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Hi!
Old 06-05-2006, 09:52 AM   #1
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Hi!

I'm 28 years old. I've been active duty in the USAF for 8 years. I'm married with one 22 month old daughter.

My wife is one year older than me and we want to retire in our early 50's. To accomplish this, my plan is to retire from the USAF at the 20 year point. At that point my daughter will have 3 years until she graduates from highschool and goes to college. Her education is already covered thanks to wonderful, thoughtful, generous grandparents -- but we're still placing money into this account as well to finance through a Medical or Law degree (a parent can hope).

We live in the Metro/DC area and have yet to invest in real estate due to the extremely high prices, and the fact that I'm getting short and will more than likely get orders soon. My does invest in her 401K and has done so since she graduated from college in 99 and started in her profession. She has already accumulated a tidy sum (thankfully) and I can only imagine how much that may be in 25 years or so.

Both my wife and I aren't big spenders, although we did finally buy our first new car and are suffering through the car payments. We've previously always had paid off vehicles, but one kept giving us so many problems we finally just traded it in on a brand new Toyota 4Runner Limited, that we love. I must say that I love the "new car" driving experience a bit more than I should. That is our ownly debt though. We both hate debt..so making that payment each month kind of racks me with guilt, although it seems the norm for most. We could pay the vehicle off early, but I'd rather make the minimum payment, and keep my money in savings/investments.

I have invested in my military TSP since they offered it and max that out. We plan on buying our first home whenever I get to my next stateside base. We plan on keeping the property and renting it out once we PCS again. The plan after I retire from the USAF is for me to get into some sort of corporate or perhaps Civil Service job and simply live off of the spouse's income who makes "less" plus whatever income we might make from a few investment properties. We will save/invest the rest of the income for a period of 10 years. After that...we will be in our early 50's and I'm sure ready to retire.

I don't really know what to write. I guess this pretty much covers it. So far, our plan is on schedule. Nothing really complicated or too savey. This is a great forum and I've enjoyed lurking the past month and reading through the great posts. There is a generous amount of knowledge on here, and I look forward to learning more.

Thanks!
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Re: Hi!
Old 06-05-2006, 10:16 AM   #2
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Re: Hi!

Welcome to the board, Matt! Sounds like you guys are well on your way.

Quote:
Originally Posted by Matt_24
I'm 28 years old. I've been active duty in the USAF for 8 years. I'm married with one 22 month old daughter. My wife is one year older than me and we want to retire in our early 50's. To accomplish this, my plan is to retire from the USAF at the 20 year point.
A military retirement looks mighty sweet from that perspective, but there are 12 more years of pain separating you from it. Even a couple years of an ugly tour might be unsustainable if you guys are separated or if it's in a tough location. You're also approaching the point where your assignment officer is probably saving a really ugly nasty nice career-enhancing job just for you.

Instead of trying to psych yourself up for a 12-year marathon, I'd suggest that you take it one tour at a time. If you're having fun (or at least not suffering too horribly) then stick around. However if you receive the "unrefuseable offer", then bail for the Reserves. One of my career regrets was sticking around way past the "fun" point because I didn't realize how much the Reserves had to offer.

I know several Navy officers who've left active duty careers for the Reserves, where they could return to active duty for years. Some of them have had more years of active duty as Reservists than they had when they were on active duty. The difference is that they get to pick & choose their jobs, not their assignment officers.

Quote:
Originally Posted by Matt_24
I have invested in my military TSP since they offered it and max that out.
$15K/year now, right?

Quote:
Originally Posted by Matt_24
We plan on buying our first home whenever I get to my next stateside base. We plan on keeping the property and renting it out once we PCS again.
That's a tough one. I know dozens of Navy veterans who've bought houses in Pensacola or Norfolk and poured thousands of dollars down the rathole in management fees & maintenance. They see a nice appreciation but they would have done better investing all their housing expenses in an index fund.

We had the same experience with a Hawaii home while living in San Diego for three years. If you can find a place that gives a cash-on-cash return of at least 6% after fees & expenses then you're probably in good shape. But if you're buying a house every 2-3 years then you're spending a lot of money on closing costs that's not necessarily recouped by cap gains.

However rental property works out great if you're able to keep an eye on the area by homesteading or visiting frequently. I don't know how well it works out when you're handing over a big chunk of profits to a property manager.

Arif, how'd you handle being away from your properties?
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Re: Hi!
Old 06-05-2006, 10:29 AM   #3
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Re: Hi!

