Thanks,
@davisgang90!
Thanks for the replies! Sorry I forgot to mention I have 2 rental properties paid for in Texas earning me about $2k a month(managed by father) and will be trying to get a job that pays at least $80k here in Hawaii as an IT position which is what I was doing in the military to help me save as much money as possible while going to school full time in the evenings and earning $3k there(studying management information systems). I have lived in Houston, Texas for 18 years but don't really like it as much now because of high property tax, lack of outdoors and pollution. The only reason I may consider going to Texas is because my parents and brothers live there. I plan on visiting Arizona this year particularly Tucson to see how I like it and property tax is much cheaper there and still close to Texas with lots of outdoors. I will give Doug Nordman a PM as well, thanks! I will probably max out TSP for my wife once I get a job. As far as primary residence I may not be purchasing 3-5 years from now depending on how I like Arizona and if I moved to Texas I would just rent so should I utilize a portion of the $110k in vanguard total stock index fund or VGSLX?
Welcome to the forums,
@mak123. There seem to be two threads on this topic, so let me offer a longer reply here and let the moderators figure out the rest.
It looks like you’re doing fine with your home down-payment fund. Money that you expect to use on a house in the next few years should be in a CD-- you don’t want to risk stock-market volatility or even take much risk in a bond fund. It’s frustrating to earn “just” 3% APY but chasing a higher yield in a short term (less than five years)is not worth the risk of loss of principal. You could keep an eye on the CD rates at NFCU and PenFed but 3% right now seems pretty compelling.
https://thefinancebuff.com/cd-vs-bond-fund-five-years-later.htmlWhen you buy your home, your biggest returns on your savings will come from having a large down payment and a high likelihood of financing. Those are both good ways to negotiate a lower sale price. In addition when that $110K is at least a 20% down payment then you can avoid private mortgage insurance and perhaps have a small fund left over for maintenance & repairs.
When you search for that home, don’t try to buy it like you’re blowing into town for a new duty station. It’s more hassle to rent for a few months at your new location, but research shows that nearly half of veterans only stay at that first location for two years. You’d hate to buy a home and then start the bridge career, only to find out 18 months later that you’re moving again.
http://the-military-guide.com/dont-buy-home-leave-active-duty/The best way to put that money to work when you find the home you want is to use a mortgage broker. A VA loan might seem like the easy answer but you may find a better loan through a broker, and the VA loan has stringent habitability & sanitation requirements (on the home inspection) which discourage some sellers. A mortgage broker can find different loans (from the same lenders) which might have better terms than the VA requirements.
The markets go up about 2/3 of the time. They were higher a couple months ago, and they’ll be higher 10 years from now, but nobody knows where they’ll go in between. The best way to deal with the emotions of stock-market volatility is to have an asset allocation plan. You’re already saving for a home (with a pretty good down payment), you’ll have several years of cash flow from the GI Bill, and you have a pretty good savings rate. Pick an asset allocation which lets you sleep well at night, put it in autopilot, and sleep better at night. The savings & investments that you’re making now (for >10 years in the future) are your foundation of financial independence.
If you’re not happy with the TSP’s L2050 fund or even 60%/20%20% in the C,S, & I funds then you could maximize your Roth IRA contributions in a stock-market index fund with low expense ratios from Vanguard or Fidelity. (Roth IRA contributions can be withdrawn any time for any reason with no taxes or penalties... they’re a good option for an emergency fund.) The important part of the FI plan is picking the asset allocation which lets you sleep at night and then setting up the deductions to get the money in there. You can read more about the Bogleheads investment policy statement and picking an asset allocation at their wiki:
https://www.bogleheads.org/wiki/Getting_startedhttps://www.bogleheads.org/wiki/Asset_allocationIf you're going to buy a home in 5-10 years then maybe you could invest some of your down-payment fund in a short-duration bond fund or put a portion of it in a dividend stock fund, but you have a high savings rate and there's zero reason to push the envelope on risk. Keep your $110K liquid & safe and put your other (future) cash flow into total stock market index funds.
You seem to be doing just fine with real estate but if you have more questions about investment properties, David Pere (a Kaneohe Marine who blogs/records at FromMilitaryToMillionaire.com) has an informal group meetup every month at Kailua Beach Park. We usually have about 20 people discussing investment properties across the Mainland, and many of them are military. However the real benefit for you would be networking that group for local college advice and to find out who knows people in the Oahu IT industry. You'll have some job-search help from your university as well as from the local IT groups, and David's group is one more way to work the problem. With free pizza.
If you have a TS/SCI clearance then you have some great IT options with Oahu's military commands as a contractor or federal civil service. You have the potential with the essential qualifications, and your employer would train you up on the rest.
My spouse and I have been on Oahu for nearly 30 years, and our daughter was born & raised here. (She also spent four years behind the hedges in Houston.) I’m up in Mililani. Let me know if you have more questions or want to get together for a cup of coffee to dig into the financial or IT career options. I know plenty of IT Mustachians on the Mainland so hopefully they'll know IT people to talk to here to figure out the employers.
Speaking of the book:
He literally wrote the book on Military Financial Independence and Retirement He's also a resident of Hawaii.
https://amazon.com/Military-Guide-Financial-Independence-Retirement-ebook/dp/B005AU15EU/ref=sr_1_3?s=digital-text&ie=UTF8&qid=1547549889&sr=1-3&keywords=the+military+guide+to+financial+independence+and+retirement
For all those of you who are also in Hawaii, there's still two copies of the book in the Hawaii State Public Library System. There are also copies at the base libraries on Pearl Harbor/Hickam and up at Kaneohe. Of course if you want an eBook version you'll have to borrow the (one) HSPLS copy or buy it from Amazon.
