DFAS stealing TSP funds

[The Chief]

TSP is a ripoff anyway. ....

All is relative, guess. My TSP ROI was only about 18% YTD this year, but that was better than my portfolio of direct stocks, even though I had holding in China Google (BIDU) and China Mobile (CHL) early on. Return there is about 500% and 300% respectively. Always looking for some good insight into investing!

Agree TSP, and retirement systems in deferred taxes in general, are not the be all, end all for everyone. Personal example of the flip side of deferred taxes:

I must start my mandatory disbursment this year, about 6% of year end value. My tax bite, Federal and State, will be about 43%, whereas on investments not deferred my Federal tax bite would have been 15% (or less) for capital gains. That is why I think ROTH IRA's are the way to go, having said that, one size does not fit all.

Back to the original thread post, good on you FLYTPAY. Make sure your money is working for you as hard as possible. Make sure it is always returning max interest and on the other side of the ledger, make sure you pay others an absolute minimum amount of interest.

 

[FlyingBeagle]

FB, shouldn't you update the "clinging to happy place"

Oh, and a wings request.

Ha, good point, I'ts been a while.

Still, has anyone else had trouble with their customer service?

 

[MasterBates]

Just go to the user request panel and request to join "To add wings of gold"

 

[FlybyWired06]

... I got my salary 'matched' when I left and make considerably less now with all the taxes and other things I pay for taken into account....

If I ever get out, I'll have to remember this when negotiating my salary...that is, if I don't just decide to work at a gas station part time and play golf full time.

Also, diversification was mentioned...definitely DO NOT depend solely on your TSP investment. Since we're trading personal strategies, right now I invest TSP, have a ROTH IRA, and several mutual funds...I'm staying out of the direct investment (stocks) game for now as I'm still learning the game. My mutual funds are mixed between small cap value, capital growth, and precious metals right now. I don't know if this is the best strategy, but it seems to work for now...

Oh yeah, my mutual funds are with USAA. I love their online support and low fees and their returns are better than their respective sector averages, but I'm always looking for other opportunities...anybody have any issues with USAA mutual funds?

 

[Purdue]

I believe this would be called a Roth IRA.

BINGO. I max out my ROTH every month... (to total $4K a year) and it is FAR outperforming the TSP.

 

[McLovin]

Oh yeah, my mutual funds are with USAA. I love their online support and low fees and their returns are better than their respective sector averages, but I'm always looking for other opportunities...anybody have any issues with USAA mutual funds?

USAA is ok but Vanguard fees are lower, their customer service is great too. It's very easy to set up an online Vanguard account, moving money to and from your banks is easy as well.

Also, if you are maxing out your Roth IRA don't forget the max contributions increase to 5K for 2008.

 

[MasterBates]

Okay, I am trying to get my investment plan back on track. I won't go into why it derailed, I am just trying to fix it.

Right now I am dumping a whopping 1% into TSP, just to keep it active. When my flight pay goes up in January, it will be ~$400 extra a month. Would it be wiser to dump that into a Roth ($333 a month to max out at $4k/yr) or just continuing to hammer away at bills? I have about $7500 left on a credit card from the ex that is interest-free until ~Feb-March, that will probably just be rolled to another "no interest for xx months" offer when it gets close to when it has interest again, and another $4K or so on a no-interest til June 08 card.

I have been taking advantage of living cheaply and DITY moves to pay the debt off faster, but I know if I wait until I am debt free to start investing again, I will never get there.

 

[Ektar]

MB,

Start investing now! You have to remember compounding of interest. The sooner you get your money in, the more you will make. If anything, start putting some money away. I found it was a lot harder just to get started, but once I started I found it was easy to increase the amount going into my investments (TSP, mutual funds, soon to be Vanguard IRA) once I realized I wasn't going to miss an extra $50 or so month. Increase the amount gradually each month for a few months and you won't have shell shock when you are suddenly missing 400/month in spending cash. Just a thought on a stragety that worked for me...

To others,

I agree with everyone about Roth IRAs. Start one! I'm going with Vanguard as soon as I get the minimum amount required to open one saved up ($3000). A good friend of mine pointed out that in the future tax rates will have to go up to support the national debt and all of these federal programs being proposed. So, put your money in now at a lower tax rate, it will grow tax free in the Roth and when you take it out you won't pay higher taxes. Pay now or pay more later basically.

