After the TSP, I invest my money in Betterment and Vanguard. I track all of my investments with Personal Capital. I also wrote a short, 2 hour book summarizing this site. You can buy it here.
The following is a conversation I had with an Air Force Airman 1st Class (A1C or E-3) on Reddit Military Finance, a great resource for asking anonymous and difficult military financial questions. I’ve reproduced it below (with some redaction for privacy) because I think it’s useful information for all military personnel.
The lesson here is that it’s never too early to start investing! If you can start investing the Roth TSP as a young enlisted personnel you will reap massive benefits in the future. It’s time in the market, not timing the market, that yields the greatest returns. Compounding interest takes time so you got to start early.
Good Afternoon Captain, I read your one post about TSP contribution and felt the need to message you and pick your brain a bit if you don’t mind.
I’m an E-3 in Air Force and work in Finance. My monthly paycheck is $1000 with monthly deductions/ Car payment $312 for 4 years/ & TSP $200. I’m usually left off with $200 to myself once I pay off my phone bill and car insurance.
My car loan is in the 8% range I can’t remember exactly, I purchased the vehicle in November of last year for 10800, currently paying 312 a month on a 4 year plan. I’ve been thinking today of trying to pay it off earlier would probably be a smarter idea so I could have more disposable income.
I’ve saved a few months worth of savings, my ideal goal was to have at least $10k in my savings account(too much?). Last week I created an IRA Brokerage account on USAA to get into the world of investing in the stock exchange. In the post you made you said you max out into the TSP and create a IRA Vanguard account and max out into that. Does my IRA Brokerage account give me a tax break? I guess that’s something I should of spoke to USAA with? All I know is that the money is tax free when I’m of age and decide to pull the money out.
I created my TSP account in January of 2014, sadly it took me a year to actually do research and switch the allocation out of G and putting it in a C S & I Fund ( 70 – 20 – 10). I have already seen major gains but will be changing it soon from some reading and research.
In the post you told the OP (original poster) once he has made the savings to message you so you could give him more to do. What information could you provide to me? anything would be helpful.
2 Websites I Use to Achieve Financial Independence Faster
I have investment accounts all over the place. To keep track of all of them in one place I use Personal Capital. It combines all of my accounts, shows me where I may be overpaying in fees, and provides beautiful charts showing my overall asset allocation and performance.
I use Personal Capital to track my Roth and Traditional TSP, Vanguard IRAs, banking accounts, SDP, and my Betterment taxable account, all in one place. It's free, secure and presents me with a one-stop dashboard so I can see all my money on one site.
Read my full review of Personal Capital and see how easy it can be to manage your investments in one place. Trust me, once you try it, you'll love it.
P.S. - If you have over $100,000 of assets and a 401k, you really need to run the Personal Capital 401k Fee Analyzer.
The best way I know to achieve financial independence is to keep your investments simple, diversified, automatic, and low-cost. Costs eat into your returns like you wouldn't believe! A 1% difference in expense ratios can mean $100,000s lost to fees over a lifetime of investing.
Even if you're a DIY (do-it-yourself) investor like I am, you need to check out Betterment. You can read my full review here, but the bottom line is for only $250 per $100,000 invested (0.25% expense ratio) you get simple, diversified, and automated investing. In addition every account now gets free Tax Loss Harvesting+ features, which should increase returns for the average investor more than the minuscule management fee.
If you're not a DIY investor or are just getting started with investing, then you definitely need to check out Betterment. It's what I recommend to my family and friends who aren't strong investors or don't care to learn about asset allocations, diversification, or rebalancing.