flipman's Account Talk

[flipman]

Hey everyone!

I guess I'll start off by saying that I decided to follow the LMBF method for now. After reading through that thread, the method really interested me so I figured I'd give it a go. Once I get more familiar with all the terminology, chart reading, etc etc, I may switch off this method down the road.

I don't have much in my TSP account at the moment, but right now I'm sitting 100% in C.

My wife created a "get out of debt" plan for us which unfortunately caused me to stop my TSP contributions for now. I don't have the exact numbers with me as I post this, but in about 3.5 years we will have paid off roughly $74,000 in debt at varying interest rates with just a mortgage left. Our plan after is to chunnel the money used to pay the debt into retirement savings/investments/paying off mortgage.

I was thinking of starting a thread about our endeavor to help keep us motivated with sticking to the plan. Any ideas where I should create it or can I use this thread?

flipman

 

[Mapper]

Welcome!

And congratulations on starting to take control of your finances. I applaud your debt elimination plan. I will add, however, that putting even a small amount in TSP each pay check will really pay off in the long-term. This isn't investment advice, but a couple things to consider: Because TSP contributions are pre-tax they have a less adverse effect to your take home pay than you might think. Depending on you salary your pay is reduced roughly $0.60 to $0.70 for every $1.00 you contribute. More importantly, consider a minimal contribution if you get matching funds for the first 5% contributed. Matching funds are a guaranteed 100% return on investment you just can't get anywhere!

Oh yeah, and learning how to position your TSP funds while the account is small is the way to go. It's much easier on the mind to make financial decisions when you aren't risking a lifetime of retirement savings!

 

[Frixxxx]

Good start to a thread for your account.

I would start a flipman-debtfree plan thread if you are serious about tracking your progress and lessons learned.

Also, since your debt is that high, I suggest contact One-Source and get your benefit on talking to a few counselors. But, be careful, you don't want to pay anybody to get you out of debt!

Good luck!

 

[flipman]

Welcome!

And congratulations on starting to take control of your finances. I applaud your debt elimination plan. I will add, however, that putting even a small amount in TSP each pay check will really pay off in the long-term. This isn't investment advice, but a couple things to consider: Because TSP contributions are pre-tax they have a less adverse effect to your take home pay than you might think. Depending on you salary your pay is reduced roughly $0.60 to $0.70 for every $1.00 you contribute. More importantly, consider a minimal contribution if you get matching funds for the first 5% contributed. Matching funds are a guaranteed 100% return on investment you just can't get anywhere!

Oh yeah, and learning how to position your TSP funds while the account is small is the way to go. It's much easier on the mind to make financial decisions when you aren't risking a lifetime of retirement savings!

Mapper,

Thank you! My wife really takes all the credit for our plan. It took her a couple of weeks to work the numbers out and she did a great job.

I understand what you mean about the TSP contributions. I'm in the Air Force and we don't get the matching contributions unfortunately. We definately would've kept the contributions for that 100% return. We are on the first month of our debt plan and we are "testing the waters" so to speak. She did say that if we manage our money properly during the first few months, I should be able to start TSP contributions again later this year.

flipman

 

[flipman]

Good start to a thread for your account.

I would start a flipman-debtfree plan thread if you are serious about tracking your progress and lessons learned.

Also, since your debt is that high, I suggest contact One-Source and get your benefit on talking to a few counselors. But, be careful, you don't want to pay anybody to get you out of debt!

Good luck!

Frixxxx,

Which forum should I start the thread in? I thought maybe the retirement area, since this plan spurred from us wanting to be debt free by the time I retire from the AF, but I wasn't sure.

I'll take a look and see what One-Source has to offer. I know the debt number we have looks bad, but we aren't in over our heads. The majority of the debt are 2 car loans and my wife's student loan.

A funny side note is when we went to refi our mortgage, we didn't have trouble, but the bank needed certain forms, etc. My wife told the bankster that we look completely horrible on paper, but if they really got into the weeds, they would see that we are completely responsible with our bills.

flipman

 

[MrJohnRoss]

Mapper,

Thank you! My wife really takes all the credit for our plan. It took her a couple of weeks to work the numbers out and she did a great job.

I understand what you mean about the TSP contributions. I'm in the Air Force and we don't get the matching contributions unfortunately. We definately would've kept the contributions for that 100% return. We are on the first month of our debt plan and we are "testing the waters" so to speak. She did say that if we manage our money properly during the first few months, I should be able to start TSP contributions again later this year.

flipman

Go give your wife a big hug right now!

