Edit: TL;DR - wall of text explaining my current finances, also asking if it’s the right time to enter the housing market (and how I might protect myself if I do so). I’m very cash-heavy and looking for ideas to diversify and grow into retirement, while ensuring my wife and kid are taken care of as well.
I realize there are many different options for how to save and plan for retirement. I think I’ll be just fine, but I also recognize that I have a lot of room for improvement. More than my own personal security, I want to provide as much as possible for my wife and child, both of whom I expect to outlive me by many years.
Now, I would never share this kind of detail with someone who knows who I am irl, hence the throwaway. As far as non-immediate family and acquaintances know, I’m living paycheck to paycheck, and I’d like to keep it that way.
Some background information about me:
I’m 35 years old, serving on active duty in the US military, and I’ve been in for a little over 12 years. I’ll be eligible to retire in about 8 years, and a rough conservative estimate is that I’ll receive about $2,000/month retirement pay starting in my early-mid 40s. The plan is to continue working after I separate until, well... until I’m ready to stop. Who knows when I’ll feel too old to work? 55? 65? 85???
The idea is to have the financial freedom to “officially” retire when I’m ready to so, no sooner and no later.
I’m married and I have one kiddo.
The wife makes a pretty decent paycheck atm, but she’ll soon be looking for work when we relocate to our next assignment. She has about $15K saved up right now.
I transferred my Post-911 GI bill to the kid to help offset the cost of college, and because Uncle Sam already so generously paid for my own education while I’ve been on active duty. It would be a waste to use the Bill for myself. Still, I’d like to set aside at least enough to match it or fill the gap up to a Doctorate (just in case the kid wants to pursue that level of education- no pressure lol). The GI Bill should cover a substantial part of the first 3 years, beginning sometime around the year 2030, but I could potentially be paying as much as half of the cost of a 4-year degree, and likely most of any education beyond that. Student loans aren’t all bad, but if I can put my kid through college without having to take out a loan, that would be fantastic.
So here’s where my finances sit right now:
I’ve calculated my compensations for the next year, and a conservative post-taxes estimate is that I’ll bring home about $50K. I don’t expect that figure to change whole lot over the next 4 years at least. I’m sure my wife will find gainful employment again after we move, but I don’t have enough information to forecast what her earnings will be, so I’ll simply leave it out for now.
I’ve done a lot of research into the cost of living at our next assignment, and I keep pretty solid records of spending. Based on our current expenses, and a conservative adjustment accounting fo the location change. I expect to reliably save an average of $1,800 per month out of my paycheck. That’s about a 40% decrease in annual savings compared to the last 2 years, during which time I received some special pay and a bonus.
My family budget plan for 2018 allows for about $29K in expenses total, which sounds tight for 2 adults and a child (and it is tight), but I also know it’s easily doable. I’ll adjust that target as we settle into the new place over the next several months, and go from there.
Whatever the wife is able to earn after we move, can go straight to the bottom line. I hesitate to forecast my capital gains from investments based on past performance, because it really has been an exceptional few years. Besides, I have yet to ever withdraw from my brokerage account. All dividends and gains from closing positions has gone right back into the pot.
I have $46K in my brokerage account. Roughly 50/50 cash and stocks (individual stocks and ETFs/ETNs etc). Here’s my current portfolio if anyone cares: MO, AAPL, WFC, AMD, BND, IAU, WMT, ARNC, SPY, XIV- roughly equal parts for all of those. They’re a mixture of speculative short-term and div-yielding long-term holds. The half I have sitting in cash is so I can quickly sell calls/average-down/BTFD whenever the next market correction/crash/recession comes. I’m adding about $1K/month to this account via automatic deposit, which I typically split between cost-price-averaging into my longs, and into my cash reserve. I balance my holdings mostly by adding to underperforming positions when I expect a rebound, and not by selling stock unless I’ve held the shares for more than a year. I also try to keep my cash balance roughly equal to the market value of my stocks for the reasons mentioned above (and so I can act if I see an opportunity for a nice swing trade).
I have a little over $20K in an interest-earning checking/debit account. This is where the majority of my paycheck lands, and it’s where the majority of my bills come out.
I have $15K in USD hard cash. That’s more than I need, to be sure. It’s mostly leftovers from when I sold one car and bought another. I’ll eventually deposit it into a bank I suppose lol.
I also have $11K in another checking account which I feed through a credit card, paying the balance off monthly. I’ve been using the credit card to buy gas and pay for other travel expenses. I don’t need a cc to do that, but it’s an easy way to build up my credit score and it helps whenever I need to rent a car or something.
Then there’s the $6K sitting in a credit union Roth IRA I opened and sort of forgot about. It barely earns interest at all and I can’t for the life of me figure out how to use it.
I own exactly 1
BTC I bought on a whim this summer. It’s hard for me to watch, because it moves around so much in value. Worth about $4.5K today. Other assets I can think of off the top of my head:
~ $4K in physical gold/silver. I guess it’s my hedge against society collapse or whatever lol. I have one of those 50g combi-bars that can be broken into smaller ingots and then a bunch of 1oz silver coins.
~ $2K in various foreign currencies, mostly Sterling. This was left over from when I spent some time in the UK pre-brexit vote. I’m sort of bag-holding it until I can exchange it back to USD for less of a loss.
On top of that, I have exactly zero debt. If I were forced to liquidate all of my assets not mentioned above, I’m confident I could come up with another ~ $40K (That’s if you figure a >50% emergency sale depreciation... I have 4 cars, 3 of which would be considered collector’s items and about another $15K in Snap-on tools + all the other random shit I own)
I realize my money allocations don’t make a lot of sense right now, but I’m an aggressive saver and the cash tends to pile up quickly. That’s a nice problem to have I guess.
