Investment Advice for 47yo - confused

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edithpiaf

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Made a big career change a few years ago. Living on much reduced monthly income successfully but want to make sure that spare cash/funds are optimised. I have a broker/advisor but I'm not sure how independent they are. I am happy to take control of some of it myself but afraid I will make a mess of it all. I am aware that I have a (very) little knowledge and that can be a dangerous thing so I have been going round in circles trying to make a decision and failing so here I am. All advice very gratefully received.

(Also @Brendan Burgess I am a lurker for probably 20 years now. I paid off 2 mortgages early, had an SSIA and always pay my CC off thanks to you. I wouldn't have been able to make the career change I did without you and I woudn't be spending the summer holidays with the kids now without that. Now if you could just sort out my next twenty years, we'd be laughing!! :) Seriously though, thank you very much)

Personal details

Age: 47
Spouse's age: 50
Partner's age if not married:

Number and age of children: 3 (Ages 6, 10, 11)


Income and expenditure
Annual gross income from employment or profession: €18K from PAYE job, €6K from company director (plus travel expenses)
Annual gross income of spouse/partner: €60K

Monthly take-home pay:

Type of employment Me: part-time casual lecturer and company director
Husband civil service


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

Summary of Assets and Liabilities
Family home value: €300K
Mortgage on family home: 0
Net equity:€300K

Cash: €60K
Defined Contribution pension fund: €350K me (spouse is civil servant)
Company shares : me: own company 100%. plus €3K of 5 companies on Revolut.
Buy to Let Property value: €250K
Buy to let Mortgage: Tracker, maybe €25K left

Total net assets: €938Kish


Family home mortgage information
Lender na/a
Interest rate
Type of interest rate: tracker, variable, fixed.
If fixed, what is the term remaining of the fixed rate?
If tracker, what is the margin e.g. ECB + 1%

Remaining term: (Original term is not relevant)
Monthly repayment:

Other borrowings – car loans/personal loans etc

None

Pension information

Value of pension fund: €350K

Buy to let properties
Value: €250K
Rental income per year: €12K
Rough annual expenses other than mortgage interest : €4000
Lender: PTSB
Interest rate Tracker - very little left on it.
If fixed, what is the term remaining of the fixed rate?

Other savings and investments:
Savings in Aviva Savings plan: €35K plus €420 per month (childrens allowance essentially)

Other information which might be relevant

Life insurance: mortgage protection only.
My limited company is a service business. Has cash reserves of €105K - net cash flows at €3-5K p.m.


1. Aviva Savings Plan. 3 of 5 years done. Performance is middling at best here. Considering stop/reduce monthly contributions to this and start buying monthly Berkshire Hathaway instead. I am trying to get my head around what might be involved in terms of charges and then taxes of monthly direct purchase of shares (would just like S&P500 but can see that is a tax issue).

2. €60K cash - would like to invest this also like 1 above.

3. Existing pension pot from previous employment. Don't really know what to do with this. It hasn't done anything amazing, despite the fact I have been contributing since my 20s. Ambivalent about re-starting contributions due to this.

4. Need life assurance (and possibly critical illness) but how much and what duration?

5. Ltd company (I am sole director) with cash reserves of €105K - not sure what to do with that either.
 
Pensions can be "semi actively" managed.

Eg, Zurich have dozens of funds. Depending on the risk level you like, choose a fund or a group of funds you like.

Fund Price Calculator| Zurich Life

Use the fund price calculator to find bid prices and offer prices of a fund on a specific date. Learn more.
www.zurich.ie www.zurich.ie

You can switch in/out every now and then depending on how you see the market, but as it's a fund it's not as risky as single stocks. No fees for changing within Zurich

Eg I moved from relatively safe prisma 3 to top tech, 5 star USA, dividend growth and Euro stock in early 2023.

I'm reviewing now with the broker and deciding if I want to have less tech exposure (massive growth in past 16 months) and higher European exposure.

So between what risk I want, what knowledge I have and combined with commentary/advice from the broker, I'll make some changes.

But going alone is too risky as I don't have the knowledge.
 
Thank you for your kind words and I am glad that Askaboutmoney is guiding you along over a long period of time.

edithpiaf said:
My limited company is a service business. Has cash reserves of €105K - net cash flows at €3-5K p.m.
Click to expand...

This is the bit which most concerns me. Why did you build up cash reserves in a service company?

It's very tax inefficient.

You should address this first and foremost and get the cash out into your hands. Whatever you do, you will be taxed on it. Whenever you do it you will be taxed on it. So get it out now and face the tax consequences.

If you had a profit subject to Corporation Tax last year, you can take out enough this year to create a loss which can be set against last year's profits and so you will get a refund of the Corporation Tax which you paid unnecessarily.

Brendan
 
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So you have about €140k cash to invest ( €60k + €35k + €50k)

edithpiaf said:
1. Aviva Savings Plan. 3 of 5 years done.
Click to expand...

I don't like the sound of this. It sounds like there are early exit charges if you take this money out. Presumably there are no additional charges for stopping contributions.

You might be better going to a fee only broker to review these issues so that they don't sell you a product which maximises the commission for them.
 
edithpiaf said:
3. Existing pension pot from previous employment. Don't really know what to do with this. It hasn't done anything amazing, despite the fact I have been contributing since my 20s. Ambivalent about re-starting contributions due to this.
Click to expand...

edithpiaf said:
Value of pension fund: €350K
Click to expand...

Can you contribute to a pot from a previous employer? I doubt you can. You could contribute to a standalone pension fund, but as you are not paying tax at 40%, I don't think that you should. It would make more sense for your husband to contribute AVCs and get the full tax deduction.

It is likely that the charges on your pension from a previous employment are quite low. Make sure it's fully invested in equities and then leave it there. Your broker might try to get you to switch to a fund which makes him more commission which you will pay by way of higher charges.

Another thing for an independent fee-based advisor to review for you.

Brendan
 
Thank you for the replies all.

I thought I was receiving independent advice but realise that I need someone to look at the whole thing. I understand that I need to pay for this service but when I google, I'm not sure if those I would pay a fee too are any more independent/trustworthy than my broker (who I'm not dissing really). I've searched here for a list of independent advisor but didn't find one either. I would be very grateful for any recommendations or advice on approx fees to expect.
 
edithpiaf said:
Avivva Savings Plan. 3 of 5 years done.
Click to expand...
I'd say this is an open ended investment plan, but it has early encashment charges in the first 5 years. Plenty of people get it into their heads that means a 5 year term and they should cash it at that point.
 
Interested in terms of best extra pension for civil service partner. Cornmarket or labrokers/zurich PRSA AVC. I have not checked standardlife.ie/vanguard option.
 
Red Baron said:
Interested in terms of best extra pension for civil service partner. Cornmarket or labrokers/zurich PRSA AVC. I have not checked standardlife.ie/vanguard option.
Click to expand...
It's getting my wife to do it, so I can only advise/might not happen soon. We missed year before last years avc deadline.
 
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