Capital Gains is a thing right? Oh and Credit too.

Honestly USAA or NFCU... and why?

  • USAA

  • NFCU

  • Niether, I got a better place for you!

Results are only viewable after voting.
Capt MJ said:
I am sure current USNA mids or recent Marine grads can chime in with more accuracy, but those midshipmen going Marine purchase a specified set of types and numbers of uniform items, including the Mameluke sword, which must be paid for before graduation. A team comes up from Quantico to measure and fit, and the uniforms are custom-made of top-quality materials. There is a reason they look so sharp! Since none of their USNA mid uniforms make the transition, they are starting from scratch.

The number $3500 is sticking in my head for the Marine uniform buy.

In contrast, Navy officers are told what uniforms they must have by Uniform Regulations. It’s up to them how many, and they are purchased off the rack and tailored at the Uniform Store. The SDBs are Brooks Brothers, as I recall. Some of their USNA SDBs and mess dress will be in good enough shape to be re-striped with Ensign rank insignia. The Navy officer sword is not required until the rank of Lieutenant Commander. The individual officer determines how many of each Uniform he or she needs to look routinely squared away. New Ensigns will be buying uniforms appropriate for their first duty station and replacing worn items.

When I had duty at USNA as a Battalion Officer, during summer white season, depending on the activities of the day, I might go through 2 sets of SW in a day. I had 3 pairs of spare white shoes in my Bancroft Hall office, more at home. The more senior I became, the more attention I paid to uniform appearance.
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Thanks for the number esimate; Marines is not off the table as of now. And your detailed information on the transitition is very useful. Thank you!
 
TexMex2022 said:
Hello all! As my 18th, and the PRT packet, looms around the corner I was wanting some advice from current mids and alumni on my current financial plan and namely how it translates into USNA life. Also when I qualify for membership with the two "Military banks" is kind of fuzzy and I didn't get a good response from calling either; if someone could elaborate that would be fantastic! I wish to get all this funny money business over before I'm in the Academy because I got free time now... I may not later.

Step 1. Transfer my current USAA Checking to my name come 18
Step 2. Open USAA Secured Credit Card ($250 CD as collateral) to build credit
I chose USAA over NFCU because NFCU has a $500 minimum on the CD​
Step 3. Await PTR / List Car for sale ~$3250
Step 4. Oh god it's actually here
Step 5. Open NFCU Student Checking Acct (Use that as Primary Deposit Account)
Step 6. Sell Car (If anyone will buy that expensive beater)
Step 7. Buy into an Aggressive Growth Mutual Fund with car cash (Make your money work for you)
Step 8. Academy
Step 9. Cash out AGMF in Texas--No Capital Gains Tax under $10k, sorry Tax-Central Maryland :)
Step 10. Use cash in AGMF to either supplement or replace commissioning loan / Serve our Nation!

Thoughts or considerations?
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Five suggestions:
  1. Have your parents put you on their oldest credit card account as an additional card holder (assuming they have good credit). You will then benefit from the length and quality of their credit history - the payment history of that card will appear on your credit report and increase your credit score. You do not need to use the additional card or even take possession it.
  2. Once you are at the academy apply for a USAA Visa cash rewards credit card (or NFCU equivalent). No need to go the secured route unless there is a problem with credit history. Not sure, but you may be able to apply before reporting (ask USAA).
  3. Apply for American Express Platinum Card when you are eligible (not sure of age requirement, but think 18 or 19). $550 annual fee waived for active duty military and travel benefits are unbeatable at that price.
  4. Consider investing in a Roth IRA. Once you start getting a paycheck, you are eligible. You can convert it to a traditional IRA later when you start earning the big bucks. ;)
  5. Be very, very responsible (sounds like you are). Credit cards can get an immature person in trouble real fast.
 
FYI. I highly recommend USAA for banking and insurance. Their investment group is ok, but there are better options out there.
 
@TexMex2022

You are smart to get a grip on your finances now. Your older self will thank you.

