Advice on paying back current account debt to my own company or keep it in ETFs
Hi All,
I have my own 'BV' and I earn roughly 155k EUR pre-tax yearly. If I keep at this job, this will only go up (with roughly 10k EUR pre-tax each year). I might have a potential offer for a 200K+ EUR job soon as well, but for now let's assume 155k EUR. I pay myself a net monthly salary of 2.7k EUR, which costs my company 4841.83 EUR. The remainder is kept in my company (and used for company expenses as well) as I will only be able to pay myself dividends at the beneficial rate in July 2027.
The issue that I have at the moment: I managed to save a bit and invest into ETFs, funds, and some stocks. I had roughly 11k invested. I also invest into "IPT" through my company, at the maximum allowed rate (+-380 EUR a month, which by my retirement should end up at +-180k EUR). This means that I cannot invest into VAPZ, but when I had my "eenmanszaak" I accumulated a total VAPZ saving of about 4.5k EUR. I don't have any other savings.
I recently found out that accountant, made some interesting choices without explaining them to me. This leads to me owing my company about 24k EUR (current account). This is effectively a loan that my company has given me and I need to pay interest on it (which on a yearly basis amounts to about 1500 EUR). What I am planning on doing is, selling my ETF investment and paying of as much as possible of the current account debt, and paying ~1k a month back to my company. This would mean that this month I would pay back EUR 9k (not selling all my investments, to have some emergency funds that I can withdraw) and then 1k each month (from the 2.7k EUR net that I pay myself monthly) for the remaining 15k. This money would end up on my company account and would then be eligible to distribute as a dividend later.
Alternatively, I can wait and pay back 1k monthly and pay back the remainder once I get the dividends from my company in July 2027.
The question I have is essentially this: If I understand it correctly, paying back the 24k on my current account should be my priority as the yield from ETFs/funds/stocks, will likely not be higher than the interest I end up paying on my current account.
My accountant told me that the best way to go about this would be to pay back the current account as soon as possible, but it feels like I've dug a significant financial hole which I was unaware of. In the grand scheme of things, I think that I can cover this with the income that I am making but it feels like I am not saving enough and not building wealth.