JS
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Posts posted by JS
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If you only owned 10-20% of your home, PMI would cover the difference. Same for a VA backed loan.
You sure about that? I always thought PMI was "lenders" insurance to protect against defaults. I am pretty sure it is not an additional bump up on homeowners insurance for this type of situation. I think the philosophy is that if you get foreclosed on, the bank will lose 10-20% of the value in collection costs and possibly a firesale to unload the house. So the lender stands to lose money if you default with less than 20% equity. If you have more than 20% equity and get foreclosed, the bank uses the proceeds to fully cover their costs and there should be some left over.
Dude, no need to be a dick. Especially an ignorant dick. FYI, I have a substantial emergency fund that I can last about 5-6 months on if I lost my job. It's completey liquid, in a savings account. In just a few years, I'll have the house completely paid off. That will give me a steady flow of secondary income if I lost my job or had some other large financial stress. If I really needed a large amount of money, I could sell the place. My Roth TSP is diversified in a number of funds, not just one. In my view, what I just laid out is an acceptable amount of risk and safety.
I re-read my post three times and still don't see where I was trying to be a dick, but I guess it comes off differently when someone else reads it. Either way - sorry about that. I was just trying to point that I believe if you are funneling extra cash into equity in your house as opposed to putting it into a broader investment account, then you are indeed decreasing diversification while increasing risk due to "having all of those eggs in one basket." Having that money tied up in the house as opposed to an Ameritrade account opens you up to liquidity risk (you might not be able to sell the house so quickly) as well as the risk that the housing market will go down, or whatever.
In the end, it is mostly personal preference with regards to your risk assessments and diversification levels. I personally like having my extra $50K in a liquid account earning 5% or more while only paying 2.5% on the mortgage as opposed to have it tied up in the walls of my home while not earning the 5% is could be earning. Not only is my net return higher, but I have easy access to that money. Plus I, like you, also have a separate emergency fund that is in a boring savings account losing money each month.
Correct me if I'm wrong, but if I only owned 10-20% of my home, and something like a housefire/flood happened, and the insurance company came up short... wouldn't you be even more screwed than the guy who owns 100% of the house? You would still owe the mortgage company, and you would be equally screwed by the insurance company coming up short. I would much rather be the guy who can collect all the insurance money and walk away in that scenerio.
Not sure I follow this. Usually homeowners insurance is for the same amount that the appraisal was for when you closed on the mortgage. Actually, I believe it is required to be that exact amount by law. So even if the house jumps wildly up or down in price, if the place burned down, the homeowners insurance would be enough to pay off the mortgage, which is it required to do by law, hence protecting the lender (and you), and you would keep the difference in whatever you had built up in equity so far.
- $300K purchase price on the house. You have $50K equity and the place burns down. The homeowners insurance pays the bank $250K and pays you $50K (plus your money for personal belongings per your policy). You then either rebuild or buy a new house and take out a new mortgage.
- $300K house that you own outright. The house burns down, the insurance company pays you $300K and then you either rebuild or buy a new house (using a new loan as opposed to paying cash so you could invest the other $300K in the market, right??? Ha ha, sorry had throw that in there).
Either way, even if the house was worth $150K or $500K on the open market when it burned down, the above numbers should still stand. So in actuality, if you owned the house outright but its value had gone up, you would actually lose money in the deal. It would be the opposite if the home value went down. Either way in the end, the mortgage company is covered, unless you increase your policy after you own it outright (if you value went up).
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My big picture game plan is to diversify my investments and minimize my risk. I'm putting a lot of money into Roth TSP for long-term security....
Not minimizing your risks at all. You are assuming the risks of the broader markets in return for the growth that your retirement plan will hopefully achieve over the next 40 years.
My big picture game plan is to diversify my investments and minimize my risk. I'm putting a lot of money into Roth TSP for long-term security and I'm still going to aggressively pay the mortgage down. That gives me a lot more security in the near future.
Not diversifying your investments at all, nor is this giving you security in the future. Having your wealth tied up in the house, where you can't access it in an emergency (such as losing your job or having your riskier investments collapse like Cannon mentions) is not low-risk nor is it diversified. It's actually the complete opposite on both counts - you risk not having cash if you need it in an emergency, and you are 0% diversified if 100% of your excess money is in the house.
