timwalsh300
Recycles dryer sheets
- Joined
- Nov 7, 2009
- Messages
- 131
Thanks again for all the great replies to my last question about the need to take risk with our investments.
My fiancee and I have talked this over and decided to (1) continue maxing out our Roth IRA's with $10k/year, (2) begin maxing out a Thrift Savings Plan with another $16.5k/year, and (3) use a balanced stock/bond mix for these investments. FireCalc says that following this plan for the next 20 years, coupled with receiving a military pension, would give us a very high probability of being able to retire successfully in our early 40's.
Anyway, my next question is about housing. I'm familiar with the conventional wisdom about buying vs. renting: that you should only buy if you plan to be somewhere for at least 3-5 years. Unfortunately, as an active duty military member I think 3 years is about the longest I could ever expect to be in one place and I'm afraid that we'd be at a disadvantage if we just rented for the next 20 years and then left the military with 0 home equity. Am I correct in this line of thought or not?
Some older military members I've spoken to have dealt with this by purchasing homes wherever they get stationed and turning them into rental properties when they PCS. This has worked out great for some, but I've heard from others that it can cause serious headaches. Any thoughts on this?
Another idea I've been cultivating is this: rent and aggressively save money for a few years until we can buy a modest home with cash. This would give us 100% equity from the start and (I think?) avoid most closing costs. When we PCS we'd sell and get our money back (ignoring capital gain/loss) minus the cost of insurance, property tax, and maintenance (which seems cheaper than renting). We could then use that money plus other savings accrued along the way to purchase another, less modest home at the next duty station and so on. Upon retirement we'd have a paid-for home. Is this as smart as I'm imagining, or am I missing something?
Tim
My fiancee and I have talked this over and decided to (1) continue maxing out our Roth IRA's with $10k/year, (2) begin maxing out a Thrift Savings Plan with another $16.5k/year, and (3) use a balanced stock/bond mix for these investments. FireCalc says that following this plan for the next 20 years, coupled with receiving a military pension, would give us a very high probability of being able to retire successfully in our early 40's.
Anyway, my next question is about housing. I'm familiar with the conventional wisdom about buying vs. renting: that you should only buy if you plan to be somewhere for at least 3-5 years. Unfortunately, as an active duty military member I think 3 years is about the longest I could ever expect to be in one place and I'm afraid that we'd be at a disadvantage if we just rented for the next 20 years and then left the military with 0 home equity. Am I correct in this line of thought or not?
Some older military members I've spoken to have dealt with this by purchasing homes wherever they get stationed and turning them into rental properties when they PCS. This has worked out great for some, but I've heard from others that it can cause serious headaches. Any thoughts on this?
Another idea I've been cultivating is this: rent and aggressively save money for a few years until we can buy a modest home with cash. This would give us 100% equity from the start and (I think?) avoid most closing costs. When we PCS we'd sell and get our money back (ignoring capital gain/loss) minus the cost of insurance, property tax, and maintenance (which seems cheaper than renting). We could then use that money plus other savings accrued along the way to purchase another, less modest home at the next duty station and so on. Upon retirement we'd have a paid-for home. Is this as smart as I'm imagining, or am I missing something?
Tim