Author Topic: Question from baby stubble  (Read 23271 times)

Jay72

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Question from baby stubble
« on: May 07, 2014, 12:45:54 PM »
Fellow Mustachiates....lend me your keyboards, as it were.
I am brand new to this forum, after spending a week reading the main sites blogs and comments, and I have a dilemna that hopefully one of you Subblers or Senior Mustachians, can help me with.  My financial situation is good, but as people you have talked to before, I have made some VERY BAD mistakes (money wise). 
     My financial house, is as follows:  I am a 43yo male, living in Louisiana, I am single, have no children.  I care for no one in my house (except 3 dogs...2 of which I inherited).  I have a full time job and am a full time Reservist (a weekend a month, 2 weeks a year).  My primary job is also a Govt. job, that I applied for after getting out of Active duty, in 1998.  I am about to retire from the Reserves, but will not receive a pension, until I turn 48 (about 2 years after I retire).  I have deployed to Iraq (twice) and Afghanistan (1) and have thanked God for letting me come back in one piece.  The money earned there (tax free) paid off Car note (in '07) and Truck note (in '12). I will not retire from my Main job, until I turn 55 (about 12 years).  I own a home (recently refinanced to 15 years) and owe about $125K.  The home was recently appraised for $145K.  I have not owned another home, so if I decide to sell, I will keep most of the profits (minue sellers fees).  My only other debt is a credit card, with $4500 on it (currently making payments above the norm of $350/month...but am considering using stashed money to pay it off completely, leaving me only my mortgage.
      I have 2 vehicles, both of which are paid.  One is a '05 Tacoma and the other is a '02 Civic (my daily driver).  The truck is for the weekends, or moving items for family, otherwise it stays mostly in the garage (EXCEPT during Hurricane Season, when i have to beat feet out of the state from an approaching storm). 
      I currently have $16K in a 401K, with employer matching (TSP for government folks, contribute $200/month), $2K (Emergency Fund on hand), some physical Gold/Silver (about $5K), $10K (in a online account, in case we I ever have a Sequestration, as the U.S. had in 10/13), $2900 mutual fund (I contribute $100/month), $2300 in the bank.  On my main job, I am to far off to get a 'guesstimation' of what my monthly retirement will be, and Reserves will be about $1K/month (+ or -).  I make about $2258/month (after taxes) from both Main job and Reserves.  That is about it in a nutshell.
      So you may be saying to yourself, "How come this person does not have more money than this socked away", as you scratch your Bearded face?   This is where the VERY BAD money mistakes kick in.
      When I got back from Afghanistan, a 'Friend' came to me with a prospectus, about a business he wanted to start with me.  I had the money, he had the skills/determination.  I have always wanted to start a business, as my father did, so after some head scratching/soul searching I was in.  I received a second mortgage (Mistake Numero Uno), and we went into business together. The business was Long Haul trucking.  For those of you who do not know, there are 2 major types (Long haul and Local).  Long haul is just as it sounds, driving across many states, to deliver frieght, and local, is staying (roughly) around your state/city you live in).  Long haul (generally) pays more than Local.  Long story short, I borrow $40K, we buy a used truck, and start the business, everything is great, until  we start to have minor problems.  My 'friend', got in an accident, not his fault according to him, with a Toyota Avalon, driven by an old married couple.  The  vehicle took out the passenger sides Diesel tank, thankfully no one was hurt.  Their insurance paid for the damages....eventually.  My 'friend' was out of work for 2 months, while our insurance/their insurance went toe to toe to see how much the damage would be repaired for.  During this time, our business made no money (Mistake Numbro Dos), but lost ALOT of it (this was during 2010, when the economy was really getting worse).  While my 'friend' was at home, he became overweight, through inactivity.  When the truck was fixed and ready to work, my 'friend' had to get his truckers license renewed and in the trucking business, before you can be cleared by a physician, you must be physically fit.  He was not.  He had high blood pressure, 100 pounds overweight, etc., so his license was not cleared to operate a truck.  This put him on the sidelines for almost 4 months while he lost the weight.  Long story short, he had little money saved, I 'loaned' him, almost $10K in personal loans, and when he finally was able to get back on the road, his wife left him, with their 3 children.  While this happened I was preparing to deploy to Afghanistan, and was out of country, so I did not hear anything about his divorce, etc.  Needing money, he sold the truck (Mistake Numero Tres) since it was in our companies name, while not telling me, or needing my permission to do so (since we were both co-owners of the truck), for $17K (an $18K loss) and within 2 months that money was gone (used for living expenses, child support, food, etc....or just plain wastefulness).  Meanwhile, in Afghanistan, I heard through a friend of ours, what was going on, but by this time it was too late.  The money was gone, business dissolved, 'friend' not returning calls/emails, and me holding an almost over $50K (with interest).  When I refinanced my home, I rolled this second mortgage into it, and drop to a 15 year loan.
     I would LOVE to be like the tripled M one (as I'm sure most of us would) and retire soon.  I was GOING TO retire when I was 55....but that may not be possible. Apologies if it gets a little....whiney toward the end, but buried feelings rise to the surface, occassionally. 
     If after reading this story, if you have any ideas/advise, I would be grateful to hear from you. 
     May your Stubble, become Full Flowing Beards (As Triple M's is)!!!

Jay72

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Re: Question from baby stubble
« Reply #1 on: May 07, 2014, 01:03:44 PM »
Fellow Mustachiates,
    I forgot to mention my budget.  House note is $1125/month, plus additional $200/month toward principle (about to up it to $275 toward principle), $47/month cell phone bill (possible to cut out), $150/month Cable/Internet (possible to cut out), $100/month Electric (with new insulated windows/doors/Garage door), $200/month food bill, $350/month Credit Card payment, $100/month vehicle gas, $100/month (6 month premium) Car insurance, $18/month Natural Gas....and that is about it.
     Again, any ideas/insights you would have, would be appreciated.
     Keep Calm and GROW ON!!
     Jay

Lans Holman

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Re: Question from baby stubble
« Reply #2 on: May 07, 2014, 01:09:33 PM »
Sounds like your mistakes all come down to just trusting one person who you shouldn't have.  50k is a lot to lose but it does look like you're on the path to overcoming that. 
Looking ahead, it seems like you've basically got 12 years left to optimize your situation while you are earning.  If you really want to get into it, posting a list of monthly expenses on here and letting people go over them with a fine tooth comb is a pretty rewarding exercise, at least it was for me.  If you feel like you've done the best you can with the expenses, the next question is where you are keeping your money.  I would definitely vote for taking a chunk of that emergency fund and paying off the credit card.  Right now you are essentially borrowing money at whatever percentage just so you can keep some in the bank in case of government cuts.  Pay off the credit cards, and then if you have some kind of real financial emergency use them to smooth it over.  I would also say that since you're fairly close to retirement age, already own a house and don't have kids, there's not much sense in making regular after tax contributions to the mutual fund that you could be putting into your 401k pretax. 

