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What do with Spare Cash

  • 15-10-2019 12:39am
    #1
    MondayBlues
    Registered Users Posts: 20 ✭


    Hi,

    I'm currently earning 80k in the states, moved over from Ireland around a year ago.

    I'm paying 15% into the pension and employers are paying 7% match so so in total 22% of my wage is going into a penison.

    I'm 28 years of age. I plan on definitely retiring at 55 with the same company so won't be hit with the 10% fine on withdrawing early from the 401K.

    I'm currently renting over here with no plans to buy and paying 1100 dollars a month.

    I have around 1200 dollars left over a month and enjoying life and not living frugally at all.

    I really want to get a house in Ireland but looks like I'm screwed that way while working abroad which is a massive pain. A decent house in my area goes for 200K.

    What would you do with the spare 1200 a month, pay more into the pension? Save normally?
    Can i get a co-signer to buy a house back in Ireland? I usually return back to Ireland every three months for a week to catch up with family and friends.

    Any advice would be greatly appreciated, particularly with purchasing in Ireland and am I using my money correctly with rent. I know with my savings and the pension at 55 i will be able to purchase a house back in Ireland when I return properly at 55 but would rather get on the property market now and rent out a house.

    I might get a financial advisor soon but would like peoples opinions here before i do this, I am not a permanent citizen but should be eventually.


Comments

  • #2
    AlmightyCushion
    Moderators, Education Moderators, Technology & Internet Moderators Posts: 35,090 Mod ✭✭✭✭AlmightyCushion


    You could but a house in the States to live in. Then when you move back to Ireland to retire, you can sell the house in the States and buy a house here.


  • #3
    MondayBlues
    Registered Users Posts: 20 ✭MondayBlues


    AlmightyCushion wrote: »
    You could but a house in the States to live in. Then when you move back to Ireland to retire, you can sell the house in the States and buy a house here.

    I'm a good bit away from getting a green card with the L1(b) probably six or seven years at the moment so mortgage not an option.


  • #4
    RedRochey
    Registered Users Posts: 1,298 ✭✭✭RedRochey


    Do you have a rainy day/emergency fund saved up for, 6 months expenses? I know it's boring but everyone should have a couple grand saved away somewhere (not invested) just to be safe

    After that I would start to invest it in some equities (broad market ETFs or active share picking, up to yourself) and have some goals in mind about what you want to do with it, e.g. buy a car in a year, a house in 3 years, etc.

    With 22% going into your pension I don't think you need to worry about putting money into that


  • #5
    antix80
    Registered Users, Registered Users 2 Posts: 2,419 ✭✭✭antix80


    MondayBlues wrote: »
    I'm currently earning 80k in the states, moved over from Ireland around a year ago. ...
    I'm 28 years of age. I plan on definitely retiring at 55 with the same company

    ...

    I really want to get a house in Ireland but looks like I'm screwed that way while working abroad which is a massive pain. A decent house in my area goes for 200K.

    Op.. am I misreading things or did you just find a job and you're now planning to stay with that same company the next 28 years, then retire at 55?

    What you decide at 28 may not still be a good fit for you when you're 40, let alone 55.

    As for buying a house in Ireland. Two options.

    1. Accumulate as much cash as possible and wait for the bust. There'll be at least 1 and maybe 2 between now and when you're 55. Wait til houses are not just down 15% but when they're 60% down... Have a financial adviser in the US who knows how to get you finance to buy a house in Ireland.
    MondayBlues wrote: »
    I'm a good bit away from getting a green card with the L1(b) probably six or seven years at the moment so mortgage not an option.

    Is this an assumption or a fact? Talk to a financial adviser who specialises in loans.


    2. An alternative is to buy in the US, live in it and later sell it, using the proceeds to buy a house in Ireland on retirement.

    Sit with your financial adviser too and talk about your pension taking into consideration how much you'll need to live on to fund your lifestyle in retirement, and your desire to avoid the 10% penalty. Pay one who charges a fee for advice rather than one who gets commission to convince you to pour more into your pension.


  • #6
    Henry Ford III
    Moderators, Business & Finance Moderators Posts: 17,735 Mod ✭✭✭✭Henry Ford III


    Invest in mutual funds. Simple, clean, flexible.


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  • #7
    dennyk
    Registered Users, Registered Users 2 Posts: 1,715 ✭✭✭dennyk


    MondayBlues wrote: »
    I'm a good bit away from getting a green card with the L1(b) probably six or seven years at the moment so mortgage not an option.

    If you're planning to go the green card route, you definitely need to have a chat with some tax professionals before making any long-term financial decisions. Holding a green card makes you subject to report and pay US taxes no matter what country you live in, just like a US citizen. Holding any non-US financial accounts or assets may become an immediate issue when you acquire a green card, as well; many types of foreign financial assets have reporting requirements that can require many thousands of dollars per year in professional tax preparation costs to meet (or result in five- and six-figure fines if you fail to report them properly), and your investment gains may also be subject to high double taxation as well. You need to be careful about what assets you invest in if you plan to become a long-term resident in the US.


  • #8
    Trish56
    Registered Users, Registered Users 2 Posts: 1,256 ✭✭✭Trish56


    The good news is you can indeed get a mortgage in Ireland if you are a non-resident and earning non euro - once you qualify - not all lenders will lend for them but many do and it's a bit harder to qualify for. Hope the following helps:
    • Max. mortgage 65% so would need a 35% deposit plus fees.
    • You can apply for mortgage for a Holiday Home or Future Family Home.
    • Need to provide your CV outlining qualifications and employment history.
    • Credit Report from country of residence. Irish Credit check will be made by lender so last known Irish address has to be provided.
    • Must have a connection to Ireland and the location where you intend to purchase and the right to work in Ireland.
    • The rent you pay now will be factored in plus any other commitments so need to prove repayment capacity.
    • Latest 3 months payslips and equivalent of P60. May also have to provide details of earnings for past 2/3 years.
    • 6 months bank statements
    • Max. term is 25 years and max. 80% of FX Income taken.
    Looking at your current details if you can save up the 35% deposit and your income increases you should be able to purchase a property in Ireland in a few years.
    Hope the above helps.


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