PSA - things I should have done....

[Jim123]

"pay off a home in 10yrs." That's not something most people do unless their home is their only investment, they bought WELL within their means, or they got super lucky and bought before an area blew up.

You left out one big reason- got tired of dealing with "take your kid to work day" every contact you had with the subcontractor USAA used for your mortgage.

 

[Spekkio]

So wait, you're willing to say "7% ROI on sticks" is bunk in one breath but then basically say that house value will always go up? Plenty of people got pinched hard by that in '08.

I never said that a house will' always go up.' I said that on average it appreciates with inflation, which is similar to saying that the stock market returns 7% on average.

Also, I find it interesting that one of the assumptions your argument is based on is "pay off a home in 10yrs." That's not something most people do unless their home is their only investment, they bought WELL within their means, or they got super lucky and bought before an area blew up. It's also a hard thing to do if you're not homesteading somewhere. It's much easier to do if you buy a place and then love in it for 30yrs.

No, that's not at all what I said.

Point 1: Paying the minimum mortgage nets profit on average after 5-7 years due to appreciation of the property.

Point 2: Paying off my mortgage early vice maxing Tsp offers more financial flexibility in my middle aged years.

 

[DanMa1156]

@Spekkio - I don't see how on one hand you're willing to say a home makes a profit in equity, then say it keeps up with inflation, and all the while discount the returns found in the market by inflation compounded over time. You're holding multiple standards here man.

Taking stock market data from 1915 forward was to show historical data. Sure, from 1966 onward, I don't disagree with your stat and mine only changes by a percentage point lower. I still don't see your point. You've yet to show me (or anyone here) an asset class that performs demonstrably better after all fees are taken into account and then adjusted for inflation, not to mention the tax benefits that come along with many options for stock investing (IRA/TSP/401k).

 

[DanMa1156]

I never said that a house will' always go up.' I said that on average it appreciates with inflation, which is similar to saying that the stock market returns 7% on average.


No, that's not at all what I said.

Point 1: Paying the minimum mortgage nets profit on average after 5-7 years due to appreciation of the property.

Point 2: Paying off my mortgage early vice maxing Tsp offers more financial flexibility in my middle aged years.

Nets a profit on what? The nominal value of the home? The inflation adjusted value? Does it take into account closing costs, PMI, interest, taxes, etc.?

I'm with you if you're about to tell me the nominal value of the home vs. the purchase prince as when I bought my home, I saw 6.5 years as the break even point on the value of the home, but it didn't account for any of the other stuff. My first (and only so far) home purchase was to avoid an incredibly expensive rental market compared to the home buying market which was significantly better. My goal was to recoup some of my BAH, and basically I with the combined increased equity of the home as a net positive and the closing costs as a negative, plus three years worth of taxes, HOA fees, maintenance, etc., I was able to recoup about 2/3 of the BAH I would have spent renting. However, that's not a profit.

 

[HAL Pilot]

No, that's not at all what I said.

Point 1: Paying the minimum mortgage nets profit on average after 5-7 years due to appreciation of the property.

Point 2: Paying off my mortgage early vice maxing Tsp offers more financial flexibility in my middle aged years.

But...but....but....the average American.....means to do this......

 

[JTS11]

Well I’m 58 and my finial advisor is personally rated in the top 10 in Texas and top 30 nation wide (as an individual not a corporation). I was only able to become a client as a personal favor to a 45+ year friend that’s a client of his.

Is that the AP or Coaches Poll of finial advisors? I hadn't heard of the state or national rankings.

 

[HAL Pilot]

Is that the AP or Coaches Poll of finial advisors? I hadn't heard of the state or national rankings.

When he was recommended to me by my friend, I asked my tax accountant if there was a way to research him. My tax accountant said she could do it and about a week later got back to me saying to sign up with him as he was one of the best. She included links to about 10 financial business associations that had rankings/ratings on financial advisors and he was in that range on all of them. I don't remember what they were as it's been a while and I've had no need to look up anyone else. When she sent me the links, I did some searches on those sites and they were all legit and seemed to be the ones the industry used. My parent's financial advisor verified the legitimacy of the links as well as their rankings, and so did a couple of friends I have in the business. They also agreed with my tax accountant that I should jump at the opportunity to sign with him.

Or you can just assume I make shit because I like to lie on the internet as you seem to be insinuating .

Either way, I don't really give a shit.

