Wednesday, May 14, 2014

Reposting Against My Will

No one is actually forcing me to write this; however, I slightly disagree with the statement. A brief synopsis is people are using their own bank cards at AAFES and the NEX sponsored stores. Not only do the exchanges lose money on point-of-sale machine fees, they are now complaining that the STAR Card has lost its customer base. A small part of the STAR card's profits are given back to the military. These profits are given back to the military in Moral and Welfare funds. I disagree with some of this because the STAR card is a credit card and the majority of bank cards are being used as a point-of-sale function and not being put on an interest bearing credit account. But here is the article in its entirety and you can choose for yourself. Remember...I never endorse spending money no matter what the end result may be.

Military StarSM Card Strengthens Troops’ Return on Investment

DALLAS –The use of bank-issued cards by troops at their exchanges costs the military community millions of dollars annually that could be directed to Morale, Welfare and Recreation (MWR) efforts.

Last year alone, bank issued card processing expenses at Army & Air Force Exchange Service (AAFES) facilities jumped approximately 12 percent, ultimately sapping more than $65 million from the Exchange and, in turn, critical MWR programs in 2006. Since 2001, AAFES has paid more than $310 million in fees to card issuing banks, resulting in lost revenues for the military community.

“Traditionally, two-thirds of AAFES’ earnings are paid to MWR, while the other third is returned to the military community in the form of improvements, such as technology investments or capital expenditures to enhance the shopping experience,” said AAFES’ Chief Financial Officer Harold Lavender. “With 100 percent of AAFES earnings going back to authorized customers in one way or another, something as seemingly insignificant as credit card processing fees can quickly add up to a quality of life issue.”

One way military families can help reduce costs and strengthen their Exchange benefit is to take advantage of the Exchanges’ exclusive Military StarSM Card. Unlike bank cards, profits generated from the Military StarSM Card are shared with military communities through contributions to the military service's MWR funds. These funds reduce the tax burden of all U.S. citizens, and are used to fund Youth Services, Armed Forces Recreation Centers, aquatic centers post functions and golf courses that are enjoyed by military families across the globe.

“Using the Military StarSM Card is one of the easiest ways for troops to directly impact their Exchange and MWR benefits,” said Lavender. “Reducing these unnecessary expenses can go a long way in maximizing the dividend AAFES annually returns to the military community.”

The Military StarSM Card is accepted at AAFES, Navy, Marine Corps and Coast Guard Exchange activities, as well as the Exchange Catalog and the Exchange Online store at www.aafes.com.

For more information on the Military StarSM Card, visit www.aafes.com and click on the Military StarSM Card icon.

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The Army & Air Force Exchange Service (AAFES) is a joint command of the U.S. Army and U.S. Air Force, and is directed by a Board of Directors who is responsible to the Secretaries of the Army and the Air Force through the Service Chiefs of Staff. AAFES has the dual mission of providing authorized patrons with articles of merchandise and services and of generating non-appropriated fund earnings as a supplemental source of funding for military Morale, Welfare and Recreation (MWR) programs. To find out more about AAFES' history and mission or to view recent press releases please visit our Web site at http://www.aafes.com/pa/default.asp.

No Fee Checkings Accounts


I hope everyone that reads my blog understands that my MAIN philosophy is to not pay any fees. Here is an explanation of what I mean. If you put in $1000 into a savings account earning nothing, than that $1000 will not be able to have the same purchase power in five, ten, or twenty years. You will be indirectly losing money to inflation. That is why saving your money is so important and I'm sure everyone that reads this blog understands this.

Paying fees for checkings or savings, or paying extensive fees for brokerage management, commissions, is also diminishing your purchasing power. If you go to an ATM machine and take out $20, you will be assessed a $1.50 from the ATM machine and $1.50 from your bank. That's $3 just to take out $20; which is a 15% fee. 15% fee and nobody is rioting over that. Imagine if there was a 15% tax on everything you buy.

People are paying maintenance fees, balance inquiry fees, and many others just to do their everyday money business. I switched to USAA checkings because of several reasons.
Try finding internet information about military banking on say...Wells Fargo. There is none. You have to call...that's right...you have to use the telephone.
USAA is only for military members so the whole site is on the internet.
Free checks....FOREVER.
No Annual Fee
No ATM fees and you get refunded up to $15 of other ATM machine fees.
So check your last couple bank statements and see if you have any fees. If you do, switch over to another bank or check out USAA checkings.

Adam Suggests the USAA Cornerstone Strategy Fund (USCRX)


Here is what Adam's comments were the USAA First Start Fund, "I owned this fund for a few years and it was PAINful to say the least. I switched to Cornerstone Strategy Fund, which in my opinion is the best moderate risk fund USAA has. I also owned Capital Growth which did very well for me. I would stay away from First Start though, unless you like losing money."

The Cornerstone Strategy Fund (USCRX) is rated 4-stars by Morningstar. If you look at the first chart given, it shows that the DOW Jones has beaten it over the past five years; however, the USCRX has beat the S&P 500 in the same time period. The expense ratio is 1.17% which is too high, in my opinion. The high expense ratio makes Morningstar look unfavorably on it. The top four holding are all DOW Jones components. The fund percentages are typical of the main-stream herd. 21% of the assets are in financials and 13% is in health care. This is where most mutual funds are turning their assets.

