Financial Advice - What do you need to know?

PV2 Private RallyPoint Member — Tue, 01 Apr 2014 10:01:23 -0400

Personal Finance has been a passion of mine since I was in high school. When I joined the Army I was very surprised at the small amount of financial education we received throughout BCT/AIT, many of us were getting our first real "salaries" (I have worked before but it has always been shift based for an hourly rate) and we were basically told to just run with it.

I do understand that there are a good amount of financial briefs/resources available to service members, but in my case and the case of many of my peers, these were never made clear/offered to us.

Because of this, I've taken up a bit of a pet project. I'm working on a website designed specifically for new (presumably young and financially inexperienced) service members to educate themselves about the basics of personal finance. Very simple topics such as making a budget, dealing with debt, establishing an emergency fund, setting up a TSP account. Real world skills that they will need to manage their new income.

My question is, and this is aimed at the younger members but I'd love to hear from everyone, what do you feel like you don't know enough about when it comes to personal finance? What would you be interested in learning more about?

Thank you in advance for your responses, and as the website comes together I will be sure to make it available to everyone here on RallyPoint to critique.

Response by LTC Private RallyPoint Member made Apr 1 at 2014 10:41 AM

LTC Private RallyPoint Member — Tue, 01 Apr 2014 10:41:01 -0400

You'll need to run it by your JAG/SJA office. If you are not a certified financial advisor then you could get in trouble (get sued) for giving out financial advice. If they clear you then go for it! Just don't want you to get in trouble.

Response by SFC Private RallyPoint Member made Apr 1 at 2014 9:37 PM

SFC Private RallyPoint Member — Tue, 01 Apr 2014 21:37:59 -0400

LTC Dickey makes a good point, and I was just about to offer some of my own personal pointers that I got from my MBA classes, but I don't want to cause or get into trouble. What I will recommend is that you go to your Installation ACS and ask about the financial planning classes. They give sound information and will give you a foundation on which to build upon. If I remember correctly, you should be able to also get promotion points for those ACS classes, which might not mean much to you now, but they will when you want to get promoted to SGT!

Response by Maj Jarrod Graham made Apr 1 at 2014 10:06 PM

Maj Jarrod Graham — Tue, 01 Apr 2014 22:06:04 -0400

I think the best advice I have seen is to avoid any car dealership that has $0 down, financing for E-1 and up. I have seen loans from dealerships to my Marines that had an APR well over 20%. Look out for predatory lenders. That and do not buy a car that costs more than a full year's salary.

Response by MAJ Steve Sheridan made Apr 22 at 2014 11:20 PM

MAJ Steve Sheridan — Tue, 22 Apr 2014 23:20:39 -0400

<p>Very impressive PV2 Rodriguez! It will be tough mission, but encourage you to keep at it.</p><p><br></p><p>Let me share what I've been doing for the past 12+ years.</p><p><br></p><p>After digging my way out of debt, I became a Dave Ramsey Certified Counselor (http://www.DaveRamsey.com) and led several Financial Peace University classes.</p><p><br></p><p>Then I developed my own class called Waging War On Debt which I've taught thousands of Servicemembers stateside and overseas. I agree with most of Dave's ideas, but hate the stock market. I prefer people invest in themselves.</p><p><br></p><p>Then a few years back I got the vision to write my first book based on my class (http://www.WagingWarOnDebt.com) to reach even more.</p><p><br></p><p>In my class and book I share my 10 Step Battle Plan To Lasting Financial Freedom (see attached photo), which is simple, but effective. It focuses on equipping our Military to kill debt & create wealth. </p><p><br></p><p>I encourage others to build a side business that creates streams of leveraged unearned income (not trading hours for dollars) while on active duty, so when you retire, you can actually live on your Military retirement along with your business income. I tell people your profession is a Soldier, but your business is U Inc. (investing in your own personal business).</p><p><br></p><p>That's it for now, as I could write and talk for hours on this subject.</p><p><br></p><p>Kill Debt & Create Wealth,</p><p><br></p><p>MAJ $heridan</p><div class="pta-link-card"><div class="pta-link-card-picture"><img src="http://www.WagingWarOnDebt.com/images/FoodInsurance.jpg"></div><div class="pta-link-card-content"><div class="pta-link-card-title"><a href="http://www.WagingWarOnDebt.com" target="_blank">Waging War on Debt</a></div><div class="pta-link-card-description">Military families have experienced increased OPTEMPO, deployments, injuries, stress and separation. Any of these issues can lead to financial problems, emotional trauma, hopelessness and divorce. Whil...</div></div><div style="clear: both;"></div><div class="pta-box-hide"><i class="icon-remove"></i></div></div><div class="pta-link-card"><div class="pta-link-card-picture"><img src="http://a248.e.akamai.net/f/1611/26335/9h/dramsey.download.akamai.com/23572/daveramsey.com/media/3_way_universal//main_homepage/images/2014/drhome_header_top_logo.png"></div><div class="pta-link-card-content"><div class="pta-link-card-title"><a href="http://www.DaveRamsey.com" target="_blank">Dave Ramsey Homepage - daveramsey.com</a></div><div class="pta-link-card-description">New York Times best-selling author and radio host Dave Ramsey is America's trusted voice on money. Learn how to budget, beat debt, and build a legacy with Dave's proven plan.</div></div><div style="clear: both;"></div><div class="pta-box-hide"><i class="icon-remove"></i></div></div>

