What financial tips would you give yourself straight out of boot camp?

RallyPoint News — Mon, 20 May 2019 10:53:09 -0400

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Response by LTC Eugene Chu made May 20 at 2019 10:54 AM

LTC Eugene Chu — Mon, 20 May 2019 10:54:39 -0400

Don't invest with a company that primarily sells high-commission loaded mutual funds or whole life insurance

Response by CPT Jack Durish made May 20 at 2019 11:12 AM

CPT Jack Durish — Mon, 20 May 2019 11:12:00 -0400

Well, to be fair, my advice today would not be the same as when I was an E-1. I only made $89/month, beer and cigarette money. Still, there was one piece of advice I heard back then that still applies today: "If you need a spouse, the Army'll issue you one". The E-1 or E-2 pay may look like a fortune today to someone who enlisted right out of high school, but it isn't. Our VFW post is feeding a lot of young families of E-1 to E-4 members who made that mistake. We're taking disposable diapers so they don't have to resuse them (yes, they're actually reusing disposable diapers) We're setting up households with donated furniture. My advice? Put it away and save against the future. Whether you become a "lifer" or serve just one enlistment, don't encumber yourself with a debt that you can't repay.

Response by 1SG Eddie Smith made May 20 at 2019 12:21 PM

1SG Eddie Smith — Mon, 20 May 2019 12:21:32 -0400

Only used credit as a last resort, build your wealth by savings, maybe investment, do anything before using credit.

Response by SFC Private RallyPoint Member made May 22 at 2019 8:13 AM

SFC Private RallyPoint Member — Wed, 22 May 2019 08:13:59 -0400

Soldiers entering Boot Camp today are all enrolled in the Blended Retirement System (BRS). The very minimum they should all be contributing to their Thrift Savings Plan (TSP) is 5% base pay in order to maximize the matching funds from the DoD. Hopefully new Soldiers are smart enough to invest around 20% of base pay to the TSP; especially during the early years of their career when non-discretionary spending (mandatory bills you don’t have a lot of control over to pay for true "needs"; not "wants") is traditionally very low.

The ROTH TSP option is a much better deal for most Soldiers, over the the Traditional TSP option. While in a combat zone receiving tax free pay (CZTE) only contribute to the ROTH TSP in order to avoid all taxes. The CZTE pay goes in tax free and all money comes out tax free at retirement. (With a Traditional TSP account, the CZTE pay may go in tax free but the earnings will be taxed upon withdrawal from the Traditional TSP during retirement.)

Allocation your contributions in the TSP to the L-Fund with the furthest maturity date available when you joined. Today, that fund is the L-2050 fund. In 2020, it will be the L-2060 fund. Use the L-Funds as a "fire-and-forget" retirement investment until you've gained the necessary education and wisdom to know what you're doing if you decide to invest in the individual TSP funds (C, S, I, G, or F) or venture into the commercial market for investing.

Pay yourself first. Allocate some pay to your retirement and other individual goals first. Then fund non-discretionary spending to pay for mandatory items required to survive. After you've paid yourself and paid your required expenses, then think about blowing a little money on all the stupid discretionary spending we like to waste money on. Pay yourself and fund your goals before you run up a bar tab and have to pay the bartender. Pay yourself and live within your means instead of blowing your future on the latest trend and fashions or cool gizmo for the field. Make your money work for you, instead of you always working for money. Don't let an inflated lifestyle and consumerism condemn you to a life of indentured servitude just to pay down your debt or impress the neighbors.

Your savings gets a raise every time your paycheck gets a raise. Add an extra 1% to your TSP when you get the annual COLA raise. Add another 1% or 2% each time you get a promotion or reach a TIS (time in service) milestone that increases your base pay. When you deploy and start earning all that extra pay and entitlements, your retirement and personal goals still need to be the first thing you fund. The more you earn, the more you should be investing in your future and in your family's future.

