The Military Guide


3 Steps to Retire Early on a Military Salary


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BLUF: In college I paid off $32k in student loans in a year. On a military salary I paid off a $280k mortgage in seven years. I’ve bought several rental properties with cash. I did this through paying off debt, having a high savings rate, and investing well.

My name is Rich. I’m an Air Force Lt Col of 16 years. I’m married with 2 young kids.

Here is my message:

Don’t work until you’re 65. Not even 55. You can save enough money to retire in 20 years or less. I mean after 20 years of work, NEVER WORK AGAIN (unless you want to). This method doesn’t depend on a military retirement, that’s just a bonus!


I currently make enough money from my investments to live on. I could quit working today, but I’m less than four years from a generous military retirement.

I worked for Fidelity Investments as a stock broker during college. I’ve read almost every finance and real estate book out there.

Most of what I’ve read is useless. Money is strikingly simple.

Image of piggy bank with hundred-dollar bills falling into it |
Less than 20 years!
  1. Get out of debt
  2. Have a high savings rate
  3. Invest

1. Get out and stay out of debt

If you are in debt, get out. Debt keeps us poor forever.

This has to be done before you worry about savings, investments, or real estate.

My wife knew this. When I was in college and we were still dating, she asked me how much I owed in student loans. I really didn’t want to answer the question.

Why not?


Even though I had an ROTC scholarship, worked almost full-time, and had free room and board because I was a resident advisor in the dorms, I still borrowed money through financial aid whenever I could. It wasn’t for tuition, books, or rent, it was for traveling with friends and eating out all the time.

Not smart.

I reluctantly totaled up all my student loans from 4 years at school. $32,000. Ouch.

My wife told me time to get out and stay out of debt!

We both took extra jobs, and paid off my debt as fast as we could. In about a year it was gone. We started off our marriage debt free and vowed to stay that way.

I don’t know if I really vowed. It was more she demanded and I accepted.

My wife is a smart woman. I’m glad I listened to her.

2. Have a high savings rate

So we have no debt. Now what?

Save as much of your paycheck as you can.


That doesn’t sound like fun!

This may not sound easy or fun, but it’s the key to retiring early.

Most investment advisors will suggest that you save 10 or 15 percent of your paycheck. Saving at that rate, you’ll still be working ‘til social security age.

For an early and comfortable retirement, have a goal of saving 50% of your pay.

I can hear you all screaming at me now.

That’s impossible, I don’t make enough as it is!

I hear ya, but it is NOT impossible. To do this, you need to change how you look at and spend money.

In my BLUF, you saw that I did some impressive stuff with paying off debt. I wish I could tell you those results can be had while owning two new cars, two current model iPhones, cable with the NFL package (hell yeah!), eating out all the time, taking vacations in Hawaii, living in big houses, and having beautiful furniture from all over the world.

Quite the opposite.

The only way those results are possible are by NOT doing those things. You need to maximize your savings by lowering what you spend in a big way.


It’s a sacrifice worth making until you are out of debt and have a large nest egg of savings. It may take ten of fifteen years, but ultimately, it will allow you to live the rest of your life comfortably.

Here are examples of things I did to make awesome boosts in my savings rate:


I didn’t spend all my BAH. Rent a house that costs a lot less than your allowance. That’s money in your pocket each month. In Monterey, CA while at DLI, I banked $1000 a month this way.


I owned dependable, practical, used cars that were paid off. My criteria: At least five years old, one prior owner, low mileage.

Buying a new car is insane. Leasing new cars is worse. Don’t even think about it. Even with military discounts, you are getting KILLED by depreciation.

If you really want to supercharge your savings rate, try having one car, or maybe even no car. Living near work can make this possible. Bikes are great exercise and cheap as hell.


We vacationed once a year. When we did vacation, we didn’t stay in hotels and rarely ate out. We used AirBnB and cooked most meals at home.


We didn’t fly to our vacation destinations. Instead, we took advantage of existing geography and went somewhere driving distance. The rest of the year, we would take several day trips on the weekends.

Eating Out

This is a social norm. Get together with friends and relatives and go out to eat.

I almost never eat out. I cook at home. I have people over for dinner instead of taking them out to eat. I just had relatives stay with us for a week. We ate most meals at home. They liked it!

When I do eat out, I skip the appetizers, alcohol, and desserts.

Gift Giving

We spend a fortune giving each other expensive gifts during several holidays throughout the year.


Because that’s what everybody else does. Well, everybody else is probably also in debt.

I have a deal with my wife. We don’t get each other anything!! Christmas, New Years, Birthdays, Valentines, Anniversary, I’m off the hook!


Not everyone will get away with this, but it saves a small fortune. Our kids know they get one modest present on their birthday and one at Christmas.

Bottom line, drastically reduce the amount of money spent on gift giving.

Other Crap

I don’t buy crap I don’t need. You don’t need the newest iPhone every year. Your wife doesn’t need new clothes every time she goes to the mall. You children don’t need new bedroom furniture sets every time they move. You don’t need a Harley, boat, or timeshare. If you have these things, sell them. Be practical.

Buy what you need and save the rest.

I realize this seems like a huge sacrifice. I felt like it was while I was doing it.

Then I woke up one day, not too long ago, and realized I was pretty well off financially, even though I still had several years to retirement. That’s not a bad feeling!

3. Investing well

Now that you have no debt and a high savings rate, it’s time to invest that money.

I do what Warren Buffett suggests and what many early retirees have done.


Invest all your money in the S&P 500 Index fund.

Make sure it has low fees.

Nothing else.

Financial advisors will suggest that you can beat the market by listening to them. They won’t beat the S&P 500, but they’ll charge you while trying!

This is what order you should invest your savings in once debt is gone:

First, fully fund your TSP to $18,000 max a year. The TSP has a fund that mimics the S&P 500 Index. Buy that one.

TSP (and IRA) accounts are basically a legal way to “cheat” on taxes. The tax benefit allows this money to grow much faster. This is why they are so important.

Next you fully fund an IRA for you and your spouse. Each of you can contribute $5,500 a year. Same thing. Max it out and put it in the S&P 500 index. Easy.

When these retirement accounts are fully funded, then you start funding a normal brokerage account that can hold mutual funds. All it needs is S&P!

The S&P 500 historically has grown at an average rate of about 8% a year. Some years it has gone up much more than this, and some years down much more.


The important thing to remember is you NEVER panic when the market drops and NEVER sell. It will drop. It’s doesn’t matter. It always comes back. Your money will be there when you retire. With interest.

Bonus: Real Estate

What I’ve outlined so far is the best way I’ve seen to invest and retire early, and it requires absolutely no skill and no work. It’s autopilot investing.

Image of red roof over a rental property made out of stacks of money to illustrate the idea of investing in real estate. |
Only do it if you’re fascinated by it.

I used this method to save up a fat nest egg early in my career. I then caught the real estate bug and started buying rentals.

I’ll admit, it’s more work than what I outlined above, but it allowed me to boost my passive income even faster and it acts as a hedge against having all my investment in the market.

My rental income has almost caught up with my military pay.

In Conclusion

I want to help military members navigate these tricky financial waters. Comment below or send me an email. I’m happy to answer any questions.

If you are interested in learning more about how I’ve done real estate and investing, read my first blog post.

My Wife Knows Money

Rich on Money