Pre-Children Tune Up

Gordon Gekko said:
In the US, “tune up” means to beat someone up…seems extreme.

You’ve a great platform to build wealth over the coming years, congrats.

I would echo what others have said. I’d explore the possibility of a DC pension scheme so their 10% could be added to your 20%. I’d look at pension funding for your wife. You can clip away at your mortgage quite a bit as you go along, thus buying yourselves flexibility.

Don’t forget to enjoy life though too. Generic financial advice tends not to be fit for purpose for higher earners.
Click to expand...
Ha, was thinking more like a tune up of the car! Appreciate the sentiments.
Sarenco said:
I would echo the various points made by others.

One small point in relation to your pension fund -

US equities already make up 68% of the MSCI World index so you have an overall allocation of around 84% to US equities. That may be deliberate but it is a significant overweight to US equities relative to market cap.

If it was me, I would invest the lot in a fund that tracks a global index for the time being.

Also, I believe Standard Life offer a PRSA with an AMC of 0.65% for transfers over €100k. That's not relevant at the moment but it's something to bear in mind in the future.
Click to expand...
Those are really good pointers, thank you. I think we made a particular point to go over exposed to North America, as that's where the outsized returns are - The Irish Life fund for NA has returned 35% over the past 12 months vs 27% for the global index, and I believe that the performance delta was similar when we "set and forget" it. That being said, I'm sure we keep a good thread going in the investments forum for quite a while on the correct strategy here, and perhaps you're right to look again and move stuff around.
michaelm said:
They do read a bit like that alright, not intended to be. But a rational behind them. Trying to tiptoe in what could be a minefield.
Click to expand...
Thank you, and to others who have commented on the whole childcare thing - it is a valid question worth exploring and I'm sure we'll have to make some decisions here.
Gordon Gekko said:
It might make financial sense for a spouse to give up work, but what about that individual’s sense of fulfilment and career ambitions? There are lots of careers which are remunerative but contribute very little to society and there are lots of careers that are poorly paid but hugely important.
Click to expand...
huskerdu said:
Maybe , the OPs wife would like to make a decision on whether she wants to work full time, part time or take a career break herself and maybe, its got nothing to do with any of you.
Click to expand...
On all of these points, there's a lot to unpick yes that's non-financial as well as financial. Of course the advice has been solicited and is welcome in all cases, and ultimately we'll make a decision that's right for us in that sphere. But I do appreciate all the points of view offered on it.

Same for the sentiment about planning the timing of this - as I said, if we are lucky enough for it to go smooth as clockwork, perhaps it won't be.
 
jujubes said:
I think we made a particular point to go over exposed to North America, as that's where the outsized returns are
Click to expand...
Well, that's where the outsized returns have been over the last decade but there's no particular reason to believe that will continue indefinitely.

The US actually underperformed the rest of the world during the first decade of this century.
 
jujubes said:
On all of these points, there's a lot to unpick yes that's non-financial as well as financial. Of course the advice has been solicited and is welcome in all cases, and ultimately we'll make a decision that's right for us in that sphere. But I do appreciate all the points of view offered on it.

Same for the sentiment about planning the timing of this - as I said, if we are lucky enough for it to go smooth as clockwork, perhaps it won't be.
Click to expand...
Don't underestimate the stress having children can put on you both and on your relationship with each other. The decision about both parents working or one working part time or one staying at home fulltime should be informed primarily by what arrangement produced the least stress on the parents as if you're no good to yourself you'll certainly be no good to your children.

Time will become a much more important commodity.

On the financial side you are doing really well. Well done. Spend your money to create quality time and good memories rather than on 'stuff'.
 
Sarenco said:
Well, that's where the outsized returns have been over the last decade but there's no particular reason to believe that will continue indefinitely.

The US actually underperformed the rest of the world during the first decade of this century.
Click to expand...
That's very sound advice, thank you.
Purple said:
Don't underestimate the stress having children can put on you both and on your relationship with each other. The decision about both parents working or one working part time or one staying at home fulltime should be informed primarily by what arrangement produced the least stress on the parents as if you're no good to yourself you'll certainly be no good to your children.

Time will become a much more important commodity.

On the financial side you are doing really well. Well done. Spend your money to create quality time and good memories rather than on 'stuff'.
Click to expand...
Very wise and much appreciated.
 
Wow! That's a fantastic salary! (well done you) I am dying to know your occupation :);)
That's a great position to be in. Great to be able to still enjoy life whilst still saving. So important.
 
Peanuts20 said:
For someone with that level of salary, you don't have a lot put aside. Given the value of the house, I'd have to question what else it is you have to do to it that requires you to put more money into it. Once the smallies start to arrive and start moving around, the nice clean house goes out the window.

Make sure you have your life assurance and will sorted out. Also worth doing a review of medical and other expenses to see if you can get a tax rebate and check your health insurance for maternity and other cover.

Big issue coming down the line is the kids. 3 in 5 years means your wife will be on unpaid maternity leave for around 18 months (at least) so that is almost €100k before tax in income gone (offset slightly by state benefit and child allowance). During the course of that period your fixed term mortgage will be up and you will have to get a new rate. When you are talking to a pension advisor, you will need to consider the tax position of your wife when she pays into a private pension with no income coming in and you may also need to consider how or if you can take advantage of her tax credits during this period

The big cost you have coming is child minding. Do you have a family infrastructure in place to support you during this period? (ie Granny for minding kids). If not, you are looking at least at €75k-€100k and probably more in creche and child minding fees alone up until the end of the decade. Do you need to go down the au pair route? You are also potentially looking at a car change in the period as well,.
Click to expand...
Given what 1.1m now buys in parts of the country the house could needs 100s of thousands spent on it, also i disagree that kids mean that your nice clean house goes out the window.

I do agree with the general advice that your outlook, and your plans may well change when kids come along. its one thing to theorise what you might do and look at the financial impact but its quite something else when they are actually there and you realise what it all entails.

We were in a similar position financially, albeit my wife earned a bit more, when the chance came to take redundancy she took it and will take at least 3 or 4 years out and see how we go, it has improved our quality of life a lot, but she wanted to do it, its not for everyone.

Also, having kids in your mid 30s isnt always straightfoward so maybe consider how you are covered for fertility treatments if required.
 
Annual income €303,000.00 and a home worth €1.100,000.00 along with investments and the OP is asking us mere mortals with incomes of <€50,000.00 and mortgaged homes valued @ <€300,000.00 to give him financial advice. We've spent more time keeping the wolf from the door and trying to keep food on the table from meal to meal but perhaps some of us can actually give some advice?

But, I won't leave him go away emptyhanded. Beware of the two words "Hey Dad!" and of course the old chestnut "Some day dad I'll pay it all back." Get over those two statements and count your lucky stars.
 
Leper said:
Annual income €303,000.00 and a home worth €1.100,000.00 along with investments and the OP is asking us mere mortals with incomes of <€50,000.00 and mortgaged homes valued @ <€300,000.00 to give him financial advice. We've spent more time keeping the wolf from the door and trying to keep food on the table from meal to meal but perhaps some of us can actually give some advice?
Click to expand...
Speak for yourself, pal.
 
Purple said:
No we’re not. There are enough resources on the planet to support a population of over 10 billion if we choose not to waste those resources.
Click to expand...
With no other species left and the biosphere destroyed; but that's ok because we're special and have the right to choose
 
ATC110 said:
With no other species left and the biosphere destroyed; but that's ok because we're special and have the right to choose
Click to expand...
Well this has gone off topic, even by my standards. I’ll not continue down that rabbit hole.
 
You must log in or register to reply here.
Back
Top