Avoid giving anyone the keys to your kingdom. Use low balance joint accounts with trusted individuals instead of giving them full access to all the money in your individual accounts. Over the years I have seen literally every type of relation (mom, dad, brother, sister, spouse, ex-spouse, friend, roommate, etc) rip-off warriors and empty their bank accounts or rack-up overwhelming debt in the Soldier's name. Your pay goes to your individual account while an allotment or automatic payment goes to a joint account shared with another person (i.e. spouse, parent, etc) to pay household expenses and other agreed upon activities. You can easily add more funds to the joint account as needed, but you can't stop anyone from taking everything once you give them the keys to your kingdom (i.e. full access to your accounts, credit cards, DFAS myPay, etc.).

Avoid developing addictions (tobacco, alcohol, etc) or habits (gourmet coffee, energy drinks, fast vehicles, trendy crap, etc.) that rob you of your wealth and/or health. These things are not "needs" but far too many Soldiers fund their fun first and live beyond their means so they dig themselves into debt and never reach their financial goals our achieve their dreams.

Know your benefits. Maximize your benefits. Stay attune to your benefits. Not knowing what your benefits are, or how to use the benefit, is virtually the same as not having benefits. You signed a blank check to Uncle Sam payable in full up to an including your mind, body, and all your tomorrows in exchange for a paycheck and your benefits, so don't be coy about using the benefits your service entitles you to. Lastly, the only constant is change. The rules, regulations, and laws for your benefits will change and you will need to continually update your knowledge or it could cost you dearly and some benefits could be lost forever. For example DoD regulations changed in 2018 so after June 2019, Soldiers with 16 or more years of service will become ineligible for GI Bill Transfer of Educational Benefits (TEB) to their dependents. Those that stay informed are able to act in their best interest, but those that are not paying attention will not figure things out until its too late and they've lost the benefit forever.

Response by Lt Col John (Jack) Christensen made May 22 at 2019 6:56 PM

Lt Col John (Jack) Christensen — Wed, 22 May 2019 18:56:22 -0400

Look ONLY at companies that deal exclusively, or almost exclusively, with the military.

Response by LTC Private RallyPoint Member made May 23 at 2019 11:06 AM

LTC Private RallyPoint Member — Thu, 23 May 2019 11:06:29 -0400

Don't get married...! Stay single, just kidding...!! :)

Response by MAJ Ken Landgren made May 23 at 2019 12:20 PM

MAJ Ken Landgren — Thu, 23 May 2019 12:20:47 -0400

Response by MAJ Ken Landgren made May 23 at 2019 3:41 PM

MAJ Ken Landgren — Thu, 23 May 2019 15:41:02 -0400

Start investing now.

Response by MAJ Ken Landgren made May 24 at 2019 5:06 PM

MAJ Ken Landgren — Fri, 24 May 2019 17:06:24 -0400

Learn about investing.

Response by MSgt Private RallyPoint Member made May 25 at 2019 11:17 AM

MSgt Private RallyPoint Member — Sat, 25 May 2019 11:17:05 -0400

Pay yourself first. Start your TSP at 10% from the get go. Increase it by 1% every time you make rank. Live at least one pay grade below you. For example, when you make E2 continue to live as an E1. Make E3 live like an E2 and so on. Take the difference and bank it. If you do this from the get go, you wont miss the money.

Response by PO1 Mary Vermont made May 26 at 2019 5:59 PM

PO1 Mary Vermont — Sun, 26 May 2019 17:59:34 -0400

Buy property

Response by MAJ Ken Landgren made May 27 at 2019 2:54 PM

MAJ Ken Landgren — Mon, 27 May 2019 14:54:19 -0400

I would recommend folks to learn about:
- Various instruments of investing
- Diversification
- Time value of money
- Compounding interest
- Risk/reward relationship
- How to value stocks
- How to compare mutual funds with the market
- Investing in TSP reduces taxes. Let's say you invest $10,000 a year into TSP and you get $2000 dollars back from taxes. Your true cost of investing is $8000.

Response by SGT Private RallyPoint Member made May 28 at 2019 9:08 AM

SGT Private RallyPoint Member — Tue, 28 May 2019 09:08:34 -0400

Be a lender, not a spender!

Response by Cpl Christopher Snarski Sr. made May 30 at 2019 7:57 AM

Cpl Christopher Snarski Sr. — Thu, 30 May 2019 07:57:13 -0400

Don't finance the Mustang at 29.9% interest... keep running everyday on boot leave!!