buy a house for ~1.1m?
Current house Equity = 460k
New Mortgage = 650k
Total = 1.11m
I agree, it is - just checked and it's 54k. As to your question, possibly both? I figure there's always the possibility of downsizing in the future as our needs change and it's just the two of us at home.However, you only have €50k in your pension, which looks light for your age - it certainly doesn't scream "early retirement".
I guess you have choices to make - what's more important to you, an expensive house or early retirement?
Only started building my pension 7 years ago, I'm contributing 5% which is the max my employer matches. My income is about 4x what it was 5 years ago. Spouse also has a pension fund, we're just not sure how much is in it at present (which we need to run down).- You "only" have €50k in your pension. You are way behind the curve for someone on your income with ambitions for early retirement
- You are 40, so I would assume you purchased your current home in the last 5-10 years. If true, then the market has done the heavy lifting in terms of current value but you have probably contributed ~€150k to that. Again, not bad at all but not great based on your ambitions
- So where has your money been going in the past 10 years considering you are 2 high earners?
The 75k equity is indeed per year - we don't intend to have my spouse return to full-time work though, however it's an option in the event of something going terribly wrong.A few other things to consider:
- A lot hinges on what you mean by the +€75k equity. If that is per year and your spouse intends to return to full time work then a lot of the concerns I have raised start to fall away
- If you buy the €1.2m, whether you like it or not, it will come with a "keeping up with the Joneses" effect. Your lifestyle will match your neighbours probably meaning private schooling, expensive cars and holidays and just a generally more expensive lifestyle
- Fast forward 15 years and you will be facing a €3k+ mortgage, 3rd level on the horizon and trying to heavily fund a pension. It will put a lot of pressure on you to maintain a very high income all the way into your 60's so you can say goodbye to early retirement
- If a 3rd child were to come along and your spouse gave up work completely for a few years, suddenly you become a single income household with 4 dependants.
So before deciding on whether to move or not, I think you need to prioritise the following:
- Family size: will a 3rd child be likely or not
- Do you plan on using fee paying schools?
- Spouse's work: Do they intend to return to full-time, stay part time or even reduce further
- Early retirement: Heavy funding required to achieve this. Are you happy to give this up to provide a better lifestyle for your family now
- Are you comfortable with working in a €200k+ role for the next 25 years?
- Can you afford all of the other "extras" that will come with your new home?
You need to think about materially increasing your contributions if you want to have any realistic chance of retiring early.I'm contributing 5% which is the max my employer matches
Company shares : €51k
75k equity
I strongly disagree.While your pension is very light, given that you will have a very large mortgage, you should focus on getting that down to a more comfortable level before you increase your contributions. However, you can't wait too long as you won't have enough time to make up the "deficit".
This explains a lot. Your pension, savings and equity are more in line with a well paid but lower income. You now want to take advantage of your recent and significant pay increase.My income is about 4x what it was 5 years ago.
So you get €75k a year in shares instead of salary.
How long do you have to hold onto these shares for?
If you are getting €75k a year, it seems odd that you have only €51k at the moment.
Are you cashing them immediately you get them or as soon as they vest?
Restricted Stock Units as a part of compensation, they're treated like salary but they "vest" a couple of times a year, rather than being added into your monthly wages. They can be sold immediately and converted to cash, or held onto to sell later. 52% get sold to cover tax obligations.
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