 

[JTS11]

When he was recommended to me by my friend, I asked my tax accountant if there was a way to research him. My tax accountant said she could do it and about a week later got back to me saying to sign up with him as he was one of the best. She included links to about 10 financial business associations that had rankings/ratings on financial advisors and he was in that range on all of them. I don't remember what they were as it's been a while and I've had no need to look up anyone else. When she sent me the links, I did some searches on those sites and they were all legit and seemed to be the ones the industry used. My parent's financial advisor verified the legitimacy of the links as well as their rankings, and so did a couple of friends I have in the business. They also agreed with my tax accountant that I should jump at the opportunity to sign with him.

Or you can just assume I make shit because I like to lie on the internet as you seem to be insinuating .

Either way, I don't really give a shit.

As long as your parents' financial advisors and your tax accountant can verify the 'links', no complaints from me.

 

[Pags]

I never said that a house will' always go up.' I said that on average it appreciates with inflation, which is similar to saying that the stock market returns 7% on average.


No, that's not at all what I said.

Point 1: Paying the minimum mortgage nets profit on average after 5-7 years due to appreciation of the property.

Point 2: Paying off my mortgage early vice maxing Tsp offers more financial flexibility in my middle aged years.

1. Fair but I still think this is something that isn't achievable by the average service members who moves every 2-3yrs.
2. For you (which is ok) but other folks may not have the same situation you do. Putting all your money into a house is a gamble. Sure, it's a gamble you can still live in if you lose but in this case you're losing out on the early money of investments. Obviously you've done your math and analysis for your case and thats good but I just want to point out that's what good for you may not be the case for others and they should think critically about their own situation. If you buy a house in your JO tour in a town you'll only live in for 3yrs and never come back to that seems to me like a lot of non-liquid investment as opposed to renting and then investing the difference between mortgage and rent.

Also, for discussion: is it really accurate to call the money you get when you sell your house "profit?" For instance, say I buy a home and live in it for 30yrs. Across that 30yrs I put out $1M in PMIT and I now own the house free and clear. But then I sell the house for less than $1M. In this case I haven't made profit, I've just lost less than I would have had I been renting.

 

[croakerfish]

Which it specifically states when you sign up, "this is a retention tool." If you gave it away for family members immediately, I'd bet you have a higher take rate; making it a benefit of extended service, the government now gets something out of the deal.

I read an article they are changing it, but I think it should have been from the beginning is that it can be transferable to unborn children. I work with several women who want children after their Navy careers (20+ years), but are reasonably disgruntled that they can't (couldn't?) transfer it.

If you are married, you can transfer it to your spouse, then move it around your dependents at will later on.

 

[SlickAg]

If you are married, you can transfer it to your spouse, then move it around your dependents at will later on.

I’m amazed that I’ve met dudes who haven’t used this strategy. 100% transfer it to your spouse at the first opportunity and get that clock ticking. You only incur the commitment once, then as soon as the dependent is in DEERS you can move it around as you please.

I’ve also heard that if you bite the dust your survivors can’t switch it around anymore. My oldest kid has 34 months and my wife and youngest each have one month as a placeholder as opposed to 12/12/12 or some other combination.

 

[RedFive]

If you are married, you can transfer it to your spouse, then move it around your dependents at will later on.

Anyone know how this works in the Reserves? Can I transfer it to a spouse or child while affiliated with the Reserves?

 

[Pags]

If you are married, you can transfer it to your spouse, then move it around your dependents at will later on.

You used to have to give all your kids at least 1mo. For instance, my wife and kid #1 are in the system as eligible. Kid #2 didn't get into the system prior to me leaving ACDU so now I can't xfer it to him (unless they've changed the rules).

 

[SlickAg]

Anyone know how this works in the Reserves? Can I transfer it to a spouse or child while affiliated with the Reserves?

Yes. You incur the four year commitment upon transfer.

And the service may have specific rules about when you can stop transferring it; e.g. I believe the Navy just got rid of allowing people to transfer it at year 18 if they were going to retire at 20 - requiring a four year commitment from everyone.

For anyone who’s started their clock on active duty, you can continue to serve out the remainder in the reserves. However, you CANNOT have a break in service. Not a big deal for active duty Navy to reserve Navy, but a big deal for interservice transfers.

 

[SlickAg]

You used to have to give all your kids at least 1mo. For instance, my wife and kid #1 are in the system as eligible. Kid #2 didn't get into the system prior to me leaving ACDU so now I can't xfer it to him (unless they've changed the rules).

They have to be in DEERS in order for them to be eligible. Are you in the IRR or anything?