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First Command Financial Planning: Their Insurance and Mutual Funds Are Rip Offs
- Thread starter johndd321
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asise
It really tied the room together.
To add on to GSKiker's comment on USAA,
In order to get out of the large Minimum Initial Investment ($2,000 to $10,000), you need to enroll in their InveStart program. Instead of an initial investment, you have monthly deposits from your account of $20 to $50. Great way to start if you have steady income, but not a lot saved up (or you're sending that $3,000 to your rothIRA).
As I'm only 24, this was an attractive program for me.
They used to send me mail about it and it's hard to find on thier website, but if anyone is interested you can call them and they are always very helpful.
In order to get out of the large Minimum Initial Investment ($2,000 to $10,000), you need to enroll in their InveStart program. Instead of an initial investment, you have monthly deposits from your account of $20 to $50. Great way to start if you have steady income, but not a lot saved up (or you're sending that $3,000 to your rothIRA).
As I'm only 24, this was an attractive program for me.
They used to send me mail about it and it's hard to find on thier website, but if anyone is interested you can call them and they are always very helpful.
ENSsquid said:
probably less now due to inflation :icon_smil
The USAA Balanced Strategy fund looks good if you want a more conservative fund. If you are just starting an IRA in your 20s it is too conservative. It only has about 65% in stocks and the rest is in bonds and cash. It also has an expense ratio of 1%. Take a look at USAA S&P 500 index member (USSPX). It has tracked the S&P pretty close. It has 98% in stocks. USSPX has an expense ratio of only 0.17% (I don't know if that is temporary because it has been 0.23 in the past). The difference between the two expenses can add up over time.
I keep hearing about a guy here in the Pcola area that's a Financial Advisor, the name is Mike Montee (retired P-3 guy). Anyone in the area hear of him? Several of my buds have started Roths etc with him. According to them, Mr. Montee says that First Command is a big rip-off, and TSP sells because service members don't realize how much they will be taxed when they pull their cash out of TSP. Of course he would say negatives about his 'competition'...
I was pretty annoyed with FC because they called my house every day for a week when I first moved here, even after I told them I wasn't interested and they kept telling me to avoid that Mr Montee guy.
I was pretty annoyed with FC because they called my house every day for a week when I first moved here, even after I told them I wasn't interested and they kept telling me to avoid that Mr Montee guy.
I met with Mr. Montee once. He somehow got my number from the base....because he's prior or something I don't know....regardless, I didn't authorize anyone to give out my number. Then he started calling my house and bugging me and my wife to schedule an appointment...but I kept telling him I wasn't interested. After I had been in Pensacola for about six months, I finally scheduled the appointment. I got a really bad feeling from him. I certainly didn't trust him....it's almost like he was trying to use his Navy service and flight experience to force a bond between us to sell his services..I don't know, it was just weird. It seemed out of character and tactless as hell. He was telling me how proud he was that I was interested (even after I told him I wasn't), how I was setting a good example, telling sea stories, almost trying to act "fatherly" or something. Then, when I finally got through to him that I wasn't interested and wouldn't be paying for his services he got all indignant and told me how disappointed he was and how I was making a big mistake and being irresponsible! It was totally ridiculous and really pissed me off.
Somehow he gets new 2ndLt's and Ensigns phone numbers from the base (some type of roster or something) and just starts calling them. I hate solicitors, but I absolutely DESPISE the way this guy operates.
Somehow he gets new 2ndLt's and Ensigns phone numbers from the base (some type of roster or something) and just starts calling them. I hate solicitors, but I absolutely DESPISE the way this guy operates.
I really don't like the guys who try to capitalize on being prior military. They know that you want to trust a former (insert service here). The ones who really push that angle are the ones who should be trusted the least.
