Can anyone give tips or financial advice to a Junior Enlisted?

HN Private RallyPoint Member — Fri, 09 Oct 2015 21:21:53 -0400

I will be straightforward and honest, I know very little when it comes to finances. I know enough to get by and support my family, but as far as making money by using money, I know little to nothing. Who doesn't want to retire with a good bit of money? Who doesn't want to be able to give their family everything they want plus be able to stay financially stable? Basically I'm asking if anyone has tips or advice for me. I'm really interested in the stock market and I would like to learn how to use the stock market more in depth so I can use it to invest money. All advice is welcome, but please don't give information about something you don't know yourself. I would prefer financial "gurus" that actually know a thing or two to help me get on the right track so that I'm not an E-3 living paycheck to paycheck.

Response by 1stSgt Private RallyPoint Member made Oct 9 at 2015 9:22 PM

1stSgt Private RallyPoint Member — Fri, 09 Oct 2015 21:22:52 -0400

Go to your local NMCRS office and sign up for their free budget class.

Response by LCDR Private RallyPoint Member made Oct 9 at 2015 9:28 PM

LCDR Private RallyPoint Member — Fri, 09 Oct 2015 21:28:01 -0400

Be careful with any advice anyone gives you. Free advice is typically worth what you pay for it, and financial advice even more so.

Now that I've said that, here's my free advice ;)

Be careful with the stock market. It sounds like you are looking to supplement your income. Stock market investing is typically long term unless you are day-trading which is essentially impossible for an active duty military member. You need to have you eye on prices all the time to do this (including option trading). Also this is much riskier than longer term investments. If you are looking at long term, I suggest mutual funds, but I don't have the right credentials to tell you which ones. What I will tell you is that TSP is a great tool and in the next few years looks like it will be getting matching government contributions. Take advantage of that when the time comes, and potentially now.

Response by PVT Robert Gresham made Oct 9 at 2015 9:46 PM

PVT Robert Gresham — Fri, 09 Oct 2015 21:46:39 -0400

HN Private RallyPoint Member Since you are currently deployed you seem to have some limited options. You might consider a long term savings plan, like an IRA, to start out. The stock market can be a way to make some fast money, but it can also lead you down the path where you can lose a lot at one time.

I personally invested in silver. It is a precious metal which is easy to afford, and a solid, and tangible investment. I have shied away from gold even though many brokers have tried to steer me in that direction. As a disabled Vet I just don't bring home enough to put money into savings and into gold. Plus, I am not totally confident in the gold market for the long haul.

I would suggest that when you return from your deployment you see a professional broker. Preferably one that is recommended by someone who has some experience with him/her. Edward Jones and Charles Schwab firms come readily to mind. Talk to them about your goals, and about how much you are willing to invest each month. You will get much better advice from a good broker than you would get from most amateur investors on RP.

Response by LTC John Shaw made Oct 9 at 2015 10:25 PM

LTC John Shaw — Fri, 09 Oct 2015 22:25:32 -0400

HN Private RallyPoint Member I highly recommend Dave Ramsey's Financial Peace and Total Money Makeover. He usually has a way for service members to get access for free on Veteran's day or through the Chaplin's office.
This course will provide a great overview of how to manage money.
Avoid aggressive sales people pushing loaded mutual funds and NO annuities that pay the Salesperson more than the benefit to the Soldier.
TSP is your best friend and you should put at minimum 10% for retirement, if you can't stomach 10% start at 5% and work up 1% every year until you get there.
Best free site is the USAA Foundation and you can always call USAA for a financial review even if you have no money to invest.
Good luck and happy investing.

Response by MSgt Jamie Lyons made Oct 9 at 2015 10:28 PM

MSgt Jamie Lyons — Fri, 09 Oct 2015 22:28:02 -0400

If your looking for a basic understanding of financial management I would suggest reading David Bach's 'The Automatic Millionaire'

Response by Sgt Private RallyPoint Member made Oct 9 at 2015 11:56 PM

Sgt Private RallyPoint Member — Fri, 09 Oct 2015 23:56:59 -0400

Do your homework before you invest. Starting out I would invest in a conservative mutual fund with low fees. Look at http://www.vanguard.com to start because they have many low fee funds to choose from. Starting out, look at an index mutual fund. You could pick out a balanced fund that invests 60% in stocks, and 40% in bonds. Begin with mutual funds, and only after you know what you are doing should you consider individual stocks. Study IRAs, Roth IRAs, 401K, and discover how these tools can provide big benefits. I can answer any questions that you have, but you need to do your own research. Investing and watching your money grow is fun, but it takes time and effort. The payoff for your elbow grease is financial peace of mind.

Mutual funds, IRAs, ETFs, 401(k) plans, and more | Vanguard

Vanguard is one of the world's largest investment companies, with more than $3 trillion in global assets.

Response by SSG Private RallyPoint Member made Oct 10 at 2015 12:24 AM

SSG Private RallyPoint Member — Sat, 10 Oct 2015 00:24:40 -0400

I would go to the bank that you do business with and ask to speak with a financial planner. They have the tools and ability to craft an exact plan for you that is perfect for your family's needs.