Gimesalot

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Re: Question from baby stubble
« Reply #3 on: May 07, 2014, 05:38:55 PM »
I think you are doing okay.  I assumed that once you finish your mortgage, you housing expenses will drop to $600 a month, for insurance and the like.  Then your basic expenses will be around $1400 a month, which is significantly less than your pension. 

I don't agree that you should use your savings to pay off your credit card, just yet.  Right now your house is worth $145k.  My guess is that your wind and hail deductible is 5%.  So you have enough in cash to cover that, plus a little extra.  Therefore, I would continue to pay the credit cards, as you are doing, until November.  If you still have a balance, then you should pay the full amount.  That way, you can build you emergency savings up, before next hurricane season.   

After that, I agree that you should maximize your 401k contributions to lower your taxes. 

To me it looks like you are doing okay and despite the mistakes, it looks like you will be on track to retire or at least reduce your workload.

Emg03063

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Re: Question from baby stubble
« Reply #4 on: May 07, 2014, 07:12:06 PM »
You're ok.  Shift extra money to pay off the cc before investing any more in non-tax advantaged accounts or making extra pre-payments to your house, then resume.  Please provide the interest rates on all of your debt, and your income from gov't job with and without drill pay (gross and net).  The biggest concern I see is cash flow from ages 45-48.  I would think your gov't pension + military pension would cover your retirement needs, but you really need a projection to confirm.  Someone from USAA or First Command should be able to help you out with that if you can't figure it out from gov't sources.  I imagine funding an IRA would be to your benefit, but I can't tell you if you're better off with a Roth or traditional without a fuller picture.  Thanks for your service!

Jay72

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Re: Question from baby stubble
« Reply #5 on: May 07, 2014, 08:33:17 PM »
Fellow Mustachites,
     Thank you for your help with the advise...but I have to admit, financing terms and I are not friends.  What is a 'non tax advantage account', is that the Mutual fund, that I spoke of?  As far as % rates on my debt, my home is now refinanced to 3.5% for 15 years, fixed and my CC is currently 18.99%, or roughly a dollar a day ($35/month in interest).
      Gimesalot does make sense, about Hurricane Season, and holding off on paying the CC off (which is $350/month, vice the $100 that they are wanting me to pay), but Lans Holsman, makes a point as well.
      My money is currently being kept in 2 places.  Main account is at Capital One Bank (for rudimentary interest....and bank 'points').  I also have a school account there, with $10.95 in it, and my Retirement fund (laughing nicknamed by me, when I/my 'friend' went into business together), with about $850 in it.  The other fund is USAA, where the $10023 is at (earning .20 percent based on market...it goes up...but mostly down, as far as the interest).  The Mutual fund is there as well, along with another partial "Emergency Fund' of $450, making up $1100 in cash for unexpected occurancies and between the Capital One account/USAA account another $1200 digitally stored.  I read MMM blog from 2011, about the woman who had $45K+ of expenses, but had $44K spread over 4 different accounts/banks.  Maybe I should just put all the smaller accounts, into a couple of large accounts, and be done with it.
      Now once my home/CC is paid for, should I do as MMM suggests and invest in Vanguard index funds or dump it all into my TSP (401K)
      Please let me know if more information is needed.  Again, thank you for the advice.
      Jay

MrAlexMoore

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Re: Question from baby stubble
« Reply #6 on: May 07, 2014, 08:50:04 PM »
Jay it's great that you found your way here.  While I'm relatively new to the forums, I hope I can offer some useful advice.  Let's take stock of your situation quickly

Monthly...
Income: $2250, eventually $3250 after reserves pension kicks in
Expenses: $1400 home, $50 phone, $150 cable/inet, $120 Utilities, $250 food, $350 credit payment, $100 gas, $100 Insurance
Net: Current -$270 loss per month

Assets: House $145K, $16K 401k, $22K cash/gold/other relatively liquid accounts, 2 cars (guess $12K & $7K)
Debts: House $125K, $4.5K credit

Based on your listed income and expense, I see an immediate concern in that you are spending about 10% more than you are making.  Based on this picture alone, I would recommend the following
1. Cut cable tv, keep internet, get netflix / amazon prime, save around $100 per month
2. Dump the $50 cell phone and switch to Republic or Airvoice, save $30-40 per month
3. Pay the minimum on your mortgage to get closer to breaking even

Next, that credit card payment is weighing you down.  While I understand you are saving some $$ in other areas in case of an emergency, credit debt is an emergency in my book.  Look at it this way.  You have a net of 'cash' and debt of $18K ish.  If you have an emergency that requires all of your reserves ($22K), you will be left with your $4K of debt whether you pay it off now, or don't pay it off at all.  So I recommend paying it off NOW and saving the interest.  If an emergency DOES happen, use your credit card if needed to get you through

Now let's update
Income: $2250, eventually $3250 after reserves pension kicks in
Expenses: $1400 home, $20 phone, $50 cable/inet, $120 Utilities, $250 food, $0 credit payment, $100 gas, $100 Insurance
Net: Current $220 savings per month!

Assets: House $145K, $16K 401k, $18K cash/gold/other relatively liquid accounts, 2 cars (guess $12K & $7K)
Debts: House $125K

Boom!  Now you are saving.  This is AWESOME.  So what next?  Here are some ideas
1. Push more into the 401k or an IRA and save tax money, because every bit helps.  Tax advantaged accounts are key ( Your mutual fund has no tax advantage like the tax deferral of a 401k)
2. Alternatively you could pay more principle on your mortgage, build equity
3. Advanced - downsize to 1 car if possible, save gas / insurance costs
4. Definitely consolidate accounts!  Pick either Cap1 or USAA and close any other bank type accounts.  Move all retirement or investment type accounts to Vanguard, and now you only have 2 places to look at your cash.  It's a pain to do, but it is so much easier to manage when you are done...

