Thoughts and Opinions on our financial situation

[Simpli]

Hi All -

Wanted to get your ideas on what to do next. 34m, employed married to 35f, unemployed. 2 Children.

Income: $11,500 per month tax free (Approx 10k EUR average over the past 4 years), Bonus: $10k-$30k.

Costs: $1,500 per month approximately

Net Income - household expenses: 120k EUR per year on average over the past 4 years.

Assets:
250k EUR - Home: Used to come home and stay to visit family

200K EUR - Rental Property: income of 18k EUR per year taxed @20% non resident rate. 90k left on mortgage at 2.5%, fixed for 5 years. My plan is to allow rental income accrue and pay off 90% of the remainder of the mortgage at the end of the fixed term. Keeping mortgage to claim mortgage interest relief as taxable expense.

150k EUR - Land (Bought as an inflation hedge)

250K EUR - Cash

200K EUR - Cryptocurrency

No pension but going through the process to buy back 15 Years from HMRC as I should qualify having stayed for 3 years in UK.

Plans: Stay for another 2 years in the tax-free jurisdiction. Potentially build a large family home in Ireland (cost 500k EUR) with current cash plus cash to be saved over next two years. Everything else stays the same (as variable as it is).

Would anybody do anything else, other than what i'm doing above?

 

[NoRegretsCoyote]

No pension but going through the process to buy back 15 Years from HMRC as I should qualify having stayed for 3 years in UK.

A UK state pension is £180 a week. It makes total sense to make voluntary NICs but this will provide you with nothing near a replacement income similar to what you have now.

200K EUR - Cryptocurrency

Your risk exposure is gigantic relative to your overall wealth and you should reduce this massively.

My plan is to allow rental income accrue and pay off 90% of the remainder of the mortgage at the end of the fixed term.

Given interest rates have risen there is probably no break fee to do so along the way, so unlikely you'll have to wait til end of fixed term.

 

[Simpli]

A UK state pension is £180 a week. It makes total sense to make voluntary NICs but this will provide you with nothing near a replacement income similar to what you have now.


Your risk exposure is gigantic relative to your overall wealth and you should reduce this massively.


Given interest rates have risen there is probably no break fee to do so along the way, so unlikely you'll have to wait til end of fixed term.

Thanks for your review Coyote. I'll respond to each in line:

1. It's free money - I see it as a no brainer, but it's not what i'm relying upon. I've still got 35 years to start a private pension in Ireland as well as pay public contributions.

2. Noted, but my initial investment was small and the current value is 33% of what it was at peak. So i'm comfortable with the risk.

3. Why would I pay off early, considering I can use it as an expense against my income tax? Genuine question - I don't know enough about how it works.

 

[NoRegretsCoyote]

1. It's free money - I see it as a no brainer, but it's not what i'm relying upon. I've still got 35 years to start a private pension in Ireland as well as pay public contributions.

It's worth taking professional advice so as how to most efficiently transfer your wealth to Ireland when you come. When you start a private pension you will want to start maxing contributions for your age potentially making use of your accumulated wealth.

2. Noted, but my initial investment was small and the current value is 33% of what it was at peak. So i'm comfortable with the risk.

I still think it is crazy to have >20% of your net wealth in an asset class that could go to zero overnight.

3. Why would I pay off early, considering I can use it as an expense against my income tax? Genuine question - I don't know enough about how it works.

Because it's a guaranteed return you won't get on deposit. Anyway you are only getting tax relief @20% so that's not very much.

Otherwise good luck! I think you are in a great position for your age but the big missing piece is equities, ideally in a tax-exempt vehicle. In your shoes I would have (after PPR) >70% of my assets in equities as I don't see a better return over the next half century that you could be drawing from your wealth.

 

[Simpli]

Yep - future wealth creation will be stored in equities and pension. Those are the gaps so to speak. I intend to rebalance the crypto into equities 'when the time comes' (if it comes).

Thanks so much for your feedback.