DerpReport Challenged by trainwrecktrader in TSP Performance

Money and finance are no longer dirty words that are meant to be discussed in a private bedroom setting between Mummies and Daddies that love each other very much. Nor is it a huge faux pax to admit your an idiot and have no idea what your doing to everyone. I will have to give it to you that it took God’s “Gift” to the world Dave Ramsey and his guilt ridden sermons to finally get my spouse on board to talk about the most boring and uncomfortable subject of budgeting and finances. This blog has taken a new direction as we are now not just doing sweet churning deals for military, but I want to analyze the many financial options out there for us.

My work place is unique, we have a 40 year old family man on his second occupation who runs FPU, we have a DINK HENRY, I have this YOLO /r/wallstreet bet childless single hipster, and phoning in is a O-5 in his mid 40s with two kids.  Together we have very different views and opinions on how to save for the future. We are however all staff corps officers with the Navy who are always comparing ourselves to our private practice counterparts.

First challenge raised is TSP allocations, we have all started out $18,000 a year into TSP and now we have been disputing what we should do in terms of allocations. I went ahead and got two years of TSP Pilot since I needed to do $3k spend on my AmEx Hilton Surpass card. Plus, I’m like super lazy, i don’t even have time to read these huge reports he sells.

On the flip side we have Davey who does have time since he has no wife and kids, and just a giant pile of money in his tiny BEQ (edit: BOQ aka jack shack). He will be tracking his performance here. Smart dude, but not asian, so questionable quant skills. Any-who, let the best man win, if you want to be included in the rankings, go right ahead and comment below. Let the best TSP win!

-Derp

Illinois Freebies for Military

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Sears Tower for free with Military ID (worth every penny on a foggy day)

Got my orders to Great Lakes Naval Base in Chicago. in preparation I have compiled all of the military waived fees:

  1. Get your FOID card, Illinois is weird that they require a Firearms Identification card for residents, even when buying ammunition in other states.
  2. Go ahead and get you Concealed Carry License which normally costs $300 out of state and $150 resident, not sure if its waived for active duty, but they do give 8 hours towards your 16 hours of training. Been looking at this training company that makes mention of the 8 hours credit.
  3. Get your free hunting and fishing license for the Department of natural resources.
  4. Lots of museums, shows, hotels have no admission fees for military and discounts at down town hotels, you can still put the hotels on branded credit cards to earn points. For example check a comedy show at second city for free!!
  5. Use the discount fare on Metra ($2 from Great Lakes to Down Town), free Pace buses (while in uniform), free cta buses (need military ventra pass) and El trains. All info here.
  6. Check out USO at ORD and MDW, good for a snack and nap, hopefully they put that Centurion lounge in ORD soon which you will get for free with your fee waived AmEx Platinum. They also always have extra tickets for shows, I was able to see a Neil Diamond show back in the day when I was a Military Spouse.
  7. Looks like the Lyric Opera of Chicago has discounted tickets by calling number is 312.827.5600

More to come!

-Derp

Financial Spring Cleaning

Springtime means tax time, which means logging into every website to get statements and to analyze whats been going on over the past year. The beauty of being overseas is filing your taxes 2 months late, and even extend to October. If you withhold correctly you can usually extend without any penalty. However if you know you own money you will need to prepay your taxes on time or just file on time to not incur any interest on taxes unpaid. I was charged a late fee as well as a failure to file fee, but sending in my orders got them to drop some of the charges for being overseas.

So here is my most humble check list on what you should do at least once a year:

  1. Rebalance your TSP, if you from the Dave Ramsey camp stick with your 60,20,20:CSI funds. I have been following this dude who suggests 85% C and 15% I. This dude says 50/50 in C and S who smartly moved it into 100% G prior to the January market correction. You can always pay $15 a month to people like this guy which I don’t recommend because in reality you can’t really loose that much money in the 5 funds, and rather take the $180 a year I would of spent and use it on something else. Bottom line you get two interfund transfers a month to rebalance your tsp, but you also get unlimited transfer to G fund if you want to take your earnings and feel like there is going to be another correction. Lots of info on Bogleheads.
  2. Rebalance your Roth IRA and Stock Portfolio.  You should keep in mind that your TSP tracks the following indexes: C: S&P 500, F: U.S.Agg. Bond Index, I: EAFE Index, S; DJ U.S. Completion TSM Index, and G is always around 2% since its a special product from the US Treasury made just for TSP. So keep this in mind for example if you got money in the C fund and the S&P 500 you just stuck all your money in the exact same stocks. If you got tons of stock in Apple, well that one stock already made up 3% of S&P 500. Bottom line, don’t double dip, diversify for reals. You may think you are spread out with G, S&P 500, AAPL, but guess what, you own a lot of the same things. I would consider your balancing between TSP as well as your Roth IRA to maximize diversity and minimize cost. So I have all Admirals shares of Vanguard Funds in indexes not covered by TSP. Then my TSP is in all indices that Vanguard does not cover. From the TSP site: Expense ratios may also be expressed in basis points. One basis point is 1/100th of one percent, or .01%. Therefore, the 2015 TSP net expense ratio of .029% is 2.9 basis points. Expressed either way, this means that expenses charged to each TSP account in 2015 were approximately 29 cents per $1,000 of investment. Here is a comparison of overlapping funds and their expense ratios:
    TSP Fund ETF Vanguard Admiral Fund
    S&P 500 C .029% SPY VFIAX .05%
    U.S.Agg. Bond Index F .029% BNDS VBTLX .06%
    EAFE Index I .029% EFA VTMGX .09%
    DJ U.S. Completion TSM Index S .029% MDY VIMAX .08%

