The title says it all. Many people would disagree with this statement, but I know it is true. Here are a few ways I know of to get rich in the military:
- Stay in for the pension – Many civilians work 40+ years before they can retire. You only have to stay in for 20 years to retire with an inflation adjusted lifetime pension. It’s even tax free in some states. You might not realize it, but the value of the pension alone can make you rich. According to the Department of Defense, the value of a 20 year pension for an O5 at 20 years, the value is $1.46 million. Combine this pension with regular savings in the Thrift Savings Plan, and you’re automatically a multimillionaire.
- Live frugally and become a super saver – There are a few advantages you’ve got that will allow you to live frugally and sock away more of your income. They include government housing or a tax free housing allowance, government subsidized meals (Basic Allowance for Subsistence), free medical and dental care, on base services (exchanges, commissaries, gyms, auto shops, child care, etc.), uniforms to wear instead of expensive clothes, military discounts, USAA insurance, and no income lapse when you change jobs.
- Purchase houses or condos at each of your duty stations and turn them into rental properties – The details of doing this are complicated, and not everyone wants to be a landlord/real estate investor nor will it make economic sense in all duty stations. You have to purchase your properties as if they are an investment, but if you are motivated and the economics make sense you can turn the downside of frequent moves into an upside. A potentially very lucrative upside.
- Use special programs for veteran entrepreneurs – There are many programs available that help veterans with an entrepreneurial spirit. Own your own business or side hustle and become wealthy.
A few upcoming blog posts will discuss each of these in detail.