Most importantly keep saving, only maintain your reserves as needed.  Use any extra money for 'retirement', even after your retirement payment start coming in. 

Now your expenses seem fairly minimal, so if my calculations are inaccurate, please adjust as needed. 

I like to think that all this can be boiled down to the following tasks
1. Take stock of your current situation, income, expenses, and understand whether you are saving / losing money
2. Write down multiple goals for your income / expenses / savings.  What do you want to achieve?
3. Build an action plan to achieve each goal, with itemized steps to achieve each one and a target date for your accomplishment.  Break goals into mini-goals if it helps.
4. Finally, make your plan happen!  Get out there and do it!

Good luck Jay, I wish you the best. 

Emg03063

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Re: Question from baby stubble
« Reply #7 on: May 07, 2014, 11:29:54 PM »
What is a 'non tax advantage account', is that the Mutual fund, that I spoke of?  As far as % rates on my debt, my home is now refinanced to 3.5% for 15 years, fixed and my CC is currently 18.99%, or roughly a dollar a day ($35/month in interest).

Yes.  Any investment other than a 401k, TSP, or IRA.  19% cc debt is horrible.  Pay that off immediately.  See http://www.mrmoneymustache.com/2011/04/22/springy-debt-instead-of-a-cash-cushion/

Also, your car insurance premiums seem high.  Is there a reason for that?

Jay72

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Re: Question from baby stubble
« Reply #8 on: May 08, 2014, 11:00:45 AM »
EMG,
     Honestly I do not know exactly why.  I have called 10 different insurance companies, and all of them are high.  I'm not sure if it's because I am single, vice married, childless, vice having children, or what.  I have no frecent speeding tickets (last one was over 20 years ago), no recent accidents (last one was almost 20 years ago), my Credit is good (according to the Big 3)  Currently I am with Allstate, I was with USAA, but their insurance rates kept rising steadily over the decade I was with them, so I left last October.  Now it seems that Allstate is starting the same thing....slowly raising their rates.  I have my home/car ins. through them, which gave me a discount, and was cheaper than USAA, but it is now $50 more expensive, than when I got it in 10/13.   
      Maybe it's time to do another call around, for insurance rate quotes. 
      One of the previous commenters suggested dropping my truck, which sounds like a good deal....in theory.  I live in La., and evacuated for Hurricane Katrina, with 2 dogs, a cat, and a ferret....in a '02 Honda Civic, let me tell you it was NOT FUN.  Which is why I bought the truck, in case of another evacuation, at least it would be larger, so I could have some room in my vehicle.  I'm over 6'3", and I was jammed into the steering wheel of my vehicle, for almost 20 grueling hours, trying to get to Ft. Worth.  Long story short, when I got back to La. and I saw I had lost everything (flood waters from the Storm Surge, were 8 foot high), I decided at least I can take a little extra of my belongings with me next time, instead of starting out with nothing, as I did after Katrina.
      Honestly, though, if I did get rid of the truck, it would cut down on fuel/insurance bills.
      Again, thank you all for your advice. 
      Jay

FunkyStickman

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Re: Question from baby stubble
« Reply #9 on: May 08, 2014, 11:18:55 AM »
I'll throw a little advice in here... as a fellow Cajun, and having lived in New Orleans during Katrina, I understand the evacuation thing. But your truck is technically not necessary. If you're seriously concerned about room to evacuate in, you can get a roof pod, or a trailer hitch and a small trailer (which you can also use to haul stuff in). I'm currently trying to convince my dad to get rid of his truck... he even has a trailer already, just needs to put a hitch on my mom's Jeep.

Everybody else has pretty much covered the financial end of it, and I agree with paying off the CC immediately, 18% interest is ridiculous.

If we get some more LA folks up in here, maybe we could have a MMM meet-up one day... hmmm.

Emg03063

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Re: Question from baby stubble
« Reply #10 on: May 08, 2014, 07:43:14 PM »
Ask your insurance agents why they're so high.  Are you carrying collision?  What are your deductibles? 

I have to agree with FunkyStickman re: evacuation advice.  Sounds like the perfect application for a trailer to me.

Jay72

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Re: Question from baby stubble
« Reply #11 on: May 08, 2014, 07:56:33 PM »
FunkyStickman/EMG,
     I appreciate the advise from a fellow Cajun, but there is a 'flaw in the slaw', so to speak.  The previous post about me, 2 dogs, a cat and ferret, making the Civic cramped, with a trailer it's still going to be cramped.  While I was deployed to Iraq, my brother came to stay with my mother, at my home, unbeknowst to me.  He is always 'between jobs' it seems, and he brought his dog with him...the one I left with during Katrina, a female pit bull.  While he was at my home, I had asked both my mother and he, to 'not let them outside together', since I had a feeling his dog was not fixed...long story short they didn't listen, nature took it's course, and after lying to me, that his dog was not pregnant, after I said I would take her (because of the always 'between jobs' problem), she gave birth to 6 puppies, her first litter.  I wont bug you with the details, much as I have already done, but I was only able to give away 4 puppies, to homes, one passed several days after birth, and one was left.  The last one, no one seemed to want, and I knew that if I took her to the pound (since she is a Pitbull mix, if you read/heard the hype about 'KILLER PITBULLS', which they aren't...but I digress), I knew she would be put to sleep.  I decided to keep her...so now I have 3 dogs, minus a cat/ferret, which would make the Civic even MORE crowded.  Thank you for the advise, it is much appreciated though.
     I seem to see a pattern about the CC, and to use my furlough money, to knock it out.
     As for the meet up, I would like to meet fellow MMM's and local folk, if possible.  Maybe we could set something up, and exchange ideas in person.  Again thank you for the help and every one elses' as well.
     EMG, you were posting, while I was typing, Great minds.....As for my coverage, yes I have collision on my car/truck, because of my interstate driving I do,and because my truck is newer.  The coverages, are La. standard, for the Civic (50,100,100), for the truck is (50/100/100).  It was suggested that I keep the higher coverages, b/c the truck is newer, and b/c I am a homeowner.   Let me know what you think.
     Jay

GoldenStache

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Re: Question from baby stubble
« Reply #12 on: May 08, 2014, 08:22:51 PM »
From a former insurance guy… Your rates are still high from Katrina.. You probably live within 25 miles of the coast.. A lot of companies will not cover there or will give you a bad rate.. Less supply, higher demand..

