Returning from the Middle East

Clueless Clive

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Hello All,

I hope you are well. Myself and my wife are 34 and are returning from a few years in Bahrain, where we have put our heads down and saved hard.

We are returning to rural Donegal, where the prospect of decent jobs is very minimal, it will really be earning enough to keep us in food. With this in mind, we are hoping you could help advise us on what to do with our savings?

Currently we have around 400,000 euro in cash in various accounts. We have paid off our house in Donegal (circa 125k). What we were thinking is:

Put 200,000 into 2x Buy to Let properties (100k each). 150K purchase price each roughly, means that we are putting a 66% deposit on each, with rent making up the mortgage. We are then thinking of putting 150k into a long term ETF (20 years) for our kids college requirements.

That leaves us with 50k, to buy new cars and as a buffer to reintegrate with for up to a year.

Would anyone suggest to diversify in a different way?

Thank you in advance,

Clive.
 
So you want to borrow €100k to buy an ETF ?

Doesn't make any sense. The cost of borrowing will be expensive and the return on the ETF, uncertain and taxable.

If you want to buy property, buy them for cash.

Avoid borrowings.

You must have some decent skills. Do you really want to work below your skill level because you want to live in Donegal?

I would think that you should live where you can get well paid work and retire to Donegal when you are better off.

Brendan
 
Ohhh i get you. I think 400k and a cleared house is a reasonable amount to return to Donegal. Family are getting older and a great place to bring up children.

Just wondering the best way to diversify current holdings to do so.

I'm in the tech sector, so (probably) will get decent paid work now with corona promoting home working, but even if i don't would like to understand a little better what to do.
 
No, he should not be borrowing to invest, when he does not need to.

Most people don't see the problem of borrowing to invest in property.

But most of them do see the problem of borrowing to invest in equities.

So I was showing him that he was borrowing to invest in equities.

Brendan
 
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Thank you for your advice so far Brendan. I never thought about it like that.

with respect to Donegal - that’s fixed, money is not as important as family/ living where you want to live etc. I want my children to be Donegal. I’m naturally a pessimist so I’m assuming I won’t get decent salary but working for a Dublin company remotely I probably would. Better again if wife worked too.

to rephrase the question- what would you do with 400k assuming you didn’t need it for 20 years
 
If I were you I’d sit tight, for six months anyway.
IMHO there’s more uncertainty in the world now than there was in the aftermath of 9/11.

The seriousness of the triple whammy of Trump, COVID-19 and Brexit cannot be understated.
This time last year Brexit was a big deal. Now it’s third in the pecking order.

At the moment it’s looking like a hard Brexit again. There’s plenty of threads elsewhere on this site about how that’ll impact the EU, Ireland and Ulster. Lots of uncertainty.

It’s mid-September and in terms of COVID-19, things are very similar to where we were in mid-March (except the schools though not uni’s are open). Despite six months of worldwide experience, little has changed.
A vaccine is six 6-9 months away. Just like it was in March.
Lockdown worked when we were in lockdown, but not post-lockdown.
In NZ, “Zero Covid” worked for 100 days, and suddenly it didn’t.
In Sweden, they have taken the long game approach...
Lots of uncertainty.

If Trump wins the election, things may be OK on that front. But unless Biden has an overwhelming win, things may get messy.
Trump says he won’t be leaving office. By this he means he’ll win. But he’s also stated he doesn’t trust the postal ballot. Everybody in the US has the option of postal ballot, and because of the pandemic, many will choose it over the peann luaithe.
Who will win?
Who will be president?
Who will decide?
The voters? The Supreme Court? The militias? The army?
Lots of uncertainty.
 
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