Response by SSG (ret) William Martin made Apr 23 at 2014 2:36 PM

SSG (ret) William Martin — Wed, 23 Apr 2014 14:36:28 -0400

I am also impressed by PV2 Rodriguez. I have been trying to teach financial responsibility for years to soldiers who will listen.

Response by MSG Private RallyPoint Member made Apr 23 at 2014 2:46 PM

MSG Private RallyPoint Member — Wed, 23 Apr 2014 14:46:01 -0400

Great idea! Honestly I wish I understood how IRAs worked. Someone once told me I should start a civilian retirement savings plan with an IRA. I don't understand it and I'd hate to just trust some company to set it up for me when I'm going in blind.

Response by PO3 Private RallyPoint Member made Apr 23 at 2014 11:34 PM

PO3 Private RallyPoint Member — Wed, 23 Apr 2014 23:34:22 -0400

I am also a Dave Ramsey fan, and one day hope to become a certified financial counselor. I am currently an FPU coordinator.

Things I wish I had known when I was an E-Nothing:

The power of compounding interest. Delaying instant gratification NOW for a small price to have huge rewards later. http://www.daveramsey.com/media/pdf/forms/ben_and_arthur_military.pdf

Why financing a car is stupid. mathematically, it's one of the dumbest money mistakes you can ever make.

http://www.daveramsey.com/article/drive-free/

I also wish I had been smarter about WHY saving was important. Just because you get a paycheck on the 1st and 15th doesn't mean you have to blow through it and wait for the next payday. I wish I had learned about Dave's tips when I was in the service, rather than waiting until after I was out of the service and out of college and deeply in debt before figuring out how to get my finances in control.

Cell phone contracts with big name carriers are dumb. Pay as you go plans are much cheaper. Financially, if you ABSOLUTELY HAVE TO HAVE the latest smart phone, you are better off paying FULL PRICE for the phone and then getting a $30-$45 month to month pay as you go plan, such as Virgin Mobile PayLo, Straighttalk, Boost Mobile, Cricket, etc. Big name cell phone carriers sucker you in with the "cheap cost" of the phone, and stick you with a $100 or more monthly service rate for 2+ years. You'd have been better off paying full price for that phone, and paying only $30-$45 per month instead.

I'm not a fan of TSP, but I think the stock market is a great tool if you are smart enough to diversify your funds rather than putting all your eggs in one basket. As a civilian, I have a 401K, and it's doing FABULOUS. I have 25% small growth, 25% mid growth, 25% large growth, and 25% international, and I have seen phenomenal returns in the last 5 years.... even in the down market times. the key to the stock market is to NOT be a day trader. That's just asking for trouble. stock market is meant to be long term investing. Historically, over any 10 year period in history, there is always a growth. There will be dips, sure, but if you compare any date with 10 years earlier, the later date has historically been higher. That's why you cannot watch the stock market on a daily basis. You will give yourself an ulcer if you do.

Those are just a few of the things I wish I had known better about 15 years ago.....