Response by Capt Seid Waddell made Oct 10 at 2015 1:40 AM

Capt Seid Waddell — Sat, 10 Oct 2015 01:40:57 -0400

Investor’s Business Daily has some very good investment advice and books on investment strategies. Disciplined investment works better than any of the many get-rich-quick schemes, which generally fail.
And beware of anything that comes in the mail.

Response by 1SG Private RallyPoint Member made Oct 10 at 2015 2:32 AM

1SG Private RallyPoint Member — Sat, 10 Oct 2015 02:32:23 -0400

HN Private RallyPoint Member it seems you are serious about learning about finances and if this is true, the best person you can link up with is Band of Brothers Investment Group, they are on Facebook. The president is Dearonne Bethea and he is a current Warrant Officer in the US Army. He is one of my mentors and one of the best financial minds I have ever met in the last 20yrs! He started as a private, worked his way up to Staff Sergeant and then became a Warrant Officer. However, he lives on a budget that equals his pay from when he was an E4! He owns several homes across the country and businesses, such as a barber shop in Killeen. He is about to open a new business in Hawaii. He uses many different investments strategies, including the TSP which he has a 6 figure balance! I trusted him with my families financial future and he has not let me down. My only regret is not meeting him sooner in life. He is all about educating people on using finances to set you free from debt and securing a better future.

Response by PO1 Kenneth Cardwell made Oct 10 at 2015 1:21 PM

PO1 Kenneth Cardwell — Sat, 10 Oct 2015 13:21:18 -0400

Take the College money and go back to college! the military is great, but when you watch your children go off to college, there maybe some regrets!

Response by SPC Jim DeGennaro made Feb 5 at 2016 12:42 PM

SPC Jim DeGennaro — Fri, 05 Feb 2016 12:42:02 -0500

This is what you need to do!

1. Always keep an emergency fund of about 10-20K in a savings account or short term high credit quality bond fund. This number will be higher in the future when you make more and have greater financial demands.

2. Get about 1MM in 20 to 30 year term life insurance while you are still in junior enlisted health. Make sure it doesn't have any odd clauses where it wouldn't pay if you died in war or it only covers you if you die in an accident, etc. Do NOT buy any sort of whole, permanent, variable, universal life insurance. It is a rip-off 99% of the time and especially for a young person.

3. Max your Roth IRA with a $5500 contribution per year with a discount broker (Scottrade, TD Ameritrade, Charles Schwab, etc.) Invest with a heavy weighting towards stocks in index funds (VLCAX), ETFs (IYY), or a good global allocation fund (MALOX). You can google those letters in parentheses called ticker symbols to learn more about what each is - read the fact sheets, annual reports, and prospectuses. Do NOT ever buy any fund that carries a sales load, A share, B share, C share, etc.

4. If you still have money to invest put it in TSP in the L 2040 or L 2050 fund, 2050 is more stocks, more aggressive. Attempt to max your TSP contribution at 18K per year.

5. Now if and when you do all that you might be ready to start trading some stocks on your own in the Roth or a non-qualified brokerage account. You want to control what you can control, what is in your sector of fire so to speak first, in order to create wealth. That means taking full advantage of tax rules that are black and white for the Roth and TSP.

In the meantime to learn about trading stocks, you can compete in one of these virtual stock exchange simulators. This is where plenty of big time hedge fund traders test their strategies. Junior enlisted are more than welcome as well. See links below.

http://www.marketwatch.com/game/

http://www.investopedia.com/simulator/

Good on you thinking about this stuff as a junior enlisted person. Sorry if my answer isn't as sexy as buying silicon valley stocks. However, you follow my advice from a young age, and you will be very comfortable one day, possibly quite wealthy.

Virtual Stock Exchange Games (VSE) - MarketWatch.com

Free stock market game with community trading discussion, player rank, profiles, earnings game.

Response by Maj John Bell made Apr 9 at 2016 11:49 PM

Maj John Bell — Sat, 09 Apr 2016 23:49:43 -0400

Divide your money into two piles. Obligated funds (the bills you Know you have) This should include savings (target 10-15% if you can swing it). When you have enough in savings to cover you 100% for three months, decrease your savings by 50%. Take that 50% and start killing debt. You don't need to invest until you're debt free. The gains on the investment probably won't equal the loss on interest. Take this time to look and learn about all kinds of investments. Remember that financial advisors have a code of conduct, but they make their money off you. Go to the library, not the internet and read periodicals about investing, all kinds of investing. The fact that you are asking, tells me that you are smart enough to learn all you need.

That second pile of money is your discretionary funds. It is for the things you do not need, but want. A smart man never borrows money to buy a depreciating asset. Know the difference between what you want, and what you need.

