095 | A Military Path to FI | Military Dollar

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095 Military Dollar

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Looking for the best credit card to start earning travel rewards points? The Chase Sapphire Preferred is our pick. With a 50,000 point signup bonus (after spending $4,000 in the first 3 months), the $95 annual fee waived the first year, and ultra-flexible points (transfers to 13 airlines & hotels!), this is our top choice!

The author of the Military Dollar joins Brad and Jonathan to discuss the various ways that service members can optimize their finances and choose financial independence, including retirement plans, financial planning, health care benefits and the GI Bill.

  • Working in the military can set someone up to retire after 20 years with a pension and the ability to pursue whatever interests them.
  • Why do many young members of the military actually have financial problems?
  • Has Military Dollar ever seen any specific education for new servicemen?
  • How could a young person change his/her mindset to make more frugal choices and pursue FI?
  • Why did Military Dollar decide to pursue financial independence?
  • How did she get started?
  • What was MD’s savings rate early on?
  • How has MD set herself up to potentially retire by 41?
  • What was the moment that changed MD’s mindset and approach toward finances?
  • How do most military members approach debt?
  • What does the optimized path to FI look like in 2018.
  • What’s the difference between the old Legacy Retirement and new Blended Retirement System?
  • What advantages does the Blended Retirement System have for people who don’t stay in the military for 20 years or more?
  • What is the biggest difference between the enlisted and the officer’s route to FI?
  • How can people plan for and understand relatively predictable promotions and pay raises?
  • If someone starts young and doesn’t increase their lifestyle spending, getting to a 50% savings rate is very possible.
  • Within the military retirement system, what investment options are available?
  • Active duty health care = free for you and your family.
  • How does the GI Bill work, and how does that help with college expenses?
  • The GI Bill can be passed onto family members, but does include a service commitment.
  • If the GI Bill is used by a service member’s children, or after separating from the military, there is a housing allowance available.
  • GI Bill will cover all tuition and fees as an in-state student for public universities.
  • GI Bill will cover approximately $22k for private universities.
  • What is the Yellow Ribbon program, and how does it help cover the difference?
  • What is the minimum time of service to qualify for the GI Bill?
  • What’s next for the MD whenever she retires from the military?
  • How does MD balance her commitment to the military with her interest in serving her community?
  • How will MD know when it’s time to retire?

 

Links:

Military Dollar

Yellow Ribbon Program

Budgets are Sexy

How and Why I Sold Get Rich Slowly – JD Roth

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11 thoughts on “095 | A Military Path to FI | Military Dollar

  1. Awesome post! May I add a little bit about advantages of transferring post-9/11 GI Bill benefits to dependents?
    1) Early Decision – this is the “binding” version of early application (as opposed to “Early Action”) and many people don’t do this because they don’t know what the financial aid package will look like. But Early Decision is a way to get a qualified student a better shot at the limited number of acceptances at high caliber colleges. So parents have a dilemma – do we do Early Decision for junior’s dream college but perhaps not afford it once s/he is in, or do we take our chances with the normal application process knowing that 1,000’s of kids are competing for a few hundred spots in the Freshman class coming up?
    Having the financing backup of the post 9/11 GI bill gives you some freedom to go Early Decision if junior has one “dream school”.
    Caution – most private colleges will be more expensive than public so the GI Bill may not cover everything – check to see about “Yellow Ribbon” if available to cover the difference. But if so, gives your kid a leg up.
    2) Limited “Yellow Ribbon” – many private schools have only a few “Yellow Ribbon” scholarships – these help make up some or all of the difference between what the GI Bill pays (equal to most expensive state PUBLIC college) and what a private college charges. But if you are Early Decision, you may be able to lock down the Yellow Ribbon at a school that only has a limited number.

    Sent my kid to Duke University for 4 years for free. She was totally competitive, but Early Decision helped lock it down.

  2. Great episode. I wish you had been around in 1998 when I first enlisted. I agree, back then there was no formal education than a Commander for a 10minute briefing that you were voluntold to attend. As I speak to my children who several have been in the military now, it mostly remains the same. Great episode and insight into the blended TSP vs the traditional TSP. Great breakdown on the GI benefits and taking the multiple ways to get credits while still active.

  3. Thank you for this episode. My son enlisted and leaves in a couple of months. He’s in a unique position of having no debt of any kind, and I so want him to take advantage of the unique financial position he will be in if he makes good choices. This was extremely helpful!

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