Drive Free, Retire Rich

Do you think that having a car payment is just a way of life and always will be? Dave Ramsey teaches you how to follow a plan so you can drive free cars for life.

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Response by SPC Anthony Smith made Apr 28 at 2014 2:32 PM

SPC Anthony Smith — Mon, 28 Apr 2014 14:32:36 -0400

You are on the right track there PV2 Rodriguez!

So many more of our fellow military men and women would be setting themselves up for success if they had your drive and ambition. Great job, and if you have any questions regarding home buying or VA Loans, dont hesitate to ask!

Response by SSG Timothy McCoy made May 12 at 2014 5:01 PM

SSG Timothy McCoy — Mon, 12 May 2014 17:01:44 -0400

Rock on young man, Rock on.
This sounds like the making of a fine NCO. Soldiers care will be your main job in the coming ranks. When you teach others, higher or lower ranks, you will be not only helping others but helping yourself in the knowledge of self sacrifice
Personal Finance, and Education is what I stressed to my soldiers all the time. These were the 2 of my Indoc., and monthly counseling. My job was to train my soldiers for either the Board room or Battlefield. Making sure that their Financial goals are be met allowed them to keep their head in the game. And for the young married knowing momma was taken care of ensured I didn't get that phone call telling me to go take care a soldier.
The two points or tips I would like you to keep on your web page, would be first:
For young marrieds, is to have a "Deployment" checking account. We had one of these so when deployed and needed funds, my wife could deposited funds into the checking account and within 12-18 hrs. I could write a cheque.
And 2nd include the Rule of 72. This is a simple equation to show how long monies take to double. Take the Interest received and divide it into 72. the Sum of this equation is the number of year it will take at that interest rate for you money to double.
Here is an example,
If you receive 10% interest on a saving acct. divided into 72 equals 7.2 years. or 10%/72= 7.2 year to double.

You will be accredit to your unit, and the Army as a whole.

Response by LTC David S. Chang, ChFC®, CLU® made May 12 at 2014 5:23 PM

LTC David S. Chang, ChFC®, CLU® — Mon, 12 May 2014 17:23:00 -0400

good job. I have done the same with artofthinkingsmart.com and will now launch artofsmartmoney.com to help with the same. I have studied this in depth with market research and the competition is very stiff. I am averaging 65k hits a month but it wasn't easy and I am on the lower end of the spectrum. It may be helpful to team up with people who have the marketing prowess to get your site out. Getting hits isn't easy and will take a lot of work. I have been working on mine for two years now and write for a weekly article for the paper.

I would recommend trying to also guest blog on other finance sites, learn about keywords and search engine optimization. If you build your site on wordpress, then it has plug-ins that you can use. Google and facebook change their algorithms quite a bit so it is studying how they do it to get a good search ranking. The reason I say all of this is that since competition is high, there are ones that also cater to military, you have to distinguish yourself and make sure people know about it. No matter how good the content is, the marketing has to be there to push it out. Good luck!

Response by SSgt Gregory Guina made May 12 at 2014 5:27 PM

SSgt Gregory Guina — Mon, 12 May 2014 17:27:41 -0400

PV2 Rodriguez Believe it or not there is a website out there to do this already. my brother runs it. If you are interested in it message me and I can send you the link. Additionally my brother is always looking for contributers to his site and if your writing skills are decent he does pay for submission.

*If anyone else would ike the site please feel free to message me and I will get it to you that way.

Response by COL Randall C. made Jun 22 at 2014 12:37 PM

COL Randall C. — Sun, 22 Jun 2014 12:37:41 -0400

LOTS of great ideas and comments on what to do with your money as a service member, and like a lot of the diets out there, none is 'wrong' .. you just have to choose the one that works best for you.

One bit of advice that a very helpful Captain (Charlie, I'll always be grateful for you getting me started on the right path!) gave me when I first came into the military - "pay me now, pay me later".

Simply put, whenever you get an increase in pay, take 1/2 of it as a pay increase and put the other 1/2 of it into ANYTHING (refer to many of the great ideas of what to do above, but at least put it into a separate account that you don't touch).

Pretty simple approach that can easily be implemented, especially for those that have no financial discipline to start with.