“Golly, Nords, if I had an inflation-fighting pension and TRICARE then I’d retire early, too. How hard could it be?”
I hear that a lot, and not just from my family & shipmates.
In spite of all our mistakes, we managed to retire early– and you can too. If you follow the advice in “The Military Guide“ and use its resources, then you’ll avoid our errors and get to financial independence even more quickly!
Compared to the civilian challenge of early retirement, military financial independence is easy! We didn’t figure it out for a long time and we made plenty of errors along the way. There are many roads to your goal, and you’ll find the one that works for you.
I joined the submarine force right out of college and (according to a number of my XOs & COs) I did “OK”. I made more than my fair share of mistakes and collected several notable failures but I persevered for the irresistible challenge. I was having fun. After two submarine tours I made the cut for XO but I never got the call, so I spent the rest of my 20 years at training commands.
When my spouse and I started a family, the big surprise was that our baby completely realigned our priorities. For the first time in my life I realized that I didn’t want to work long hours any more, and I wanted to spend more time watching our kid grow up.
Financial independence came slowly and with many more mistakes. I grew up with limited financial skills, but my spouse showed me how to stop wasting money and to start building our savings. We tracked our spending for a few months, and then we began building a budget. We spent the money where we felt that it brought value to us, and tried to stop spending money on the things that we didn’t value. It’s easy to save money on sea duty, and when we became parents we spent a lot of our time at free activities like the beach, the playground, and the public library. We saved most of every pay raise and every promotion. Every month we wrote checks to our investment accounts (and to our kid’s college fund), and the compounding began to work its magic.
We weren’t brilliant investors– far from it. We paid 2% sales charges on our Fidelity actively-managed equity mutual funds. Our portfolio generally trailed the 1980s bull market. We didn’t discover IRAs until 1986 and the military couldn’t invest in the TSP until 2002. We didn’t have an asset-allocation plan and we chased performance with all sorts of gimmicky mutual funds through the 1987 crash, the 1990s Internet bubble, the 2000 tech wreck, and 9/11. We lost thousands of dollars in the 2000-2002 recession. Through it all, however, we kept saving and kept writing those checks to our investment accounts.
When you live on a submarine, you become accustomed to a fairly austere lifestyle. If you waste your resources then you have to live without until the next port. My spouse & I adopted basic frugal habits in our personal lives and started living green long before it became today’s fashion. We also learned Navy maintenance & repair skills that supported our home-improvement projects. (Our damage-control skills came in handy, too.) As we kept reducing waste and cutting expenses, we sent the extra money to our investments. Between our jobs and our family, we certainly didn’t have the time or the energy to find ways to spend it on luxuries or extra entertainment.
My financial independence epiphany came about five years from military retirement. I didn’t really like any of my options for a bridge career. The transition research was not going well, the skills assessments and interest surveys didn’t fill me with enthusiasm for a civilian career, and I wondered how much I’d have to work. After a few months of reading and plugging away at website calculators, I realized the answer was “probably not at all”. We read all the retirement information we could find and we tweaked our plan. When our portfolio was buffeted by 9/11 and the bear market, we kept running the numbers– and they kept working! We eventually settled on a low-cost diversified equity portfolio and began thinking about what we would do all day.
I retired from the military in June 2002 at the pit of the tech-wreck recession. Even after the recent Great Recession, our finances are better than ever. I’ve had plenty of job offers but none of them can improve our ER lifestyle. My time is far more valuable to me than my money and I won’t tolerate the “dissatisfiers” that come with working. I start every day with the surf forecast, I have many more things that I want to do than I have the time for, I take a nap almost every day, and I’m still exhausted by bedtime. I don’t think I’ll ever go back to a “real” job.
Do you want to take control of your own financial independence? Read the first chapter of the book for free, and then see if you can find a copy at your local library. (If you decide to buy your own copy, all royalties are donated to military charities.) If you like what you read then start tracking your own spending and align your budget with your values. Save as much as you can and figure out your retirement budget. The more you can save and the less you spend, the faster you’ll reach financial independence!
Questions? Problem? Suggestion? Send me a note!