32 -redundant -no commitments – how to invest

ReillyJ

Hi
I am looking for some general advice on what to do with my redundancy.
I’m 32 single, with no house / mortgage or other commitments. I will be made redundant in 6 months time with a pay off of €55k. I have €30k in savings and €40k in shares which will mature in 3 years time.
I imagine that I will be able to get a job fairly quickly but the pay will be much lower than what I have been earning for the last number of years. So I want to use the money I will have to the maximum possible benefit.
I am unlikely to get a permanent job so buying a house to live in does not seem feasible for a few years.
So is buying a buy to let property for ~ €100k the smartest thing to do with my money? Or with the property tax / tax on rental income, & general hassle involved in letting & managing does it make more sense to put this money into a high interest savings account? Or buy shares?

Advice appreciated.
James

howamidifferent

I would suggest spend the €30 on a few scoops to relax and then look at the €55k and €40k as a lump sum investment.

ReillyJ

haha - corrected

SCOOP 64

You wont be single long.

Buzzliteyear

You have savings , so you have the discipline to hold onto your money. Property is still on the floor but it won't be there forever. Whatever investment you make as I see it its about the combination of the right price and the long-term return. If you're not into stocks make sure you spread your risk, eg. a low cost index fund. If you require an income there are high dividend funds. If you don't require a dividend why not consider an investment company like BRK. Their long-term record speaks for itself! Best of luck. Make the most of your opportunity! It may not come your way again.

yoloc

Buzzliteyear wrote: »

You have savings , so you have the discipline to hold onto your money. Property is still on the floor but it won't be there forever. Whatever investment you make as I see it its about the combination of the right price and the long-term return. If you're not into stocks make sure you spread your risk, eg. a low cost index fund. If you require an income there are high dividend funds. If you don't require a dividend why not consider an investment company like BRK. Their long-term record speaks for itself! Best of luck. Make the most of your opportunity! It may not come your way again.

Not going by what others where saying in the property forum on here. I am coming into 135k myself very soon and was thinking of buying a few brand new cheap properties in carrick on shannon/sligo but was more or less talked out of it on that forum. Ive been banging my head against a brick wall thinking what i should do with it thou. Im currently unemployed and was just thinking of building another house with the money and sit back and take life easy again but would love to turn it into a cool mill. Prob a pipe dream but sure, its good to dream

gordongekko

yoloc wrote: »

Not going by what others where saying in the property forum on here. I am coming into 135k myself very soon and was thinking of buying a few brand new cheap properties in carrick on shannon/sligo but was more or less talked out of it on that forum. Ive been banging my head against a brick wall thinking what i should do with it thou. Im currently unemployed and was just thinking of building another house with the money and sit back and take life easy again but would love to turn it into a cool mill. Prob a pipe dream but sure, its good to dream

make sure you have less than €100k per bank. Pay off any unsecured debts as these are likely to have a high interest rate and as always seek professional advise.

yoloc

gordongekko wrote: »

make sure you have less than €100k per bank. Pay off any unsecured debts as these are likely to have a high interest rate and as always seek professional advise.

Will actully have 150k but will be paying of my debt and will be left with 135k or there abouts.

gordongekko

yoloc wrote: »

Will actully have 150k but will be paying of my debt and will be left with 135k or there abouts.

only keep a max of €100k per bank

tommylimerick

how do you have money in shares that will mature in 3 years time ?
did you pick these shares yourself ?
this guy in the paper again bought irish government bonds getting around 4 percent
I would buy something that will create income if you are worried that you will not be able to live as comfortably as before on your reduced wages
that and maybe growth stock , you are young and can take more risks than someone facing retirement

green_bow

ReillyJ wrote: »

Hi
I am looking for some general advice on what to do with my redundancy.
I’m 32 single, with no house / mortgage or other commitments. I will be made redundant in 6 months time with a pay off of €55k. I have €30k in savings and €40k in shares which will mature in 3 years time.
I imagine that I will be able to get a job fairly quickly but the pay will be much lower than what I have been earning for the last number of years. So I want to use the money I will have to the maximum possible benefit.
I am unlikely to get a permanent job so buying a house to live in does not seem feasible for a few years.
So is buying a buy to let property for ~ €100k the smartest thing to do with my money? Or with the property tax / tax on rental income, & general hassle involved in letting & managing does it make more sense to put this money into a high interest savings account? Or buy shares?