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Unless you lose your job and your ability to pay your mortgage, and your electronic investments dry up with a market crash.
True. Both would have to happen. I was going to argue that you would own your $200K house, while I would owe $100K and have $100K in liquid investments (actually a little more, because I would be earning the spread between the mortgage rate and my investment returns). I would rather have the liquid cash as opposed to having it all tied up in the house. You can't get the money out if you need it, such as in the emergency situation that you bring up if you lost your job.
But, if as you mention, I both lost my job and allof my very conservative investments dried up to 0, then you would be right. But this begs the question - how long will I be out of work? What about my wife's job? What about my emergency fund? Does my $100K investment account (in my above example) really have a chance to instantly dry up to 0? If that is the case, then I think you are agreeing with my when I say that "if you hate debt, then you hate investments," because you are basically not putting the slightest amount of trust into the investment philosophy, the overall economy, or the "good faith and credit" of the government. So it sounds like you hate all forms of investments because they are too risky, right? You might be right, but I think in the end, you are so risk-averse that it is costing you net wealth.
Like I mentioned above with my illustration of S&P returns - the overall market has always gone up. I read a study that was similar to my illustration above, only it went back to when they first started tracking stock indexes like 100+ years ago. They basically said that if you had "good" timing and invested after the depression, you were way ahead on returns over the 80+year horizon, even taking into account all of the depressions and recessions. If you had the worst possible timing, and began investing at the height of the pre-depression boom, you were still ahead over the 40,60, or 80 year horizon. In other words, the broader market always goes up over the very long term.
At least JS seems to understand things like opportunity cost and interest rates. These are probably the most basic things in finance.
True - those two concepts probably sum all of the multiple paragraphs of rambling that I have spouted out over the past few pages of these threads. I would also throw in the concept of risk-aversion in there too, because I think the anti-debt, cash-only folks either don't truly understand the risk/reward concept, or they are intentionally choosing to bring their risk (and their inherent "reward") down to near zero.
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No, it's fine. They could lose their income, but still pay off all those things that are financed and pay them off because they "have" the money, but just chose to finance... To, you know, get a higher credit score or get some 1% rebate or something.
Remember from past posts, Champ, most of the guys arguing with you on this stuff don't have credit card debt. More of them are like me and have their credit cards set up to auto-debit the entire balance each month, so there is no chance of late fees or interest I have not had CC debt since I first went in the hole $2K about 15 years ago to get basic furniture for my first apartment. Right now, I have about 5 active cards. I put all my groceries on that Amex card that gives me 6% cash. According to my Amex year-end summary last year, my grocery bill with kids in the house was in the $20K range. 6% cash back on that puts $1200 of real cash in my pocket, without incurring a nickel of debt of paying a nickel of interest.
I also put all my gas on that PenFed platinum card which give me back 5% on all gas purchases. That's a 5% discount on all gas, no matter how you slice it. It's simply foolish to not do it. I think our total fuel bill at the end of the year was in the $10K ballpark (they didn't give me an annual summary), so again, that another $500 of cold cash in my pocket for not incurring any debt or paying any interest or fees.
I will tend to agree with you in that the 1% BS that a lot of these cards tease people with probably have more of a psychological effect of making them buy more (which I think you mentioned in a previous post) than they would have had they just used cash. That's a valid point. But I am pretty sure that I would have consumed the same amount of groceries and fuel for the car whether I used cash or the above cards. Besides, 5-6% cash back is no joke over the years versus the shitty 1% airline mile crap.
Owing people money, even for a "short" time and even if you can "afford" it does not contribute to your net worth.
Dead wrong. Paying the minimum on a 2.5% mortgage while investing the rest at 7.8% annual return (see my above post 253) does indeed contribute to your net worth as opposed to paying down the mortgage first with every available extra dollar. Like I said before, by saying you hate debt is saying that you have investments, because every dollar you divert to the mortgage is one less that you can invest.
Millionaires don't get to where they are and say, "Man, those credit card rewards really helped me get here." They got there by living within their means, which means they did not BORROW MONEY.
