Just introducing myself, and asking some questions - you can skip to the last section for these.
I am yet another user from Denmark, I guess the recent press is causing some influx of Danes around here!
While I'm not really planning to go full "ERE" just yet, I would like to adopt some of the money managing principles to at least approach an ERE-level financial situation, or possibly allow me to work part time in the near or distant future.
So for now I want to understand which would be the smartest way to manage my current assets. I don’t want to give out the detailed numbers just yet - I’m not sure they are relevant for my questions anyway.
### Quick background info: ###
- I'm in my thirties, working full time.
- Married, children
- My wife works full time as well
- All our assets are shared except our "pensions" (what's the proper word in English?) which are separately owned (by law) in Denmark
### Income/Assets: ###
- We own an "andelslejlighed" (not sure what the equivalent English term is?) of which we have remaining debt of approx. 30% of its expected sales value
- We have a vacation home (sommerhus) in which we have remaining debt of 80% (This purchase is most likely the major obstacle to any ERE hopes I may have had for myself
)- I have a decent “pension” - some of it is saved as "livrente", because I have paid more than the Danish tax system allows you to pay into a "regular" retirement fund (not sure if this makes sense to other Danes?)
- My wife has a pension as well, about a third of what I have saved
- I have received stocks in a publicly listed company which are held in a brokerage account in a foreign country
### Expenses/Spending: ###
Both my wife and I are paying 5% extra into our retirement savings (by default our employer pays 10% of our salary, we pay a mandatory 5%, and then the 5% extra/voluntary).
We usually pay off all our recurring expenses and hold back a very small amount of money in our personal accounts for clothes purchases etc. - everything else we pay into our “mortgage” in the apartment to bring that down as quickly as possible. We pay only interest on the vacation home loan, until we have paid of the more expensive debt in the apartment.
- The loan in the apartment is currently at interest rate 3.2%
- The loan in the vacation home has an interest rate of 1.6%
- Both loans are variable interest rate (which is a risk to consider)
- We get tax deductions for all the expenses on interest rates
### Questions: ###
1) Where should we really be spending our money right now? Paying of the debt on our apartment/vacation home or putting them into our retirement fund? Or neither?
2) We have always paid off way more on our loans than what we “had” to. For instance, we had one loan on a 14-year run time as opposed to the standard 30 year run time. Mostly because I'm terrified of debt. But is this really wise? Should we instead borrow as much money as we possibly can and invest the money instead? I guess that would require a significantly better performance than e.g. the 3.2% interest rate? I don't think I would have the nerves to do this anyway, but just not sure if it would make more financial sense?
3) What should I do with my stock abroad? As far as I understand they will be taxed heavily here in Denmark. So should I sell ASAP and transfer the money to Denmark? (On the other hand I expect them to increase in value over the next couple of years if I keep them)