Money Makeover- Investment Options/Plan

Personal details

Age: 52
Spouse's age: 56
Number and age of children: 16, 19, 22 (all at home )

Income and expenditure
Annual gross income from employment or profession: 70K (State job)
Annual gross income of spouse/partner: 50k (private sector)
Rental Income: 16k

Monthly take-home pay: Combined @ 6,000 monthly
Type of employment - e.g. Employee or self-employed. : Both PAYE

In general are you:
(b) saving? 1k p.m.

Summary of Assets and Liabilities
Family home value: 450K
Mortgage on family home: 0
Rented Property value; 240k
Mortgage on this: 0

Cash:
100K on deposit (don't shout!)
54K Irish Life Plan , 72k Zurich savings plan (pay €500 monthly to this)
10k Credit union

Shares :
50K - in a couple of specific shares via Revolut

Other borrowings – car loans/personal loans etc : 0

Do you pay off your full credit card balance each month? Yes

Pension information
Value of pension fund: Not sure of spouses figures , is putting max in but started late
me - Government Pension - will have 38 years @ age 60 so may consider retirement.

What specific question do you have or what issues are of concern to you?
I know we need to invest the cash we have available and considering Zurich Prisma, Irish Life MAPS, was looking at S&P500 ...but seems way too complicated with the tax scenario. Head wrecked looking at options so so would really appreciate any feedback / thoughts?

frunzy said:

Shares :
50K - in a couple of specific shares via Revolut

Click to expand...

Why not buy some more shares directly?

RE: the s&p :

Disclaimer: I'm an idiot who has no financial qualification. The comments below are I just what I do.

You could hire an accountant eight years from now, hand over the pile of investment receipts and ask them to handle the deemed disposal. Or opt to sell everything, settle up the tax and reinvest. The broker will generally list your p/l when you sell and you just pay the gov 41% of the gain. It's not "efficent" but it's better than losing money through inflation by inaction.

There's also the admittedly small hope that deemed dispoals might be scrapped within the next eight years.

The S&P is carried by a tiny number of tech companies. For a single fund, I would consider either the FTSE All World Index or the FTSE Developed Index, the difference being the All World has around 10% emerging markets exposure (but costs slightly more) while the FTSE Developed does not. There is also the MSCI World which despite its name has only Developed countries but less of them compared to the FTSE Developed so it's more concentrated.

This is the return of the Irish Life Map 5 fund mentioned in the OP which is listed as being medium to high risk. I picked it as it has around 14% emerging market exposure similar to the FTSE All World index :-

And these are before you pay their fees :-



This the FTSE Developed via a Vanguard ETF you can buy for no commission and costs just 0.15% per year :-





This is the Vanguard FTSE All World ETF which costs 0.22% mostly for access to the emerging markets:-

theObserver said:

You could hire an accountant eight years from now, hand over the pile of investment receipts and ask them to handle the deemed disposal. Or opt to sell everything, settle up the tax and reinvest. The broker will generally list your p/l when you sell and you just pay the gov 41% of the gain. It's not "efficent" but it's better than losing money through inflation by inaction.

Click to expand...

I don't understand.

If you buy a fund through a company like Irish Life or Standard Life, they will do the deemed disposal for you and adjust your investment accordingly. You don't do anything.

If you buy shares directly, there is no deemed disposal, so you don't need to do anything unless you sell.

Brendan

The funds on offer are all underperforming the passive indexes even before fees.

theObserver said:

This is the return of the Irish Life Map 5 fund mentioned in the OP which is listed as being medium to high risk. I picked it as it has around 14% emerging market exposure similar to the FTSE All World index :-

And these are before you pay their fees :-

Click to expand...

The fact sheet that you lifted the performance from specifically states that the figures include an AMC of 0.90%. We also know that Other Ongoing Costs/ CIVs and Portfolio Transaction Costs are include in the the performance figures because all providers have to do that (except, it seems, in the links you provided as PTCs aren't included).

To make your point, you're comparing a fund that has (as at 30th June) 81.7% in equities with funds that have 100% in equities.

If you do an underperformance comparison, it should be done on a like-for-like basis. Or as close as possible. Otherwise it's just very misleading.