1. Personal Finance 101 Part
The Purpose of this briefing is to walk everyone through the Logistics concept from the
Strategic level to the tactical level.
9/20/2018

2. Three Tenets of Personal Finance Emergency Savings
AGENDA
Purpose
Budgeting
Credit Cards
Three Tenets of Personal Finance
Emergency Savings
Retirement Investing
Thrift Savings Plan (TSP)
Individual Retirement Accounts (IRAs)
Life Insurance
Servicemembers’ Group Life Ins (SGLI)
Term vs. Whole Life Insurance
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3. PURPOSE
To provide Army leaders with a Better Understanding of personal financial planning in order to provide our Soldiers timely, accurate, and honest information in order to make more informed decisions.
The Purpose of this briefing is to walk everyone through the Logistics concept from the
Strategic level to the tactical level.
9/20/2018

4. Almost everyone hates to budget
Budgeting
Almost everyone hates to budget
You must have a good idea of your income and expenses
For one month = keep track of every penny you spend. You’ll be shocked to see where your money goes
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5. Credit Cards
If you spend $4,000 on credit cards at 18.5% interest and pay only the minimum payments, it will take you 11 years to pay off ($7,800 total).
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6. Three Main Tenets of Personal Finance
Savings
Emergency Fund
Investing
Individual Retirement Accounts (IRA)
Federal Thrift Savings Plan
Insurance
Servicemembers’ Group Life Insurance (SGLI) & Family SGLI
Term vs. Whole Life
9/20/2018

7. Rainy days will happen…. You need 3-6 months of living expenses saved
Emergency Savings
Rainy days will happen….
You need 3-6 months of living expenses saved
Very liquid….not in CDs, mutual funds, etc.
The more secure your job, the less you need (Army = 3 months)
Most should aim for $10,000
More responsibilities = larger savings needed
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8. Everyone can begin saving something
Getting Started
Everyone can begin saving something
Start with $50 a month if nothing else
Many mutual funds can be started with as little as $50 (USAA for example)
Everyone has a Latte Factor…find yours.
Time is your biggest benefit. You miss out on compounding interest the longer you wait.
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9. Retirement Investing - TSP
Thrift Savings Plan….
Exactly like a civilian 401-k retirement plan
Five index funds & four target date Life Cycle funds
Index funds follow S&P 500, Wilshire 5000, etc.
Life Cycle funds are too conservative for most
Funded with before tax dollars
Earnings grow tax deferred & taxes are owed on the interest and capital gains when withdrawn
Can withdraw the money at 59 ½ years old
$15,500 maximum yearly contribution limit
Automatic enrollment….coming soon!
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10. Retirement Investing – Roth IRA
Roth IRAs….
Usually invested inside mutual funds or a brokerage account with individual stocks
Funded with after tax earnings
Earnings grow tax free & no taxes are owed on interest and capital gains when withdrawn
Can withdraw the money at 59 ½ years old
$5,000 maximum contribution limits ($416 a month)
Investing $5,000 a year starting at 22 years-old, earning 8% annually, will grow to over $2.2 million at age 62 (your investment =$245,000)
Skip a Traditional IRA until you max out a Roth
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11. Investing Tips
It’s usually more beneficial to start with a Roth IRA and then invest in TSP
You can take out a loan for college, but you can’t take out a loan for retirement
Investments with low expenses (like Index Funds) are a great place for a beginner investor
Individual stocks are hard to track, mutual funds are better & more diversified
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12. Is $400,000 SGLI enough? Maybe…. Life Insurance
You need approximately 10x your income
For an E-6 with 10 years of service, you should have $500,00 in insurance. Do not forget to include BAH.
Do you depend on your wife’s income? You may need insurance for her.
Will the Family SGLI be enough to cover full time daycare for children, fixing meals, etc.?
You have disability insurance with the Army, but does your spouse have it at her work? Can you survive a loss of her income?
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13. For most people, Term insurance is better than Whole Life
Life Insurance
For most people, Term insurance is better than Whole Life
$100,000 Whole Life = $100 a month
$500,000 Term Life = $40 a month
20 to 30 year term insurance (like SGLI) will protect you while your children are young
You only need insurance to protect income
Insurance on children is a waste of money
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14. If you take nothing else away….
The Last Word…..
If you take nothing else away….
Start now!
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15. “Amateurs talk about tactics, but professionals study Logistics.”
QUESTIONS ?
“Amateurs talk about tactics, but professionals study Logistics.”
– General Omar Bradley
9/20/2018