Investment showdown -- beyond the Roth, SDP, & TSP

[Swizzle]

After maxing-out Roth IRA's and placing a small mint in TSP, the wife and I are wondering where else could investment money go? Ideas out of ordinary?

Heard these:

Rental house, raw gold before in case of economic collapse, weekly stock trading, savings deposit program, bullets & assault rifles, lottery tickets

We've also gleamed some info from previous threads on the Roth, SDP, and TSP. But haven't seen any good direct comparisons of those common methods or much beyond those common methods.

What about a small side-business? Or something else? What is something different you all have heard/seen active duty do as an financial investment outside the norms?

[Guest]

Vegas. The Tender Trap. Make it rain.

[Duck]

I know some section 8 housing slumlords...

[Day Man]

Good call...was thinking about starting an investment thread but never get around to it.

One of my recommendations: Armour Residential (ARR). It's an REIT that invests in mortgage backed securities. Best part? $0.10/share dividend paid monthly which ~ 16% annual dividend yield.

I take no responsibility if you lose your ass.

[sky_king]

I invested heavily in raw asbestos. My closet's full of the stuff.

Safe Bulkers (https://www.google.com/finance?q=NYSE%3ASB) also has pretty good dividends. It's been pretty stable for the last 4 years or so too.

Edited September 7, 2012 by sky_king

[matmacwc]

I know some section 8 housing slumlords...

I'd love to own some of those, high drama, high return.

Vegas. The Tender Trap. Make it rain.

Will be there over Halloween, should be interesting. Snacko bet on red.

[Guest]

Cool. Make sure you hit Satin Saddle and Larry's Villa, too.

[Guest]

Passive income is hated by many. Be careful.

[Flaco]

Passive income is hated by many. Be careful.

Explanation?

[nsplayr]

Explanation?

See Party, Democratic and their plans to raise capital gains taxes for wealthy people.

[Fud]

After maxing-out Roth IRA's and placing a small mint in TSP, the wife and I are wondering where else could investment money go? Ideas out of ordinary?

My wife and I follow Dave Ramsey's style of money management and are very secure in doing so over the years. We have a nice amount saved up, a great budget which allows us to live comfortably, yet save a lot of money towards our future. That said, I'm not banking on the military retirement should the benefits not be there, or should I choose to separate before 20.

Rental houses can be a tricky investment, as well as prescious metals. I don't do either of those because I have seen relatives and my current landlord handle multiple houses and have no time off. The possibility of having terrible tenants rent your place is high, and you will likely have a lot of work to do on your weekends. A solution to managing it yourself would be to have a company do that for you. It's not to say you cannot make some extra money, but it's not for me.

One of the other things we do is open up money market accounts to save larger amounts of money towards our emergency fund, car fund, and house fund. I'm not planning on buying a house while in the military and just saving money into the house fund. My goal will be to have enough to pay for a a portion or the entire house (~150-200K) after retirement. Following this plan allowed me to pay for a car in cash recently, and it was a great feeling walking away from the dealer owning the car outright with zero debt.

This style is not for everyone, but I like it because it makes my wife feel secure while I am away working, and when we need to make purchases that are large. I'm willing to answer any serious questions, but I'm not a big investment guy other than my IRA and my kids' education funds. I do most of my investing through USAA and they are great. I have also heard wonderful things about Vanguard, and am looking towards moving my Roth IRA in that direction relatively soon.

Passive income is hated by many. Be careful.

I laughed at this, but have found this to be very true when talking about investments with friends/family. I never bring up the subject, just like I don't like talking about religion, politics, because it's pointless. However, I don't mind mentioning the Dave Ramsey stuff to others. You'll find that most folks have no savings of any kind, which is pretty scary. There isn't a lot of financial accountability among our populace, much less our government but I don't want to digress.

[Dupe]

Roth TSP starts in Oct for the Air Force. $17K max contribution per year (compared to the $5K max for normal Roth). Seems like a hell of a deal to me.

[ThreeHoler]

Roth TSP starts in Oct for the Air Force. $17K max contribution per year (compared to the $5K max for normal Roth). Seems like a hell of a deal to me.

If you go over the 17K because you have the 'combat' bump to 50K max, the remaining money above 17K can only go in the Traditional TSP.

After doing the math, I'll be switching all my new contributions to Roth TSP next month. It is a very good deal, since our effective tax rate last year was ~8% with no chachings. Should be even lower with several tax free months this year.

[abmwaldo]

Roth TSP starts in Oct for the Air Force. $17K max contribution per year (compared to the $5K max for normal Roth). Seems like a hell of a deal to me.

So will I be able to roll my current Roth, with Vanguard, into the Roth TSP and then max out the 17k? Or will rolling it over count towards that 17K?

