PSA - things I should have done....

[exNavyOffRec]

In general, I wouldn't recommend whole or universal. Not that I agree with Dave Ramsey on everything, but he doesn't either.

It depends on your circumstances, the example I gave happened to the customer of an agent I know, set up with a term policy at 20 by his parents that was a 30 year term, got married had several kids, wife was stay at home mom, he was asked if he wanted to convert to whole and declined a few times, term policy reached the end of the term and several months later died of a heart attack leaving 1 kid still in HS, 1 in college, 1 recent college grad. The agent said last she heard the wife was looking at selling the house and moving to an apartment due to remaining finances didn't support long term ability to keep the house.

There is also the circumstance of the memorial I went to of the veteran who passed away 2 weeks ago, after a 7 week battle with Leukemia, he left behind a 37 year old wife and 4 kids under 10. He did have a policy through his work but way under insured, his wife also didn't work as she was busy moving kids to and from school and other kid events, sitting in their living room hearing her talk about what her finances she is getting I am betting she will lose the house, in their case a term policy would have been fine if a good evaluation had been done on their needs, but who thinks they will die at 42 after a 7 week battle with Leukemia?

In the end it really depends on the individual, in @HAL Pilot description whole or unlimited isn't a need for him as he had a spouse that realistically could get along fine without him, many can't. I have both as the short term needs of my family are higher than the long term needs, by the times my term ends kids will all be out of college and house will be either paid off or very close to it so the whole/unlimited will provide funds for my wife to re-establish in the workforce without having to panic.

 

[Pags]

Are you cashflowing? Sometimes those condo fees are a bit steep.

Did you just verb cashflow? Barf.

My condo fees aren't that high and I've always had a renter but I didn't set out to be a slumlord and it hasn't been worth the headaches and stress.

For every guy I know who's some sort of real estate or slum lord genius there are at least five other guys saddled with properties from duty stations they'll never go back to and the headaches that come with either managing those properties or trying to offload them after the market has turned. My peer group who bought homes largely got shwacked when the 2008 recession hit. Many of us bought prior to the bubble bursting and then were left to pick up the pieces while trying to get on with your life. However, the peer group that made up our instructors and DHs had largely managed ok as they had bought earlier. Oh, and FRS IPs are the guys who haven't left and they're forgetting about the guys who did one tour in NOB, Jax, or SD and whose career orbit will never return them there. Frankly, if I had advice for an RP it would be: "don't ever buy a house." I wish I had just rented throughout my mil career and saved the rest for later.

Also, the corollary to some of this discussion is don't be too overly obsessed with retirement that you miss out on today.

 

[Jim123]

... but who thinks they will die at 42 after a 7 week battle with Leukemia?

Agreed- and by the time you're in your forties then you'll have probably known someone who died after a similarly sudden and rapid decline in their health- especially if you're in an occupation where you meet a lot of people because you move across the country from one place to another every few years.

Really all the more reason to enjoy the present or don't miss out on today, as Pags put it. (Enjoying the present doesn't have to be expensive. There's a happy medium between living like a hermit miser and blowing cash like the world is going to end tomorrow.)

 

[Pags]

Agreed- and by the time you're in your forties then you'll have probably known someone who died after a similarly sudden and rapid decline in their health- especially if you're in an occupation where you meet a lot of people because you move across the country from one place to another every few years.

Really all the more reason to enjoy the present or don't miss out on today, as Pags put it. (Enjoying the present doesn't have to be expensive. There's a happy medium between living like a hermit miser and blowing cash like the world is going to end tomorrow.)

Agreed! If you get hit by a bus tomorrow you don't want to have missed out on today. Busses come in many forms and there seem to be more of them as you get older.

Some folks seem to get very obsessed about minimizing their current costs and maximizing retirement but it comes with a cost. Sure, you could retire at a young age like Mr. Money Mustache but is not working worth driving a beater, buying your kids used toys, and generally sacrificing a lot just to say, "I retired early."

Also, I can't help but feel like these investment property discussions are the dude equivalent of lularoe. Everyone knows someone who has totally made a ton of money and no one knows anyone with a basement full of unsold leggings and buy in debt.

 

[taxi1]

Also, I can't help but feel like these investment property discussions are the dude equivalent of lularoe. Everyone knows someone who has totally made a ton of money and no one knows anyone with a basement full of unsold leggings and buy in debt.

Yup. Every single person I went to Tailhook with, when it was in Vegas, came back having beat the house.

 

[Jim123]

Also, I can't help but feel like these investment property discussions are the dude equivalent of lularoe.

?

I'm dying over here!

 

[Gatordev]

This includes getting copies of medical records when you're TAD or otherwise somewhere there is a chance things wont make it back into your home record.

Also for those that don't know, MERS has an "Export to PDF" function. Don't let the HMs tell you you can't get a digital version of your medical record. It's super easy and can be burned to a CD. This helps reduce the reams of paper copies of your record that you have to keep track of at home...or like me, don't keep track of and instead are just in the way.

You'll still need a paper copy for the VA, and if you're old enough to have a record prior to MERS (~2005-ish), you'll still have get photocopies of those pages (I scanned them, as well, so I have them in PDF, too). But having everything digitally is a huge help.