Dead wrong again. I am not an expert on millionaires, but my wife's family is sort of connected to the old-money part of society here, so I know a few. Most of them (or their Dad's) had businesses that were indeed massively financed by loans or other debt. And once able, those companies "went public" in order to take on more debt in the form of bonds or equities sold, thus increasing the wealth of the owners even more. We studied startup after startup in business school, and one thing most of them had in common was some sort of outside loan and huge risk (meaning loan) being taken.
I even know a millionaire who made all of his money just by investing in puts and calls in the stock market. He said his initial strategy was, in his words, to "be mortgaged up to his eyeballs" for as long as possible and take that money to put into his investment business. It takes money to make money, and if you are an extreme risk taker, than using other people's money is the only way to do it. But like mentioned before, you can also lost it all (but we are talking about millionaires only here).
Very rarely is the average Joe going to work for the man, live within his means, and then start investing or start up a new business with no debt and make it to the millionaire status. Even higher profile people like Trump or Gates initially borrowed in order to get rich.
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But if it did happen, humor me, what would you have to show for it? What would you own if you lost your job and the banks took your shit when you could no longer make the payments? What if much of your money is tied up in the Fed inflated QE-drenched stock market bubble and that crashed? What if those toxic assets (which were never addressed but rather painted over) rear their head despite the fed's printing press? So the bank takes the stuff you "owned" and your electronic assets in the market vanish. Where are you? What do you REALLY own?
If the shit really hit he fan and the government started to collapse and seize assets ala Cyprus style, what would be the difference between them seizing your fully paid-for house versus my half-paid for house? If things really got that bad, do you really think that "they" would not take your shit simply because you already paid for it? What are you going to do, move your physical house out of the country? In your nightmare scenario, I would actually bet better off because I would have excess cash on hand that I did not pre-pay on the house. I would feel better about trying to transfer those funds to the backwoods of Wyoming, or to Mexico, or Switzerland as opposed to trying to move my house, where a bunch of my wealth was tied up in.
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In my view and experience, it is precisely ensuring that I'm not like "the rest of us" that has resulted in me having more net worth than the vast vast majority of folks I know in the military. The herd is a good thing, being like everybody else, following conventional wisdom....it's a good thing for those who will fleece you.
Besides being totally condescending and trying to throw hator-ade ® into the conversation, you make a good point or two. First off, it would be impossible to see if you had more or less net worth than anyone on this board considering the thousands of parameters - college you chose to go to, wife's income, part of the country you live in, what you did before the military, etc. So why even try to bring that up?
But, on a brighter note, I think most people on this board don't really have debt, except in the form of possible student loans (if you didn't do ROTC or the Academy or whatever) and a mortgage - both of which are generally considered "good" because they directly contribute to society. One contributes to human capital while the other allows people to be productive members of society while working and bringing up a family (if that is still in our values). Yes, I know you can play your cards better and get a degree with no debt, but a lot of things have to line up - scholarships, ROTC, or whatever. I personally chose to go to a top engineering school and left with a moderate amount of debt - about $15K. I think it was worth it for the years I worked as an engineer before joining the Air Force. I doubt I would have had that work or that salary without my degree, which is why I have no regrets about not going to a "cheaper" school. But there's a lot of speculation in there, especially because I obviously didn't know I would join the military five years later.
I have had a bunch of long, nerdy, philosophical discussions with some smart friends (lawyers, financial planners) about the issue of mortgages and if they were generally "good or bad." The alternatives to not taking out a mortgage are pretty much to rent (not wealth building) or live with family. You can only do that so long if you are trying to raise your own family, etc. Plus there are other limitations to such a strategy, such as your parents house being too small due to downsizing in retirement, etc. Although I disagree with it, I can acknowledge your philosophy of trying to have people bust their ass and sacrifice in order to completely save for a small home without having to take out a mortgage. I still don't think it is very realistic in today's world, however.
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My opinions only, but the ideas of maxing TSPs, Roth IRA vs. traditional, etc. are moot if one isn't actively involved and up to date with their investments. I believe the days of buy and hold are long gone.....
......Those of you who invested in bonds, I would say you've done well if you bought them when interest rates were high. But, if you have bought recently, watch out. I don't know when, but sometime in the future, interest rates will rise and when they do, I believe the market will be flooded with investors tying to dump their "paper". You risk a big capital loss.