    You can see that TSP is the cheaper version of these respective Vanguard Funds. The name of the game is to limit your fees with passive investing, and then even more so with TSP. If you use a stock broker that is constantly rebalancing your portfolio, guess what that jerk is making money if your portfolio goes up or down. He’s paid on commission by the selling and buying these active funds, your a sucker because you you think he’s got an edge, but in reality you could of done it yourself since is not 1999 and everyone has access to buying their own securities. Index funds are so cheap your paying 30 cents per $1000 with TSP so your million dollar portfolio would only cost you $300 a year to manage! This new philosophy is reverberated by the one index card dude from University of Chicago. Even good old Warren Buffett put this all in as a sure bet. Are you thinking of dumping all your money into Blue Star Airlines since you got some inside information? Don’t be an idiot, you can’t beat the market!!! On the opposite side we have some funds with an expense ratio of 3% with no better earnings which make up a frightening large component of Mom and Pop accounts managed by “financial managers”. Fascinating stuff that is now mainstream is how this boring passive investing popularized by John Bogle and Vanguard was hated by people as being Un-American, but has proven itself very profitable for many years.

  3. Sell your stocks or at least think about when you want to get out and what price you want to sell them at. Don’t hold on to them forever and not have an end game for them. You picked some good companies and now what? They become overvalued and you should of taken your earnings and moved them to an index fund. Think about what Bogle says, below are his eight basic rules for investors:
    • Select low-cost index funds
    • Consider carefully the added costs of advice
    • Do not overrate past fund performance
    • Use past performance to determine consistency and risk
    • Beware of stars (as in, star mutual fund managers)
    • Beware of asset size
    • Don’t own too many funds
    • Buy your fund portfolio – and hold it
  4. Go though those credit cards, downgrade the ones that will soon incur a non waivable SCRA fee, don’t close the account if it’s less than 2 years as it will decrease your account age average and thus your credit score.
  5. Submit annual paperwork to Studentaid.gov and you loan servicer to ensure your in compliance with the student loan forgiveness program. Minimize each payment if you are going to do 10 years.

Hope that gives you something to do in the next few weeks. Also a shout out to discount deals 4 military for the recognition!

-Derp

100K for Amex Platinum, 75K for MB Platinum, What a Time to be Alive!

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If you felt cheated out of the $1,000 cash giveaway that was the Gold Luxury Card you got a new opportunity! The AmEx Platinum is now going for 100k points worth at last $1,000 in statement credit alone. Well I kind of feel bad, AmEx is going though some hard times right now. Their desperation shows since they are now offering 75K MR points on the Mercedes Benz Platinum and 100k MR points on the regular Platinum (thank you r/churning). So with $6k spend in one month you could get 175,000 points to transfer or use as $1,750 statement credit (not worth it), and also remember your spouse is covered under your SCRA fee waiver so that saves you $925 a year on fees each! Using my handy dandy spreadsheet you can get an idea of transfer partners to use it on. Don’t forget ANA from Okinawa to use your points to travel to USA on United flights as a partner.

-Derp

Shine Bright Like a Diamond: Elite Status Without Stays

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First off, if you haven’t already gone double platinum, they are offering 75K MR points with the MB AmEx till June, so don’t slack off and miss another amazing deal, like how you missed the free $1,200 giveaway with Luxury Card Gold MasterCard. The AmEx Platinum has the one new perk of giving you Gold HHonors Status with Hilton Hotels, this can then be used to get Diamond status at Best Western. I just emailed StatusMatch@bestwestern.com with my membership number and a screenshot of my HHonors Apple Wallet card. They emailed me back in 10 mins with the good news that I have turned gold into a diamond.

Elite status is quite a silly thing, its like being a level 5 contributor on trip advisor or having any badges on foursquare. Its leveling up in some made up game using made up points in a way to gauge my loyalty. In the case of Hilton Gold you get the free breakfast, and I guess in Best Western you get a “room upgrade” and a recognition “gift”. Turns out people are not really successful at getting this upgrade since each hotel is independently owned. This would be upsetting since your stay of 30 nights, or 20 stays or earn of 30,000 points is whats needed to get to this level. So think of this as a cheat code to level up without spending a dime.

Check out http://www.statusmatcher.com/ for many more of these upgrades, its like making companies jelly with your elite status cash, jokes on them, didn’t pay a dime for it in the first place.