 

[FlybyWired06]

Would it be wiser to dump that into a Roth ($333 a month to max out at $4k/yr) or just continuing to hammer away at bills?

Do both...some for debts, some for investments...even 50 bucks month into a Roth will help you in the long run...but I don't believe you should just do one or the other..

 

[McLovin]

MB, another option which I did when I had credit card balances with zero interest was to open a Money Market account with about 5% interest. I made the min payment to my zero interest credit card and set up an allotment to my money market account, at the end of zero interest term I pulled the money out of my money market and payed off the credit card. This way I made the credit cards work for me. I even transfered my car loan to a credit card that had a zero interest, I just had to make sure I payed it off before the term expired.

You have to be somewhat disiplined to do this, don't put anything else on your credit card or use your money market money for other crap. If you plan to transfer your zero balance to another zero balance card be careful because a lot of cards have a minimum transacation fees based off a percentage but a lot of times there isn't a maximum fee.

You may even want to consider opening two Money Market accounts, one account to pay off your credit card and another for an emergency fund, so you don't have to use your credit cards anymore.

You should be putting a little money aside for the future but your main focus should be getting rid of anything you have to pay interest or fees on and setting up a short to mid term savings so you won't have to use credit cards anymore. Allotments are the best way to stay focused, this way you pay yourself first, use whatever you have left over for spending cash.

 

[HH-60H]

Here is an interesting stat I got off Dave Ramsey's website:


The number of security clearances of sailors and Marines that were revoked or denied due to financial problems have soared from 124 in 2000 to 1,999 in 2005. The six-year total was 5,482 - a 1512.1% increase! Financial difficulties are the number-one reason sailors lose their security clearance. (Seapower, June 2006)

That's probably more to DONCAF/OPM/DIS manning/backlog issues than to an actual increase in Sailor and Marine financial irresponsibility.

 

[The Chief]

MB, another option ... .

Great advice. Once credit card debit is down to zero, you have another option:

I put everything I can on a credit card, utilities, all purchases, no matter how small. Each month I pay them off, just prior to end of "grace period". I average $4,000 month credit card bill, that gives me an effective "float" of $4,000 a year. In the MMSA, it garners almost 5% or $200. Plus, NFCU Awards Credit Card give me $1 award for each $100 or 1%, that averages out of about $480 per annum. Ergo, I reap almost $680 a year from my credit card company. Not a lot of money, but it is a no-brainer.

 

[KSUFLY]

I would go for the credit card until you are good...pump what you can into that SOB....HEre is some good info for someone in your shoes MB:

http://www.daveramsey.com/etc/cms/baby_steps_2867.htmlc


Dude, Ektar: If you have 8 grand in credit card debt, that shite needs to go before you do anything!!!
Most financial advisors who have any concern and not just their commission will tell you to get out of debt first then get 3-6 months of living expenses saved up then to invest....

Dave Ramsey is great...I listen to him whenever I get a chance. I'm working on getting debt free but I'm a long ways from it right now.

 

[FLYTPAY]

I agree with everyone about Roth IRAs. Start one! I'm going with Vanguard as soon as I get the minimum amount required to open one saved up ($3000). A good friend of mine pointed out that in the future tax rates will have to go up to support the national debt and all of these federal programs being proposed. So, put your money in now at a lower tax rate, it will grow tax free in the Roth and when you take it out you won't pay higher taxes. Pay now or pay more later basically.

Open up a Roth with USAA. Put your money in a T Rowe Price fund, I own PRASX and PRLAX and have been doing 60% rate of return on them. I disagree with individual tax rates going up, I think your friend is mistaken.

 

[The Chief]

Chief;
What is your setup?
Do you have all your money deposited to a money market and then just use that money to pay your card?
I have been considering that route, but don't want to fall into the perma-debt trap...

I keep a hefty cash flow through my MMSA. it is open ended, return is based on average daily balance. Use it to fund real estate transaction & etc. MMSA has limit of 6 withdrawals a month, not really much of an issue. With little advance planning, I do an online transfer from MMSA to Checking and then issue checks from the checking account. Think you cannot have direct deposit directly to MMSA. Checks from Uncle comes into savings account and I immediately transfer to MMSA.