There is absolutely nothing like the power of two minds working together to solve a common goal. Sounds like you guys have got a great plan in place! Congratulations!

My wife and I were in the same boat a few years back, and we've worked diligently to create a plan and stuck to it. Each and every month we run the numbers to see how our progress is going. We'll basically be at zero debt by the end of this month, so starting next month, we'll be meeting to look at how our retirement accounts are growing. Will be good to see how much our numbers are going up, instead of working to get our numbers to go down! Lol!

One recommendation is to spend about a hundred bucks on a class called "Financial Peace University". It's a Dave Ramsey video class that goes over debt reduction, wealth building, insurance, savings, mortgages... everything. My wife and I took the class, and it transformed our thought process in a huge way. Although I didn't agree with 100% of what he taught, there was a huge amount of good material to think about and discuss. Classes are held all over the country by trained instructors. Highly recommended.

Keep us posted on your progress. You'll probably have ups and downs during your journey, but keep your common goal in mind, and nothing will stop you.

Good luck!

JR

 

[flipman]

Go give your wife a big hug right now!

There is absolutely nothing like the power of two minds working together to solve a common goal. Sounds like you guys have got a great plan in place! Congratulations!

My wife and I were in the same boat a few years back, and we've worked diligently to create a plan and stuck to it. Each and every month we run the numbers to see how our progress is going. We'll basically be at zero debt by the end of this month, so starting next month, we'll be meeting to look at how our retirement accounts are growing. Will be good to see how much our numbers are going up, instead of working to get our numbers to go down! Lol!

One recommendation is to spend about a hundred bucks on a class called "Financial Peace University". It's a Dave Ramsey video class that goes over debt reduction, wealth building, insurance, savings, mortgages... everything. My wife and I took the class, and it transformed our thought process in a huge way. Although I didn't agree with 100% of what he taught, there was a huge amount of good material to think about and discuss. Classes are held all over the country by trained instructors. Highly recommended.

Keep us posted on your progress. You'll probably have ups and downs during your journey, but keep your common goal in mind, and nothing will stop you.

Good luck!

JR

JR,

Thanks! It's great to hear you'll be debt free in May! We are pretty excited for when that day comes.

My wife recently read 2 of Dave Ramsey's books and modelled our debt plan to some of his suggestions. I think it's called the debt snowball or something like that. I'll mention that class to my wife and see what she says. She is pretty motivated to learn as much as she can to help improve our financial situation.

I'll definately keep updates on our progess. It'll be a great way for us to keep chipping away!

flipman

 

[Mapper]

The debt snowball is a great approach, especially for folks with revolving debt. I was going to mention it when you started the debt elimination thread, but since it's here I've gotta give props to a outstanding simple approach to clearing debt.

 

[flipman]

The debt snowball is a great approach, especially for folks with revolving debt. I was going to mention it when you started the debt elimination thread, but since it's here I've gotta give props to a outstanding simple approach to clearing debt.

Mapper,

Yea, when my wife explained it to me, I was a little apprehensive at first. I told her I always heard you should pay off the high interest rate debts off first to minimize losses. After showing me the numbers she worked on, I had to admit that it was surprising at how well the plan was going to work for us.

I'm still planning on creating that thread and would appreciate any input you have on the method.

flipman

 

[uscfanhawaii]

Hey flipman, congrats on a terrific start to your Account Talk. Very exciting.

you don't say if you are CSRS or FERS...either way, I would encourage you to be putting SOMETHING into TSP. Helping with reducing taxes and all (check out what marginal tax rate you are in, including Federal AND State, and compare THAT with your debt interest rates). :suspicious:

Please don't tell me you are in FERS....too many times I hear FERS people saying they can't put into their TSP cause their bills are too high! If FERS people are not putting in 5%, they are throwing away free money (matching funds). :blink:

Enjoying your posts!!

 

[uscfanhawaii]

Oh, yeah....I went back to your intro....you are in the military so neither FERS or CSRS (yet!).

But my bit about the tax savings still merits some thought......:embarrest:

 

[flipman]

Oh, yeah....I went back to your intro....you are in the military so neither FERS or CSRS (yet!).

But my bit about the tax savings still merits some thought......:embarrest:

uscfan,

Yea, that's my only worry for tax season next year. It helped out my taxes I filed this year, especially since half my year's pay was combat zone tax exempt. Between that and deductions, I ended up getting a lot back in taxes. One thing I did learn was I am overpaying the IRS by a considerable amount. Although it was nice getting a huge payday mid-February, I didn't like the idea of giving the gov an interest free loan. So, I've adjusted my W4 for this year and hopefully only get a little back or break even.

flipman

 

[flipman]

Hello everyone!