With all due respect, I think you are a little wacko on some of this. With regards to equities and the "buy and hold" stuff - I have mentioned in a few posts, but the broader stock markets are already past their rock bottom after the 2008 crisis. If you started investing before that, you are still way up as opposed if you had settled for lower bond returns. If you invested when the general stock market hit rock bottom after the 2007-2008-2009 crisis (March 6, 2009, the S&P hit rock bottom), you are way ahead on returns. And if you just started investing in the past year or two in the greater stock markets, you are way up as well. Some actual numbers from S&P Return Calculator online (these are returns not taking inflation into account, and assuming reinvestment of dividends):
10 years of solid investment, since April 2003, in the S&P 500 - 112% return, 7.8% annual return
If you picked the absolute worst time in modern memory to start investing, and you put money into the S&P in the summer of 2007, a few months before the subprime crap started the financial crisis - 15.6% total return, 2.6% annual
If you started investing in September of 2008, in the heat of the economic crisis while the Presidential candidates were actually debating on live TV how to "fix" the situation - 41% overall return since then, 7.8% annually.
And if you were prescient enough to wait until all the undisciplined idiots pulled their money out of the stock market (after it went down - you know, the old buy high and sell low strategy) and started investing on March 6, 2009, when the S&P started its long, solid recovery that is still kicking today - 123% overall return, 21.7% annual return.
You can draw own conclusions from above, but the way I see it is that equities over the long run actually perform pretty well - even given the recent crisis. Can there be another crisis on the horizon thanks to ______ (insert asset bubble, Fed Reserve, terrorism, China, inflation or whatever here) that will cause another drop? Sure. But I am literally betting my life savings on the hope that in 30 years or so when I retire, my previous 15 years of solid investing (mostly equities, with a slight rebalance annually to more conservative stuff like bonds) combined with the next 30 years, that I will be ahead of the guys who just invested in bonds from the beginning.
Sure if you are one of those nut-jobs who believes that the whole US government will collapse, the country is about to degenerate into complete anarchy, nobody will accept USD as currency anymore and gold will be THE currency, then by all means hoard your gold.
I don't know if I qualify as a "nut-job," as much as I might try, but I do actually believe this. I don't think it will happen in the next 100-150 years, but it will happen. Something about studying the 5000 years of history that AnimalMother mentioned above leaves me with a sneaking suspicion that the US will indeed eventually disintegrate. But it will be a slow and gradual death, and that worthless paper, I mean fiat currency, will become less and less important in the world.
But at the end of the day, I don't believe in hoarding (or even investing in) gold, because a bigger part of me agrees with Buffet (and mappleby) that gold is just a piece of metal that has stood the test of time as a currency, while other fiat currencies have come and gone. The thing that gets me thinking twice about gold, however, is the fact that some of the smartest investors that I know and read regularly actually purchase no-shit gold coins each month and keep them in a safe in their houses. It just keeps me thinking.
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First off, I hate debt - whatever the form or justification.
Besides listening to the wealth-diminishing radio buffoon (whose name I shall once again refrain from mentioning), there is no real reason to "hate" debt, unless you are emotionally attached to your financial decisions, which is never a good thing. Math always trumps emotions.
Think about it this way. Assume that you, like the rest of us, have a nice mixture of debt (mostly in the form of a mortgage, maybe some old student loans or a car payment). The first pages of any economics textbook will tell you that economics is defined as the allocation of scarce resources. It then goes on to say that when those scarce resources are put to use in area A, they are not spent in area B, and you have an opportunity cost of not putting the money in B. Like Jughead said, you really have to understand opportunity cost.
In other words, hating debt is the exact same thing as saying you hate investments. If you funnel your scarce money toward paying down the debt you hate, you are not funneling it toward investments. In other words, your hatred of debt equates to a hatred of investments. Again, if the debt (mortgage) is 2.5%, and the investments yield on average 6%, then you are losing money equal to the "spread," which is 3.5% in this case.
