Back to Basics: Why a HELOC Does Not Equal Liquidity

Most financial planners and counselors advise their clients to maintain emergency savings of somewhere between 3 & 6 months’ living expenses.  As I’ve mentioned in a previous article, saving 3-6 months’ expenses sounds so daunting that many people don’t know where to begin.  When you throw in paltry returns on savings accounts, some folks might not even try.  In fact, why bother when you can use a HELOC & tap into your home equity?  After all, it’s pretty easy to tap into, and you can put your money to work in other ways, right? Continue reading

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Back to Basics-What’s Your Marginal Tax Rate?

Tax planning is one of the most fundamental aspects of financial planning.  In fact, many people would argue that financial planning without respect to taxes is not really financial planning.  Yet, in order to fully understand how tax planning works, it’s important to understand what your marginal tax rate is. Continue reading

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What’s Your Value Proposition?

As servicemembers exit the military, one of the biggest challenges we face is finding post-military employment that is commensurate with what we bring to the table.  Many times, I’ve heard the story of someone who works hard, networks well, and ends up in a job with great promise.  A year later, that person is dissatisfied and feels like they were sold a bad deal.  From the employer’s perspective, that person is filling every single requirement for that job description, so this could be a one-way street.  Or, if that person’s resentment is great enough, it could spill over in the form of workplace friction until one or both parties decide to part ways.

But is it all the company’s responsibility?  Perhaps we owe ourselves and our prospective employers a more defined value proposition. Continue reading

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Why I Became a Financial Planner

As my financial planning practice grows, I’ve noticed that people are asking me how to become a financial planner.  The other day, I answered an email from someone asking how to become a financial planner.  It was at that point that two things occurred to me:

  • At the time of this writing, I’ll have written about 150 articles on this website. None of them talks about why I became a financial planner.
  • Military in Transition contains an “About Me” page, but it doesn’t really explain my journey from the military to becoming a financial planner.

This article is a first step towards outlining my path to becoming a financial planner. Continue reading

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Why the ‘You Just Gave Uncle Sam an Interest-Free Loan’ Argument Doesn’t Work For Many Transitioning People

Executive Summary

Every year at tax time, you see pundits talk about ‘giving Uncle Sam an interest-free loan.’  While the concept of lowering tax withholdings is sound, there are several problems with its practice.  In this article, we’ll discuss:

  • The ‘common’ wisdom behind this interest-free loan concept
  • The major problems with its practical application during transition
  • Situations in which this is actually wrong

Continue reading

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Homeowner Insurance Regulatory Offices By State

In a previous article, I described my homeowner’s insurance claim process.  In this article, I discussed how difficult it was to understand what I was entitled to under the law.  I was finally able to reach a better understanding once I became familiar with the Florida Homeowner’s Insurance Bill of Rights.

Since the insurance industry is regulated at the state level, these rights can differ from state to state.  Moreover, most states don’t even have a clearly defined ‘Bill of Rights.’  However, each state does have a homeowner’s insurance page that can help you understand what resources exist for your situation. Continue reading

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12 Lessons Learned From My Homeowner’s Insurance Claim

Executive Summary

This story is about my personal experience in dealing with a homeowner insurance claim for a roof replacement.  Although virtually every other home in my neighborhood experienced the same damage (from a freak hailstorm), my insurance claim became a long, drawn out affair.  While the settlement terms are beside the point, I hope this story will help steel someone for the challenges they might face if they’re dealing with a particularly tough insurance company. Continue reading

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5 Tax Planning Considerations of a Roth Conversion for Your TSP Account

Introduction

Many people have taken advantage of the Roth TSP option since its inception in 2012.  However, there are still many federal employees and service members with most of their retirement savings in traditional accounts.  Naturally, this begs the question: “How do I convert my traditional account to a Roth account?”  This is also known as a Roth conversion.

The more appropriate approach should be to ask two questions:

  • Should I convert my traditional account to a Roth account?
  • If so, how do I do this in the most effective manner?  Effective manner indicates minimal loss of money through fees, taxes, etc.

As with most questions, the correct answer is not straightforward.  Rather, it’s an answer that depends on the person’s (or family’s) particular financial situation, goals, and values. Continue reading

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TSP Rollover to an IRA Account—Should I do it or Not?

This is a question that I received the other day from someone who has a lot on his plate.  He’s getting his financial life in order and was trying to figure out whether a TSP rollover was the right thing.  While everyone has different perspectives and situations, there is one constant:

Any financial decision you make should be consistent with a financial plan that reflects your values and goals.

This article will discuss the pros and cons of rolling your TSP account into an IRA.  However, any decision you make should be consistent with the long-term plan or strategy you have in place. Continue reading

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Six Steps to Hire a Military-Focused Financial Planner

Disclosure:  I am a financial planner.  With that said, there are many people who do not need a financial planner to live their best lives.  However, there are probably many more who could benefit from professional financial advice in at least one aspect of their lives.  This article is for them.

Introduction

In the military, we’re pretty familiar with the financial counseling resources that are available, either through our commands or the installation’s support services.  However, there comes a time when we’ve paid off our credit cards, established an emergency savings account, and started putting money away for retirement.

At this point comes a logical question:  “Even though I feel like I’m doing all the right things, could I be doing more?”  This is where a financial planner can help you out.  However, with almost 300,000 financial advisers in the United States, finding one that meets your needs can be difficult.

Here are six steps to help you select the right planner for you. Continue reading

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