|
I just
recently retired after 30 years of service with the Marine
Corps. I truly enjoyed my time serving the Corps and I
flourished in the disciplined environment.
I also
took a disciplined approach to saving. Here are some of the
tactics I used-they are very low to moderate risk.
U.S.
Savings Bonds
I
started a bond allotment in September 1981 and kept it in effect
throughout my entire career and have also continued it into
retirement. I have yet to cash any of these bonds.
Since they stop drawing interest after 30 years I will begin
cashing a bond every month for the next 30 years. I have
about $40,000 in Savings Bonds but they are worth much more.
Buying bonds was a painless way to save. They are not the
highest rate of return around but they are secure.
Thrift
Savings Plan
I
only wish TSP was available earlier in my career. In fact,
I am such a strong believer in TSP that I think everyone should
have to participate. Mandatory minimal enrollment would be
automatic unless service members opt out.
When
TSP became available for members of the military in 2000, the
maximum contribution amount of base pay allowed was 5%. I
immediately signed myself up for 5% deduction as it became
available. At that time, I went with the safe approach and
invested in the "G Government Securities Investment
Fund" which is the safest among all funds available under
the TSP. Investing is a marathon, not a short race.
I
increased my contribution by 1% every December to coincide with
the January pay raise which never decreased my actual pay.
I utilized this strategy every year and by the time I retired in
2009 - 14% of my basic pay was going in TSP. I was very
disciplined with my savings approach.
While
deployed, I also would designate that 100% of hazard pay and
deployed benefits go to TSP. All of that compensation is
above regular pay - in essence a windfall, so why not save
it? It will also remain tax free among the TSP
contributions.
Although
I left the service with only 50K in my TSP, if I could have
participated over my 30 years of service, it would be worth a
fortune.
Dividend
Reinvestment Plan (DRIP)
A
Dividend Reinvestment Plan allows individuals to purchase shares
of common stock directly from the company through its plan.
Many large companies offer this service which allows an investor
to bypass the need to go through a stock broker when buying shares.
The plans allow you to buy shares, re-invest dividends in
additional shares, or sell shares out of your account.
There are hundreds of companies available that offer this
service.
This
too is an excellent way to build a rounded portfolio of investments.
It is fairly simple to open an account and typically can be done
with a modest initial investment of $250 to $500. Compare
the companies and their costs associated with the plans to
determine what is best suited for you.
I began
to invest in a stock about 14 years ago and was able to invest
$100.00 monthly. To date, that stock provides a dividend of
about $360 per quarter ($120 per month average). I just
re-invest the dividend in additional shares now but in the
future, this could be another income stream.
When
to Start?
Any
of these investments are easy to start. The key to these
investments is to stick with them and try to leave the funds
invested. That is where the discipline comes in. If
you start when you are younger it will become habit and the
fruits will be greater. It is never too late to start
either. The potential is there. It is upon you to
decide that you want to impact your
future.
|