Sell your truck (the insurance is killing you) and use that to pay off your CC… You have insurance for items, stuff is replaceable.. Might be a pain to load up your animals in your car but worth the risk to reach FIRE…

Once you get your CC paid off start maxing out your TSP, save a boat load in taxes at the end of the year. I like to do a manageable amount and have a little reserve built up towards the end of the year, and if I have my bills covered, switch it to 50% or 100% to try and reach that maxed limit. 




Jay72

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Re: Question from baby stubble
« Reply #13 on: May 08, 2014, 08:43:40 PM »
Golden,
     Thank you for the advise, but I have question. 
     You said you, 'ike to do a manageable amount and have a little reserve built up towards the end of the year, and if I have my bills covered, switch it to 50% or 100% to try and reach that maxed limit. '  What exactly does that mean, as far as having a reserve built at the end of the year, and then switching it to 50% or 100%.  Appreciate the advise.
      Jay

totoro

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Re: Question from baby stubble
« Reply #14 on: May 08, 2014, 09:15:34 PM »
Sorry about your friend experience...

I would sell your truck and pay off your credit card.  The amount you are paying on the truck and credit card interest to save you from a possible hurricane in the future is not worth it imo.   You are operating from an emergency hurricane/wartime mindset imo which is not really rational when you calculate the odds.  Not sure if you can transition yourself to a less vigilant stance?

If you lost everything in the last hurricane and think you can make the next one better by having a truck maybe it is time to evaluate cost of truck vs. cost of stuff lost?  We own a fair bit of stuff but we could replace it without a huge loss because most of it was purchased second-hand.  Could you use that as a strategy instead?  Get a rooftop or trailer for the important/sentimental things?

Have you tried to use CL to rehome one or two of the inherited dogs?

What about room-mates?  Easy way to increase your cash flow if you feel it could work for you.

SJS

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Re: Question from baby stubble
« Reply #15 on: May 08, 2014, 09:22:34 PM »
Jay - THANK YOU for serving our country - for protecting each and every one of us so that we can continue to live amazing, fruitful lives!

I am sorry your got screwed by a "friend" - you sound like a great guy.  Live and learn.  Sounds like you are turning things around - best of luck to you! 

Jay72

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Re: Question from baby stubble
« Reply #16 on: May 09, 2014, 04:48:59 AM »
Totoro, SJS,
     Thank you both for your advice, it is greatly appreciated.
      Totoro, I have several questions for you, at the bottom of your advice you said I should use 'CL to rehome one or two of the dogs'....what is CL?  I'm not sure.  Also now the truck is not mostly for items (although I will be taking photos/videos with me this time, so I can protect them), but it is primarily now for the dogs, that I have now.  Some folks, in La., left their animals behind, because they did not have the room to take them with them, b/c they thought it would be a miss, as most Hurricanes were, before '05.  Thousands of animals died b/c their owners could not get back in time, after the storm.
      SJS, and other posters, it was my HONOR to serve the U.S.  Thank you for the recognition, it is greatly appreciated, but definitely not necessary.  Thank you again for the compliment.  Looking forward to hearing your advice.
      Jay

TomTX

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Re: Question from baby stubble
« Reply #17 on: May 09, 2014, 04:52:49 AM »
Edit: I'm more of a "tough love" kinda guy. Welcome to the forum. Now down to business:

Why the HELL would you be paying extra on a 3.5% loan, when you have a 19% loan? Facepunch time.

There is "diversified" and there is "scattered" - you are the latter. You are all over the damn place financially. Dribbles of cash, outflow and assets while your PANTS ARE ON FIRE WITH 19% DEBT!

You have $2K + $5K + $10K + $2900 + $2300 sitting around. - and you are squirting cash all over, every month.

That's over $22,000 of after-tax money sitting around outside of retirement accounts, and you're adding more to it, or paying down your 3.5% debt instead of dealing with $4,500 PANTS ON FIRE 19% DEBT!

Which costs more, $4,500 at 19%, or $4,500 at 3.5%?

Why would you be putting extra at the 3.5% instead?

Is there ANY investment which you have that can reliably pay you 19% after tax? NO.

Even after you pay that debt, you will have a lot left for an emergency fund. Go pay the debt. Today.

Sure, there are other areas to improve. The credit card is "first and worst" - after that we can start talking about selling off your gold and your truck. You don't need two vehicles. You can't eat gold, and it's not an investment. It is at best a hedge. Lots of people make money from selling gold. Yes, gold had a great runup for about 10 years - after decades of doing zero. Looking at the long view, just after a huge gold runup - stocks have still done better.
« Last Edit: May 09, 2014, 04:55:43 AM by TomTX »

TomTX

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Re: Question from baby stubble
« Reply #18 on: May 09, 2014, 05:20:52 AM »
You know, the excuse for keeping the debt because you "might" have a hurricane (or tornado or whatever) wreck your house, and you have a 5% deductible is really bugging me.

Lets actually look at this scenario.

You pay off the $4,500 today.  Your house gets hit a glancing blow by a tornado tomorrow, with $50,000 in damage. You will need the whole $4,500 back for (whatever) to fix your house.

Even if you have to spend the $4,500 on Monday (and you fail to sell off your gold/stocks/truck/other junk) - you just put it back on the credit card.

Back where you started....

Except that interest doesn't start accruing for ~45 days. You just suspended the 19% interest for 45 days by paying off and re-using the card.