Wow Matt,I wish that at 28 I had thought it all out as thoroughly as you guys have.

I was lucky enough to have an employer who provided a car for me so I could afford to splurge a little on my wife's vehicle. Working weird hours and being gone from home a lot I didn't want to have to worry about the dependability of what she and the kids were driving around in. We still kept them for a long time, but whenever reliability became an issue I would trade in and get something new.

We have some friends who were both in the Army, but his skills were worth more in the civilian world and her military career had a lot more upside than his, so she stayed in until retirement and he went into the corporate world. After retiring she stays home to raise the kids and her pension pays the mortgage and some other bills. His salary catches the rest, pays for a few extras and the everything else goes into their plan to retire to the country somewhere near his family in Puerto Rico. It seems to be working well for them and they'll be in the early 50's when they go to PR (waiting on the kids to leave home).

Welcome and thank you for your service to our country.
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Re: Hi!
Old 06-05-2006, 03:29 PM   #4
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Re: Hi!

Matt,

Are you stationed at Andrews? Just curious :

My plans are pretty much the same as yours except I want to retire at 20 years of service. Its funny that other military people actually think about this kind of thing.. Would never know it walking around the squadron and asking. Most people seem to retire from the military and continue working as some contractor doing more or less the same thing.

As for me I am currently 24 years old with almost 5 years of service. Military retirement benefits plus my portforlio should allow me to retire at 39 years old.

Have fun with the PCS!!
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Re: Hi!
Old 06-05-2006, 10:17 PM   #5
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Re: Hi!

Nords--

Aren't you supposed to be the moderator of this board rather than the heavy handed naysayer?*
This is only my second post but I've been reading diligently for the last six months.* And I've gotten to the point where I wonder where on earth you're coming from in response to some of the new posters.

Matt24 seems to have a pretty good plan worked out.* And your "rain on his parade" response doesn't seem at all warranted.* To wit, you write:* "A military retirement looks mighty sweet from that perspective, but there are 12 more years of pain separating you from it.* Even a couple years of an ugly tour might be unsustainable if you guys are separated or if it's in a tough location.* You're also approaching the point where your assignment officer is probably saving a really ugly nasty nice career-enhancing j*b just for you."* Gosh thanks for the advice and, by the way, welcome to the board, Matt24.* By the way, if you read his post, he had no reservations at all about his current plan nor about his next few years in the military.* Just lots of enthusiasm about sharing his plans with us.* *I guess he'll think twice about that in the future.

I could go on, but you get my point.* Oh, and congrats on running Maximillian off the boards.* I thought of writing at that point about how over-the-top your response to him was, but couldn't really be bothered.* * It's another thing when your replies to inoffensive new posters seem completely out of line with their intentions and sentiments.

imho, you need to lighten your touch.
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Re: Hi!
Old 06-06-2006, 02:17 AM   #6
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Re: Hi!

Ahem -- excuse me for piping up here. I don't know the history some of you have on this board, but what I like about the posts here so far is that nobody is selling anything - no dreams or rose-colored glasses to make the dreams look viable.

Being in the military for 12 more years must be tougher than anyone who's not in that position can imagine.

Owning rental property is not exactly a picnic either. I just sold mine after a 5-year marathon, trying to keep an old house with decades worth of deferred maintenance from falling to the building inspector's bloodhounds while keeping my tenants happy and myself somewhat sane.

The rental income business is so lucrative only because it is also very risky. I still shudder to think how I fought the termites, and the deluge in So Cal 0f 2005 that destroyed most roofs (and no reputable roofer available for the next 10 months!), and the sewer pipe overfl... You get the picture just the tip of the iceberg.

Theronware, would you rather have Matt gung-hoing with no idea where he's actually going?

Or maybe you have some other unrelated axe to grind. Anyway... just my 0.75 cents with tax.

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Re: Hi!
Old 06-06-2006, 06:15 AM   #7
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Re: Hi!

Quote:
Originally Posted by theronware
Nords--

Aren't you supposed to be the moderator of this board rather than the heavy handed naysayer?
This is only my second post but I've been reading diligently for the last six months. And I've gotten to the point where I wonder where on earth you're coming from in response to some of the new posters.
Hi Theronware. I don't want to chase you off after a couple of posts so don't take this as a flame. I read Nord's comments as constructive. He cautioned Matt that s**t happens and to keep viable alternatives in mind. On staying in vs Reserves, he actually encouraged Matt to stay the course unless and until things go bad.

