Fine-tuning a good position at 30

[Rationaleyes]

Age: 30

Annual gross income from employment or profession: 67000 before bonus or OT (last year earned 78000 with all in and will be similar or more this year)

Monthly take-home pay: 3500

Type of employment: Full time, permanent employee in private sector

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

Rough estimate of value of home: 350000 (valued back in February)

Amount outstanding on your mortgage: 130000

What interest rate are you paying? : 2.1% with Avant 10 year fixed. Switched this year down from 2.85% 35 year mortgage

Other borrowings – car loans/personal loans etc: n/a

Do you pay off your full credit card balance each month? n/a
If not, what is the balance on your credit card?

Savings and investments: ~61000 in current account. 8000 in company shares (RSUs and stock options) vesting soon to exercise before tax. 5000 in company shares locked in APSS for 2 more years.

Do you have a pension scheme? ~55000 in pension in 2 pension funds. Doing 20% and 8% match (company match my base pay before shift allowance so its more like 6% in practice)

Do you own any investment or other property? N/A

Life insurance: N/A


I currently live with my Fiancée and have two of my friends also renting rooms. The two friends pay 550 in rent between them and the 4 of us split all regular bills. Wedding planned for mid to late 2024.

I dont currently drive or own a car but will be purchasing a car within the next year, most likely electric.


Questions

1. How should I be making best use of my accruing post tax money. Since I am maxing out pension contributions and using all the vehicles in work (bonuses into APSS) to minimise my tax on income, I need to really start looking at what to do besides letting the cash build up in a current account. I know of the various things that can be done and some of the details on the strengths and weaknesses. Feeling some paralysis by analysis if I am honest, whether I go into ETFs, investment trusts, shares, overpaying mortgage. At the moment I am mostly leaning towards a mix of some of the trusts and shares (Brk B). The Deemed disposal and 41% does take a lot of the luster away from ETFs, and doing some maths on overpaying the mortgage just seems underwhelming. Really just looking for some direction and insights into how others deal with navigating all the different investment idea.

2. Are there other less obvious investments I am not aware of. Such as, solar panels etc. I have looked a little into solar panels, still not clear if it is truly worth it but I am definitely thinking of it and would love some experiences others have on this. I do have a south facing back garden so might work out. But aside from the solar panels, similar ideas are welcome. House is insulated to the max already. If I am purchasing a car in the next year I am thinking of buying a 3 year old electric car outright. Seems like the best value purchase (I wont be doing much in the of long mileage journeys) if I plan to hold a car for 10+ years.

3. Assuming no mortgage overpayments, would it make sense to pay the mortgage fully off once the 10 year rate expires. It should be less than 70000 at the time, and would be able to pull out cash from other investments to clear at that time.

Thanks in advance!

 

[NoRegretsCoyote]

How should I be making best use of my accruing post tax money.

Marriage and kids will answer that question Seriously though, when that happens you'll need to start seriously thinking about life insurance and health insurance. You're in your 30s now and you probably won't want friends living in your house forever either.

I need to really start looking at what to do besides letting the cash build up in a current account.

There is nothing better you can do than pay off your mortgage. If you got the 2% Avant rate earlier this year they will bite your hand off.

 

[PGF2016]

If I am purchasing a car in the next year I am thinking of buying a 3 year old electric car outright. Seems like the best value purchase (I wont be doing much in the of long mileage journeys) if I plan to hold a car for 10+ years.

If you can do without a car now why buy? Can you avail of car sharing services? Would be a great way to avoid the headaches of car ownership and should be a big money saver in the long run.

 

[interested21]

You've amassed a considerable amount of equity, pension and cash by 30 on ~80k a year. Congrats! You must be living like a monk. Have you considered spending some of your money?

 

[Blackrock1]

Marriage and kids will answer that question Seriously though, when that happens you'll need to start seriously thinking about life insurance and health insurance. You're in your 30s now and you probably won't want friends living in your house forever either.


There is nothing better you can do than pay off your mortgage. If you got the 2% Avant rate earlier this year they will bite your hand off.

i was going to say, you will have a wedding to pay for and if you choose to have kids your income will soon be swallowed up so i wouldnt worry too much, you are doing well!

 

[Rationaleyes]

Thanks for the replies!

Marriage and kids will answer that question Seriously though, when that happens you'll need to start seriously thinking about life insurance and health insurance. You're in your 30s now and you probably won't want friends living in your house forever either.


There is nothing better you can do than pay off your mortgage. If you got the 2% Avant rate earlier this year they will bite your hand off.

There wont be any kids so takes a big item off the list of considerations! I have health insurance through work, pretty good one, and also some form of life insurance through the pension at work. I think its like 6x yearly wage to a spouse. I'm sure they wont be here forever but another year or two isnt too unlikely. I did get the 2.1% 10 year fixed a couple of months before the rates went up, certainly looked like writing was on the wall for the bottom of the rates so jumped on it. So you would be suggesting every euro I am looking to invest fully into overpaying the mortgage (to the max allowed I think 10% of principal a year)? And if I hit the max allowed after that would you have any suggestions for money I wont have spent?

If you can do without a car now why buy? Can you avail of car sharing services? Would be a great way to avoid the headaches of car ownership and should be a big money saver in the long run.