Even in the worst-case scenario of having an instant emergency, you saved ~$100  of after-tax money by paying off the credit card today.

aj_yooper

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Re: Question from baby stubble
« Reply #19 on: May 09, 2014, 05:37:33 AM »
Have you applied the business losses to your taxes?  If not, I would re-file for those years and see if that helps you out. 

totoro

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Re: Question from baby stubble
« Reply #20 on: May 09, 2014, 08:14:18 AM »
Totoro, SJS,
     Thank you both for your advice, it is greatly appreciated.
      Totoro, I have several questions for you, at the bottom of your advice you said I should use 'CL to rehome one or two of the dogs'....what is CL?  I'm not sure.  Also now the truck is not mostly for items (although I will be taking photos/videos with me this time, so I can protect them), but it is primarily now for the dogs, that I have now.  Some folks, in La., left their animals behind, because they did not have the room to take them with them, b/c they thought it would be a miss, as most Hurricanes were, before '05.  Thousands of animals died b/c their owners could not get back in time, after the storm.
      SJS, and other posters, it was my HONOR to serve the U.S.  Thank you for the recognition, it is greatly appreciated, but definitely not necessary.  Thank you again for the compliment.  Looking forward to hearing your advice.
      Jay

CL is craigslist, the online classified system.  You can post a picture and all the info about your dog(s) and if you find a good match you can rehome.  No obligation.  If it doesn't work in your area you can try an area a bit further away.

With three dogs a civic would be tight in the worst case scenario, but the odds are very low this will occur and you could fit three dogs in if I'm not mistaken?

Jay72

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Re: Question from baby stubble
« Reply #21 on: May 09, 2014, 09:58:54 AM »
Totoro,
     Craigslist....you got me on that one, I was wracking my brain to figure out what you were talking about.  Unfortunately, it is too late for that, for several reason (please know I'm not 'making excuses' as my family members' seem to think).  Both dogs, to be honest, I have become emotionally attached to, especially since I have been back from overseas.  The VA, seems to think it is a good idea, for me to keep them, since I suffer from mild PTSD (dreams, loud noises, cars following too closely, etc).  As for the dogs fitting in the car, they can fit in the car, all three of them, but one would have to be in a dog cage, since the father/daughter fight like cat and dogs.  As for the 'odds being very low' that something would happen, unfortunately that's what alot of people thought, during Hurricane Katrina, and 1900+ people drowned/got eaten by gators, or suffered on bridges, waiting for help.  Louisianians, PK as we like to call it, are now more jumpier when theirs a storm in the Gulf...I know this one is.
      Again, thank you for the suggestions, they are all appreciated.  Apologies if it seems like I'm making excuses/shooting them down for no apparent reason.
      Jay

totoro

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Re: Question from baby stubble
« Reply #22 on: May 09, 2014, 10:15:28 AM »
Totoro,
     Craigslist....you got me on that one, I was wracking my brain to figure out what you were talking about.  Unfortunately, it is too late for that, for several reason (please know I'm not 'making excuses' as my family members' seem to think).  Both dogs, to be honest, I have become emotionally attached to, especially since I have been back from overseas.  The VA, seems to think it is a good idea, for me to keep them, since I suffer from mild PTSD (dreams, loud noises, cars following too closely, etc).  As for the dogs fitting in the car, they can fit in the car, all three of them, but one would have to be in a dog cage, since the father/daughter fight like cat and dogs.  As for the 'odds being very low' that something would happen, unfortunately that's what alot of people thought, during Hurricane Katrina, and 1900+ people drowned/got eaten by gators, or suffered on bridges, waiting for help.  Louisianians, PK as we like to call it, are now more jumpier when theirs a storm in the Gulf...I know this one is.
      Again, thank you for the suggestions, they are all appreciated.  Apologies if it seems like I'm making excuses/shooting them down for no apparent reason.
      Jay

No. I don't see it as excuses.  A solution is only good if it fits.  I do see the influence of tragic events shaping your choices in a big way, but that is how it works for us all. If you have lived through a big hurricane, earthquake or war it will make you extra vigilant.

The real question is whether you have considered all the options and it seems like you are doing this.  As for the dog crate, maybe that solution would work but if the truck serves to give you sense of security that you need maybe that is okay to.

Jay72

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Re: Question from baby stubble
« Reply #23 on: May 09, 2014, 10:59:17 AM »
Fellow Mustachians,
     It seems the concensus, is to pay off my CC, with my Furlough fund.  I guess, in the long run, this makes sense.
     So, the next question, what do I do with the extra cash, no longer going toward the CC?? Throw it ALL ($350/month) at TSP/401K, or some at the TSP/401K...some at a Vanguard Fund, as triple M suggests.  I am already putting extra ($200/month) toward principal of house.  Should I put this money, toward house principal. 
     As always, any advice you can give, would be appreciated.  Thank you.
     J

Another Reader

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Re: Question from baby stubble
« Reply #24 on: May 09, 2014, 11:19:19 AM »
I live in earthquake country.  I will always have the biggest mortgage I can on my house.  Right now, if the house disappears in a cloud of dust, the bank has a $400k interest in fixing it.  I have an additional $400k working for me elsewhere that's no longer tied up in the house and I can afford to move and buy somewhere else.

I would pay off that ridiculous credit card ASAP.  Then I would put the money towards savings and investments that will get me through another Katrina.

TomTX

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Re: Question from baby stubble
« Reply #25 on: May 09, 2014, 02:08:40 PM »
Your house loan is barely above inflation.

Personally, I would not pay the house loan early. I would put anything extra in the TSP.

With all that post-tax money you already have sloshing around, you could at least protect $5,500/year of your various emergency funds/gold money/etc in a Roth. You can always get your contributions back out.

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Re: Question from baby stubble
« Reply #26 on: May 09, 2014, 06:36:10 PM »
Golden,
     Thank you for the advise, but I have question. 
     You said you, 'ike to do a manageable amount and have a little reserve built up towards the end of the year, and if I have my bills covered, switch it to 50% or 100% to try and reach that maxed limit. '  What exactly does that mean, as far as having a reserve built at the end of the year, and then switching it to 50% or 100%.  Appreciate the advise.
      Jay

I save a small portion each month for on going mini emergencies besides having an actual emergency fund.  At the end of the year If that pot is full, I use that as account as my pay check and switch my tsp to 100% (all of my check goes into tsp and I am not paid anything).  This year my mini emergency pot was doing great so I did 100% for Dec and Jan.  December is considered backloading January is considered front loading, people will tell you one is better than the other depending on if the market is going up or down, but I am just happy putting more into it for now.

