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

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3 hours ago, LJ Driver said:

Great job taking your future into your own hands, ands thanks for serving 20 years of your life to the USAF. I’m coming up on 20 myself next year, I know the job market is really hot right now but a military  pension really does give you a lot of flexibility and piece of mind. 

 

Question for you: Did you gonkulate all those numbers over your 20 year career or is there a site that lets you plug in some data and spits it out for you? Seems pretty tedious but it is definitely an interesting nugget to have for reference. 

Thanks.  Congrats on 20 yourself.  No, there's no calculator (that I know of anyway).  I just have a big spreadsheet that I update with a new row every month.  It has a column for each type of pay.  It also has a column for how much I invested/saved that month, so I have a good visual of investments vs income over time.

I started the spreadsheet about 10 years ago, so the first day of building it was tedious.  Doing the monthly input since then takes about a minute.  Its also a good way to double check the LES.  I find that my LES is wrong at least 4 months a year, mainly due to changes in language pay.

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On 3/1/2017 at 2:12 AM, panchbarnes said:

Thinking about purchasing rental properties in either Wichita Falls or Abilene, TX.  Would appreciate any insights people have on either one of those rental market and economic development or growth potential.  Any RUMINT regarding Sheppard or Dyess and future BRAC?

Thanks in advance.

I know I'm late to the party but the rental market in Abilene is almost non-existent, with a steady for of FTU students parading through. Quail Hollow captures a decent chunk as "unofficial" base housing, but there's money to be made renting a house at O-1/O-2 BAH rates.

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Having a background in finance from Harvard Extension helps. I'll start working on my MBA. from Yale Executive after I earn my UTP slot. 

The investment theory really just focuses upon your available equity, credit, location, and risk:reward ratio you feel comfortable with.

If you are just getting started and are probably in your 20's & 30's. Its easy, just live where you can rent (like a 4-plex), buy a tesla instead of a Lamborghini, and ideally marry a beutiful women who works.

As for the rest, that's more corporate style investing. And nobody without a formal education should attempt that.

As real estate, oil, securities, and business development have a much higher ROI.

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On 3/1/2017 at 5:56 AM, panchbarnes said:

We are looking for multifamily units in the great state of Texas, all of the big cities are very tough to invest in due to competition, so looking at the smaller cities for better deals.

Curious about Altus, OK as a rental market as well.

 

@panchbarnes did y'all end up finding an options to pick up? I'm a big advocate of residential multi-families, especially to get started in real estate investing. If so, where did you end up buying? How are they performing for you?

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BLUF:  I'm still a big believer in the TX MF (class C) market, but based on what I am comfortable with I can't justify buying anything right now because of the average to below average CAP rates that I'm seeing.

The Fannie Mae/Freddie Mac MF loan program is the best kept secret out there.  I've put the MF search on hold because the numbers don't make any sense right now, will probably get serious again when the CAP rate gets back up to ~9 or 10%.  I am on several MF marketing distros and there is just nothing good right now as compared to 2 years ago.  I found a really good deal (~70 units) in Amarillo at the time but was not able to follow through with the transaction because of a conflicting TDY and still am kicking myself for it.

I eventually bought a piece of land in Texas and am planning to build several units on it.

The upcoming downturn in the housing market is going to be quite lucrative if you are a rental property investor.

Timing is everything!

Edited by panchbarnes
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Interesting discussion  on the recent 737 max mishaps...  is this guy full of shit?

https://old.reddit.com/r/wallstreetbets/comments/azo3vp/im_a_pilot_shortput_ba/

Quote

There exists a new system on the 737 MAX jets. On all last-gen Boeing jets (and the vast majority of commercial and private jets), there exists systems designed to prevent a stall (the term used to describe the state an aircraft is in when it's currently aerodynamic profile is depriving it of lift to the point where the aircraft will begin to fall). These systems manipulate or provide feedback in the pilot controls to encourage a stall recovery. However these systems are easy to identify and combat, and disable.