It is just becoming burdensome to not have a car now. We rely on others for some necessary car journeys, and though I can make it work without one getting to work is brutal if I dont have a carpool option which may become less and less as time goes on. I work 12 hour shifts so adding an hour each way to commute (and thats if everything goes well on public transport) is just not appealing to me anymore to save money.

You've amassed a considerable amount of equity, pension and cash by 30 on ~80k a year. Congrats! You must be living like a monk. Have you considered spending some of your money?

For sure I am in a very fortunate position. As for the equity I did, unfortunately, inherit a third of the property a couple of years back. To be honest I know in some ways I need to make myself spend money, but I am just not a very material person. The house is nice and modern, I have my own built PC which cost a fair bit, a home theater with surround sound, a proper kitted out gym in my garage I built during covid, and a ludicrously costly Maine Coon cat, among others things I have to be grateful for. I just dont feel spending heavily more on things would noticeably increase my happiness. The only thing I could think of is taking more (and more extravagant) holidays and having more time off in general. For the holidays I usually already go away twice a year though keep it sensible mostly. Other than that I spent time with friends and we usually stay in playing games on gatherings, though have started to venture out a bit more recently. I cook a lot in bulk, and enjoy cooking. Just dont see many places where I would be much happier having spent more money. But it is something I work on to pull the trigger on buying something a bit nicer or more expensive when I need to.

 

[interested21]

Fair play, it sounds like you're very happy living well within your means!

Do you have a financial goal? You don't mention any in your post. I think this is partly where your "paralysis by analysis" is coming from - you don't know what path to take because you don't know where you're going. You already have many big-ticket items covered now that you've have a great house and no children in your future. You have a car-purchase and wedding ahead of you which will eat up a lot of your cash, but you will build that back up. What else do you want to achieve? Travel the world? Start your own business? FIRE? If you pick a financial goal then the next steps may become more clear.

 

[OEP1990]

Buy the car if it will make your life easier. It's nice to be able to take trips around Ireland whenever and wherever you want - you have the money to do it. Share it with your fiancee if that's a runner. They are a money pit though, but in Ireland they add a lot of flexibility to life imo.

 

[Rationaleyes]

What else do you want to achieve? Travel the world? Start your own business? FIRE? If you pick a financial goal then the next steps may become more clear.

Ya I have definitely looked into FIRE before. Who knows of I'd actually retire early but the option being there would give a lot of freedom. It's just the choices to make as far as where the excess money goes in the meantime.

Share it with your fiancee if that's a runner. They are a money pit though

Haha I know you meant the car with the second sentence but it gave me a nice chuckle how it can be read! Ya I definitely help her out and make her costs a lot more manageable but could and should do more.

 

[Axlmac2]

Great position

In your shoes, short term, I would ...

1. Treat yourself to a nice car - you've earned it
2. Treat yourself to a nice wedding and honeymoon - again, you've earned it

That may take your existing savings.

From there any future savings I would focus on:

1. Making memories - to your point on holidays
2. Paying down the mortgage - mindful that's my more risk averse perspective
3. Start considering what you would do with your life if you didn't have to work? If the answer is "still work in some shape or form for an employer" that's fine. But it may give you wider perspective and at least start informing your financial goals.

 

[OEP1990]

Haha I know you meant the car with the second sentence but it gave me a nice chuckle how it can be read! Ya I definitely help her out and make her costs a lot more manageable but could and should do more.

I also meant sharing the car with her, as in you both pay for it! Not give her money, which is your own prerogative

 

[Clamball]

You are doing great, but it does sound bittersweet that you are in this position due to a bereavement, so sorry for you loss.

Put aside some money for the car, & wedding. The solar p/v seems a good idea too, but if you are all out of the house every day maybe not so much. But being on shift you may be off shift during the week and use more electricity during daylight hours so get more use from the p/v electricity. I am not sure the solar panels will be an investment though, they are expensive but so is electricity.

Then continue to plan to pay off mortgage and max pension.

Any left over why not invest is something higher risk than you are comfortable with? Gambling on good gains, but willing to loose it if the investment tanks. All the other things you are doing are the most optimal use of your money currently.

 

[_OkGo_]

As an individual you are in a great position financially at 30 so well done!

However you are about to get married so you should really treat your finances as one and include your spouse's details of income and savings to get better feedback and opinions.

Feeling some paralysis by analysis if I am honest, whether I go into ETFs, investment trusts, shares, overpaying mortgage

I don't think you need to be worrying about this. You have a few big expenditure items in the next 12-24 months so keep life simple and pay for the wedding and car and then reevaluate your situation.

The biggest change to your finances will be when your friends move out. You should discuss this with your fiancee and set a date so there are no surprises. You probably won't want them their after you get married so it will be a drop of €13k of net income plus a doubling of all bills.

There wont be any kids so takes a big item off the list of considerations!

Another one to discuss with your fiancee again. I've had friends who were adamant (in their 20's) that they wouldn't have kids and now they have kids (mid 30's). It's not to say you should or shouldn't have them but there is always the possibility and minds can change especially when you see your own friends starting families.

 

[Rationaleyes]

Thanks all! Will keep it all in mind