Response by SPC Mary J Randall made Apr 21 at 2016 3:49 PM

SPC Mary J Randall — Thu, 21 Apr 2016 15:49:03 -0400

I am not a financial "guru" but just a person who got herself in debt and learned a things over the years.
1. Get out of debt. Credit Card companies are not your friends and they will not care if you have milk on the table to feed your family. Understand. Cut the credit cards.
2. Go on a cash basis using the envelop system. Total up all your debts from the smallest to the highest and start paying them down. Start with the minimum payment and if you could add a little more then do so.
3. Pay yourself first. - Emergency fund Start saving for a $1000.00 and if you can increase it to possibly $5000 or $10,000 or whatever you feel you should have do so. If you can only start with $20.00 a month, that is $20.00 that you do not have before. Use the envelop system for everything that you are saving for - a new car, downpayment on a house, a vacation, insurance and one for each of your wife and yourself as mad money in which you or your spouse can spend without asking the other spouse for permission and as long as it is not illegal. We do not want anyone to get in trouble with the police or the MPs if still in the service.
4. Write down your numbers in a small notebook whether you spend a quarter or$1000 for something including money coming in as income.
5. Join Debtors Anonymous which I based on the principles of AA which you can go either in person around the world or online.
6. Go to the library and check out books about different subjects that might interest you. Jerold Mundis wrote a book about DA principles and Dave Ramsey wrote his book about getting out of debt.
7. For the Stock Market, Join NAIC which stands for National Association for Investors Corporation which helps educate members about stocks. Speak with your friends and relatives and neighbors about forming a investment club. Invest in companies that offer DRIPS which are Dividend Reinvestment Programs in which you can invest from as small as $10.00 to thousands of dollars. You know more then you think. Look at your favorite foods, cars, etc. Majority of companies are public and you now can buy shares directly from the companies. There are also online brokers that you can use but check their fees also.
If you retire or just get out of the service before your 20 years, look at a company that has a 401K and write and call for information concerning their stock. What do they make? Are they in debt? What do they spend on research? Check with Morningside Publication that you can find in your library and look at the stock information about a company. If there is a company that interests you, get their annual report and read. Every 3 months, most companies come out with a report about how the company is doing and what is going on. Each year, they publish a annual report telling their shareholders that is you if you buy shares of the company which means that you bought a part of the company. Investigate everything. Do your research.
Another point about credit cards, ask for the interest rate to be lowered and if they do not, do a balance transfer to another card and pay it off. Get a free copy of your Credit Report each other with the AnnualReport.com. The credit score will not be included but I am told that Credit Karma will give you one from the 3 credit reporting agencies . Got to your library and read. Good Luck.

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Response by CW3 Kevin Storm made Dec 27 at 2017 9:59 AM

CW3 Kevin Storm — Wed, 27 Dec 2017 09:59:31 -0500

I would suggest looking up information on the Thrift Savings Plan, learn about the various funds you can divert your money too. Odds are you don't get that much time to sit there and see the coming trends in the market, so spend on something that will give you a better return: yourself. I suggest studying more, to improve the tests the Navy gives you. The better you do with those the better you will do for selection for your next grade. Next investment, get a degree. The long term return on that is most likely better than any return the market will give you right now.

Response by SPC Steven Depuy made Nov 3 at 2021 8:01 AM

SPC Steven Depuy — Wed, 03 Nov 2021 08:01:11 -0400

Live on 90% or less of your take home pay. Invest whats left, and don't play with penny stocks, put it in stable companies that have a future, ie not Blockbuster, Game Stop, Big Box Stores, Phone Companies surviving on land lines, Cable Companies surviving on land lines, and other things that technology will shut down. By the time your ready to retire if you stay in the military, your not going to have to work anymore. If you get out, you should still be able to retire by 50.

Response by MAJ Ken Landgren made Nov 3 at 2021 1:35 PM

MAJ Ken Landgren — Wed, 03 Nov 2021 13:35:26 -0400

Thrift Savings Plan (TSP). It is a financial vehicle used by the military and governmental employees. The main objective of TSP is for long term investment for your retirement. The government will match your TSP contributions to a certain limit, and government matching is like free money for you.

I don't remember all the types of investments in the the umbrella of the TSP program. I will try my best off the top of my head.
- Government bond.
- International stock fund.
- Small company fund.
- Large company fund.
- Fixed income fund.
- Life cycle fund.

I believe all these can be described as mutual funds. For your edification, a mutual fund has a portfolio has many different stocks or bonds which diversifies the risk. For example if a mutual fund has 20 different stocks in its portfolio, if one stock goes down, it does not crash the fund.

A stock represents your partial ownership of a corporation. A bond is an inters bearing
financial investment.

I suggest that you start your investments with mutual funds. Don't buy individual stocks until you are investments savvy. That is a good way to lose your shirt.

There is a risk/reward design in investments. One of the safest investments in the world is our government bonds but it increases very little. Mutual funds have more risk but they have higher yields but they can go down in value as well.

I believe over the century the average annual growth per year is around 10%. But the stock market has its ups and downs, but there is an upward trajectory of the stock market which averages 10% a year. Just ride out the storm. You are young so you can ride out the storms.