Financial Things I’m Thankful For

It’s the day before Thanksgiving in the US, so I thought it’d be a good idea to show some thanks. Here are some of the financial things I’m thankful for.

Retirement Plans

Every dollar I put into the Traditional side of the Thrift Savings Plan is currently saving me 24 cents in taxes.

Every dollar I put into my Roth IRA and Roth TSP turns into more dollars that will be tax free when I take withdrawals in retirement.

That is awesome. But there’s more!

Because of the way those accounts are set up, I can’t just take the money out whenever I want to spend a little extra on Chipotle burritos. Retirement accounts “lock” your money away (sort of….keep reading) which means you are building your wealth while making it harder to sabotage yourself. It’s easy to get access to a savings account at your bank – it’s much more difficult to get access to your retirement money.

I also appreciate the simple choices available in the TSP. Many people think it’s a drawback of the TSP that the investment options are limited, but I disagree. Limited options help prevent analysis paralysis. The TSP has good options. Because it’s so simple, the fees are very low. What is there not to like about all that??

Long Term Capital Gains Rules

I love long term capital gains rules!

All I have to do to qualify for advantaged tax rules on my stock investments is hold them for more than a year. For a house, you just have to live in the house for at least 2 of the 5 years before selling. Qualified military members can even get a 10 year “stop the clock” extension on that 5 years!

I used the 2-in-5-years rule when I sold my primary residence in 2015. I’d realized huge appreciation on the house (40% gain in just over 2 years!) and this rule saved me probably $20k+ in taxes. I also have a rental home that has almost doubled in assessed value in 8 years. If I can, I’ll live in that house for 2 years before selling, too, to avoid that massive tax hit.

As far as the stocks, long term capital gains rules means I have a chance to pay 0% or 15% tax on them depending on my tax bracket when/if I ever sell those assets. Either way, that’s potentially a big savings over the 24% tax bracket I’m currently in. Nice.

For that matter, I’m thankful to Congress

I frequently see people speculate that the government doesn’t want people to retire early or stop working. And in general, this is true. The government definitely does not want large swathes of the population to stop working, because that would massively affect our national productivity. But they do incentivize people to FIRE, even if most people don’t realize it.

Don’t believe me? Check out the many ways people can pull money out of their retirement accounts early, without penalty.

Note – that’s not permission to pull money out of your retirement accounts early to buy a boat. If you are going to enact any of the special rules, it should be as part of a larger, well thought out financial plan. But I do think you should know they exist, since many people use “you can’t take the money out until you’re 65!” as an argument against using retirement accounts. Forget that 65 isn’t even the regular age…

Congress is also responsible for passing the rules about long term capital gains tax. Huzzah!

IMO, Congress is down with having a few FIREes!

(Note: I’m good with paying fair taxes, and I think I do. I just don’t want to pay more taxes than necessary)

The FIRE Movement and Community

There are a lot of people out there hating on the FIRE movement, and that’s dumb. FIRE is awesome. Not the movement part, because I tend to worry anytime something I like gets trendy. Inevitably people will take it too far and start to ruin it, and I’m already seeing signs of that.

But the FIRE part, I like. The FIRE movement and community (minus the trendiness) is awesome.

Why would anybody hate a lifestyle where people learn to only spend money on the things they value, take control over their financial lives, pay off debt, and work to become free of some of the normal barriers in life so they can pursue their passions without being a burden on others?

Doesn’t that seem like something everybody should want?

I’m so thankful I realized early on that I didn’t have to follow the normal American path. I’m thankful I was able to mold my life into something I loved instead of something I tolerated. I know people who are tolerating their life with the hopes something better magically comes along – I don’t want to do that. I want to pursue my dreams without restrictions, and FIRE is going to allow me to do that.

A Good Paycheck

There are many military officers who feel we aren’t paid enough.

Some of you readers may be among that group.

You are wrong.

Military officers are paid plenty. I’ve proven it.

I’m not saying we are paid a “worthy” amount. I don’t think such a thing exists. I don’t think there is a way you can put a price on what a military member does, especially since there is such a wide range of experiences. A personnelist is not maintenance is not a gunner is not a chaplain’s assistant. Those are very different jobs, some of which would be paid more in the civilian world, some which would be paid less, and some positions that have no civilian equivalent. None of which, in the civilian world, would have to go through all the additional things military members go through.

But military officers are paid enough. Plenty to live a comfortable, middle class or higher life. So don’t come at me with “it’s not enough.” It is.

Enlisted are paid enough to be middle class in most places, too, but I wouldn’t mind if they got a bigger raise than officers for once instead of always getting equal percentages. They may be paid “enough” but that doesn’t mean the pay disparity between Os and Es needs to be quite so large.

Anyway…mini rant over. My paycheck is well more than I need, and for that I am thankful.

The Internet

We all know the internet is awesome. I literally carry the collective knowledge of the human race in a 4 oz metal box in my pocket. That’s cool.

You know what else is cool? All the ways the internet makes your finances easier.

You can open up a financial account in minutes online. You can increase your retirement accounts contributions in minutes online. If you want, you can go to Twitter to talk to me about anything from personal finance to food to…more food. I talk about food a lot on Twitter.

The internet has made it possible for regular people to access pretty much all the same information as rich people. And you can use that information to get money. You can start an internet-based job to begin your entrepreneurial empire. Learn about dividend investing. Become a real estate mogul. Whatever. Before the internet, what you learned was basically limited to whatever your local library managed to stock. Now you can learn anything.

Choose wisely, because there’s plenty of bad info out there too.

Personal Finance Content Creators

I’m thankful that there are people who want to help other people get better with their money, frequently for no tangible benefit. Being a personal finance blogger is not a huge money maker for most of us. So why do we spend the time and effort? Because it feels really, really good to help other people.

Thank you.

My Health

This might not seem like a financial thing, but it is. My health is what allows me to continue serving in the military, which obviously is necessary for that paycheck I mentioned. It’s also what helps me avoid accumulating enormous debt. Medical debt in the US is insane. I don’t know what the right solution is, so I’m not getting into that here. But it’s insane!

Military members, if you don’t know how much medical debt affects people, please do some research. And be very, very thankful you have Tricare!

What Financial Things Are You Thankful For?