I can't believe its been over 9 months since I last posted here. I don't really have much to contribute since there are a lot more people on the board who have a greater understanding. I've just been lurking and learning.

Checked my TSP account today and saw this: Your Personal Investment Performance (PIP) for the past 12 months ending 12/31/2012 is 12.06%
I was pretty shocked to see that. The auto tracker is a bit more accurate I think since the TSP percentage is a bit skewed with my contributions (which I did turn back on, but only to 1% of base pay).

I want to say thank you to all the frequent posters of the board. I do believe everyone's insights and knowledge helped me get such a high return. I still try to follow the LMBF method, but sometimes will adjust fire with the info I read on here. Hopefully in 2013 I can beat my 2012 return.

My wife and I are still tackling our debt. I think when I first posted we were in the $74K range; right now we are roughly in the $66K range. We did close down two credit cards which had ~25% APR combined on them. It was a great feeling telling them no, we don't want to keep the accounts open. One of them asked what they could do for us to keep the card and I said a balance transfer with 3 years no interest. They weren't too keen with that idea :nuts:

Again, thanks for all the great wisdom that is shared here and I hope everyone has a great year!

Oh, and I am still in the I fund. Hopefully January will be a great month!

 

[nnuut]

The best to you and your family for the new year.
When you can increase your contributions so you can get the 5% matching, it is a great deal.
Norman

 

[ILoveTDs]

I'd keep a 25% credit card to get a 100% matching return in TSP. You should be getting full matching at any cost Flipman.

 

[Boghie]

FlipMan,

The PIP is actually an 'Internal Rate of Return'. It is a calculated number that incorporates contributions, the 12 month return in this case, and the risk variance. It is a very good number to know, and it is very rare that it is higher than the actual annual return. But, for me this year it is. Strange... If you want to learn more about the PIP, the IRR, or the CAGR look at this...

Regardless, the AutoTracker is one of the finest tools you can find for computing your actual returns for the various time periods it has. Since the AutoTracker number is so different from your PIP it is obvious that you missed entering a trade in the AutoTracker. If you want to use it as a tool than you have to be religious about entering the data upon each IFT. It really is the ONLY way to track on your real return. Plus, you can use it to find members who trade in your style that you can communicate with. This is another reason you want to be legit in AutoTracker as well. I'm not saying you are cheating (especially when it is going the wrong way:cheesy, but you want good numbers, you want good friends, and you might have a few pigeons floating around out their that like your style and are kinda watch listing you.

As far as the credit crunch - great job. Read and listen to Dave Ramsey for techniques and support. If the remaining debt is bad debt I would recommend powering it down gazelle like. You never know when the credit card companies will start jacking the rates. Yowser on the 25%.

Happy Hunting

 

[imike023]

Wow 25% interest on a credit card. The lowest one I have is 11% Anything over 13% I say no. I remember when my Capital One credit card APR was raised to 17% because I was not using it as often as the other credit cards I have. Called them up and cancelled my card.

 

[flipman]

The best to you and your family for the new year.
When you can increase your contributions so you can get the 5% matching, it is a great deal.
Norman

Thanks Norman! Happy New Year to you and yours!

I'd keep a 25% credit card to get a 100% matching return in TSP. You should be getting full matching at any cost Flipman.

I don't get the matching since I'm military. I hope to increase my contributions eventually.

 

[flipman]

Thanks Bohgie, I'll take a look at the link. I was accurate with my AutoTracker IFTs. Whenever I made an IFT on the TSP website, I came right over here and entered it. I didn't start on the AutoTracker until March of last year and I started my contributions towards the end of the year in 2010. Maybe with that combination, that's why my numbers are way off. Hopefully my AutoTracker return this year will match my PIP a little better.

We do try to keep up with Dave Ramsey's techniques through his website. The remaining debt isn't anything too bad; the majority of it is car loans and a student loan. We only have one more credit card left and it should be paid off by the middle of the year.

 

[flipman]

Wow 25% interest on a credit card. The lowest one I have is 11% Anything over 13% I say no. I remember when my Capital One credit card APR was raised to 17% because I was not using it as often as the other credit cards I have. Called them up and cancelled my card.

Yea, it was pretty bad. I'm glad we got rid of them. The only card we have now has 7.75%.