Advice appreciated.
James

stocks will earn you a lot more money than property over the long term , the trick is picking the right ones at the right time , you could be a passive investor which means you buy the market ( ETF ) and let it take its course , your risk is spread across hundreds of companies , if you buy a global index fund , thousands , dividend should be equal to what most bank savings accounts pay , that said , markets are quite toppy at the moment but a long term investor should not be concerned with short term trends

or you could stick it all in a company like Vodafone which pay nearly 6% of a dividend per anum , most houses wont give you a return of anymore than that and its unlikely Vodafone is going to go bust anytime soon even you don't see much capital appreciation

yoloc

Any good books on where to start about learning about investing in stocks/shares

tommylimerick

I really like benjamen graham the intelligent investor
it s all about value investing
that should become your main reference in investing I think

gordongekko

I've made a lot of investment mistakes and some great investments down the years but if I was starting with more than €100k I would not risk it. You would want years of experience before you start investing with that amount.

I have a few books in the attic I read before, I will dug them out and let you know the names of them.

There has been a major bull run on shares so im not sure investing now is the right idea, you should seek professional advise.

Value Hunter

gordongekko wrote: »

I've made a lot of investment mistakes and some great investments down the years but if I was starting with more than €100k I would not risk it. You would want years of experience before you start investing with that amount.

I have a few books in the attic I read before, I will dug them out and let you know the names of them.

There has been a major bull run on shares so im not sure investing now is the right idea, you should seek professional advise.

+1

Research hugely before you even begin to invest this amount of money, don't be afraid to ask questions on this forum even if they seem childishly simple, its very easy to lose money quickly if you don't know exactly what your doing

jank

tommylimerick wrote: »

how do you have money in shares that will mature in 3 years time ?did you pick these shares yourself ?
this guy in the paper again bought irish government bonds getting around 4 percent
I would buy something that will create income if you are worried that you will not be able to live as comfortably as before on your reduced wages
that and maybe growth stock , you are young and can take more risks than someone facing retirement

RSU ?

ballyharpat

Go to sites like 'Ask about Money' and 'Morningstar' just two that come to mind. WHile all stocks/investments are speculative, on this forum, very few people actually are actually involved in it themselves. The advice above-to invest all in Vodafone, is a crazy idea, anything can happen, I bought into Verizon at $25 and sold at $50, and it still pays a big dividend and it's a great stock, but look at the history of practically any stock, they all drop at some point, do you have the stomach to lose 50% in a few weeks- Lets say I currently have e500,000 I have one apartment, I have one house that I renovated myself and rent out, both of these are netting 8% and in time there may or may not be capital appreciation, or depreciation, it doesn't bother me either way. I have e100,000 in cash that I don't want to risk, as I am waiting for another house that I will move into and renovate with the profits of my other 2 properties. I have e100,000 in stocks, very diversified in regions as well as sectors. I also have a fund that will mature in about 4 years. The above is a breakdown of how I am invested, not the amounts, but the percentages are the same. I would not be buyng into too many stocks right now, but that's just me...... I see a correction coming, again, speculation, and it may keep rising, it has risen circa 12% since I sold half my stocks.....

green_bow

ballyharpat wrote: »

Go to sites like 'Ask about Money' and 'Morningstar' just two that come to mind. WHile all stocks/investments are speculative, on this forum, very few people actually are actually involved in it themselves. The advice above-to invest all in Vodafone, is a crazy idea, anything can happen, I bought into Verizon at $25 and sold at $50, and it still pays a big dividend and it's a great stock, but look at the history of practically any stock, they all drop at some point, do you have the stomach to lose 50% in a few weeks- Lets say I currently have e500,000 I have one apartment, I have one house that I renovated myself and rent out, both of these are netting 8% and in time there may or may not be capital appreciation, or depreciation, it doesn't bother me either way. I have e100,000 in cash that I don't want to risk, as I am waiting for another house that I will move into and renovate with the profits of my other 2 properties. I have e100,000 in stocks, very diversified in regions as well as sectors. I also have a fund that will mature in about 4 years. The above is a breakdown of how I am invested, not the amounts, but the percentages are the same. I would not be buyng into too many stocks right now, but that's just me...... I see a correction coming, again, speculation, and it may keep rising, it has risen circa 12% since I sold half my stocks.....

keep away from morning star , too expensive and not much good anyway , they put a redicolously high fair value price on everything , they have france telecom with a five star rating this past two years , this despite the fact that the company hasn't made a profit in ten years and has dropped 60% in value this past three

pokerface11

Ballyhar Pat & ReillyJ what broker do ye hold your diversified stock portfolio with? I hold shares with Goodbody online connected to AIB but they can be expensive for the basic service they provide. I am interested in creating my own portfolio to buy and sell stocks with my own research. Just wondering what brokers do ye use thats efficient to create your own portfolio without overpaying in transaction and management fees. Thanks.

ReillyJ

jank wrote: »

RSU ?

