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Financial advice for a young military man.

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Old 04-06-2013, 07:01 PM   #21
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Quote:
Originally Posted by Monster Coma View Post
Pay off school before modding the truck. Mods don't charge interest
Agreed.

Although i've got 6K in debt atm, i'm going to get the remaining 3 years i've got left paid in full by the Guard, so i've got 6K to wack down to 0 before the modding to the truck continues.
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Old 04-06-2013, 07:10 PM   #22
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Quote:
Originally Posted by ChamYota View Post
Agreed.

Although i've got 6K in debt atm, i'm going to get the remaining 3 years i've got left paid in full by the Guard, so i've got 6K to wack down to 0 before the modding to the truck continues.
Yup yup. After I finish what I've already started I'm done until the truck is paid down. But 6k is not as bad as it could be. And congrats on the military man!
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Old 04-06-2013, 07:20 PM   #24
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TSP

EDIT:Allotments Set it for the TSP or whichever you choose and forget it.
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Old 04-06-2013, 07:27 PM   #25
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Deploy. First one was the down payment on the house and second bought the truck and more. I know it's not up to you when or if to deploy but how you handle that chunk of tax exempt cash can set you up for life. TSP contributions during deployment are tax exempt forever and SDP is a no brainer. That's all I can add to everything above.
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Old 04-06-2013, 07:30 PM   #26
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Set up a couple of savings accounts.... Retirement - Roth IRA and TSP - max them out, 6 mos living expenses, house/future big expenses, play/mod/?? money.

Set up a budget and stick to it. Like a friend told me after I had gotten into a big financial hole - pay yourself first (savings first, then bills), and anything left over is for play.

USAA is a great place for this.

Good luck! You are smarter than half the folks out there.
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Old 04-06-2013, 07:35 PM   #27
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Quote:
Originally Posted by Monster Coma View Post
Yup yup. After I finish what I've already started I'm done until the truck is paid down. But 6k is not as bad as it could be. And congrats on the military man!
yeah, i've got a couple family friend's that said 6K of debt is pretty much nothing. I've gotta budget and go from there. Appreciate it man. GL with your Law enforcement gig!

Quote:
Originally Posted by 60driver View Post
Deploy. First one was the down payment on the house and second bought the truck and more. I know it's not up to you when or if to deploy but how you handle that chunk of tax exempt cash can set you up for life. TSP contributions during deployment are tax exempt forever and SDP is a no brainer. That's all I can add to everything above.
TSP? I've considered deploying but only if i could do so pretty much right after college. I dont want to wait too long to get experience to attempt access into the FBI. Now what exactly happens on a "deployment?" i've seen it everywhere and i think of a battleground but i have a good feeling that is an inaccurate idea.

Quote:
Originally Posted by ImpulseRed008 View Post
Set up a couple of savings accounts.... Retirement - Roth IRA and TSP - max them out, 6 mos living expenses, house/future big expenses, play/mod/?? money.

Set up a budget and stick to it. Like a friend told me after I had gotten into a big financial hole - pay yourself first (savings first, then bills), and anything left over is for play.

USAA is a great place for this.

Good luck! You are smarter than half the folks out there.
Ah, that makes sense! now is a TSP the same as an IRA?
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Old 04-06-2013, 07:43 PM   #28
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Quote:
Originally Posted by ImpulseRed008 View Post
Set up a couple of savings accounts.... Retirement - Roth IRA and TSP - max them out, 6 mos living expenses, house/future big expenses, play/mod/?? money.

Set up a budget and stick to it. Like a friend told me after I had gotten into a big financial hole - pay yourself first (savings first, then bills), and anything left over is for play.

USAA is a great place for this.

Good luck! You are smarter than half the folks out there.
At least 10% of your checks, refunds, stipends etc, to savings. If you set up an allotment from your military check you will never see it and it will build quick. If you stick to all the other suggestions you will be doing good. And as others have said, USAA is one of the best financial resources available to you.

Your service and education will carry you far in life. Good luck!!
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Old 04-06-2013, 07:44 PM   #29
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Quote:
Originally Posted by ChamYota View Post
y
Ah, that makes sense! now is a TSP the same as an IRA?
Yes and no. http://themilitarywallet.com/tsp-or-ira/
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Old 04-06-2013, 07:53 PM   #30
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Quote:
Originally Posted by satcom221 View Post
At least 10% of your checks, refunds, stipends etc, to savings. If you set up an allotment from your military check you will never see it and it will build quick. If you stick to all the other suggestions you will be doing good. And as others have said, USAA is one of the best financial resources available to you.

Your service and education will carry you far in life. Good luck!!
Alrighty, that makes sense. 10% is small and wont be noticed.

Quote:
Originally Posted by ImpulseRed008 View Post

Ah, so a TSP is like a IRA except they tax the money when it's time to get it and with the IRA they dont tax it?


so would 5% go to savings and 5% go to an IRA be a feasible option or should i be focusing at least 10% to each of these things?
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Old 04-06-2013, 07:58 PM   #31
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Quote:
Originally Posted by ChamYota View Post
Alrighty, that makes sense. 10% is small and wont be noticed.




