Most civilians have a misconception about the military. I mean, yes, we all know it’s honorable to serve your country, and it will make your family proud to see you in that uniform saluting the old red white and blue! All that aside, most people THINK they have a better chance at financial freedom if they go to college. If you are in high school, a young adult under 31, or have any friends or relatives in the latter two categories, I will explain why you might want to rethink your outlook on military service as an avenue to financial freedom.
Recruiters, mainly, try to sell you the G.I. Bill (a program that pays four years of college). It’s the biggest pitch they sell. Although the G.I. Bill is excellent; it isn’t the best incentive to serve. Making money is the biggest reason you should serve in the military, outside of honor, of course. Yep, that’s right, I said it. You get paid! Who doesn’t like to get paid? Not only do you get paid, but they also train you for a specific job. So you are getting paid and trained at the same ***** time!
Let’s forget about all the intangibles, like making life long friends, traveling the world, and witnessing the greatest mechanical inventions known to humanity!!! The kind of machinery that brings freedom to the home of the brave. I’m talking bombs, bullets, mortars, cool assault rifles that are illegal for personal use I mean, world-class fighter jets, aircraft carriers, submarines, helicopters, tanks…but I digress. ( I got a little fired up) You get the chance to be apart of that for a short period of your life and have unforgettable memories. Let’s put all that aside. You get paid and experience in your career all at once. When you leave the service, you will take that experience with you. If you joined right after high school, served four years, you would have four years of experience ahead of your peers.
This could be done at any point. I good friend of mine was going through life trying to find her way. She didn’t immediately go to college after high school. She eventually got her degree. She went on to do other jobs and eventually settled on joining the military, and she was mid to late 20s. Still a good decision.
LETS TALK ABOUT MONEY
Right off the bat, you may be thinking, “Well, a junior enlisted or even a lower-ranking officer does not make a lot of money.” This is where understanding the financial principles of building wealth is critical. Would you rather earn A) 100k dollars and have 98k dollars of expenses or B) earn 24k dollars and no expenses? Now think carefully. Person A) can only save 2k a year. How much can person B) save with no expenses? A lot!!! Remember, step 1 increase savings, and step 2 let that money make money. Person B) can take his savings, invest it in many different ways to earn 2k a year; his money is making money. Person A has to earn 100k just to save 2k. Eventually, Person B will increase his spending, but he’s already ahead in the wealth-building process.
I know what you’re thinking, how could this be true? How come I don’t know this? It’s because most people who join the military are young and are not thinking about income vs. savings, and that’s ok. Most people don’t get serious about finances until their 30’s. I’ll use myself as an example. When I reached my first duty station in Korea, I was an E-2. Back then, the base pay was $1,239.30, but now it’s $1,942.50 per month. I also received special duty pay and overseas pay, which totaled about $550 in total. Although I was a Private, I made just over a grand ever two weeks, after taxes and I lived in the barracks and ate at the dining facility. If you had all your expenses paid for except your cell phone or other minor bills, how much do you think you could save in this situation? I’d bet you could put away at least 500-1000 dollars per month. That’s 6-12 racks, as the young folks would say. Who doesn’t want 12 racks?
Incentive Pay
It’s hard to keep track of all the incentives because there are so many different occupations that may have incentive pay. A linguist occupation is a good example of a job that receives incentive pay. There are also basic allowance for sustenance (BAS) and Basic Housing allowance (BAH). These are not job-specific. There are criteria you have to meet in order to receive them, but every service member, mostly, will receive at least one type of incentive pay at some point in their career.
Bonuses
The military sometimes offers bonuses to “sign-up” or “re-enlist.” This fluctuates greatly depending on what demands our country needs. When I joined, there was a 20k signing bonus for infantry soldiers. The demand for troops was high back then due to the Wars in Afghanistan and Iraq. Sign-up bonuses come and go quickly and often, so ask your recruiter. Re-Enlistment (re-up) bonuses are even more lucrative. I know many people personally from all branches that received re-up bonuses over 50k; Army re-up bonuses are substantially less generally. There goes your flip house money right there! Also, you receive an annual clothing allowance.
In the military, you are uniquely positioned to make serious strides to financial freedom in a short period of time if you have a vision. All this I’ve mentioned can be done on a contract in as little as three years. I am not a recruiter; I’m just stating what I see. If you are coming straight out of high school and your peers are going to college. They will come out of college at the same time you complete your first enlistment. They will have a degree, over 50k in debt, and no experience. If you save your money consistently during your military service, you can make that money make money and can reach financial freedom quickly!