Current matches approved:

Air Berlin topbonus Silver for United Silver (Free from flying ANA alot while overseas with United Card)

MGM Grand M-Life Gold for Hyatt Platinum (Free from Hyatt card)

Best Western Diamond (good forever) for Hilton HHonors Gold (free from AmEx Pt)

Club Carlson Gold (for 1 year) for Hilton HHonors Gold (free from AmEx Pt)

My Millennium Premium membership for Best Western Diamond

-Derp

Switch to the Revised Pay As You Earn (REPAYE) plan Right Now, RIGHT MEOW!

Pay 10% of discretionary income regardless of where you work for student loans

Pay 10% of discretionary income regardless of where you work for student loans

Looks like there is a new revision in Dec 2015 to the Pay as You Earn option of the Income-Driven Repayment Plans from the Department of Education. In the before time you must be a new borrower as of Oct. 1, 2007, and must have received a disbursement of a Direct Loan on or after Oct. 1, 2011 to qualify for the Pay as you earn which is a sweet cap of 10% of discretionary income. Now they have a new plan called the REPAYE which is the revised version of this plan that allows anyone to use it. In addition they have extended the payments to 25 years for professional students. A good summary of the new plan can be found here.

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Notes from the Okinawa Churn3 Summit at ビアライゼ

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Some amazing brews for 2x points on CSP

I had a great time at last night’s get together with Andy Sheep from Boarding Area and one of our readers Nathan who all happen to be in town at the same time for once. I like to think we are the big 3 churners on island (the ones that have admitted it it anyways). They have been doing it for much longer, and I look up to these dudes with their Diamond Hyatt status as I sit here with my lowly platinum, thinking, one day this will be me.

The venue was Beer Rize down the street and to the left from Gate 1 of Kadena in Chatan. Excellent food and beer, thanks for Nathan’s suggestion. I learned more in that diner that I have from two weeks of r/churning. Here are just two tings I learned form our little meeting:

First off, Navy related of course is the Naval Research Laboratory Credit Union is offering a 7% CD for 7 month up to $7K. This would mean $285 in earnings if you max out the deal, best part is that you can fund it with a credit card up to $9K of which I am going to use my wife’s new Gold Master Card Luxury Card to fund it, two birds with one stone!

Second thing is they are currently offering 75,ooo for the AmEx Platinum MB card with $475 annual fee waived for military. I use this card as part of my Platinum Trifecta (Normie, MB, Business) giving me $600 a year to use on United Airlines gift registry. If you haven’t gotten the card already, go for it, otherwise you won’t get the bonus if you ever had the card before.

So there you have it, any ideas for a meet up, comment below and we can make it happen.

-Derp

 

Investing for Free

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When you think of Snoop Dogg, Linkin Park, and Nas you never really think they are on the cutting edge of getting looser Otaku Millennials to start investing their pocket change. However they have backed a company called Robin Hood Trading which has exploited the momentum from the Occupy Wall Street movement to ironically bring the Jordan Belfort or Gordon Gekko lifestyle to the masses, for free. This diabolical plan is outlined in this Slate Money podcast “Matt Levine is amazing” at around the 12 min mark.

The millennials are a largely untapped market for ripe exploitation on the stock market with 74% of them with nothing in the market. They certainly love video games on iOS devices paired with a need for dumbing down complex concepts into flat color graphic form to create a goofy fun swipe game app with real money. Robin Hood Trading is this new video game, a Tinder for stocks, a flappy bird for speculation, the candy crush saga of brokerage houses.

So naturally I linked my USAA account to open a new account on Robinhood that allows free trades. They can do this because they make you their product, your trades are pretty much sold to another HFT firm so they can make a few pennies. Who cares, the trades are free to you, and I pair this up with the free Morningstar stock analysis linked from the site: MCCS Libraries and you got yourself a poor man’s trading platform. No longer do I have to pay $9 for a trade with TD Ameritrade but look up all the details I need and then I can trade for free on Robinhood.

So free trading has made me look at day trading as an option, or rather stay up till 10:30 PM in Japan and wake up at 5 AM kind of trading. This makes the ETF and ETN based on futures contracts so attractive. It is like online poker all over again with its massive 3x leveraged movements based on commodities prices.

For example some nutty bets you can do are for:

Oil (UWTI or DWTI) and (UCO or SCO)

Natural Gas (BOIL or KOLD)

Gold (NUGT or DUST) Up or down 20% as of this post

You can even bet on volatility and the Chinese stock market:

VIX (UVXY or SVXY)

China (YINN or YANG)

Even high yield (high risk) bonds (JNK)

All of the above are terrible ETFs that devalue over time. So holding on to them for more than a few days will always lead to massive loss due to contango. You better buy and sell these things daily and hope you went the right way.

Now for those who actually want to save for retirement we have super duper diverse ETFs like VTI which is essentially owning one stock of every publicly traded company in America. Its weighted by capitalization so its essentially the S&P 500.

Good luck out there.

-Derp

Full Disclosure: Nothing on this site should ever be considered to be advice, research or an invitation to buy or sell any securities. I’m no expert you will certainly loose money following the above advice, but at least you won’t pay for the trades!