Ah, so a TSP is like a IRA except they tax the money when it's time to get it and with the IRA they dont tax it?


so would 5% go to savings and 5% go to an IRA be a feasible option or should i be focusing at least 10% to each of these things?
Depending on which IRA you have - regular or roth. Regular is taxed when you get it out and roth you only pay taxes on what you put in and all gains are tax free.

Not sure what exactly your finances are, but you want to end up maxing out all retirement options. Start small and increase every time you get a pay raise or as you have $ left over come pay day.

Not a financial planner... check with one to see what's best for you.
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Old 04-06-2013, 07:58 PM   #32
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Quote:
Originally Posted by AlphaEcho2k5 View Post
TSP

EDIT:Allotments Set it for the TSP or whichever you choose and forget it.
gotcha, so which one do i build first? or do i do both at the same time for 5% and do 10% for savings, which leaves 80% for me.

EDIT:

So, i have the choice of do i want it taxed as i put it in or not taxed at all until i get it out... Now that's interesting.
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Old 04-07-2013, 12:01 AM   #33
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Originally Posted by ChamYota View Post
This is my issue right here.

I don't know what i need to save for and how much and for how long it needs to be saved.

My first plan is to get about 1000$ saved and tucked away for a rainy,shitty,messy circumstance, when i get back from basic i'll have that amount tucked away in a mutual fund or something, so it's growing on it's own and if i need it, i'll be able to pull from it,

I've also been considering taking a percentage of my check (unknown yet) to contribute to my mutual/rainy fucking day fund.

I've gotta see what my average income is after the summer and what goes in and out before i get ahead of myself.

For an emergency fund, its recommended you have 3-6 months living expenses in cash, not a mutual fund. A money market fund is generally acceptable but with rates near zero, its a non option currently.

What i do is ladder CDs to maximize yield while maintaining liquidity. For example if you could eventually swing 3-$1000 dollar CDs (i realize that may be a longer term goal- but the idea is to always be looking for ways to make your money work harder for you), You would earn .30% interest vs .10% interest on the same $3000 in a regular savings account. "laddering" means buy one 3 month CD the first month then another the next month and then another the 3rd month. That way you maximize yield while still maintaining penalty free access to 1/3 of your funds in any given month.

If you need to pull it all out penalties will never exceed the accrued interest on the CD, in other words you might lose whatever interest you earned in the current period but youll always have your initial 3000 plus whatever interest you earned for previous periods.

-rates are based on USAA rates as of 6April13
-feel free to PM me if you want to know more
-Knowledge is power brother, congrats on getting squared away so soon. I did the same as you and trust me it pays off, big-time. Keep it up
- I will also echo what others have said about debt, Roths and TSP.
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Old 04-07-2013, 12:08 AM   #34
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Also look into taking a personal finance course at school. Most campuses offer them and it will count as an elective if you are not a business major.
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Old 04-07-2013, 12:15 AM   #35
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Live well beneath your means so when ... not if ... when emergencies arise, you can weather the storm without breaking the bank, and stressing yourself out. As someone else said, it's worth it to live simply. It really is more enjoyable. Yeah all the toys are great. But toys also break. And that means more money which means more working. I may have less than others my age ... but I have a LOT more time to enjoy what I have. And that I wouldn't trade for the world.

Remember this: You can always make more money. But you can't make more time.
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Old 04-07-2013, 03:07 AM   #36
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try to see if you can enroll in tsp (thrift savings plan). not too sure if youll be able to do it if youre in the guard though. best investment i had while i was in.
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Old 04-07-2013, 05:36 AM   #37
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I think there are three components to setting yourself up for long term financial health - and this is the time to do it. Very few people do this - be one of the few and you will be happy you did in 20 or 30 years.

1. Savings
2. Investments
3. Life insurance

You've already talked about setting up a savings plan - that's your short term "emergency fund." Use it sparingly when you absolutely need to. Be careful, though. Because it is easily accessible with no "penalty" it can be an attractive target for those purchasing urges.

Start investing in some type of long-term retirement plan. USAA is a great place to ask someone to help you find what will work for you. Start putting something into the plan now - even just $50 a month. Have it taken out automatically - and every time you get a payraise, a bonus, etc, kick up the investment a bit. Try to stretch yourself a bit here - you'll be surprised how you can do it after a few months of getting used to it. Don't touch this fund unless you have a huge need. You can never gain lost compounded interest. And, remember that as the market goes up and down, it's only a loss or gain if you need the cash that day. The historical trend since the beginning is up - certainly there are down periods but it always goes back up.

Many people forget about life insurance. When you are young you don't think you need it - but it is also the cheapest time to buy. And, once you do, you set yourself up for options to increase it without health care screens. As you get older, you will have health care crises - get started on the insurance now. Again, get an advisor to help - from USAA, etc. The long term goal is to have a base of whole life insurance and some decreasing term that is offset by the increase in your investments.

