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Had a sorta-BWM pop up recently. The US military is changing its pension system starting next year, and the majority of people already in are being offered the option to stay in the old system or take the new system, so there's been a lot of financials talk lately, which is good! But that's how I got this story. Background information: the military, like all Federal government jobs, allows you to contribute to the Thrift Savings Plan, which is our 401(k). Not mandatory, not everyone does, but cool if you do. Like a 401(k) it has a few funds to choose from; a bond index, an S&P500 index, a small cap fund, and and international fund. And a government bonds "pretty much risk free but beats inflation" fund for when you're like, fully-retired. One of the officers had a senior staff enlisted guy who came up to him after a financial talk. He'd been contributing for like 12-14 years to this TSP and never thought any more about it. Never even logged into the TSP website to check stuff, just made sure the deductions came out of his paycheck correctly. Guess which fund the TSP deposits your contributions to by default? If you said "the Government bond fund that has earned 2.63% annually over the past 10 years" you're right! Poor guy. He's for sure not the only one who's made this mistake, though.
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May 3, 2017 21:41
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| # ¿ May 4, 2024 04:45 |
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Hot Dog Day #91 posted:Hey Overdesigned - is the 401k/TSP your only military retirement, or is there something more? I'm glad you asked! Like I said the system is changing, so you have the "Legacy High-3" and the new "Blended" system. Legacy High-3: After 20 years, you get a pension that's 50% of the average of your highest-three years of base pay. Also, health insurance for life. If you don't stay for 20 years, you get nothing. New Blended: After 20 years, you get a pension that's 40% of the average of your highest-three years of base pay. Also, still health insurance for life. You also get 5% match into the TSP. All matched funds are fully vested after 2 years of service (99% of people enlist for >2yrs so a non-issue) Anyone in either system is free to contribute as much or as little as they want to the TSP up to the annual 401(k) contribution limit. It has Roth-type and non-Roth variants, your choice. Hoodwinker posted:Honestly, that dude is still a step ahead of the game because trying to convince Marines to spend their money on something other than motorcycles, tattoos, and nicotine/alcohol products is loving difficult. This is true. He's not BWM but he could have been so much BetterWM.
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May 4, 2017 00:53
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G basically gives you inflation+a fraction of a percent or so, and the risk is essentially zero (unless the Federal government collapses). It's great for what it is, but it's definitely not what a 19-year-old should be investing in. There are people out there that try market timing with the G fund. You're allowed a few fee-free interfund transfers a month so if you think something bad is coming you dump all your money into the G and try to short the S&P500.
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May 5, 2017 05:56
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Hell yeah, you better believe there are brand new O's who use it to buy half of a real expensive Mustang or whatever and show up to officer school with it. Source: me (but not actually me, I just watched it happen). Just do what the rest of us do and use it to pay off higher interest debt, idiot.
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May 15, 2017 20:50
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ate all the Oreos posted:Just talked with my coworker about his friend who just signed on a 5br massive house. "But they were paying $2000 to rent a 4br house already so this is cheaper!" Okay whatever, this doesn't sound too bad, until friend says "I hope they have better luck this time." "What's that mean?" "They bought an even bigger house before and had it foreclosed on a year later" I'm laughing at "had it foreclosed" like oops it just happened, force of nature, no way to stop that!
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May 15, 2017 23:10
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Subjunctive posted:Amazon was public for 4 years before its first profitable quarter, let alone year; until a few years ago it still routinely lost money. Snap just raised a pile on the public markets without a plan for profitability at all. You don't need VC gravy to keep going. Snap also lost 20% of its market cap in a single day on a report that it can't grow users or revenue, so maybe not the best thing to use here. Investor storytime as actual business plan is BWM.
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May 19, 2017 17:25
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| # ¿ May 4, 2024 04:45 |
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Ahahahaahah I bet he's been working as a 1099 contractor at that law firm, thinking he's getting paid tax-free, not realizing the IRS is going to destroy him utterly when he files his taxes and hasn't been doing his proper self-withholding.
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Jun 12, 2017 20:11
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