A retired O-5 USAF contracting officer I know, who was prior E, bought a house every time she PCS'd, kept the previous one, and rented it out to other military families. By the time she retired, she owned five houses.

And did she do any actual work at her day job? We had a well-known slum lord DH in my first squadron. It didn't help JO/DH relations when that person was negotiating housing issues on the phone while sitting in the squadron OpsO seat during business hours.

 

[ABMD]

Condo fees aren't a complete waste- they keep the outside of the unit and the neighbors' units tidy and in good repair and they pay for common areas like the pool/gym/bbq grill/fire pit. Whether you get your money's worth on that stuff or if it translates into a 1:1 bump in what you charge for rent, that's debatable (not to mention you pay income tax on rental income... dang details).

Being a slumlord is complicated. If you're going to do the rental property thing then sit down with someone who's BTDT for at least a few hours.

You don't pay income taxes on rental income if you can show a loss on paper! Depreciation is a big freebie from the government in this regard. Depreciation is a non-cash charge. And you can carry over losses year to year. So if you have a $6k loss this year against $3k in rental profit you can carry forward the $3k difference to next year. Depreciation will eventually come back to bite you when it comes time to sell.

 

[Jim123]

You don't pay income taxes on rental income if you can show a loss on paper!

Ah, but you kinda do- you get a smaller refund if you have a lower net loss.

Good gouge about the sweet spot of averaging $0-3k loss each year and the concept of carry-forward. Tax software does it for you but a lot of people aren't aware of that if they've never dealt with it on their own taxes.

 

[ABMD]

I defer certain maintenance (those that aren't necessities) items for this reason. I could make the repair this year, but deferring to next year I can guarantee a small loss. You can use software, but a pro really knows the in's and out's of real estate investing and taxes. Plus, the money you spend on tax prep is also deductible on your schedule e.

 

[Bergers2short]

3. Investments - spend a few hours educating yourself on your options and look beyond the standard companies that JOs use. TSP is great. The Boglehead community that supports the late Jack Bogle of Vanguard could save you thousands of dollars.

No matter how you decide to allocate investments or how early you leave the Navy, make sure you have money in both a Roth and Traditional TSP fund. When you leave any civilian job, you can transfer the money from your previous employer's 401k into your TSP, so long as you have an established TSP account to transfer it into. So If you're mainly a Roth person, but your "employer match/contribution" are earmarked for traditional funds only (pretty standard), you'll need both a roth and traditional TSP fund to roll all of your 401k into. I had like $300 in a traditional TSP when I left AD just so it would stay open and was patting myself on the back when I was able to roll my employer contributions over. Also, when you complete that paperwork, make sure you're not cashing the 401k out first to avoid tax penalties. As the boglehead folks will tell you, TSP has the lowest fees which is a great advantage in the "low fee index fund" retirement strategy.

 

[taxi1]

Make sure you don't have any kids, or plan to sell them off into slavery.

 

[robav8r]

Check out Navy Mutual Aid Association (NMAA) Insurance . . . . great products.

 

[SynixMan]

Join the Coast Guard ?

 

[DanMa1156]

It depends on your circumstances, the example I gave happened to the customer of an agent I know, set up with a term policy at 20 by his parents that was a 30 year term, got married had several kids, wife was stay at home mom, he was asked if he wanted to convert to whole and declined a few times, term policy reached the end of the term and several months later died of a heart attack leaving 1 kid still in HS, 1 in college, 1 recent college grad. The agent said last she heard the wife was looking at selling the house and moving to an apartment due to remaining finances didn't support long term ability to keep the house.

There is also the circumstance of the memorial I went to of the veteran who passed away 2 weeks ago, after a 7 week battle with Leukemia, he left behind a 37 year old wife and 4 kids under 10. He did have a policy through his work but way under insured, his wife also didn't work as she was busy moving kids to and from school and other kid events, sitting in their living room hearing her talk about what her finances she is getting I am betting she will lose the house, in their case a term policy would have been fine if a good evaluation had been done on their needs, but who thinks they will die at 42 after a 7 week battle with Leukemia?

In the end it really depends on the individual, in @HAL Pilot description whole or unlimited isn't a need for him as he had a spouse that realistically could get along fine without him, many can't. I have both as the short term needs of my family are higher than the long term needs, by the times my term ends kids will all be out of college and house will be either paid off or very close to it so the whole/unlimited will provide funds for my wife to re-establish in the workforce without having to panic.

I'll politely disagree with you, but in the interest of this discussion, won't go too in depth. Ultimately, I am mathematically convinced that if over those 30 years, if you invested the difference between the whole life and term life costs on your own, you'd end up better unless there was some real sweetheart of a deal on the death policy. Sure, you died at 30 years and 1 day, so your term life is over, but you have 30 years of compound interest that will yield roughly what the death benefit probably was anyway and with probable actual tax benefits. Ultimately, the whole life company makes money on the fact that it's paying you less than what they are getting in the market. The fact that something on the order of 98% of whole life policies never pay out because the owners cash out beforehand is a telling statistic - and what keeps the whole life industry alive. Also, as an industry, the sales are seedy: promising "guaranteed" returns is illegal but fairly common nonetheless, and saying your cash out distributions are "tax free" is a bold faced lie.