Emg03063

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Re: Question from baby stubble
« Reply #27 on: May 09, 2014, 11:12:27 PM »
Fellow Mustachians,
     It seems the concensus, is to pay off my CC, with my Furlough fund.  I guess, in the long run, this makes sense.
     So, the next question, what do I do with the extra cash, no longer going toward the CC?? Throw it ALL ($350/month) at TSP/401K, or some at the TSP/401K...some at a Vanguard Fund, as triple M suggests.  I am already putting extra ($200/month) toward principal of house.  Should I put this money, toward house principal. 
     As always, any advice you can give, would be appreciated.  Thank you.
     J

Conventional wisdom is you max your TSP/401k to the company match, then fund a Roth IRA, then keep pushing money into the TSP/401k.  The reason for this is that gains in the Roth IRA are tax free, while those in the 401k are merely tax deferred (free is better).  If you expect your income to be much lower in retirement than it is now, a traditional IRA may be better for you than a Roth--another good reason to get a projection.  I would be maxing out my tax advantages before I put any extra cash towards the house. 

+1 on aj_yooper's advice.  It's a good idea.

Now, would you mind explaining to me why dogs can't ride in crates on a utility trailer pulled by your car in the event of an evacuation?  I'm not a dog owner, so I'll concede it's entirely possible I'm missing something there.

Jay72

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Re: Question from baby stubble
« Reply #28 on: May 10, 2014, 07:50:30 AM »
Golden, Emg, aj-yooper,
     Thank you for your advice, it does sound...sound.  As I've said in previous posts, Math and I/Finance and I, are not friends.  It does not come easy to me...which is maybe I have made major money mistakes.  I have a Mutual Fund, with USAA, that is a Roth IRA, and a TSP/401K with my Govt. job.  I am about to go back on Active duty, this time State side, with no deployment overseas.  So the increased money, that I put into my TSP is taxed, when I pull it out at retirement, correct?  Any money I put into an Roth IRA is not taxed, as long as I keep it in UNTIL after 57.5...i.e. Free Money??
      My 'company matching', is 1%, and I am currently putting in $200/month, and my company is matching up to $74/month...so I will not get anymore 'free money' from my employer, past this point.  So do I continue to add more money on top of the 401K, or do I begin to throw money into the Roth IRA with abandon? 
      If I wish to do, as MMM is doing, that it sounds like TomTx is doing as well, and use I funds to retire on, and just live off the interest, how would I do that?  Is this a wise move, since it sounds like an I fund, is dependent on the Stock market, with it's rise and falls....but if I understand correctly MOST of the time, you receive a better rate of return (in the long haul), than just burying it in the ground.
       As far as what aj_yooper said that would be great, and my CPA agrees...just one hitch.  My 'friend', has not been seen by me/talked to me, since 2010, and he was driving OUR truck, which means he did taxes on the truck, which means he received the tax benefits from the business....not I (Money Mistake Numero Cuatro).
       EMG, as far as the dogs riding on a trailer issue, I could not do that to them.  All 3 are 'inside' dogs.  They go outside, to do their businesss' but stay in my home.  Since I live in La. the humidity during Summer is very brutal (99% humidity, with 97 degree temps.), would kill these dogs, especially coupled with both their ages (15+ year old). This is why I could not load them on a trailer, outside my vehicle, with no A/C. 
       Any answers you can provide me, would be greatly appreciated. Thank you again for ALL of your responses.
       J

TomTX

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Re: Question from baby stubble
« Reply #29 on: May 10, 2014, 08:06:16 AM »

      My 'company matching', is 1%, and I am currently putting in $200/month, and my company is matching up to $74/month...so I will not get anymore 'free money' from my employer, past this point. 

Really? TSP generally means the .gov puts in 1%, no matter what you do, and gives a match up to 5%.

http://www.plan-your-federal-retirement.com/fers-tsp-match.html

Please check IMMEDIATELY with your HR/TSP rep. Unless you are in a weird position, you are giving up free money.

FunkyStickman

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Re: Question from baby stubble
« Reply #30 on: May 10, 2014, 08:09:39 AM »
I've evacuated (more than once) with my wife, 4 kids, a week's worth of stuff, and 3 cats in a minivan. It wasn't pleasant, but we did it.

It's a tough call. I still think you could evacuate with a trailer or roof pod, but you know, how much more room does your truck really have on the inside? You wouldn't put the dogs in the bed, I'm guessing. So I still don't get why you need the truck. Is your civic a hatchback? 4-door? 2+2?

Not trying to be a jerk, believe me... I'm just trying to get you to think objectively. The whole point of Mustachianism is to get people to think outside the box to achieve their goals. Unless your truck has massively more cabin space than the car (and I'm guessing it doesn't have that much more) then you don't technically need it, and it's costing you money.

And I apologize if I come across as stubborn, but you know... talking in person is much easier, and everything loses something in translation over the internet. When it comes down to it, the truck isn't costing you that much money, but if you are only keeping it "just in case" then that's not a very good reason to keep it. If the cabin space is comparable, then you need to read these articles:

http://www.mrmoneymustache.com/2011/12/08/turning-a-little-car-into-a-big-one/
http://www.mrmoneymustache.com/2012/09/20/a-diy-roof-rack-make-your-small-car-carry-big-stuff/

TomTX

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Re: Question from baby stubble
« Reply #31 on: May 10, 2014, 08:20:20 AM »
Okay, Jay and I have been exchanging some private messages, and I am trying to redirect back to this thread. While no analogy is perfect, I think this gets to the meat of the current issue:

-------

All of the other stuff is much, much less important that PAYING OFF THE 19% DEBT and getting the FULL TSP MATCH.

Lets try an analogy.

You're taking incoming fire. Key points to me are

a) get some cover (pay off the 19% debt) 

b) return fire to eliminate the threat (Ensure you are getting full TSP match.)

All the other crap about ROTH IRA versus  non-matched TSP versus paying down the mortgage is like arguing over the M-14 versus M-16 versus M-4.

Worry about that shit after you are no longer out in the open, taking incoming fire with no rifle in your hands.

FunkyStickman

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Re: Question from baby stubble
« Reply #32 on: May 10, 2014, 08:24:57 AM »
Yes, definitely... take care of the hair-on-fire debt first, no question. Get your investments in order, and slowly work on getting your living expenses where they need to be.