So if you found $200K lying around tomorrow and paid your mortgage note in full as opposed to investing it, you would lose 3.5% x $200K = $7K the first year, and then a slightly smaller amount each year thereafter for the life that the mortgage would have had. "That guy" on the radio does indeed mention the sleep factor that Jughead is talking about. He said his head hits the pillow better each night knowing that he is "debt-free." I wonder if he would stay up at night knowing that he was actually losing 3.5% of his wealth annually (in my above example) by going full anti-debt.
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Terrible advice. You need to know a lot more about his situation before you can determine if it is better to pay down the house or invest the same money.
In the long run you pay way more in interest than you ever get back in tax deductions.
I disagree about this being terrible advice. You are correct, as the standard disclaimer crap goes - everyone's situation is different, and you should consider throwing away your money on a financial advisor before you listen to a bunch of guys in the internet with eerily similar financial situations to yours who have been there before. I would particularly take a closer look at the Roth vs Traditional in your specific situation, but we covered that ad-naseum a few dozen posts back last month.
But anyway, I generally agree with the concept of paying the mortgage down last and investing the difference as opposed to pre-paying more on the mortgage. I assume everyone has refinanced recently and is appreciating the record low rates. The tax deduction only makes the effective interest rate you are paying on the mortgage even lower. That being said, if you can invest at a higher rate than you are paying on the mortgage, then this is generally correct advice. Unless you have some special reason to pay down the mortgage - underwater on the loan, don't have 80% and are paying PMI, or something like that - I really don't see many reasons why anyone would pay extra on their mortgage with today's low rates.
Real numbers - my mortgage is 2.9%, plus the tax writeoff on that interest makes my mortgage effectively cost me about 2.5%. Any extra money I have goes into the retirement accounts and the personal investment account. This was a record year for the broader markets (which most of our investments are in), but even without this year, the markets are above where they were in the lowest point of the 2008 drop. In other words, over the "long" run of 5+ years, the markets are returning 5-12%, depending on where you have your money and when you put it in.
Why would you funnel extra money these days to pay down 2.5% debt while foregoing potential 5% returns? Oh, that's right, because that idiot with the radio show (whose name shall not be mentioned here) has an emotional hatred for the term "debt." He will lost you wealth in almost every bit of his advice.
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How do you actually go about getting the fee waived? I suppose you have to call them? Now is that during the application process, or after? I am asking because I would hate to pay the $450 and expect it to get refunded, only to find out that they changed the rules after I applied.
Also, I was reading some bad reviews online about the Platinum card. I guess if the fee is $0, then it is not really applicable, but the guys who paid the $450 pretty much unequivocally said it was not worth it. The concierge service is a joke, the $200 airline credit is only for bag fees and add-ons like movies, etc - probably not applicable to most average travelers. And they said more and more of the lounges are excluded from the airport lounge thing.
But, again, if it is $0 annual fee, then one single drink in an airline lounge makes the application process probably worth it.
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This makes no sense.
Exactly - you strengthened my point. There are way too many variables and way too many places to draw the cost line to get an accurate number as to the total cost to operate a military aircraft.
There is only one way to measure cost.
This makes no sense. There are thousands of ways to measure cost, depending on what you include, hence my points.
I know you hate the car example, but you mention that you can include fuel, MX, insurance, etc., or you can "lie" about those things. What about the cost of the asphalt to have your driveway paved? What about the sunk costs that it took to build the garage on your house 60 years ago when it was built? If the car is stored there, those are costs to operate the car. So is the overall cost of the house itself along with its utilities and homeowners insurance.
And, hopefully your answer will be "but you would have incurred those costs whether or not you had the BMW," which would lead me back to my original post. They are still sunk costs that are directly (at this time) associated with the cost of operating that vehicle. Without the driveway, garage, and electricity, you simply would not be able to operate your vehicle based out of your house. And yes, those costs were also spread out over the past 20 vehicles that were owned by the various homeowners of your house since it was built 60 years ago.
I think everything should be included in the price per flying hour. If it takes 500 man-hrs on mx per flight-hr...
If you think "everything" should be included, then why single out the obvious thing like MX hours? I think that is a given. The points brought up here question whether or not we should include the salary of the gate guard at Hanscomb AFB - a "non-flying" base - because there are AF engineers there who had some small part in the R&D of an airplane now being flown out of Florida. Where do you draw the line?
