Just joined the Navy.... What to buy with my $20,000 sign on bonus?

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INVEST, and DIVERSIFY when you do so. Roth IRA, mutual funds, stable stocks, gold - heck, even savings bonds would be preferable to blowing it.

If it were me, without seeking any professional/experienced financial advice, I'd probably buy a couple ounces of gold, and put the rest in Roth IRA and mutual funds (diversify). But, of course, I would indeed try and find out what would be best (ie safest while having a good return).

If you let that money just sit there in the market for the 6 years that you're in service, I'd personally be surprised if it did not double by the time you come out, market collapse not withstanding. :p My grandparents established a $500 mutual fund for me when I was 14 or so (and I put about $200 more into it before my 18th bday); when I needed the money in 2001, it was up around $1800 - $300 or so less than it was at its peak two years prior, but still a heck of a lot more than that $500 would've been just collecting bank interest in a savings account.
 
Now, if youre really set on getting toys, Class III stuff is right around that $16k price. :p But, some of us don't really have the imagination - or, at least, the wallets - to be dreaming of what we'd do with $16k.

If I had $16k just sitting around, I'd buy land out in the middle of nowhere to eventually build a house and family farm on. That's an easy answer for me.
 
I'm an old fart and if I've heard one person say "I could have" this or that I've hear a million..

I think most of us with any age on us have passed on opportunities in our past for one reason or another.. Generally lack of money. Then 10-20, whatever, years later we hear ourselves saying "man, I could have bought that (insert particular subject here) for X amount of dollars and now it's bringing XXXXXX amount of dollars..

Since you are asking this question on a firearms forum you apparently are "into" firearms to some degree so:

I would take $1000.00 more or less, and buy myself that quality pistol/revolver you lust after.

I would take the remaining balance and either put it in bonds, IRA's something of that nature, OR go someplace you have always liked, and buy some GOOD property.. Later in life even if you don't want to live on the property you will be able to see it at , trust me on this, a very good profit...

IMO there is no greater potential for gaining the greatest return on the bonus you are getting than spending it on education, putting it someplace, safe, to earn dividends for you, or investing in property which is always a great investment unless you purchase swampland, and even then it's a good one. ;)


Best Wishes,

J. Pomeroy
 
All these folks saying to invest, that's fine, it's a "smart" move if you trust the bastards.

But whos to say when your going to die maybe today maybe tommorrow do what you want not what others tell you.

I'm "Investing" on an MP5 (Push-pin), almost there too, most think I'm crazy but in the end I'm the one smiling.:neener:

My .02:cool:
 
Yes, I for one DID read your post.

Invest it. I think, as I said before, index funds are a great long term plan (10 - 20 years).
The Fat pension you plan are counting on can easily go POOF and be gone. It has happened before, and will happen again. I do not see how you can have too much saved for retirement. Maybe retirement will come at 60, maybe 45. If you find some land you love, get it. You can not go wrong having a place you love to be on.

If you make 6% on the money ($15,000), stick 250 per month into the account and compound it for 25 years you will have darn close to $1/4 million.

Pass on the immediate gratification and plan a great life.
 
The best investment no one can ever take away from you is an education. Once acquired, guns and diamonds come rather easily.
 
20K... wow, that is serious coin. My first enlistment for 6 year AD Navy got me 3k.... which I promptly spent on tattoos, booze and women, then just wasted the rest.

Got no bonus going to the Seabees, just went from MM1 to UT3 because I was out for more than one year (1.5 to be exact)

Got no bonus from WIARNG - 13F...

Good luck, and by the way, are you drilling in Madison or Milwaukee?
 
Guys, before you jump all over me. I'm prior service AD Marine Corps 1371 from 98-02, then two years WIARNG as a 21B. I work building maintenance for the city of Milwaukee, so I already have a fat, fat pension in line. And yes, when I got back from Iraq I started a Fidelity freedom 2030..... So I have my bases pretty well covered. As to my rate, BU.... Seabees all the way! No basic, no A school. Just MEPS for the physical and raise my right hand. BTW, PO3 not a seaman here
Click to expand...

Congrats!

Sweet deal!

I was a PR (Aircrew Survival Equipmentman aka Parachute Rigger) for 23 years.