A key task is making a budget and sticking with it, determining “Wants” vs. “Needs.” You Need to drink water; you Want a Starbucks. Budget for both. One of your Needs, which I think you have already figured out, is saving for short, medium and long-term goals. If you earn a salary from your 20’s - your 60’s, spending money along the way on routine life expenses, house, spouse, kids, kids’ Stuff and College, then stop earning a salary, you will probably need enough assets after that to live comfortably another 25-30 years. If you haven’t socked it away and done smart things 20’s-60’s, it is difficult if not impossible to catch up.

Mint.com has a great free app for everyday budgeting and keeping an eye on your money flow. Down the road, when you have time, if you start getting more complex, build a budget in Quicken and keep track of your cash flow and asset growth there. You can set it up to access USAA, NFCU and other financial entities online to update, say, current IRA value.

When I give this kind of advice, I send a shout-out to Captain Merrill Peek, SC, USN, who gave me this same advice (less the online stuff). Thanks to him, I started an IRA at 20, fully funded it every year, and started a whole set of things going that have had time to benefit from compounding over decades. I never forgot his Needs vs. Wants talk.
 
Capt MJ said:
@TexMex2022

You are smart to get a grip on your finances now. Your older self will thank you.

A key task is making a budget and sticking with it, determining “Wants” vs. “Needs.” You Need to drink water; you Want a Starbucks. Budget for both. One of your Needs, which I think you have already figured out, is saving for short, medium and long-term goals. If you earn a salary from your 20’s - your 60’s, spending money along the way on routine life expenses, house, spouse, kids, kids’ Stuff and College, then stop earning a salary, you will probably need enough assets after that to live comfortably another 25-30 years. If you haven’t socked it away and done smart things 20’s-60’s, it is difficult if not impossible to catch up.

Mint.com has a great free app for everyday budgeting and keeping an eye on your money flow. Down the road, when you have time, if you start getting more complex, build a budget in Quicken and keep track of your cash flow and asset growth there. You can set it up to access USAA, NFCU and other financial entities online to update, say, current IRA value.

When I give this kind of advice, I send a shout-out to Captain Merrill Peek, SC, USN, who gave me this same advice (less the online stuff). Thanks to him, I started an IRA at 20, fully funded it every year, and started a whole set of things going that have had time to benefit from compounding over decades. I never forgot his Needs vs. Wants talk.
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I already use Mint all the time! I figured out the want vs need very quickly when I got a job. I rarely buy anything I don't need like gas, repairs, and occasionally food. Thank you for the advice.
 
jl123 said:
Five suggestions:
  1. Have your parents put you on their oldest credit card account as an additional card holder (assuming they have good credit). You will then benefit from the length and quality of their credit history - the payment history of that card will appear on your credit report and increase your credit score. You do not need to use the additional card or even take possession it.
  2. Once you are at the academy apply for a USAA Visa cash rewards credit card (or NFCU equivalent). No need to go the secured route unless there is a problem with credit history. Not sure, but you may be able to apply before reporting (ask USAA).
  3. Apply for American Express Platinum Card when you are eligible (not sure of age requirement, but think 18 or 19). $550 annual fee waived for active duty military and travel benefits are unbeatable at that price.
  4. Consider investing in a Roth IRA. Once you start getting a paycheck, you are eligible. You can convert it to a traditional IRA later when you start earning the big bucks. ;)
  5. Be very, very responsible (sounds like you are). Credit cards can get an immature person in trouble real fast.
Click to expand...
Sounds like solid advise on all. I will call USAA and find out if I need secured. This may not be the case now but a lot of older people told me it was hard to apply for anything without collateral this young. I cannot be added to my parents account though.
 
TexMex2022 said:
Sounds like solid advise on all. I will call USAA and find out if I need secured. This may not be the case now but a lot of older people told me it was hard to apply for anything without collateral this young. I cannot be added to my parents account though.
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Make sure you tell them you are an incoming midshipman at USNA. Special deals apply. Not sure when you become eligible, since USAA is an Association where uniformed status is the key to primary eligibility. I know you can stop in the office on Prince George St. before I-Day to open bank, get credit card app going, etc. You just need your PTR.