 

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Let's just say it's obvious he has no insider information.  Probably a recreational pilot because he falsely extrapolates light piston operations to airline operations, which leads him to a questionable conclusion.  

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Posted (edited)
2 hours ago, panchbarnes said:

Interesting discussion  on the recent 737 max mishaps...  is this guy full of shit?

https://old.reddit.com/r/wallstreetbets/comments/azo3vp/im_a_pilot_shortput_ba/

 

He’s not wrong, but he’s oversimplifying it. Google MCAS. Flown the max dozens of times. A bad input would likely catch someone unfamiliar by surprise, but everyone should know how to handle it after Lion Air. Might be a good time to buy Boeing. JK.

Edited by torqued

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I'd love to know if you have ever taken investment advice from reddit wallstreetbets before?

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Ha! No, I'm not a stocks guy, but I browse the site for the comedic value.  There's some funny shit in there.

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He's not necessarily wrong, he's just 24 hours late... Boeing stock already suffered its dip by the time he posted that. It's the problem with any random individual trying to pick stocks based on not-really-inside information... by the time you make a purchase, you're far behind the guys with special computer systems designed to reduce delays by a few milliseconds who do this for a living.

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On 5/21/2019 at 6:07 AM, panchbarnes said:

I personally have owned Fannie and Freddie preferreds since early 2015 when they were trading for $4 on a $25 par value. At $12 today the risk/reward ratio doesn’t look as great since you can only make 2x. I got involved expecting favorable outcomes in the courts which didn’t happen. Then Trump got elected and they got a second path to paying out. All of that is context to say that even though I like the idea in some ways I don’t like buying the common stock as a hail mary/get rich quick scheme.  If you want a good investing forum with smarter people, check out Corner of Berkshire and Fairfax. They have a thread on FNMA/FMCC that is 1,258 pages long dating back to January 2011 (https://www.cornerofberkshireandfairfax.ca/forum/general-discussion/fnma-and-fmcc-preferreds-in-search-of-the-elusive-10-bagger/). While the Trump administration is the first big proponent wanting to move this forward it is not a new idea.

I could give lots of reasons why I’m not sure this will really work out but at the end of the day it comes down to motivation. Right now the government is in a great position, these companies throw off lots of cash and it all goes directly to the Treasury. If you privatize them again the big winners will be a bunch of hedge fund assholes like me. Of course Mnuchin supports that but who else in government is going to stick their neck out to force through a massive change on something most people don’t see as being a problem in order to benefit Bill Ackman and Bruce Berkowitz?

I hope I'm wrong because the government overstepped their authority by nationalizing these business a decade ago, stealing billions of dollars from the private citizens who owned them in the process, and I would like to believe we are better than Venezuela. But I'm also not holding my breath and it's combined about 1% of my portfolio.

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Posted (edited)

Thank you for the well-written insights!  I've mentioned before that I'm more of a real estate guy, so I plead ignorance on stocks (and this is OTC...) and the associated analytical TTPs.  The reddit WSB forum is quite entertaining to read as autistic children brag about losing money, but I also learn interesting tidbits from time to time.  TacAirlifter's FNMA posts piqued my interest and I've been trying to figure out if this is a smart play or not (I'm inclined to think it is).  Trump has consistently demonstrated that he is a man of his words, so if he wants to privatize FNMA/FMCC I think it's likely to happen (w/ the support of Wall Street), even if FNMA/FMCC are both cash cows to the gov't.

Trump's motivation may defy logic in this case, but it's good enough for me to make a little gamble on it (does this make me a WSB autist?)

Edited by panchbarnes

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The fact that I still own them and haven't sold tells you that I think it is not a bad trade. It just scares me when I see people going all in like this is some sure thing. Throw 1% of your portfolio at it, if it works out you make a decent bump uncorrelated to the rest of the market but if they never leave conservatorship and trade down to $0 you haven't lost much.

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Wasn’t sure which thread to ask this in, Credit scores, so there I was, buying a house when in the mail comes the credit scores for my wife and I that the bank ran.