I didn't start thinking about this stuff until I was a young captain - and even then I missed some great opportunities to set us up for financial health.
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Old 04-07-2013, 08:31 AM   #38
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Quote:
Originally Posted by burnt_tiger View Post
For an emergency fund, its recommended you have 3-6 months living expenses in cash, not a mutual fund. A money market fund is generally acceptable but with rates near zero, its a non option currently.

What i do is ladder CDs to maximize yield while maintaining liquidity. For example if you could eventually swing 3-$1000 dollar CDs (i realize that may be a longer term goal- but the idea is to always be looking for ways to make your money work harder for you), You would earn .30% interest vs .10% interest on the same $3000 in a regular savings account. "laddering" means buy one 3 month CD the first month then another the next month and then another the 3rd month. That way you maximize yield while still maintaining penalty free access to 1/3 of your funds in any given month.

If you need to pull it all out penalties will never exceed the accrued interest on the CD, in other words you might lose whatever interest you earned in the current period but youll always have your initial 3000 plus whatever interest you earned for previous periods.

-rates are based on USAA rates as of 6April13
-feel free to PM me if you want to know more
-Knowledge is power brother, congrats on getting squared away so soon. I did the same as you and trust me it pays off, big-time. Keep it up
- I will also echo what others have said about debt, Roths and TSP.
Alright, so a couple short term goals for me as of today:

-Call USAA and:
1.Set up a small credit card(<300$ if possible to establish a small level of credit)
2.Set up the percentage 10% of the money i get from the military to go directly to my already existant savings account.
3. Discuss possible investment options and a small percentage to go toward it(if i figure out which one is good for me.)
4.Discuss Life insurance and a percentage of income for that.
5.Figure out how many savings accounts i need. (already have 2)


Quote:
Originally Posted by burnt_tiger View Post
Also look into taking a personal finance course at school. Most campuses offer them and it will count as an elective if you are not a business major.
In the spring of 2014,i'll do that, my schedule will be much lighter then.

Quote:
Originally Posted by MountainEarth View Post
Live well beneath your means so when ... not if ... when emergencies arise, you can weather the storm without breaking the bank, and stressing yourself out. As someone else said, it's worth it to live simply. It really is more enjoyable. Yeah all the toys are great. But toys also break. And that means more money which means more working. I may have less than others my age ... but I have a LOT more time to enjoy what I have. And that I wouldn't trade for the world.

Remember this: You can always make more money. But you can't make more time.
This stuck out the most to me. What does it really mean to live simply? I've never had to do that, just pay this huge up front fee and just eat whenever, sleep whenever, no bills, it's really weird trying to juggle all of it now and my future investments and stuff at the age im at but im willing to work towards making it work.

Quote:
Originally Posted by Xer0 SiN View Post
try to see if you can enroll in tsp (thrift savings plan). not too sure if youll be able to do it if youre in the guard though. best investment i had while i was in.
I'll be able to do so, the guard is a branch of the military as well as the other big ones.

Quote:
Originally Posted by Devious6 View Post
I think there are three components to setting yourself up for long term financial health - and this is the time to do it. Very few people do this - be one of the few and you will be happy you did in 20 or 30 years.

1. Savings
2. Investments
3. Life insurance

You've already talked about setting up a savings plan - that's your short term "emergency fund." Use it sparingly when you absolutely need to. Be careful, though. Because it is easily accessible with no "penalty" it can be an attractive target for those purchasing urges.

Start investing in some type of long-term retirement plan. USAA is a great place to ask someone to help you find what will work for you. Start putting something into the plan now - even just $50 a month. Have it taken out automatically - and every time you get a payraise, a bonus, etc, kick up the investment a bit. Try to stretch yourself a bit here - you'll be surprised how you can do it after a few months of getting used to it. Don't touch this fund unless you have a huge need. You can never gain lost compounded interest. And, remember that as the market goes up and down, it's only a loss or gain if you need the cash that day. The historical trend since the beginning is up - certainly there are down periods but it always goes back up.

Many people forget about life insurance. When you are young you don't think you need it - but it is also the cheapest time to buy. And, once you do, you set yourself up for options to increase it without health care screens. As you get older, you will have health care crises - get started on the insurance now. Again, get an advisor to help - from USAA, etc. The long term goal is to have a base of whole life insurance and some decreasing term that is offset by the increase in your investments.

I didn't start thinking about this stuff until I was a young captain - and even then I missed some great opportunities to set us up for financial health.
Now i follow pretty much everything you've said here, now about life insurance, thats something that USAA can set me up with right? I heard it was really cheap to get life insurance through them but i could have been mistaken or heard that wrong.
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Old 04-07-2013, 08:52 AM   #40
ChamYota [OP] ChamYota is offline
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Quote:
Originally Posted by Brunes View Post
USAA is a good START, but realize that there other, better deals out there if you look. Don't run to them and start all your business right away just because it's easy.

Shop and find the best deal for you...
A curveball.

so i'll have to look around the variety of financial institutes to find the best deal for me within my meager budget.
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