That’s generally true for other young people, but you will be an adult in the Armed Forces earning a regular salary, though you don’t see much of it for awhile.
 
Capt MJ said:
Make sure you tell them you are an incoming midshipman at USNA. Special deals apply. Not sure when you become eligible, since USAA is an Association where uniformed status is the key to primary eligibility. I know you can stop in the office on Prince George St. before I-Day to open bank, get credit card app going, etc. You just need your PTR.

That’s generally true for other young people, but you will be an adult in the Armed Forces earning a regular salary, though you don’t see much of it for awhile.
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I have before but none of the call centre people know what that is. Usually I get sent to the manager that also doesnt know...
 
I expect most topics have been covered by this point but I wanted to emphasize some things...

DS uses USAA. They have always given good service and their branch in Jacksonville, NC has gone above and beyond in letting Mom and I straighten out some financial issues (nothing to do with USAA) while he is in Okinawa. Best service I've gotten anywhere. That being said, they are closing all their branches and doing everything electronically. Works for my kid but if you'd rather deal with actual human beings from time to time, then NFCU might be for you. I don't have an NFCU account but their branch is Jacksonville has helped me deposit checks in my credit union account, so I am pleased with their service too.

I agree with setting up a Roth IRA as an item in how to use your commissioning loan. However, I wouldn't convert it to a traditional IRA. If you MUST have a traditional IRA in the future, you can open one and still contribute to one or both IRAs. Contributions to both cannot exceed $5,500 per year (combined). They each have their advantages, but it might help make things easier, financially when you retire and start drawing money from them. One will be taxable income, and the other won't. It will probably make it easier on you at that time.
 
Capt MJ said:
TexMex2022 said:
A lot of good info thanks again Capt MJ. But could you elaborate on what this extra cash need for Marine uniforms is?
Click to expand...

I am sure current USNA mids or recent Marine grads can chime in with more accuracy, but those midshipmen going Marine purchase a specified set of types and numbers of uniform items, including the Mameluke sword, which must be paid for before graduation. A team comes up from Quantico to measure and fit, and the uniforms are custom-made of top-quality materials. There is a reason they look so sharp! Since none of their USNA mid uniforms make the transition, they are starting from scratch.

The number $3500 is sticking in my head for the Marine uniform buy.

In contrast, Navy officers are told what uniforms they must have by Uniform Regulations. It’s up to them how many, and they are purchased off the rack and tailored at the Uniform Store. The SDBs are Brooks Brothers, as I recall. Some of their USNA SDBs and mess dress will be in good enough shape to be re-striped with Ensign rank insignia. The Navy officer sword is not required until the rank of Lieutenant Commander. The individual officer determines how many of each Uniform he or she needs to look routinely squared away. New Ensigns will be buying uniforms appropriate for their first duty station and replacing worn items.

When I had duty at USNA as a Battalion Officer, during summer white season, depending on the activities of the day, I might go through 2 sets of SW in a day. I had 3 pairs of spare white shoes in my Bancroft Hall office, more at home. The more senior I became, the more attention I paid to uniform appearance.
Click to expand...

My recollection is about $3,500 for the uniforms as well. I don't think that included cammies but did include dress blues and the service alpha, baker, and charlie uniforms. Just for lurkers, NROTC students don't always get called upon by the tailors from Quantico. DS's Marine commissioning class drove up to Quantico one weekend to attend a friends commissioning ceremony there. They got fitted for their uniforms there and also picked up some clothes bags from the MCX. Uniforms were shipped to them for their commissioning.
 
kinnem said:
My recollection is about $3,500 for the uniforms as well. I don't think that included cammies but did include dress blues and the service alpha, baker, and charlie uniforms. Just for lurkers, NROTC students don't always get called upon by the tailors from Quantico. DS's Marine commissioning class drove up to Quantico one weekend to attend a friends commissioning ceremony there. They got fitted for their uniforms there and also picked up some clothes bags from the MCX. Uniforms were shipped to them for their commissioning.
Click to expand...

