I have to share this information. It will radically change how you quickly and very simply get the most out of your military career. What we do for our country is great and it deserves every thank you given. You should be proud of the work you do everyday and know that you are apart go the one precent that is making a difference everyday. What you also have to realize is that making a difference and thank you won’t secure your financial future. You have to take steps to do that all your own. But there is a very simple way to do it.
So I realized this some years ago and I assumed everyone else did also. It’s a powerful yet simple way to build wealth. I was teaching a class a few days ago and I mentioned that I save a over 3/4th of my pay. Not only do I save a boat load, but I have plenty of money to enjoy myself. I was asked how I have done this and the simple answer is…I look at my money in terms of percentages. That simple. What do I mean by that? I’ll break it down.
When you are saving for the future you don’t just want money, but you want wealth. You need to look at every increase in pay as a percent. For instance most people military members know there will be pay increase at the start of each new year. This ranges from 1%-5% but average is about 3%. However, every other pay increase we get (Rank increase and Longevity) we look at it in dollars. I asked one of the E3’s in the class if she knew how much she would make once she became an E4. She responded “I don’t know maybe $200”? How about 15% of a bump in pay? when you think about it that way it makes the money feel larger. $200 extra a month is a nice pay bump, but getting a 15% raise that’s unheard of. you can direct that percent a lot easier than you can as a dollar amount. Now you look at a 15% pay increase and say “Hey i can put 7% of that into my retirement and use the rest for fun”. Over time with this simple action you made yourself thousands or hundreds of thousands of dollars.
This principal should be repeated over and over again for each and every increase you get. I mentioned that annual pay increase at the beginning go the new year. This is on average 3% if you set aside half of this pay you would be investing 15% of your pay in just 10 years. This isn’t including any pay increase you get for longevity or putting on rank. if you ad those you could easily be at 25% within the first 5 years of your career. That will make you multimillionaire. This is why I got to over 46% being put away in my TSP alone. It won’t alter your lifestyle, because you will do it gradually. Slow and steady wins the race. I have already talked about how starting younger in life gives you the opportunity to grow your money much more than someone just a few years older than you. You should start as soon as possible in order to get the most out of your time investing. I know this simple tool will work for you, but you have to be dedicated to doing it. When that pay bump comes in look at it as a percent and determine how much you will go to your future. This is the simplest way to be wealthy!