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Navy Sailor wanting investment advice

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Money Talk > Investing, Stocks and Bonds

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ithalvey
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Navy Sailor wanting investment advice  Reply with quote  

Hi, i am 20 years old and have been in the navy for 2.5 years, during this time i have saved a pretty good amount of money. I am married and have a baby coming next month. I am starting to be more serious about my finances and wanted to come on here for some more guidance. Right now i have a car completely paid off, rent is covered through my BAH from being married, and i have 6,000 cash in my savings account for emergencies. On the investment side of the house, i invest 30% of my base pay into my roth TSP, i also have $3,000 in a vangaurd stock mutual fund roth ira account and $3,000 in a vanguard stock index fund taxable account, i aslo have some physical silver and gold, and $1,000 in standard individual stocks (intel and whitewave foods). I am just wondering if you guys think my money is in the right places, or if there is anything else i should be doing. I am no expert, i just want to be able to buy a house, travel the world, provide for my family, and retire in peace. I will be going out to sea a lot, so i will be saving some money.. i just want to make sure i am putting it in the right places.
Post Sat May 09, 2015 4:11 am
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oldguy
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Wow! The people on here should be asking you for advice, not the other way around, great job!

I would skip the individual stocks and stay with the index funds, that keeps you diversified, spread across the whole market. I especially like it that you have a taxable fund,since the days of IRA, 401k, etc, people are forgetting that very important leg of your wealth. In fact, you can use that fund as a Back-up EF, we keep under $5000 in savings (dead money) - it's immediately accessible in a large need, 6 months w/o work, etc.
Post Sat May 09, 2015 1:28 pm
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GardenCat
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Hi,
I agree with oldguy! You are doing a great job.

ignorant questions - what are BAH and TSP?

To me you are well on your way to meet your goals.

Once the baby comes, your life will change. Not meant to be a downer, Just a fact of life... It will become easier for you both to want to spend money on your new child, so just be aware and don't over spend on any credit cards to the extent of not being able to completely pay that debt in full every month.

To me, if you have any really significant (although theoretical) value of silver and gold (actual metal), you may want to consider selling it whenever it seems to peak next. Actual metal is not easy to use for anything except making jewelry while the $$ gained can be invested for actual future growth and more easy access to cash if needed.

Congratulations on your new baby!!! You will learn so much about yourself and about life over the upcoming years...

Ciao and good luck!
Post Sat May 09, 2015 3:08 pm
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Wino
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quote:
Originally posted by GardenCat
what are BAH and TSP?

BAH is basic allowance for housing, which used to be called BAQ or basic allowance for quarters. It is non-taxable income that is meant to provide for rent, utilities, etc. The point that it is non-taxable means two things: While in the service, taxes are not paid on this money; once out of the service and in retirement (called "fleet reserve" in the USNavy) this money is not part of the money used to calculate one's retirement pay.

TSP is the Thrift Savings Plan. For lack of a better description, it is the equivalent of a 401K for service personnel. It has few options. Of the options it has, the "C fund" is most like the Total Stock Market Index one might find at Vanguard, while the S and the I funds are Small Cap and International index funds. These are the only three options I would use, were I in the TSP.

To the OP, I'd get rid of the physical gold and silver, and use the funds to invest in Vanguard Index funds, or more individual stocks. As you're quite early in your life, I'd probably suggest you go for something like VFIAX or VTSMX, which are basically the S&P 500 or Total Market index funds. You are basically investing in the growth of the US economy; which has survived Carter, Bush, and Obama. If it can survive in the face of that ineptitude, it should be able to survive anything.
Post Sat May 09, 2015 4:12 pm
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ithalvey
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Thank you guys for all the tips. I also have like 2,500 in savings bonde that i got from my grandparents, would it be smart to cash those out and put them in vanguard index funds as well?
Post Sat May 16, 2015 11:04 pm
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Wino
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quote:
Originally posted by ithalvey
Thank you guys for all the tips. I also have like 2,500 in savings bonde that i got from my grandparents, would it be smart to cash those out and put them in vanguard index funds as well?

Yes, sell them and put them into Vanguard Index funds, as well. If they are old enough to be getting the "fabulous" 4% of yesteryear, you MIGHT want to keep them, but I think those all stopped accruing interest either 5 years ago or 5 years from now.

Anyway, the newer bonds (series EE) are junk. I'd definitely sell those and put the money into index funds. The energy funds are currently quite low ($60ish, with historical $75ish), so you might want to use that sector index fund until oil comes back in a year or two, then switch to Total Market, International, or the S&P fund. Personally, I hold all of the funds I just mentioned.
Post Sun May 17, 2015 7:12 am
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