Jay72

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Re: Question from baby stubble
« Reply #33 on: May 10, 2014, 08:53:59 AM »
Tom and Funky,
     Clever analogy....by the way, in regards to incoming fire.   I will check with my HR department on Monday, and see what the top end is, and go with that.  In the previous post, I wrote that I will be paying off the CC (and put what little hair I have...out).
      As for my vehicle, the civic is a 4 door.  The truck to me, at over 6'3" is roomier, and the way I've been doing it is putting myself/dogs inside, along with putting belongings I wish to take with me, in the truck bed, under a tarp, along with extra gas/water, etc.
      Again, gentleman, thank you for helping me see clearer.  It is appreciated.
      Just so you know, Tom...I'm NEVER without my rifle, first rule of combat!
      J

TomTX

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Re: Question from baby stubble
« Reply #34 on: May 10, 2014, 01:04:10 PM »
If you aren't getting the full TSP match, financially speaking you are without your rifle. It's free money.

Catbert

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Re: Question from baby stubble
« Reply #35 on: May 10, 2014, 01:42:46 PM »
I'm a retired Federal government HR manager.  Government puts 1% into TSP just because you work for them.  Then it will match dollar for dollar contributions up to 5% of salary.  As soon as you pay off cc up your TSP contribution at least to the match.  It's free money.   TSP has the lowest costs of any mutual fund...even beats Vanguard.

Personally, I would sell the physical gold you have.  While gold can be part of a well rounded portfolio, you're a long way from having a portfolio that should have a precious medals component.

« Last Edit: May 10, 2014, 01:55:47 PM by mary w »

Jay72

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Re: Question from baby stubble
« Reply #36 on: May 10, 2014, 03:05:26 PM »
Tom, Mary,
    Thank you both for the replies, as always they are appreciated.
    I called USAA, and they did some mathmatics (which I am lacking in) and I was told that I AM receiving the 5% matching from our Uncle, so I'm good.
    Now that that is done, and I know that I have not been 'messing up', where to put the extra 'soldiers' as MMM says?  If anyone has any ideas, please let me know. 
    J

Emg03063

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Re: Question from baby stubble
« Reply #37 on: May 10, 2014, 03:23:33 PM »
Can you break out your income by reserve/ day job (gross and net), and what you'll make on active duty?  That should provide a fuller picture.  I'm not clear on whether the income your posted includes drill pay or not.  If it does, and you'll be missing it from the time you retire from the reserves until you start drawing your pension, then there's an income gap that needs to be planned for.

Jay72

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Re: Question from baby stubble
« Reply #38 on: May 10, 2014, 04:32:00 PM »
EMG,
     My reserve is $5079 after taxes and my main job is $26182 after taxes totaling about 31261 a year, which includes the money taken out for TSP/Mutual Fund/savings, etc.  Once I'm back on Active Duty, I will be making about $41K+, after taxes, if I do not increase my TSP/Mutual Fund, etc.  In about 3 years, if I do not advance further in rank, I will be retiring, and will not receive my military pension, until I am about 48-ish.
     Let me know what you think.
     J

Emg03063

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Re: Question from baby stubble
« Reply #39 on: May 10, 2014, 05:29:33 PM »
Your initial post said you made $2258 after taxes monthly from both sources combined, which would be $27,096 per year.  Something's not adding up there.  Does AT come with a separate paycheck?  Regardless, $26,182 from the main job gives you $2181.83 monthly.  Adding up your expenses excluding TSP contributions and extra debt payments, I get $1,840, leaving $342 available for savings, investment and discretionary spending during that timeframe.  You want to put 5% of your gross, or before tax income (which you frustratingly keep failing to post :p) into your TSP to max out your match.  I'll estimate that at $170.  The good news is it seems like you'll still be cash flow positive during that time.  The bad news is, you will be spending most of what you earn (unless you reduce expenses).  Given all that, I would focus on rebuilding the cash reserves that you are about to deplete (just depleted? ;)) to pay off the credit card between now & then. 

Post your gross incomes, let's figure out a FERS retirement projection, and we can figure out what's best from there.

P.S.  Does your year on active duty increase your reserve retirement credit, or was that included in the $1000/mo projection?

P.P.S.  Based on your statement that your TSP contribution is coming from after tax money, I'm assuming it's a Roth type plan.  Is that accurate?  (Maybe a good Mary w question).
« Last Edit: May 10, 2014, 05:32:47 PM by Emg03063 »

Emg03063

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Re: Question from baby stubble
« Reply #40 on: May 10, 2014, 10:26:13 PM »
Incidentally, how do you manage to start drawing reserve retirement at age 48?  The reading I did says you have to be 60 less 3 months for every 90 days of active service since '08.

http://usmilitary.about.com/od/guardandreserve/a/earlyretirement.htm

Jay72

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Re: Question from baby stubble
« Reply #41 on: May 11, 2014, 06:36:46 AM »
EMG,
     I was Active duty, prior the Defense bill taking affect.  If you add my Active duty time, plus my deployed/mobilization time up and subtract from age 60, you would get my 'retirement' age.  I am still precluded from receiving any medical/dental benefits until the age of 60, for free.  I can still enroll in the system, for a reduced rate.
     J

Catbert

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Re: Question from baby stubble
« Reply #42 on: May 11, 2014, 10:39:29 AM »


P.P.S.  Based on your statement that your TSP contribution is coming from after tax money, I'm assuming it's a Roth type plan.  Is that accurate?  (Maybe a good Mary w question).
[/quote]

TSP contributions can be either Roth or traditional.  The governments match will be to the traditional side.

Nords

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Re: Question from baby stubble
« Reply #43 on: May 11, 2014, 04:36:29 PM »
In about 3 years, if I do not advance further in rank, I will be retiring, and will not receive my military pension, until I am about 48-ish.
     I was Active duty, prior the Defense bill taking affect.  If you add my Active duty time, plus my deployed/mobilization time up and subtract from age 60, you would get my 'retirement' age.  I am still precluded from receiving any medical/dental benefits until the age of 60, for free.  I can still enroll in the system, for a reduced rate.
Jay, do you have a reference or a link to your military pension starting at age 48?

I'm familiar with the 2008 National Defense Authorization Act that established earlier pensions for mobilized Reservists & National Guard, but as others have mentioned that cuts off at age 58.  You say that you were active duty prior to the defense bill taking effect, but I don't know of any other early retirement for Reserve/NG that would grandfather you in. 

