Surplus cash - where to invest??

R

RainyDay

Registered User
Messages
4,505
I'd recommend that you forget about property for the time being and start a pension straight away.
 
Why not buy a second property and make that your pension when you retire just sell it,
 
Hi

Myself and my partner have a monthly cash surplus of approx €2,500 along with 40,000 savings and 170,00 equity in our house.

Neither of us have a pension in work.

At the moment our cash is just sitting in the bank at the end of the month (recently had a call from aib asking if i wanted them to invest it for us!!!).

Can anyone offer advice on where to invest? Is it a good idea to buy an apartment in dublin before the SSIA's mature?

Is there any way we could benefit from section 23's or 50's?

We anticipate that even after having kids we can maintain this level of saving/investment.

Genuine suggestions would be gratefully appreciated.

Thanks
 
oulu, your post worries me.......how many here are pitching their future in bricks and mortar exclusively?........whilst we are in a bubble or damn near one.......pension is a must.........tax deferred growth etc etc
 
Hi


Thanks for the reply.

Why forget about property? Is it not a safer bet than a pension invested in shares?

Can you use a property as a pension i.e getting tax relief on the mortgage payments?
Agai, would anyone recommend section 50's or 23's? are there any benefits of these as a second property?
 
am not saying forget about property but whatever you do..........do not forget about pension.......made up of shares property if you like.......but do not pin your pension on one asset class and most certainly do not pin it on one property.........it is way to risky to do so.

Sec 23 or 50.........side issue (unless you want to live in sec23 and get owneroccuppier relief?)..........do you have rental income?
If not avoid as tax relief is built into price invariably.
 
Thanks for the advice,


How would the following route sound?

pay 40k off existing mortgage.
increase mortgage payments by 500pm (reducing term), put 1000 pm into shares and 1000pm into a pension.

My only concern is that now i have the deposit, if i dont buy an apt am i going to miss out on possible SSIA price boost?

Can anyone recommend a financial adviser who isn't going to charge an arm or leg and who isn't tied to a particular product?
 
If there are plans for, or expectations of, an "SSIA price boost" in property-values then its a case of:- "Be Afraid! Be very afraid!"
 
MHSpurs. I would take a look at unit trusts and specialist capital secure bonds and funds for a start. Have a look at somewhere like Davy stock brokers - www.DAVY.ie . They have a number of their own funds that look good for investing lump sums and there are a myriad of funds quoted on the ISE. Also have you considered shares? I would put a few K into the top performing shares like AIB for example, they have performed very well this past year or two. Pensions are underperforming in recent years and I have little faith in them and although I do have one (mandatoryily through my work) I would much rather take my cash every month and invest it myself. But certainly do your research on pensions and make up your own mind.

Personally I am a major fan of property, yes even in this climate. I don't believe we have reached the pinacle yet because I look weekly at the market and houses are still flying off the shelves and prices are still rising in certain areas. And one major factor is that thousands of prospective first time buyers and investers alike are going to flood the market in the next two years with their SSIA deposits therefore driving prices up again. I would also look as a matter of priority at property in emerging markets as a fairly safe bet. You could take that 40 K and straight away buy an apartment in Bulgaria and sit back and watch your capital grow, even if you never rented it out. But you could have a nice holiday home in the mean time..
 
Lilia
One does not have to buy off the shelf pension product from life companies........instead can do self directed or administered pensions in which you decide buy and sells etc. Why would you avoid pension with the tax breaks conferred..........for every 100 euro you put in it costs you a lot less due to tax relief?
I am a major property fan also but the pension tax break is too good to miss imho and you can stick proerty into it also and get rent etc tax free/deferred.
 
markowitzman said:
Lilia
One does not have to buy off the shelf pension product from life companies........instead can do self directed or administered pensions in which you decide buy and sells etc. Why would you avoid pension with the tax breaks conferred..........for every 100 euro you put in it costs you a lot less due to tax relief?
I am a major property fan also but the pension tax break is too good to miss imho and you can stick proerty into it also and get rent etc tax free/deferred.
Click to expand...

Fair comment. I guess what I really mean is that I would rather take the money that my company insists I pay each month and invest it more wisely. I know there are tax breaks and that they contribute a % to it but there are far better ways of investing that x amount per month in my opinion. I personally have no choice about the pension I contribute to, it's a pre-defined pension scheme that all the employees contribute too and going by the projections, it doesn't seem like the best use of my money. Your way of course is much better than what I am locked into.
 
You lucky devil!.........defined benefit pension scheme or have I misunderstood you??
If it is a defined benefit scheme you are in, I would gladly swop my defined contribution scheme.
 
In my opinion, you must invest in a pension. I presume that you are a top rate tax payer, in which case your pension investment will almost double straight away. ie you invest 5000 in a pension, you essentially get a refund of tax of 2500, hence you have an investment worth 5000 which cost you 2500. It would take an extremely bad fund manager to make a balls of this for you!! Additionally why not get exposure to the property market through a fund of some sort if you want this type of exposure.
In your situation seeing a professional financial adviser is a must, considering the amount of money at stake, a fee of several hundred euro is not exorbitant, unfortunately, I cannot help you, but would be interested to know of any if anyone has any suggestions.
 
defined benefit........usually state pension eg teachers and other civil servants...final pension payment already defined irrespectiveof market movements etc
Defined contribution.........all you know is how much you have put in........how much you get at retirement depends on market,fund manager, pension policy of government etc etc
Very much agree on advice of glenbhoy.........who to get as financial advisor?........don't know but there is quite a lot of regional variation in prices......Dublin by far highest .........for similar advice???.........for what it is worth mine ex boi asset management
 
Good Morning,
I'm new to all this. First time to visit this site. I'm reading the threads and am wondering what the term 'tax deferred growth' is about in relation to pensions.
 
Hi Enquirer, 'Tax deferred growth' means that the assets within a pension fund grow gross - ie, no tax deducted on the assets or any growth (capital appreciation) in the fund until you start to take out the assets - on retirement.
Any assets then released are considered 'income' by the Revenue and taxed in the normal way. HOwever, usually you can take a lump sum tax free from the fund up to 1.5 times final year remuneration, and as a married couple you have €30k a year tax free allowance before you begin to pay income tax.

Essentially all assets into pension fund go in tax free, grow tax free over time, and only face tax charge on retirement. Hope this helps.
 
Hi Kirvos, Thanks for your reply. This is something I had never heard of before and is very worthwhile considering when deciding what way to go as regards AVC's. No more questions for now. Enquirer
 
You must log in or register to reply here.
Back
Top