Spend less than you make, invest, get a life

The global stock market is in freefall, a few companies are closing down, and real estate is at 5-year lows. I'm buying.

Look, here's my opinion. If you have a cash reserve, if you spend less than you make, and you invest at regular intervals in a wide variety of investment choices, in time you will do well. I'll be honest, and the proof is in my NetworthIQ link on the left margin, my portfolio value has gone down just like yours. It'll probably go lower. But I'm buying a lot more shares at this level than I was last October, and I'm confident that by 2026 (my 60th year) the market will be much higher than it is today.

You know what, though, my portfolio will be a lot different in 2026 than it is today. My favorite portfolio management ideas come from Ray Lucia. If you were in retirement now and you followed Mr. Lucia's "Buckets of Money" strategy, you'd be yawning now instead of staying up nights. Why? Because Mr. Lucia would have you in 7-years of risk free cash, 7-years of low-to-moderate risk investments, and the remainder of you nest egg in a diversified stock portfolio.

My plan is to begin to transition to the income buckets beginning 7 years prior to my 60th birthday. I'll start filling my first bucket then, and investing less in my third bucket. I'll also begin filling my second bucket from my portfolio. I'll dollar cost average out of the stock market and into REITs and fixed investment options.

Throughout this period, I'll continue to live within my means, avoid personal debt, and live my life. I'll spend time with my wife and my sons, travel, work in jobs that give me a chance to learn new things and gain new experiences.

I'll also be drawing my military pension, enjoying the benefits that military retirees have access to for life, and have the confidence that despite market fluctuations, I will prosper over time.

I wish you peace and hope.

TSP investors tested

In the most recent update at Military Update Tom Philpott reported that the "C" Fund at TSP was down more than 40% for the period of 10 Oct 2007 to 10 Oct 2008. Many who subscribed to TSP advisor web sites that urged caution are now very happy with their decision to move to the lowest risk "G" fund. Times are looking bleak at the moment.

So, the question is, when would you start investing again? Will the newsletters call the bottom and switch back to a "buy" recommendation at the correct time? Maybe, maybe not.

I prefer Mr. Philpott's recommendation to dollar-cost-average into this market. That means setting aside a predetermined monthly contribution and investing it regularly, whether the market is up or down. I do not recommend attempting to time this market.

How can this shelter you from a downturn in the market? Well, for one thing the TSP accounts are diversified, particularly if you select a portfolio that consists of all of them, not just one or two. Second, TSP accounts continue to maintain low fees, so you won't be paying advisors a significant percentage of your investment funds for advice. Third, by investing with a long-term perspective, you'll be in a position to overlook short-term losses in favor of long term growth opportunities.

I remain wildly optimistic in the future of America!

Air Force Village West: Retirement Living with options

For military officers and their spouses who are thinking of moving to a retirement community, the Air Force Village West offers all the amenities that you'd expect, with the friendships that you'd expect being surrounded by comrades. Yes, there's golf, health care, and recreational opportunities, and you get that California sunshine. There's a long waiting list to get in, however, so plan ahead. I'm signing up now for 2036!

Tricare Dental Expands Retiree Coverage

This is great news for all military members, and especially for retired military members who live overseas. Tricare's Dental Program has expanded with a new contract for service from Delta Dental of California. Coverage has expanded significantly, including an increase in covered service for orthodontic treatments (up $300 to $1500), composite fillings (a great choice), and coverage available for retirees living abroad who sign up.

You need to learn more! Check out this site for the details of all the changes.

Understand your VA benefits

One of the baseline questions of this blog concerns understanding your VA benefits. Many active military members (myself included!) don't really understand these benefits or how you apply for them. Some of the benefits are perishable, so you really owe it to yourself to learn more about them.

A pamphlet is available on line from the VA that explains the benefits. You can access it through the VA website.

The Commissary: Now more than ever!

A recent Marketwatch story pegged price increases for basic groceries at more than 10% in the past 3 months alone. Prices at the commissaries have increased as well, but the average commissary shopper saved more than 30% compared to civilian grocery stores. (Source: Commissaries.com) The commissaries also accept all manufacturers' coupons and even offers online coupons, nutrition tips, and limited delivery options for certain commissary products.

Altogether, the commissary benefit is another great way to save some of Your Military Money!