Don't look at this mutual fund to consistently beat the market. I'm a little disappointed at the expense ratio. I have a neutral opinion on this mutual fund. I don't think you will lose money, but I don't think that the high expense ratio will justify the meager gains.

Again, I'm not a certified financial planner or a mutual fund analyst. You should make your decision by reading around and doing your own research.

12 Most Useful Sites for Military Finances

So, I briefed some members of my unit on finances and I showed the a couple sites. I wanted to let everyone know that these sites exist and how to use them for financial planning. Enjoy.

List of websites from finance class (5/23/07)

www.salary.com – Can be used to find out what education you may need for hundreds of jobs and can find the salary you should expect for specific area codes. Start by either entering in the job title or search the “all titles” section and then enter a ZIP code of where you want to work.

https://mypay.dfas.mil – After you log into Mypay, click the federal withholding link. Then click the IRS tax withholding calculator link. Enter in all your information (remember to enter in that we get paid monthly.)

www.myfico.com – This is where you can find out much your credit score can affect purchasing a home or a car. Then click on the “about myfico scores” tab on the middle of the page to find out how to increase your credit score.

www.annualcreditreport.com – If you haven’t received a free credit report in the last 12 months, then you can access it from this website. Or you can find your respective State’s website that allows for one free credit report a year.

www.bankrate.com – This is the Mecca of searching for financial information. You can search the best credit card rates, CD/Savings rates, and anything else. The banks compete with each other to get top listed on this site. So you win by their competition.

www.edmunds.com – This site uses local data to tell you how much “haggle-room” you have when buying a new or used car. It’s ZIP code specific and is almost exact. You can even print this up when you go searching for cars.

www.nada.com – This website will tell you the total amount of a loan that a bank will give you for a car. This IS NOT the value of the car. It is simply how much a bank will finance for each certain car.

www.tsp.gov – This is the information side of the Thrift Savings Plan (TSP). You can actually start it by going to the Mypay site. In the briefing I talked about the L fund. So click the large “L” link, click on the L 2040 (or whatever fund matches your retirement date), and the click the “play” icon to start the graphic that shows you how the L fund will AUTOMATICALLY adjust your money throughout the five funds without you doing anything.

www.morningstar.com – This is the Bible of mutual funds and general stock information. They have an awesome education center that will teach you everything. They have stock and mutual fund screeners that you can search thousands of mutual funds and stocks that meet your criteria.

www.fool.com – In the mediavel days, the only person in the entire kingdom that was allowed to tell the King the truth was the Fool or the Jester. This website “tells-the-truth” to investors. It also has an excellent education center.

www.zillow.com – This site uses advanced calculations to figure (Zestimate) how much homes are worth. You can see the price movement of any house that has an address.

Other useful sites:

www.bloomberg.com

www.realtor.com

Your Fico Score


It's important to know your credit score when you:
Are making a large purchase like a car or house
When applying for a new job
Before moving to a new place; because you will need to get cell phones and other utilities that charge less for good credit scores.
You credit score's most important job is to give you an interest rate depending on your credibility. According to Myfico.com a 500-579 will give you a 9.683% interest rate on your house and a 760-850 will give you a 5.883% interest rate. That's a difference between $2,653 (500-579) monthly payment versus a $1,776 monthly payment (760-850). A difference of $900 a month can be more than a $100,000 over a 30-year time period.

Here is a quick list of the factors of your credit score:

35% is your payment history - How well you've paid on your bills.
30% is the amounts that you owe - Most importantly your capacity (credit limit/balance)
15% is the length of your credit history - How long have you had a source of credit opened.
10% is the amount of new credit sources have been opened - Points go down when applying for new credit.
10% is the types of credit used - Houses, signature loans, and cars are good sources of credit used.
Please go to www.annualcreditreport.com to get your free credit report. Or you can pay on the www.myfico.com site and get a real credit score.

The World's Second Richest Man is no longer Warren Buffet

Well the day that I've feared has finally come. The CEO of Telmex, the telephone operator of mexico has become the world's second richest man, besting Warren Buffett by 700 million dollars according to Forbes. He has gained four billion dollars in four months since Forbes unveiled it's annual list of billionaires. In less than two years, his net worth has gone up by 24 billion dollars. Today is a sad day for me. Give me some love on my site to help me out.


Tanyetta Asks about IRA's...


Tanyetta asked...Can you put money into an IRA and not buy stocks? I just want a place to hold my money, that has good interest, and that i can add to each month. How do you start one? Do I go through my bank, or a place like ING or something?

Tanyetta also asked...Where can I find the most up-to-date information on the TSP and what should I invest in first, the TSP or an IRA?

A Roth IRA is a place to put $4,000 per person ($8,000 for married couples) and have a tax-shelter. The $4,000 you put in is already taxed money. It will grow tax free (because you already paid it out of your income). When you retire at 59 1/2 it will not be taxed. You do not have to buy stocks; however, you are not taking full advantage of the tax benefits. You can start one through your local bank, IND Direct, USAA, or any brokerage.

I would max out my IRA first then contribute to your TSP. So you can put up to $4,000 into a Roth IRA and then another $15,000 into the TSP. Just remember the TSP is before-tax money that grows tax-free. You then pay taxes when you are withdrawing your money. This is called tax-deferred. It's disadvantage is, you will be at a higher tax-bracket when you are withdrawing the money.

For the latest info on TSP, go to www.tsp.gov.