Looking at your earlier threads this may be another case of "here we go again", but other military reading this board may benefit from the info in this post as well, so I'll make it more general.
My apologies if this seems overly critical. You're far ahead of your peers in terms of assets and planning (at least five years ahead of me), and money may be the least of your problems. Figuring out what you want to do with it will help you put realistic numbers on the costs.
I am currently 22 years old and a military officer. I am married and my wife and I are living below our means. Right now we are assuming we will be leaving the military in about 4 years.
This may seem like a nit-picking distinction, but everybody leaves the military eventually. That's easy to do. Your perspective might be better framed on what you're going to do that's going to cause you to leave the military. It's not your departure that's significant, it's your journey & destination. [-]If you're leaving for a graduate degree, you could do some portion of that on active duty.[/-] OK, I see the MBA on active duty is already in your plan. If you're leaving for a better quality of life then there's a wealth of different military specialties or the Reserves/NG. (FIREup2020 knows what she's talking about.) If you're leaving because you only have a four-year obligation, then you might want to keep an eye on your options while waiting for your assignment officer (or another specialty's assignment officer) to tap into the pool of bonus money to tempt you to change your mind.
In other words, what are you planning to do that would require you to get out? Would you stay in the military if you could do whatever it is while you were on active duty or in the Reserves/NG?
I don't mean to preach to the choir; you may have already figured out this step. It's just that the "This sucks, I'm outta here" attitude frequently gets in the way of planning. Five years from now you might find yourself barefoot in the kitchen with a baby in one arm and dinner fixings in the other. That's not necessarily a bad idea (it worked for me) but it's better if it's your plan.
At that time we look at having our first child. I would like to have about 15K set aside for the initial costs for that. Hopefully there won't be much to any for medical because we plan on having the child while I am still in the service. The 15K would be for furniture and misc expenses.
Yowza-- this would be one of the best-capitalized startups ever!
We raised our kid on hand-me-downs, garage sales, and Goodwill. (Incidentally it taught her the value of shopping at Goodwill and Craigslist, habits that are serving her well in college.) The only furniture you'll care about for the first year is a crib and maybe a changing table, and the biggest "misc" expense would be a combo stroller/baby carrier/car seat. Family and the baby shower will supply you with a couple months of diapers.
A nine-month pregnancy seems to last forever, and there'll be plenty of time for Craigslist, garage sales, & thrift shops. You're LBYM, you'll find plenty of bargains.
$15K might be a good number for full-time newborn childcare. (Or would that be your job while your spouse is teaching?) It's also a great start on a college fund, although you may not want to overcapitalize that project either.
Also, it will be our 5 year anniversary and I'd like to set aside about 10K for a return trip to Maui, where we had our honeymoon.
Again, double yowza. Maybe that's the budget for flying first-class to a Kapalua resort or for renting Thompson Ranch from Oprah, but that amount will get you an awful lot of Ma'alaea condo on VRBO.com or one of the veteran's rentals websites like
Vacations for Veterans from Veterans Holidays. Depending on the activities you have in mind, you might have a lot more left over than you expect.
I would like to start investing in real estate with this $50K, using it as a down payment on our first investment property. I am looking for insight into whether or not this is a good use of this money.
The "advantage" of real estate investing is that it keeps landlords from frittering away their money by locking up large amounts of capital in very illiquid, depreciating assets.
OTOH you'd have to be a landlord, and that takes a certain special type of personality. Even if you already have that experience, I found these two books to be very helpful:
(1) Investing in Real Estate, 4th edition or later, by Andrew McLean & Gary W. Eldred (who's taken over the new editions) and
(2) Landlording by Leigh Robinson (7th edition or later).
You might also want to read Arif's posts, another veteran who's done quite well with landlording. A lot of your success depends on your access to cheap real estate, good tenants, and high rates of return. Otherwise you're working awful hard for 3-4% APY that could be just as easily realized by an investment portfolio of blue-chip dividend stocks.
I think your plan to enrich yourself through professional property-management companies will certainly enrich the professional property-management companies. There are better ways to enrich yourself.
If you had about $100-$120K at age 26 what would you do with it? Just invest it and pay for everything else out of your paycheck? Let it compound in an index fund? I know it varies by the person, but consider my situation.
Yep-- I'd diversify across 2-3 low-cost equity index funds, either mutual funds or ETFs. If I'd decided on the landlord lifestyle (and expected to be able to stay in that area for the next decade or so to make it worth the effort) then I'd put the down-payment money in a CD.
You're probably already planning some sort of bridge career and maybe some at-home parenting. That may or may not be complemented by a Reserves/NG career (especially IRR) or some other paid employment in addition to landlording. Once you plan those aspects of your life it'll be a lot easier to figure out what you're doing with the assets and how they should be allocated.
