Best way to save money while deployed to the sand-box (insurance, policy)
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Is it better to put in large amounts initially up to the limit...and get the interest...or have smaller monthly amounts put in over the next year.....
Interesting question. If you're putting into a Roth/mutual fund/TSP - I'd dollar-cost-avg (DCA means putting buying equal amounts of shares every month instead of lump sum buying) over the year as things are so volatile, that the price/share in January may be very different by the end of the year. It is hard to predict with this market.
Dropping $10k at the beginning at 10% will earn him 1,000. I know, because that's what I did.
I think he'll have hard time finding any investment today that can earn him 10%.
His original question revolved around saving/investing. Of course, if he had any debt, unless at a low interest rate, that should be paid off first.
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If you can afford it, I'd take advantage of maximizing your TSP unless you'll need the money before you're 55 1/2 yrs of age. Most likely you'll need to pay bills, etc, that yo can't afford to maximize. Also you can put money into your ROTH, if you have one. But be careful, ROTH requires you to have taxable income over a certain amount in order to be eligible to invest in ROTH. If your income is taxfree due to being in a warzone, you'll have to check with someone to make sure you can put money into ROTH.
Visit tsptalk.com to see what rules apply.
My point is that is it 2.5% per quarter...So yes, as I shown through an amortization table that if one puts $10K in and waits a year they'd accrue the grand you speak of. The OP didn't say how long they be deployed, if they are only gone for six months, it's 2.5% twice, or 5% if you're into added the amounts...
Same interest rate, ROTH will yield you more than TSP....Big disclaimer...TSP you do not have control over other than 5 funds...Roth is simply a vehicle in which you can invest in whatever you want. In todays uncertain market I would not advice one open a Roth...
Thanks people, keep the advice coming and I'll work with the advice already posted.
First order of business is to have a professional look at my entire financial situation and give me an honest assessment of my position and the best plan of action from there.
Thanks people, keep the advice coming and I'll work with the advice already posted.
First order of business is to have a professional look at my entire financial situation and give me an honest assessment of my position and the best plan of action from there.
Thanks!
No one can offer you better advice than what you just said!
As said by TheJagMan, unfortunately, most military personal, both officer and enlisted, are carrying excessive debt. While saving for the future is important, eliminating debt must also be a priority. Think about it. If the average debt interest rate is 12% and you are earning 4% on your investment, you are losing 8% a year!
In today’s market, with saving accounts paying 2% or less and credit cards charging 14% or more, you can ‘make’ more money by paying down the debt. However, you should also allocate some amount of money to a saving plan be it a TSP or other saving vehicle. This is because of the time value of money which basically means that “the future value of a dollar saved today will be worth more than the future value of a dollar saved later.” If you have no debt, put as much as possible in a TSP or other investment vehicle. Your retirement years will thanks you.
Hi there, I am a financial planner and the information on the immediate responses to yours are incorrect. In case you weren't aware you can still invest in a ROTH IRA even though you are receiving tax free money (careful! It is tax free up to the income of an E9, otherwise the remainder will be taxed). This rule changed two years ago so that folks serving abroad can still put money into "tax free" vehicles. The money goes in tax free (because you are in theatre), and the money grows tax free. The contributions remain at 5K for 2010.
Secondly, there is a great program called SDP (sailors deposit program). This allows anyone serving abroad to put up to 10K into a 10% guaranteed savings program. You earn 10% up to 3 months after returning from theatre. Check with your money resource to get signed up.
There of course is TSP, however the money will not grow tax free. It goes in tax free, but does not grow tax free. If you plan to tap into it before you turn 59.5 or would like to invest it differently that the choices offered, restrictions apply.
Not sure of your tax position at all, but there are many choices where you can invest and save your money while deployed. It need not be limited to the choices you read about everyday in the Military print. You have a great idea to save while you are in theatre, but I recommend you ensure you are considering options that will give you flexibility over your lifetime and not just when you retire.
Be safe while deployed and thank you for your service to this country.
I heard a stat that only 1% of the military is debt free.
There are a lot of people who are in debt in the military, I wouldn't say it's THAT bad. If you're single, good with money and take advantage of the fact that your basic living expenses are essentially paid for, you can save while in the military. You're not going to get rich, but definitely stay out of debt. Many do!
When I got back from my first Iraq tour in March '04, I had at least 20K in liquid assets at any given time (and absolutely zero liabilities) from that that time until I ETSed in 2007. I was an E-4 for most of my time in and I saved 500-600 a month easy, sometimes more.
If you're the kind of Joe who lives a fairly simple lifestyle (read books, surf the Internet, go out just occasionally, etc.), drive an old Toyota, it's fairly easy.
Now if you said 1% of military FAMILIES are debt-free, I would believe that.
Last edited by Alphalogica; 02-07-2010 at 12:25 PM..
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