If you truly think "everything" should be included, we should really take the entire USAF budget and divide that by the number of total flying hours of all aircraft combined. That would probably be more accurate than this guessing game that the original article did. In some way, shape or form, most everybody and everything in the Air Force (except maybe missiles) theoretically supports the flying of the aircraft.
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Another example of drawing the line of cost - this time in the civilian world:
A friend of mine is the "ops superintendent" at a private hangar flying a large business jet for a rich guy. I think it was like a Hawker 800 or something. He basically runs the whole joint. We were chatting about numbers, and I mentioned an ancient article I read ways back about how I saw that the C-130 "cost" about $6-$8K per hour to operate, with a fuel flow of about 1000 gallons per hour (so about $4K in gas and twice that in hourly MX). I don't think that was accurate, and he totally laughed at those numbers. He basically runs his entire "operation," which includes renting the hangar, employing 3 pilots (two on duty and one spare), one A&P, and an avionics guy who doubles at the IT manager for the site as well as the janitor. He said the "rich guy" flies about 6-8 hours per week, on average, so about 350 hours per year. His hourly cost to fly the Hawker was about $12K, he was telling me, despite the fact that the Hawker website quotes about $1600 hourly "total variable cost."
So, in this example, the "cost" line is pretty clearly draw outside his hangar and before you hit the taxiway at the local international airport. He pays for the above direct costs, but everyone came to the job with prior education and experience - either by self-paying (like his A&P and spare pilot) or from the military (like him and the other pilot). Part of the annual costs does include annual sim refresher, which costs him I think around $20K per pilot - needed for insurance on the pilots. When he orders fuel, the FBO truck drives over and gives him fuel for $5/gallon - which presumably pays for the upkeep of the FBO, fuel distribution, salaries, etc. But, in the end, he is not directly paying for the taxiway, runway, ATC, NAVAIDS, field maintenance, etc. So his direct costs are much lower.
Of course, in actuality, he is actually paying for those things through taxes, but his $12K/hour figure is much more precise than a lot of these Air Force numbers we are looking at. Just food for thought.
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Dupe, the point is, there's a lot of duplication in those overall costs. Yes, there is a depot system, MICAP, engineering, and so on. But those people and systems support multiple airframes, and the "ownership costs" should not be promoted as if they are hourly operating costs.
Compare it to a car...lets say you own a BMW...someone might ask how much it costs you to commute to work for a week. A reasonable answer might include gas, insurance, and preventative/unscheduled mx.
If you came up with costs like the article mentions, you'd include the annual cost of gas, the money BMW spends on supporting their mx/parts distribution, the manpower spent by the insurance company, the cost of maintaining and operating the gas stations you fill up at...
My point is, your BMW went from costing $200 or so a week to thousands of dollars a week...but it's not a realistic cost because those other costs are spread out over other people's cars as well.
Yup. Back to my original point. If you are trying to convice the wife that you need a BMW to impress your friends, you are going to tell her how "cheap" it is - only $200 per week due to the great gas mileage compared to, say, an SUV. If you are trying to talk her out of wasting money on such a car, you would explain to her how expensive MX is on the car, how much higher insurance is because it's a sports car, and all the other stuff you mention. In other words, the same car can be made to seem expensive, depending on who you are trying to convince.
Like was mentioned on the last page - this whole game is deciding where to draw the line in terms of what's being included in "operational costs" of airplanes.
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Like I mentioned above - depends on who you want to convince. Statistics were invented to spin numbers in favor of one argument or another.
Remember, statistically speaking, the majority of all people who guess at the outcome of a coin flip are total losers, and stand to lose much if they were to bet on such outcomes.
On a totally different note, a study revealed that nearly half of all people who engage in coin betting come out ahead and wind up winning big.
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Sure, there is some legitimacy to it - depending on which point you want to prove and which idiots you want to fool. Like I ranted about in other posts, I can debunk, plant enough doubt to the veracity of, or greatly alter nearly every statistic that anyone can put out. It's just a fools game.