Also for lurkers... https://www.marineshop.net/
There is the Exchange-based uniform store, but this one is independent and operated by the non-profit Marine Corps Assn. Everything the well-turned-out, recruiting-video-ready, Devil Dawg will need.
 
I was able to get a USAA credit card in my name once I turned 18 as a cadet in AFROTC. I think was a $750 credit limit or something like that. I believe it was called the USAA card for Pre-commissioned officers (i.e cadets in commissioning programs). Then once I got on AD, I got the AMEX platinum. It’s a great deal. I use that as my primary card now to get points and perks (of which there are many), but the USAA one was perfect while I was in school.

I also have my car insurance through USAA. Not my car loan though...I got a 0% financing deal from the dealer. I did not take the career starter loan, as I’d built up a decent amount of money from working internships and didn’t want to have added debt immediately once I graduated.
 
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@TexMex2022
Since we are clearly in the mode of sharing all kinds of financial wisdom accumulated over the years with an impressively forward-thinking Plebe To Be, you will want to continue to declare TX as your state of residence over the years (assume that is current home state), because of no state income tax.

On active duty, there is your Home of Record, the place from which you entered active duty. It doesn’t change. There is your state of residence, which you declare for tax purposes and voting registration. That is changeable, if you meet state residency requirements if changing from HOR. When you are on active duty (the day you raise your right hand on I-Day), and then moving between states on orders, you are transient non-resident military personnel status, and not subject to that state’s income tax, unless you decide to establish residency there.

For example, I entered the Navy from GA, so it was my Home of Record my entire career. I paid state income tax to GA even though I was not living there. The minute I got orders to FL (no state income tax!), I got a driver’s license, registered to vote and other things. I told GA I was no longer a resident. I remained a FL resident my entire Navy career, voting absentee, though I was never stationed there again. Some states, even though they have state income tax, exempt military residents serving out of state. That was the case for my DH, also AD, for his home state of PA. He was never stationed in-state, so he never paid state income tax. So, keep TX!


Final item tonight, go to
https://usaaef.org/

The USAA Educational Foundation, an independent non-profit dedicated to financial management education, is an excellent resource to teach yourself basic and intermediate financial management. All publications, videos and articles are free and downloadable. There is no mention or pitch for USAA products and services; as noted, it’s an independent non-profit. This is where you can read about Roth vs. traditional IRA, and how to think about which is best for your situation. How mutual funds work. How 401k and TSP investments work.

If you do the right things in your early twenties or before, while your peers are saying things like “I’ll get serious about that stuff after I get married/finish flight training/get back from deployment/after I’ve gotten the stuff I want (Want!)” and don’t get serious until 10 years later, you will be lightyears ahead. You’ll be the old grad the Alumni Assn is chasing after for serious donations. [emoji16]
 
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OldRetSWO said:
Zeus said:
I don’t know where that $50K guess is coming from.
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That is what SonOfOldRetSWO and his classmates got (class of 2011) so its more experience than guess.
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This is wrong, the USAA starter loan was $36,000 for my year, and we took it out at 0.75%. Invested the whole amount and the investment returns have so far outpaced the interest on the loan.
 
MMA19kid said:
OldRetSWO said:
Zeus said:
I don’t know where that $50K guess is coming from.
Click to expand...
That is what SonOfOldRetSWO and his classmates got (class of 2011) so its more experience than guess.
Click to expand...

This is wrong, the USAA starter loan was $36,000 for my year, and we took it out at 0.75%. Invested the whole amount and the investment returns have so far outpaced the interest on the loan.
Click to expand...
Then the max loan went down at some point.
 

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So...I know the interest rate is crazy low but does it accrue from the time they take the loan or from the time they commission? And can they wait until they are ready to graduated to take it?
 
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