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Navy Sailor/Father Moving to San Diego

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ithalvey
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Navy Sailor/Father Moving to San Diego  Reply with quote  

Hey guys i am 22 years old and currently in the US Navy. I have a wife and a 1 year old son. My first 4 year enlistment is almost up and i am about to Reenlist for another 4. I got orders to San Diego California and we will be moving down there in March. I have learned a lot from this website over the years thanks to oldguy and wino, i put all my investment money into sp500 index funds.

Here is my current financial situation:
Checking: $3,500
Savings: $7,000

Roth IRA: $9,000 vanguard 500 index
Personal Taxable account: $10,000 vanguard 500 index

Roth TSP: $14,000

I don't make that much money, i am ranked E5.. but i have always been a pretty good saver. I make sure my income is always higher than my expenses. It is getting to the point where i am tired of paying rent and want to own a home. San Diego real estate is very expensive. What would you recommend for first time home buyers like us? My wife and i have no credit history, so we are working on that, i just got my first secured credit card a few hours ago with USAA $2,000 limit. I am thinking it might be best to just rent in San Diego and try to save up as much as we can and then maybe move somewhere and buy a house when i get out of the navy. We are currently just working on establishing credit, we have one car paid off.. but we will probably get another one soon since my wife will be working in San Diego. Any advice on car loans would be appreciated as well. I am also open to any other life advice or tips on ways i can invest or save more.
Post Thu Aug 18, 2016 10:38 am
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oldguy
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quote:
I am thinking it might be best to just rent in San Diego and try to save up as much as we can and then maybe move somewhere and buy a house when i get out of the navy.


That would be my choice - I think that buying a house in SD for a 4-yr period would be a coin toss. The 12% buy/sell realtor costs and the loan fees would eat up any hoped-for appreciation - and you could just as easily hit a 4-yr crash (Hillary & Trump are both lose cannons, who knows what 4 years will bring).

You're doing great, $40,000 at age 22 is a great start. Your $30,000 income plus BAH, uniforms, and other allowances, plus wife's income should keep things rolling.
You sound like you will avoid the 'military car virus', lol. If you drive thru the base at 29 Palms you will see near-new Big Duallys with 4 doors, 4 WD, Diesel, and 6 tractor tires. (The tires/wheels cost more than my whole truck) - it takes most of their incomes to make payments on one of those things.
Post Thu Aug 18, 2016 4:51 pm
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Publius
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You're doing very well to have saved that much at your age, keep that up and you're going to be very comfortable in retirement.

Don't fall into the trap of thinking that renting is just "throwing money away". There are expenses associated with owning a home that go beyond just the mortgage payment. And, as we saw in 2008, you can't count on a house always appreciating. That is doubly true with California real estate. That is some of the most expensive and volatile real estate in the nation.

Stick to the plan you've outlined and see where you are in four years. Keep in mind that you've got a kiddo that might want to go to college and if you want to be in a position to help with that, time is your best asset.
Post Fri Aug 19, 2016 2:33 pm
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oldguy
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Cash: $ 715.00

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quote:
time is your best asset


That's exactly right, don't under-estimate the power of compounding. Eg, your $40,000, placed at 11%/y longterm, will be about $920,000 in 30y (age 52). If you let it ride until you are 62, it will be about $2,600,000. And it's likely that you'll add way more to the $40,000 as the yrs go by. Most people don't have the patience, they see the $40k in the bank and they start using it - a house down payment, a 'reliable' (new) car to haul the baby to the doc, etc.
Post Fri Aug 19, 2016 5:13 pm
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