This study, for example, basically puts out "operational costs" as listed in that spreadhseet and divides that number by the number of hours and the number of planes, to come up with a "cost to keep this plane airborne per hour." Where the fuck do the "operational costs" come from, and what do they include? Like I said, depends on which idiot I want to pull the wool over on.
In attempting to rally up the liberal freaks who think we should spend more money on California pensions than the military, here is what I would say:
Operational costs have to take into account everything it takes to fly and maintain a plane like the C-130E, of which there are only about 15 left in the inventory.
The total operational costs include the cost of all of the crewmembers, MX folks, ATC folks, and scores of other support people who simply would not be employed by the government if these C-130Es were not flying. One must take into account annual salaries, benefits, medical costs, family support, and retirement costs of these thousands of personnel ($50M). Furthermore, the cost to build and maintain the runways, hangars, and hundreds of buildings to support this fleet must also be taken into account ($100M), because without these planes, there would be no need for those facilities. Finally, the cost of training, fuel, modifications, and MX are also counted ($100M).
This makes the total cost of operating the fleet nearly $250M per year. Given that these 15 planes flew only 2500 hours last year, it thus takes $100,000 per flight hour to maintain a "typical" cargo plane like this for the DoD.
Here is what I would say at a VFW meeting:
We do more with less in the Air Force. Take the 15 remaining C-130Es. All of the acquisition, modification, R&D, and infrastructure costs are already sunk costs that have already been paid - we can't change that. All of the personnel who support these planes get paid no matter what, and they will support multiple missions and multiple aircraft over their careers. In other words, the salaries and benefits of the personnel involved are also costs that would be incurred whether or not these 15 C-130Es flew.
So in summary, it only takes the cost of fuel to get the C-130E airborne, because all of the other costs have already been paid for. This plane burns about 1000 gallons per hour, or about $4000 per hour in DoD fuel rates, and this is the total operational rate per hour of this old workhorse. That's great value for your money!
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Only active duty points count toward active duty retirement. That means annual tour, MPA and RPA. UTAs and TPs are INactive duty. Once you turn 60 your retirement would get recalculated to include those points.
Did not know that. Good to know.
And yes, I stand corrected. Noonin is right - it would be dumb to forgo retirement pay in order to collect Reserve pay. I like the AF and all, but I don't think I want to actually have to pay in order to get all of the benefits of Big Blue's shenanigans like blues, reflective belts, etc. So ignore what I said before.
Besides, with 26 years in, how much more Blue pain do you want? Listen to Steve Miller Band and take the money and run - you already have a retirement+ coming to you.
Besides, you can retire, then get a nice GS-11/12/13 job doing some desk job (like you desire) at an Air Force base somewhere, still keeping your hand in the Air Force. This way you truly double-dip by getting your full retirement pay in addition to some nice cushy GS job. We have a few guys who retired from the unit and are now working in pure GS jobs in the squadron (not ART or Technician) literally doing about the same thing.
I also heard of a friend who landed some nice safety gig at Randolph or something after he retired from the AF. So he is drawing retirement, making at his new job almost what he made before retirement, and working on an Air Force base, doing Air Force safety stuff. That's probably a better route than what you are thinking. Either way, you will have to poke around at some of the bases and units (along with USAJOBS) to make that happen.
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I like how the C-141 had a -$60K operating cost in 2010. So, in other words, the taxpayers made money when the C-141 flew in 2010. It must have been dropping cash out the doors or something. And the C-130E example brought up above is equally outrageous.
Stupidest fucking spreadsheet/article I have seen in a while. Stats like this can be spun so out of control the most idiots who are bad at math will not only start to believe these numbers, but they will actually repeat and quote them as if they were true.
Lie, damn lies, and statistics.
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In reading his post, I don't think he is retired yet - still active duty, right?
If that's the case, you can "simply" (easier said than done) join the Guard/Reserves and delay retirement until you retire from the Air Force all together. In other words you can't draw retirement from the AF while still working for the AF (in the Reserves/Guard). Each additional point you earn in the Reserves only adds to your active duty retirement check amount. And because you already have 20 years in, you will be drawing that money the day you retire from the Guard/Reserves and not having to wait until you are 60 like traditional Guard Reserve guys do.
Most units don't like hiring LtCol but I've seen it, it can screw up promotion possibilities for younger dudes.
