Truth. The women I am referencing are both unmarried. I sympathize with them in their life goals.
-
Please take a moment and update your account profile. If you have an updated account profile with basic information on why you are on Air Warriors it will help other people respond to your posts. How do you update your profile you ask?
Go here:
Edit Account Details and Profile
PSA - things I should have done....
- Thread starter drgndrvr
- Start date
Truth. The women I am referencing are both unmarried. I sympathize with them in their life goals.
This is precisely my point in what I've been saying. Thanks for finding the better words to say it.
If that’s the advice, I would increase the area a little and say avoid the East Coast in general (not a huge Jax fan).
To be fair I enjoyed my time in Norfolk, wife’s folks were in Richmond at the time, and I’d never really lived in an “urban” area before, or at least one where you could walk pretty much everywhere. And of all of my friends who were west coast JOs and/or DHs, I don’t think a single one bought (Point Mugu).
Have you sold your house yet or still renting it out?
I'll keep throwing this out too for perspective: you never know when the housing bubble will burst. My peers were all told (by parents, by IPs, by buds 3yrs ahead of us) to buy property because it's a sure bet. And then the bubble burst on us and we were left underwater on our homes. This included people in SD.
Im glad this isn't the case anymore but my point is no one knows when a bubble is going to burst again and you could be in a world of hurt.
Were you Norfolk based mid-late 2000s?
Still in it and renting a couple rooms to a buddy. I'm also building a 1 br on top of the garage to rent out. Planning to stay there until the gf can get a new job up north closer to my squadron, then I'll rent out both the main house and ADU. Corona has seriously delayed all of the above.
You're 100% right, I bought at a great time (2011) and it worked out for me. I think what's keeping San Diego from bursting is the housing shortage.
For me, the investment answer is to diversify. I don't think real estate is some type of golden ticket, but it's sure nice to have physical assets in addition to everything else.
And as a car guy, I want to add this in case someone reading this had the idea pop in their head that their car is an asset. Stop. No. It's not. It's a tool/toy, nothing more. I have a Lotus and I consider that money written off. Investing in cars to try and make money is a quick path to the poor house.
Right on. I think people need to realize that investments, at their philosophical core, are all about return on your willingness to take RISK. If there's no risk then there's no reward. But risk also means that for everyone who wins there are plenty of people who lose. At some point putting your money into an "investment" is the same as putting that same amount on black in a casino.
Personally that's why I try and have a diverse set of things I'm doing with my money:
- House
- Various flavors of investments with various risk profiles to do different things (bonds, mutual funds, Roth's, 529)
- Liquid savings
- Enjoyment here and now
Last edited:
This is essentially how we became accidental landlords. We left San Diego for Japan in 2010, after basking in the SD glory for 9 years and owning some home during nearly all that time. Our townhouse was down about about 30% or $150k. Unlike many people, we could have afforded to sell, in part because we had a lot of equity due to the sale and upgrade from our previous condo. But I couldn't stomach locking in a six figure loss and writing a large check in order to sell something, so we rented (and instead ate a smaller monthly loss).
If money would have been tight for us at the time, we would have been super screwed. If we wouldn't have had so much equity from the previous place (and a lower mortgage because we didn't finance 80% or more) , bought in 2001, we would have been even more screwed. I say this, to be clear, not as a brag, but to point out it was mostly dumb luck and timing. Having bought previously at a very, very good time meant we were much less screwed when we bought at a bad time (and moved at a bad time).
Since then, it has recovered and then some, and we now make very modest money (with allll costs accounted for :
). But logic would still dictate we sell as surely that $ would do better in the market longer term. I do like the diversification it offers, but a lot of the reason we still have it is also just inertia. We don't have much longer before we but up against the 15 year cap gains limit, although those gains are fairly modest so it's not a huge factor. But we have some decisions to make. I can't see us buying again before husband retires, especially because we have no idea where we want to land permanently. (Unless we win the lottery in which case Coronado will have +2.)
Spekkio
He bowls overhand.
I think that a lot is getting lost or twisted here.
The adage 'a penny saved is a penny earned' applies. Additionally there is a utility factor that's being ignored for pure numbers.
Housing is most people's biggest bill, which needs to be paid off to afford a comfortable lifestyle on the average retirement. The perpetual rent cycle for many servicemembers is a huge barrier to building wealth. On top of that, when you own a place you can make it your own.
The mantra seems to be 'max TSP.' That's $19k of post-tax income. Nevermind doing so during an officer's initial 4 year commitment requires investing over 50% of take home base pay, or that transitioning to the civilian side will require some sort of liquid savings that you can tap before 59.5. Let alone that being remotely a feasible option for anyone below E8. If you think a junior enlisted or even E5-E6 with some dependents has $19k spare cash to invest you need to spend more time in the smoke pit. Perhaps more feasible for a 10-12 year aviation gig, but that's the small minority of servicemembers.