Hell, I had to slip the Personnelman 50 bucks and a bottle every 4 years to process my re-enlistment paperwork. Re-up bonus? Hah!

My son joined in 2002 as a Cryto Tech and got a 10K sign on bonus.
 
put 4000 in a roth IRA
put the rest in a brokrage account at fidelity. and over the next 2 years put it in a roth IRA. Clark Howard is that you?
 
Maybe you know what to do with your $20k, but the Roth IRA is an excellent investment vehicle for leaving money to heirs, so they can buy their own guns. They can generally stretch that investment out, taking minimal distributions over most of their life. So you might consider doing that with some, even if you feel like you're covered for yourself by pensions. There's never a minimal distribution for you with the Roth IRA; you never have to cash out, and you can leave that money tax-free to someone else.

I've thought a lot about how I would start if I was starting out now. I'd use exchange trade funds (ETFs), because their fees are so low. They didn't exist yet when I was beginning. This is the plan I suggest to young people wanting to invest (and maybe if it isn't for you, there are others here who will find some value in my post).

Open a Roth IRA account with firstrade.com. They are a discount broker and they have three important features: low-cost trades, no IRA fee, and free dividend reinvestment. Oh, and you'll get some free trades the first time when you sign up, so your entire $4000 will be available to invest.

Transfer $4000 to your account. We're going to create a "lazy" portfolio 45% US stocks, 15% non-US stocks, and 40% bonds. Raise the amount for stocks if you like more risk.

$4000 x 0.45 = $1800
$4000 x 0.15 = $600
$4000 x 0.40 = $1600

We will invest in three low-fee ETFs: VTI (Vanguard Total Stock market), EFA (a non-US stock index), AGG (aggregate US bond market)

The prices of those today were:
VTI:$153.56
EFA:$81.56
AGG:$98.63

So, dividing it out and rounding to the nearest, we want
12 shares of VTI ($1842.72)
7 shares of EFA ($570.92)
16 shares of AGG ($1578.08)

At today's prices that adds up to $3991.72 which leaves a bit of room to spare for price fluctuation. If you had been over or way under, the reasonable thing to do would be to adjust each of the purchase amounts up or down by one share. For example, you could buy one less share of AGG and one more share of EFA if the prices were up a bit and the total had been more than $4000. You still have a reasonable allocation.

Book those three orders with the broker, and select dividend reinvestment on everything (because dividend reinvestment is kind of like getting free trades). You've only got a token amount uninvested (about $9) and earning the pathetic "sweep rate" of interest.

Next year, look at where you are and add $4500 to it (since that is the IRA limit next year I believe). Multiply by each of the ratios and figure out how many shares of each ETF you need the same way we did this year; again close is good enough. Schedule 3 trades to buy the appropriate number of each and don't worry about the account for another year.

Rinse and repeat.


What if you can't afford $4000? Maybe you just want to do $1000? Then the first year buy one thing, maybe VTI. Next year buy AGG (and you have about a 50/50 stock bond mix). Then buy EFA (66/33 mix). Then AGG. By buying one thing each year, you minimize trading costs. Bounce around, always sort of aiming at your allocation strategy. Eventually you'll be able to invest larger amounts and you can follow the strategy I outlined initially without costs eating into you.

Disclaimer: I'm not an investment advisor. It's just what I would do. Well that, and maybe pick up a nice .45 handgun and ammunition.
 
Listen to that little voice in your head that says: "Go to Los Vegas and put it all on 17 black!"
 
Why did you never tell me this part of the story? I can understand a lot to read this, if you'd have just said it. I can forgive, it's just sad you wouldn't wait to see that :(
 
as a recently Disability discharge from the Navy after 11 years, put it away into savings for rainy days, because the hurricanes will come while collecting military pay
 
It would be kind of interesting to know how this all turned out. This thread started in May 2007. The OP received a $20,000 signing bonus to join the Navy. I guess he would have had to pay income tax on that, so he probably netted about $15,000.

If he took the advice of all the financial geniuses here and bought mutual funds, his investment would probably now be worth about $7,500.

If he had put all $15,000 in Bushmasters, his investment would now be worth close to $30,000...
 
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