This is definitely a Guard thing. The Guard will only have certain slots for certain ranks within the State, so yes, if you slide into Cougar's place as a LtCol, and there are only 8 LTCol flying slots in the entire state (with say, one guard unit), then you did indeed screw one of the up-and-coming majors who was waiting for that slot.
Unless you have an "in" at a specific Guard unit, this would probably be easier in the Reserves, because most Guard units will take care of the younger guys who have been there for their entire careers before them allow an outsider in to take an O-5 slot. AFRC has boards for the entire MAJCOM when it comes to promotions, and each unit is manned for X number of LtCol billets and Y number of Major billets. Because of all of the moving around between units (especially at the O-5 level and above), there are likely to be many units that are undermanned in their LtCol slots. Plus you are not screwing the majors below you, because they compete with every major AFRC nationwide during their promotion boards, not just the other 12 majors within the State.
The more I think about it, the more I think it would probably be easier to get into a Reserve unit as an O-5 than it would to be as an O-2 or O-3. Some AFRC guys are moving at the O-5/O-6 level to try and make rank, so there are bound to be open O-5 Reserve slots out there, and they would undoubedly be much less about "who you know" versus whether or not the unit has an opening. Plus most flying billets in AFRC are actually coded as O-4 and O-5 slots. The O-2s and O-3s just keep those slots filled until they make O-4, then get moved into an O-5 slot if that is in their cards.
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I'll give them 10 points for the Hollywood pose, but 0 points for tactical effectiveness since they're firing with their eyes closed, from the hip, without any cover or concealment, in lime-green polka dot pajamas in a brown field.
Their eyes are wide open, dude. Especially that guy in the front.
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The local Lowe's and Home Depot both still give me 10% off every day of the year, not just Veteran's Day and Memorial Day weekend. Don't forget to ask.
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I was BSing with another pilot in my unit this weekend and he mentioned that you might be able to fix some of this if you allowed UPT to count for an AAD. It's a year long "graduate" program with written tests and practical exams. I think it's a good idea.
Well, all these pilot AAD shenanighans are probably helping guard and airline recruiting. 45% seems crazy low for a pilot with SOS and no masters.
So you guys were wanting Undergraduate Pilot Training to count as a Graduate work? Wouldn't we have to rename UPT to PT, then? Oh, wait, that acronym is already taken.
Just kidding - not such a bad idea, only I can already see the shoes complaining about it not being fair, and then everyone else's technical schools somehow counting for graduate credits, thus watering down the system even more.
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I mean, those really poor guys on the bottom literally have more wealth and a higher standard of living than the Pharaohs of Egypt, the Caesars of Rome, and all the kings and queens of the Middle Ages.
Are you being serious here or just a bit of hyperbole?
Serious - in terms of transportation, electricity, heating/cooling a home, communications, entertainment, sanitary services, running water, access to high-quality healthcare (cough), life expectancy, and all of the other technological advances that we have seen over the centuries.
The only thing those guys had better was that they could bang multiple broads with no questions asked and have other people killed if they didn't like them.
Besides, I think I stole that analogy and phrasing from Tom Friedman, if I recall, in his World is Flat book.
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My view is that the government exists as the caretakers of our national community, to perform the tasks that individuals and smaller communities/business cannot do for themselves. These tasks include protection of individual liberties and agency/opportunity, provision for trade and commerce, defense from foreign and domestic threats, legislative and judicial oversight, assistance in recovery from grave disasters (beyond the scope and capability of local communities), developing/protecting baseline standards for national resources, interfacing with foreign nations, and other necessary tasks to administer their constitutional duties.
Kind of like the basic things the Constitution specifically spells out that a federal government could do? Good stuff. Playing devil's advocate, how do you interpret the "Promote the General Welfare" clause in the Constitution?
Herk hard landing - Afghanistan
in General Discussion
Posted · Edited by M2
Ethnic slurs/insults will not be tolerated on this forum. This post has been modified to remove it.
Even if the Lockheed could outsource the manufacture of the J-model to the Chinese for 1/4 the price, Lockheed would still sell them to the US government for full price (plus an additional "shipping fee" to get them flown in from China). That's the way business works with the US government.