I've never heard of a Reserve/NG member being able to draw their pension at age 48.  I've heard of Reserve/NG who were mobilized on active duty until they were eligible to receive a Reserve/NG pension, but that started at age 60 (or in some cases up to two years early).  I've heard of Reserve/NG who were mobilized on active duty and applied to stay on active duty, and who eventually qualified to receive an active-duty pension.  I've heard of Reserve/NG servicemembers receiving disability retirement pensions at age 48, but that's usually because they're 100% disabled or even unable to work. 

I'm not disputing your benefits-- you've earned them-- but I know a lot of other servicemembers & veterans who would like to see if they qualify for whatever program you're eligible for.  I'd hate to think that someone quoted some reference to you that's not applicable to you or to others in your situation.

I agree that you won't receive Tricare until age 60 and would have to use Tricare Retired Reserve until then.  However that just includes medical insurance, not dental insurance.  There are dental insurance programs for military retirees but they're generally not very competitive.

RetiredAt63

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Re: Question from baby stubble
« Reply #44 on: May 12, 2014, 07:47:22 AM »
Just re the dogs - if two of them are about 15 years old they will not be with you much longer, 15 is old for any breed of dog.  Then your planning is for one dog.

If the Civic is tight for you, might a car with a bit more room be a better fit than the truck?  And a hatchback/station wagon (i.e. 5 door) versus a sedan (4 door)?  When I shopped for my last car I took the dog crate with me, to be sure it fit in the back - you said you need to crate one dog when all three are with you, so this would be a useful shopping strategy for you as well.  Do you have car harnesses for the others?  A loose dog in a car accident is at risk both for itself and as a flying object for you, not to mention a potential danger to rescue personnel.

A comfortable car strong enough to pull a small trailer as needed (for your worldly goods) would seem to be more useful than a truck for day-to-day living. 

Can't help with the rest, we worry about winter instead of hurricanes  ;-)

Jay72

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Re: Question from baby stubble
« Reply #45 on: May 12, 2014, 08:46:05 AM »
Retired,
     Thank you for the information, I will have to do this, before this Hurricane season starts.  Money though, is tight, so hopefully I can find an inexpensive vehicle.  As far as dog collars, they do have collars, but they also have a tendency of getting hung up, in said collars.  So far, I have let them lay on the front/back seat, with one dog in crate.
      Thank you again, for your help.
      J

Sunshine23

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Re: Question from baby stubble
« Reply #46 on: May 12, 2014, 05:57:38 PM »
Jay - THANK YOU for serving our country - for protecting each and every one of us so that we can continue to live amazing, fruitful lives!

I am sorry your got screwed by a "friend" - you sound like a great guy.  Live and learn.  Sounds like you are turning things around - best of luck to you!

First of all, +1 to this.


I am not great with all of the terms either, just a baby stubble myself here :) But I did notice in one of your posts you wrote:

Any money I put into an Roth IRA is not taxed, as long as I keep it in UNTIL after 57.5...i.e. Free Money??


I didn't see that anyone else had told you, so I just wanted to let you know it is 59.5. Although, you can withdraw any of the principal amount (your money) without penalties. It's just the interest accrued that you cannot withdraw until 59.5 without penalties. Hope this information is helpful you.

I wish you all the best, you deserve it!


Jay72

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Re: Question from baby stubble
« Reply #47 on: May 13, 2014, 04:42:06 AM »
Sunshine,
     Thank you for the post. 
      It is truly an HONOR, to serve our Country.  Thank you for that humbling reposting.
      As far as age, I found that out, when I called my TSP coordinator.  I spoke with them yesterday.  I am currently contributing $200/month, and my company contributes almost $75/month, for a total of $275/month.  I decided to ask how much I would receive per month, after I retired, and thought I would receive at LEAST a $200/month, after tax.  I was mildly surprised, since people are living longer, and they guesstimate, as if you MAY live to 115 years old, that I will receive (If I do not contribute anymore per month) $44.41 per month...after taxes.
       I need some advise, although I have received some of it from Mary W (saying to pour every cent into it), to decide where to put my excess cash.  Should I do what MMM does, put it in Index funds, put it all in the Roth IRA, I currently have with USAA, or something else entirely.  I'm also toying with the idea of either selling my home, or renting it out (as MMM has suggested), find some low rent place, and invest the rest.
      If anyone has any other ideas, for receiving a good return for investment, please let me know.  Thank you for ALL of your help in this matter.
      Again, thank you, Sunshine.  Have a great day.
      J

RetiredAt63

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Re: Question from baby stubble
« Reply #48 on: May 13, 2014, 08:33:48 AM »
Hi J
As I said, can't help with hurricanes, can with dogs.  Re the collars, yes they get hung up on them, and in an accident they could get seriously hurt if the collar yanked on them with a sudden stop.  Of course when they are loose they can really hurt themselves, and you, in a sudden stop.  Dog (and cat) car harnesses look like a sled-dog harness, with a metal D ring for a short leash that attaches to the car seat-belt.  This way the pressure from a sudden stop gets distributed all over the body, they can change positions, and the collar is not involved.  They are not expensive at pet stores.  They come in different sizes, so that they will fit the dog well, so know your sizes before you go. 
I know there are also barriers you can get for a car, but they are car-specific, and the dogs are still loose, so it sounds like the harnesses would be best for your fur family.
My dog is a therapy dog, so she is in the car at least once a week when we do our visit, and I find the harness works well for her.

All the best.     R@63
Retired,
       As far as dog collars, they do have collars, but they also have a tendency of getting hung up, in said collars.  So far, I have let them lay on the front/back seat, with one dog in crate.
     

Jay72

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Re: Question from baby stubble
« Reply #49 on: May 14, 2014, 04:55:32 AM »
Retired,
    Wish you could help out with Hurricane season, quickly approaching.  Thank you for the advice, about the dog collars.  I guess I need to start doing the search, for the full body harnesses, before we get into the swing of things.  Any particular brands that you recommend?
    Was wondering if anyone else, had any suggestions, about where I should put my extra income savings at?  Put ALL of it into TSP savings, most in TSP and rest into a Roth/Index fund, or ALL into a Roth/Index fund.  Thank you all for your suggestions.
     J