WTF? So my wife who without me managing 100% of finances would be net worth -$169k in credit card debt and probably filed for bankruptcy 2x....has a credit score 800+

I have decent credit scores in the ~790 range with a long credit history, zero lateness in my life, nothing outstanding.

What gives on how this stuff is computed?


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44 minutes ago, di1630 said:

Wasn’t sure which thread to ask this in, Credit scores, so there I was, buying a house when in the mail comes the credit scores for my wife and I that the bank ran.

WTF? So my wife who without me managing 100% of finances would be net worth -$169k in credit card debt and probably filed for bankruptcy 2x....has a credit score 800+

I have decent credit scores in the ~790 range with a long credit history, zero lateness in my life, nothing outstanding.

What gives on how this stuff is computed?


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I had a similar situation. Wife never had any loans/lines of credit her life except her federal student loans. I’ve pretty much been on my own since 18, never missed a payment/no late payments, several accounts that have been open for a long time blah blah blah. Basically I have been working on building a outstanding credit score for years, wife hasn’t done anything, her score was pretty much the same as mine. 

There are a lot of variables that go into it, at the end of the day you have to remember it’s just number that tells companies how likely they are to make a buck off you. 

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3 hours ago, di1630 said:

Wasn’t sure which thread to ask this in, Credit scores, so there I was, buying a house when in the mail comes the credit scores for my wife and I that the bank ran.

WTF? So my wife who without me managing 100% of finances would be net worth -$169k in credit card debt and probably filed for bankruptcy 2x....has a credit score 800+

I have decent credit scores in the ~790 range with a long credit history, zero lateness in my life, nothing outstanding.

What gives on how this stuff is computed?


Sent from my iPhone using Baseops Network mobile app

Could be credit utilization. If you are using a pretty significant chunk of your available credit and she's using a smaller fraction of hers, then that could be where it's coming from. They also factor in patterns of utilization, so if she's consistently utilizing 15% of her available credit and you're spiking up and down, that doesn't look as good.

It's not worth fretting about, though. Anything over 750 is pretty much treated identically.

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Today I was going to move my SP500 index fund holdings ~100k into a money market fund with the intent to move it back at next market correction.

First time I have exchanged things like this but I stopped and investigated when I got to the “taxable event warning”

I’ve dollar cost averaged into this fund for 10+ years at significant gain so Am i correct that I’ll pay capital gains of ~15%.

The realized gain is about $60k...am I going to get taxed for $9k if I make this exchange.

F-cking govt.


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34 minutes ago, di1630 said:

Today I was going to move my SP500 index fund holdings ~100k into a money market fund with the intent to move it back at next market correction.

First time I have exchanged things like this but I stopped and investigated when I got to the “taxable event warning”

I’ve dollar cost averaged into this fund for 10+ years at significant gain so Am i correct that I’ll pay capital gains of ~15%.

The realized gain is about $60k...am I going to get taxed for $9k if I make this exchange.

F-cking govt.


Sent from my iPhone using Baseops Network mobile app

Here here brother. (Hulk Hogan voice).

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Fuck, I was thinking of doing the exact same thing...assholes. So now what have you decided? Bite the bullet or keep them there and ride the wave?

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Hopefully you'll both, "Don't do something, just stand there."

Yes, if you're talking about a taxable/brokerage account and not an IRA, TSP, 401k, etc, then you'll owe capital gains on your growth.

That could be long term (rate varies) or short term (taxed like income), depending on when you bought and also how you track your cost basis.

If you have a low income year or deploy or whatever, you can use that to reset your cost basis with "tax gain harvesting" and pay 0% LTCG.

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3 hours ago, brabus said:

Fuck, I was thinking of doing the exact same thing...assholes. So now what have you decided? Bite the bullet or keep them there and ride the wave?

This has some potential: Trump Moves to Lessen the Pain of Capital Gains Taxes (17 July 2019).

https://www.heritage.org/taxes/commentary/trump-moves-lessen-the-pain-capital-gains-taxes

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