If you're doing 20 years to retire then maxing TSP isn't necessary, and IMO isn't worth the sacrifice in quality of life.
I get it that the number at 70 is lower to do things like pay off all of your major living expenses... But you still need a place to live. I want to have financial freedom in my 40s, and that requires not flushing $30k down the toilet in rent and having a mortgage paid off. . I don't really care if my house is worth $1 tomorrow - it provides shelter and happiness just the same. And I don't care if my TSP is paying out $60-70k per year in my 60s, because mil retirement will be plenty for my wife and I.
The adage 'a penny saved is a penny earned' applies. Additionally there is a utility factor that's being ignored for pure numbers.
Housing is most people's biggest bill, which needs to be paid off to afford a comfortable lifestyle on the average retirement. The perpetual rent cycle for many servicemembers is a huge barrier to building wealth. On top of that, when you own a place you can make it your own.
The mantra seems to be 'max TSP.' That's $19k of post-tax income. Nevermind doing so during an officer's initial 4 year commitment requires investing over 50% of take home base pay, or that transitioning to the civilian side will require some sort of liquid savings that you can tap before 59.5. Let alone that being remotely a feasible option for anyone below E8. If you think a junior enlisted or even E5-E6 with some dependents has $19k spare cash to invest you need to spend more time in the smoke pit. Perhaps more feasible for a 10-12 year aviation gig, but that's the small minority of servicemembers.
If you're doing 20 years to retire then maxing TSP isn't necessary, and IMO isn't worth the sacrifice in quality of life.
I get it that the number at 70 is lower to do things like pay off all of your major living expenses... But you still need a place to live. I want to have financial freedom in my 40s, and that requires not flushing $30k down the toilet in rent and having a mortgage paid off. . I don't really care if my house is worth $1 tomorrow - it provides shelter and happiness just the same. And I don't care if my TSP is paying out $60-70k per year in my 60s, because mil retirement will be plenty for my wife and I.
Last edited:
I can't recall if I said "max TSP" but if I did what I intended to say was "maximize what you put into TSP within your means." I by no means meant put 50% of an O1 salary into TSP. A single O1 without any school debt should have enough cash to share a JO flophouse or have a decent single condo, have an ensign mobile, never want for pizza or beer, and be able to put away 10% or so of every paycheck into savings/retirement planning. Since so many service members are on a perpetual PCS cycle I think perpetually renting is part of the military lifecycle.
That said, having a nice place to live is often good for the soul. Owning my current house is nice because it's nice to know that I can make it my own; from paint on the walls, to gardens in the yard, to knocking down whatever wall I damn well please there's something to be said mentally for having a home of your own.
I obviously have been burned more than others in this thread, but like the housing market, there's a risk that you don't make it to 20. No amount of wanting it will make it happen. So going in as an O1 thinking "I'm gonna do 20 and retire so I don't need to invest" is also silly.
Balance in all things.
ABMD
Bullets don't fly without Supply
Are we also assuming rent will stay the same from now into perpetuity? That isn't the case. Home ownership is also provide a small tax shelter, your interest on the loan and many of the taxes at closing are tax deductible. If you are renting, you need to make sure you are investing that difference (rent vs. buy) to reduce your taxable income.
Also, you're forgetting equity in the property, again assuming you didn't finance 100%, so you have some buffer there if the market tanks and are looking to sell. I know several people that have investment properties (on the East Coast) who don't follow the 1% rule. Some are just happy if they clear $100/month. Their philosophy: if someone else covers my mortgage + expenses and I clear $100 I'm good. Most of these cases are people who lived in the house previously and have equity built-in.
While true, for most people buying or refinancing nowadays, that is smaller than the updated standard deduction combined with today's ultra low interest rates that have existed for the better part of a decade. What is nice is that a mortgage (and only the mortgage part, not the taxes, maintnenace, etc.) is a fixed cost that is monetized through inflation over time. In that sense, yes it's nice. My dad's $585 a month mortgage payment represented a 1/3 of his income in 1985, but was a negligible, almost "oh that thing!" portion of his income in 2015.
ABMD
Bullets don't fly without Supply
Although probably rare, there are those that have significant charitable giving contributions which combined with their mortgage interest allow them to continue to itemize.
I agree with all the other parts above. Especially when it comes to rents that can increase either in an apartment or house.
Spekkio
He bowls overhand.
So how would your dad feel financially if he had to pay 3-4x that in rent for the rest of his life?