One concern I have, is seeing my un-invested money take a big hit from inflation. I’m also a little worried about my bullish stock portfolio, but my plan is to build/hold it for another 15 years or so, and then slowly increase my exposure to bonds as I get into my 40s and 50s. Assuming I can stick to my long-term investing strategy, I’m hoping to be able to ride out any major correction or recession.
A major goal of mine is to buy a house. Thanks to the military lifestyle living overseas and frequent relocations though, I haven’t really been in a position to do so. Soon I’ll be moving to a stateside base, but looking at the housing market there, I’m frankly scared to buy right now. Houses in the local area have nearly doubled in just a few years, and I’d rather not spend the next 2 decades upside down in a mortgage if things suddenly take a turn for the worse. The valuations just don’t make sense to me compared with the rental market, and I suspect many of the land owners are deeply indebted in a market that feels pretty hot imo.
So there you have it. My personal finances in a nutshell. Not that I’m in financial trouble or anything, but I would love to hear any suggestions or pointers you smarties might have to offer.
I suppose some specific questions might include:
- How would you rate my stock portfolio and strategy? Are there any big glaring red flags? Am I being too aggressive by having nearly 20% of my net worth invested in those symbols? Am I not being aggressive enough?
- Am I being overly paranoid about entering today’s housing market? If not, what are some ways I can hedge against a market value decline without literally shorting the market and getting slammed with fees and commissions. Aside from a potential drawdown in property values, should I be more concerned with rising interest rates? How much might one type of loss cancel the other out? Should I buy now to get a better interest rate, or wait for a “dip” that might not come for a very long time?
To recap my holdings:
- brokerage $24K invested $22K dry powder
- liquid $67K
- metals/BTC/forex $10K
- personal property $40K
- home equity $0
- debt $0
- annual net income $50K
- projected monthly savings $1.8K
- approximate family net worth $160K
Any/all ideas and criticisms are welcome.
Thanks for reading!
An introduction to corporate finance legislation covering loan relationships, foreign exchange (FOREX) and derivative contracts CFM61000 - Corporate Finance Manual - HMRC internal manual - GOV.UK ... Forex trading. Trading. Globally recognized broker with 24 years' experience in FX trading services. MarketPulse . Daily trading news from our team of award-winning currency analysts. Foreign Exchange Data Services. FX data services. Accurate and reliable FX services and exchange rate data and from a provider you can trust. Currency converter. Trusted by major corporations, tax authorities and ... In Part 3 of our UK Relocation series we tackle the subject of finding schools for your kids, registering with a UK doctor and dealing with any animals and pets. If you have a family, then relocating to the UK will mean a huge adjustment. All children aged three to four years old are allowed 15 hours of free nursery school education for 38 weeks of the year, so if you need extra childcare that ... In Part 2 of our UK Relocation series, we turn our attention to the world of banking and shipping.... There are many banks to choose from when deciding to open a bank account in the UK. Since the economic crash of 2008, the British banks are now a little more discerning in choosing clientele but if you have all the correct documentation, then you’ll have no problems setting up a bank account ... Make No Mistake About It, A Currency Devaluation Is A Tax - Britax is a global corporation with a manufacturing hub in Fort Mill, South Carolina where it employs 300. It is there that the company creates car seats for children. Unknown is... We’re on every exchange, and with our Universal Account clients can trade stocks, options, futures, forex, bonds and funds, all around the world, from one online account.” Despite such numbers, Interactive Brokers is still seen back in the States as the upstart challenger to the country’s “big four”: Fidelity, Pershing, TD Ameritrade and, largest of all, Schwab. UK VAT is similar to a US sales tax in that it is levied on sales (outputs). UK VAT incurred on purchases and expenses (inputs) is set off against output tax and only the net amount is paid to the government (i.e. tax on the value added). A trading entity must register for VAT if its turnover is expected to be more than £85,000 p.a. Trade agreement: Phase 1, Phase 2 etc…for the next 5/10 years ; High risk zone: June/July 2020 « Boris boom » is coming: Fiscal stimulus (March 11 budget) + rate cut by the BoE (March) Negative spillovers to the EU are limited (positive sentiment, CB support, solid underlying fundamentals) Here’s what we know for the banking and financial industry: Limited staff relocation in absence of ... Business tax Import, export and customs for businesses: detailed information From: HM Revenue & Customs, Department for International Trade, Department for ... When money is transferred from abroad to India, surely there are tax implications to consider. On the other hand, if you are a resident Indian and receiving money from abroad, you’ll want to know if you are liable to pay tax on the amount. In this post, we’ll examine both these questions.
**This video is not intended to be tax advice. Seek your own tax professional about your personal tax situation. ** Grab a copy of the Home Business Success ... Make Money from Forex Trading from the Comfort of Your Own Home in the Uk. The Forex market is a $5 Trillion per day industry. Find out why I practically turned my back on the MLM and network ... Learn to Trade is one of the largest international providers of trading education in foreign exchange. In the past 10 years, over 250,000 people have attende... Hi my name is Adrean! welcome to the FX hangout. This channel is dedicated to help people not only invest in the Foreign Exchange Market but all investment a... 14 day RISK FREE TRIAL on trading HERE: http://training.tieronetrading.com/trial To apply for my Tiers Of Freedom comprehensive and practical wealth Program,... Cryptocurrency and Tax in the UK - Duration: 24:16. CryptoDave 2,778 views. 24:16. Best FX Trading Strategies (THE Top Strategy for Forex Trading) - Duration: 32:00. ... Forex Trade With Us http://bit.ly/2EYIbgI Email: [email protected] Brokers I use https://bit.ly/35kgYkc P.S MY INSTAGRAM IS GONE NOW SO IF SOMEBODY W...