[ThreeHoler]

So will I be able to roll my current Roth into the Roth TSP

No. Only a Traditional IRA can be rolled into the TSP.

https://www.tsp.gov/PDF/formspubs/oc91-16.pdf

[nsplayr]

I wonder if that fact sheet is still accurate given that it made sense before that you couldn't roll in Roth IRA to TSP because TSP had no Roth option...just wondering if that will maybe change with the implementation of Roth TSP.

Edited September 7, 2012 by nsplayr

[Day Man]

Following this plan allowed me to pay for a car in cash recently, and it was a great feeling walking away from the dealer owning the car outright with zero debt.

Please say it wasn't a brand new car...

[Fud]

Please say it wasn't a brand new car...

Oh no, it was gently used. I never buy new cars. Added link about car payments below on Dave's site. I might be accused of being a fanboy on this stuff, but I love it.

https://www.daveramsey.com/media/flash/elearning/drive-free/player.html

If you go over the 17K because you have the 'combat' bump to 50K max, the remaining money above 17K can only go in the Traditional TSP.

After doing the math, I'll be switching all my new contributions to Roth TSP next month. It is a very good deal, since our effective tax rate last year was ~8% with no chachings. Should be even lower with several tax free months this year.

I had never heard of this. Thank you for sharing the info. However, I understand TSP to be taxed upon removal of funds. Taxes keep increasing, so I like the Roth IRA option of paying now and not paying taxes when you remove it. I'm not sure if this is entirely accurate in regards to TSP since I haven't looked into this option thoroughly.

[Day Man]

Oh no, it was gently used. I never buy new cars.

cool...agree 100%

[Groundbounder]

My wife and I follow Dave Ramsey's style of money management and are very secure in doing so over the years. We have a nice amount saved up, a great budget which allows us to live comfortably, yet save a lot of money towards our future. .............

................ However, I don't mind mentioning the Dave Ramsey stuff to others. You'll find that most folks have no savings of any kind, which is pretty scary. There isn't a lot of financial accountability among our populace, much less our government but I don't want to digress.

2

[Swizzle]

So one could really invest up to $17k yearly into Roth TSP, wow (https://www.tsp.gov/PDF/formspubs/tsplf30.pdf)

Sucks you can't convert Roth-IRA to Roth TSP.

In essence CZTE contributions to traditional-Roth are Roth-TSP. Those contributions are tax-exempt coded going in, and withdrawn -- but not their appreciation or dividends. It's nice though if your pay isn't CZTE that you can Roth-TSP it = great between deployments. Though I could see the management of directing those funds bi-monthly or quarterly getting time sensitive.

I don't like the fact that the US government dipped into TSP during the "non-approved" federal budget period this last year. Scary to think that the Fed's can dip into your funds. Though it's nice that there isn't an income limit or phase-out upon Roth-TSP like Roth-IRA, great for those senior ranking personnel!

https://wallstreetnewsnetwork.com/

Someone recommended offline playing the ex-Div date of stocks. I guess this could work if capital invested and dividend gained would exceed daily trading costs....hmm....though the price day after ex-Div drops nearly every time. Would have to trade pre-market to mitigate.

[Swizzle]

Thanks for recommend on Ticker: SB looks promising as long as manufacturing/durable goods deliveries don't slow..

[Swizzle]

Didn't realize that BO.net prompted phone-a-friends....however friend thought:

DITY moves, iron-swap or TDY/deployment volunteering, spouse move job to on-base with TSP matching, asking for military discount everywhere, shopping online to avoid sales tax

[BFM this]

Sucks you can't convert Roth-IRA to Roth TSP.

Why in the wide-wide-world-of-sports would you ever want to do this? One poster above mentioned rolling his Vanguard into TSP. Look, TSP is great in a 401k-type sense, and it was great when they finally opened it up to the Military (about friggin time!). But compared to most commercial vehicles, ...meh. And especially compared to one of the best managed index fund companies around (Vanguard), why in the hell would you want to trade down like that.

In fact, SOMEONE mentioned a really great reason (among many) why you might not want to do this:

I don't like the fact that the US government dipped into TSP during the "non-approved" federal budget period this last year. Scary to think that the Fed's can dip into your funds. Though it's nice that there isn't an income limit or phase-out upon Roth-TSP like Roth-IRA, great for those senior ranking personnel!

It's a good deal: invest $5k in your Roth IRA with a solid commercial manager, and another $17k in TSP. After retirement, roll-over the TSP into a commercial vehicle.

Don't over-think it.

[Swizzle]

The only thing TSP has over other managed funds is lower admin/overhead costs and CZTE contributions. Never thought they were/are like Fidelity Contrafund for invested into company choices.

...and now Roth TSP. Pretty sweet loan-to-Uncle-Sam investment, better than bonds....

edit: clarity

Edited September 7, 2012 by Swizzle