I can't remember the Maximillion stuff so I can't comment -- maybe Nords was a jerk there. But didn't I see Maximillion back posting recently?
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Re: Hi!
Old 06-06-2006, 06:19 AM   #8
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Re: Hi!

It always piques the interest of the board moderators when a new poster wants to assist us in improving our moderating technique.

Quote:
Originally Posted by theronware
Nords--

Aren't you supposed to be the moderator of this board rather than the heavy handed naysayer?
This isn't cheerleading camp, it's an early retirement forum. People who post here should expect to hear (heck they should want to hear) all aspects of issues and questions debated and discussed...warts and all.

Quote:
Originally Posted by theronware
Oh, and congrats on running Maximillian off the boards. I thought of writing at that point about how over-the-top your response to him was, but couldn't really be bothered.
You haven't noticed that Max is still posting away on the forum, trolling posting his little heart out? If you had been around long enough you would know the history of Maximillion, who registered as Howard, posted for several months, deleted his membership, then came back weeks later under a different name.

Quote:
Originally Posted by theronware

imho, you need to lighten your touch.
Theronware
Imho you need to have a better understanding of what it's like to walk in a forum moderator's moccasins for a while before giving too much constructive criticism.
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Re: Hi!
Old 06-06-2006, 06:26 AM   #9
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Re: Hi!

Hi everyone. I just wanted to say thanks for everyone's posts/advice. I certainly haven't found anyone offensive/heavy handed. I appreciate everyone's knowlege and experience. Thanks!
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Re: Hi!
Old 06-06-2006, 06:57 AM   #10
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Re: Hi!

Hey, Matt, don't worry about it; hormones run amok... :P
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Re: Hi!
Old 06-06-2006, 07:31 AM   #11
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Re: Hi!

Quote:
Originally Posted by theronware
Aren't you supposed to be the moderator of this board rather than the heavy handed naysayer?*
I'm relatively new here. Must admit that, compared to other forums, I found it to be a little rough at first -- contentious, sometimes cynical, and even at times downright adolescent (esp for a retirement forum). But, heck, it's a forum - takes all types. On the other hand, no one needs to rise to the bait (just let it dangle and eventually it rots). Also, I have pushed back a little once in a while, but only when I think a negative reply risks misinforming other readers -- almost always taken in good spirit. I virtually always ignore the grade-school digressions.

So that's the way it is here. OTOH, there are huge numbers of pearls to be gleaned: knowledge, experience, humor, shared expertise, and even emotional support. An "ignore this user/topic" button would be nice once in a while, but just easy enough to do this on your own.

So, as Brewer says, let the jackasses bray and enjoy the rest.
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Re: Hi!
Old 06-06-2006, 10:43 AM   #12
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Re: Hi!

Of course this forum is* not a cheerleading camp -- that wasn't my point.* My point is that Nord's "moderating style" wavers between tireless self-promotion and unwarranted negativity.* There's a difference between constructive critique of somone's plans and a knee-jerk "cut-em-all-down-to size" attitude.* And,* Donheff, -- we all know that "sh*t happens"as you put it...we sure don't need Nords to remind us of that little gem.

For the last six months i've generally tended to be amused by Nords testosterone-ridden moderation -- last night I was moved to reply rather than simply smirk or grimace to myself.

What would it take to instigate a constructive critique of someone's moderation?* From most of the above replies, I'm not sure there's a place for that on this forum.* Too bad.* I guess one gets the moderator one deserves.

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Re: Hi!
Old 06-06-2006, 10:46 AM   #13
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Re: Hi!

theronware, if you have a problem with Nords, why not take it to e-mail/private messages?
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Re: Hi!
Old 06-06-2006, 12:23 PM   #14
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Re: Hi!

I'm sure a moderators job is not an easy one. I have seen some boards that there is actually no input from the moderator in discussions. They are there just to make sure foul language, porn, etc... is deleted from the forum. Maybe that would be a good way to go. But I would guess that this is an all volunteer board, so how much fun would that be if you could not participate in the forum? Not much.

I recommend as Brewer did to make a private pm to Nords, or another moderator, and discuss your displeasurer. I'm not always in agreement with some of the moderators opinions or their delivery, but I think they have a right to an opinion.
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Re: Hi!
Old 06-06-2006, 03:49 PM   #15
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Re: Hi!