Thanks for the advise. The shares that are maturing are part of the employee ownership sheme, where you can buy up to 12k per annum without paying much tax. Having read around a bit and thought about it, it seems like a property investment might suit me, as the same gains could be made from purchasing stocks with less hastle. The major attraction for stocks is that they seem to be hastle free, with no worry about trying to rent out rooms etc. Also they are more liquid, & I can buy in many different companies and spread risk.


So next steps are to decide what share to buy & how best to go about it.
I think I will invest about 10k spread over about 10 blue chip companies, until I fully get to grips with the market and how it works.

Are there any recomendations for brokers? Also do you have to declare dividends as a source of income?

thanks
James

Value Hunter

ReillyJ wrote: »

Thanks for the advise. The shares that are maturing are part of the employee ownership sheme, where you can buy up to 12k per annum without paying much tax. Having read around a bit and thought about it, it seems like a property investment might suit me, as the same gains could be made from purchasing stocks with less hastle. The major attraction for stocks is that they seem to be hastle free, with no worry about trying to rent out rooms etc. Also they are more liquid, & I can buy in many different companies and spread risk.


So next steps are to decide what share to buy & how best to go about it.
I think I will invest about 10k spread over about 10 blue chip companies, until I fully get to grips with the market and how it works.

Are there any recomendations for brokers? Also do you have to declare dividends as a source of income?

thanks
James

I'd suggest you lower the number of blue chip companies to 5 if your buying to reduce your transaction fees.

You'll be surprised how much they'll eat into your return if your doing small transactions in numerous companies.

With 10 buy orders at €20 each that would be €200, then add your future selling orders cost, another €200 = €400

On your €10,000 that's 4%, with capital gains added in on your profit you'll have to make a 6% return just to cover costs

If you lower the number of companies to 5 you will only need 3% to cover your costs.

ballyharpat

pokerface11 wrote: »

Ballyhar Pat & ReillyJ what broker do ye hold your diversified stock portfolio with? I hold shares with Goodbody online connected to AIB but they can be expensive for the basic service they provide. I am interested in creating my own portfolio to buy and sell stocks with my own research. Just wondering what brokers do ye use thats efficient to create your own portfolio without overpaying in transaction and management fees. Thanks.

I use td directinvesting, there may be people that have issues with them, I have no problem with them and their fees-or lack of, suit me fine Having said that, I mainly buy and hold, but I do put stop losses on these days, as I was burnt too much in the past....

green_bow

Value Hunter wrote: »

I'd suggest you lower the number of blue chip companies to 5 if your buying to reduce your transaction fees.

You'll be surprised how much they'll eat into your return if your doing small transactions in numerous companies.

With 10 buy orders at €20 each that would be €200, then add your future selling orders cost, another €200 = €400

On your €10,000 that's 4%, with capital gains added in on your profit you'll have to make a 6% return just to cover costs

If you lower the number of companies to 5 you will only need 3% to cover your costs.

might be better simply buying the S+P through an ETF , one transaction does the whole thing

Zipppy

Would property not be a better investment ?

Let's say buy an older 2 bed house in Dublin.
Pay about 90k so no loan.
1000+ rent per month...rents on way up..
Loose about 50% in income tax /USC so about €500 a month left to spend.(maybe keep 100 a month in reserve for house maintenance etc)

And house will appreciate over next few years.

Would this not make more sense?

listermint

Zipppy wrote: »

Would property not be a better investment ?

Let's say buy an older 2 bed house in Dublin.
Pay about 90k so no loan.
1000+ rent per month...rents on way up..
Loose about 50% in income tax /USC so about €500 a month left to spend.(maybe keep 100 a month in reserve for house maintenance etc)

And house will appreciate over next few years.

Would this not make more sense?

90K 2 bed house in dublin ??

gordongekko

How do you know that houses will increase in price?

spygirl

3 bed house in dublin currently online for 90,000 so who knows.

Zipppy

listermint wrote: »

90K 2 bed house in dublin ??

EG http://www.myhome.ie/residential/brochure/21-darley-terrace-south-city-centre-d8-dublin-8/2373864

gordongekko wrote: »

How do you know that houses will increase in price?

I dont but stocks / shares are equally risky...

green_bow

Zipppy wrote: »

EG http://www.myhome.ie/residential/brochure/21-darley-terrace-south-city-centre-d8-dublin-8/2373864




I dont but stocks / shares are equally risky...

shares are not one single entity , coca cola and bank of Ireland couldn't be further apart , if someone is willing to play a long game , stocks will earn you considerably more than property

listermint

Zipppy wrote: »

EG http://www.myhome.ie/residential/brochure/21-darley-terrace-south-city-centre-d8-dublin-8/2373864




I dont but stocks / shares are equally risky...

you win this round Zippy, you win

Zipppy

listermint wrote: »

you win this round Zippy, you win

Perhaps I should just buy that bloody house