I'm curious as to whether anyone else in the area has met him and has had the same experience as my wife and I. I'd hate to be the only one that has this impression of him and turn everyone else off.
johnd (or anyone else with this experience)...I'm curious as to your thoughts on trading stocks through a discount broker? My wife has an accounting degree and this desire to make some use of it (due to the poor job markets we've encountered and the fact we move so much...this makes it very difficult/next to impossible)....we've actually been looking into trying some trading (more as a hobby initially). After studying up on it, we've come to the conclusion that the actual act of online trading is relatively simple (once we've worked out a strategy we're comfortable with and found an online broker).
Thoughts?
johnd (or anyone else with this experience)...I'm curious as to your thoughts on trading stocks through a discount broker? My wife has an accounting degree and this desire to make some use of it (due to the poor job markets we've encountered and the fact we move so much...this makes it very difficult/next to impossible)....we've actually been looking into trying some trading (more as a hobby initially). After studying up on it, we've come to the conclusion that the actual act of online trading is relatively simple (once we've worked out a strategy we're comfortable with and found an online broker).
Thoughts?
I've used both Schwab and Scottrade... Schwab is a little better in terms of what you can do online (set up electronic transfers between banks, etc), but if you don't keep at least 50k in your account you have to pay a quarterly fee of 25 or 50 bucks. Scottrade is no-nonsense. They don't send you statements, it's all online. I had no problem switching my main and Roth accounts over to them. They have branches all over too, which is nice. I think trades cost 7 bucks or so. Very reasonable. I would recommend buying the S&P depository receipts thingy (symbol:SPY). It tracks the S&P 500, which the mutual funds are always trying to beat. Often without success. And it has very very low fees.
Does anyone do the Thrift Savings Plan through DFAS? I was wondering what its benefits were. DFAS doesn't really explain it all that well.
TSP money (currently up to 9%, + incentive pays) is deposited tax-free into a tax-deferred account that you can't touch until you're 59.5 (there may be exceptions for home purchases/kids colleges). It's like the military version of a 401(k), without any matching.
So the government is essentially giving you an extra 15-20% of money to invest over 30-40 years. However, when you bring that money out when you're retired the gov't gets to tax all that money at your new, probably higher tax bracket. Inside the TSP you can split your money up among 5 different funds, including a gov't bond fund, an S&P 500 index, international fund, etc. You can only join the TSP during open enrollment periods, which seems to happen twice a year. I think you can stop making contributions anytime, but I may be wrong.
With a Roth IRA, you pay the govt taxes on the money you earn right now, and then put it into your little tax shelter paradise thingy. So you might be starting with 15-20% less now, but when you pull it out in 30 to 40 years it and all the money it has pimped for you comes out tax free. Currently you can only put $3000 into a Roth, but I think it might be increasing here soon. Inside the Roth you can buy anything you want. Mutual funds, stocks, bonds, etc.
You can participate in both, and I recommend it!
So the government is essentially giving you an extra 15-20% of money to invest over 30-40 years. However, when you bring that money out when you're retired the gov't gets to tax all that money at your new, probably higher tax bracket. Inside the TSP you can split your money up among 5 different funds, including a gov't bond fund, an S&P 500 index, international fund, etc. You can only join the TSP during open enrollment periods, which seems to happen twice a year. I think you can stop making contributions anytime, but I may be wrong.
With a Roth IRA, you pay the govt taxes on the money you earn right now, and then put it into your little tax shelter paradise thingy. So you might be starting with 15-20% less now, but when you pull it out in 30 to 40 years it and all the money it has pimped for you comes out tax free. Currently you can only put $3000 into a Roth, but I think it might be increasing here soon. Inside the Roth you can buy anything you want. Mutual funds, stocks, bonds, etc.
You can participate in both, and I recommend it!
Should I invest in the TSP even if I dont plan to continue federal service once I am finished my initial committment? I have been seeing things on CNN financial about mutual funds earning like 15% a year... that sounds like a better idea.
When I was in Pensacola I cringed every time a "retired" wahtever seemed to get my number and want to talk investing. I had one guy tell me that a frined of mine had signed up with him only to have that friend be on caller id and say no he just took some inof to shut him up so BEWARE
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