Quote:
Originally Posted by DOG51

I recommend as Brewer did to make a private pm to Nords, or another moderator, and discuss your displeasurer. I'm not always in agreement with some of the moderators opinions or their delivery, but I think they have a right to an opinion.
Better yet, take up your issues with Dory since he "owns" the board and "manages" the moderators. I think a thick skin is a prerequisite for being a moderator or even a board participant. Folks that are agressive enough to enact a ER plan tend to be pretty tough minded and direct in their approach. Sure some of the moderators and others here can get crabby from time to time but that just goes with the prima donnas that tend to collect in a board of this type. Being FI seems to make one a bit that way.

As C-T says.....balance in all things.
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Old 06-06-2006, 04:02 PM   #16
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Re: Hi!

Quote:
Originally Posted by SteveR
Sure some of the moderators and others here can get crabby from time to time
Crabby!* Whaddya mean, crabby? * *You want crabby, you shoulda known some of us when we were still w*rking! :P


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Re: Hi!
Old 06-06-2006, 04:11 PM   #17
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Re: Hi!

Quote:
Originally Posted by REWahoo!
Quote:
Originally Posted by SteveR
Sure some of the moderators and others here can get crabby from time to time
Crabby!* Whaddya mean, crabby? * *You want crabby, you shoulda known some of us when we were still w*rking! :P


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Old 06-06-2006, 05:35 PM   #18
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Re: Hi!

Quote:
Originally Posted by SteveR
Sure some of the moderators and others here can get crabby from time to time but that just goes with the prima donnas that tend to collect in a board of this type. Being FI seems to make one a bit that way.
Or is it the other way around: Being crabby seems to enable one to become FI
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Re: Hi!
Old 06-06-2006, 08:53 PM   #19
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Re: Hi!

Matt,

Welcome aboard. We retired from the USAF last year after 21 yrs. I've owned houses, rented, and lived on base. While I've heard stories of folks making money from buying and then renting the houses out, I think this requires some luck. Being in the military works against you (compared to a civilian investor doing the same thing) in three ways:
- When you buy, you have limited time to search. As you undoubtedly already know, PCS time is a giant PITA, and as you progress in rank you'll probably find that you get less and less time to househunt. One week is a common. Given this, it's hard to get a good bargain on the house to begin with--you're in the fast lane looking at the MLS listings, not scouring for unnoticed good deals.
- You have to live in the place. Some of the best rental properties (the most profitable ones) are not necessarly places you or your family would want to live every day. The criteria for a good residence is not the same as the criteria for a good rental.
- You'll be an absentee landlord. That means you'll be out of pocket for a property manager, and even so you can expect to pay more for repairs and in vacancy costs than if you handled this yourself.

So, I'd recommend that you build yourself a spreadsheet and carefully run the numbers before you jump in.

Renting instead of buying takes a lot of the stress out of PCSing. I was never sorry we rented, I was sorry when we bought several times.

Keep up the savings habit and try not to concentrate too much on the end goal. Enjoy your career and your life and let the investments mount over time. When 20 years rolls around you'll have options that you'll really appreciate.

samclem
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Re: Hi!
Old 06-07-2006, 12:05 AM   #20
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Re: Hi!

I totally agree with Samclem- all of his points were completely accurate.
I just PCS'd (today!) to Colorado Springs. I had great luck when I bought my condo in Hawaii. I went to rent a place and ended up buying there. NOT something I'd recommend to anyone. But like I said, I just lucked out - it was a nice place, I loved it, and my renter (the only one) stayed there for 2 years until I decided to sell.
Two good choices that I made were: 1) buying a place that was low maintenance to me (I pay maintenance dues), and recently remodeled, and 2) kept the place in good condition while I lived there.
Personally, I would recommend a townhome or condo for those reasons, but not a home - there's way too much that a renter could tear up in a home.
If things are going as they should, your rent income will cover your mortgage, insurance, and property management fees. This is one reason it's super important to get a good interest rate when you buy. That makes all the difference in the world to whether you make or lose money on a rental.
Samclem also mentioned that the home you would buy for yourself might not necessarily make a good rental - that's really true. Personally, I think it's better to buy a smaller place, such as a townhome or condo, because there are many single folks out there looking for places off post, whereas there aren't as many families doing the same.
Good luck. It sounds like you're doing awesome.
Nords did mention the 15k TSP - TSP contribution limits are continuing to rise, so you can always put more and more in there - but also - I'm sort of with Nords with this on the caution side. Let's say that you got out after 12 or 15 years - are you willing to have that money sitting in TSP until 65 or whenever they let you take it out? I don't think you can withdraw without an early penalty if you don't stay in for 20. I'm all about having a Plan B - so that's why I mention it.
Good luck.
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