Military Financial Independence

Travel While You Can

Posted on December 24, 2015 by Doug Nordman

We came home from our second trip of the year in late November. Financial independence gives us the flexibility and time to travel as much or as little as we want, and we spent nearly half of 2015 away from Oahu. In this post, I’ll answer the usual reader questions about where we went and what we did, but people are also asking very perceptive questions about the travel lifestyle.

Before I discuss our after-action report, I’ll share two personal preferences.

First: Yes, we live in Hawaii, but we still enjoy visiting other places! Our daughter is stationed on a Navy destroyer in Rota, Spain, so most of each trip was spent with her. My spouse was also stationed at a Navy oceanography center in Rota in the 1980s, and it was interesting to see what’s changed in 30 years.

Our latest trip had a more ambitious itinerary because we attended FinCon15 (in Charlotte, NC) and USAA’s DigitalMilEx (in San Antonio) in September before heading to Rota. We also cut the trip short by a couple of weeks because our daughter’s deployment started a bit early– and because we caught an incredible pair of military Space A flights that covered 8000 miles in about 30 hours.

Second: Despite the distance that we covered on our second trip, we really prefer slow travel. Instead of racing among destinations we stay somewhere for at least a few weeks while enjoying day trips. Instead of using hotels we’d rather rent apartments, and that’s much easier than we expected. Instead of joining the crowds for big spectacles we try to visit sites during off-peak seasons and times– and later spend a quiet hour in a sidewalk café enjoying the rest of the sights. We also visited friends & relatives who we haven’t seen in decades.

Image of Doug Nordman in the central plaza of Tarragona Spain drinking cafe con leche | The-Military-Guide

Cafe con leche and tapas in Tarragona

This was our typical routine in Andalusia:

5 AM Wake up, breakfast, coffee, work on eBook & blog post.
6 AM Catch up on e-mail & social media.
9 AM Plan the day with spouse. Head out for the first tour or activity, preferably on foot.
2 PM Lunch + café con leche. (Because everything else closes for siesta.)
4 PM Hang out back at our place.
5 PM Head out for the second tour/activity, or just the evening paseo & people-watching.
7 PM Tapas or dinner, talk about tomorrow’s itinerary, stroll back home.

Yeah, party hardcore. Like the title says, travel while you still can. But I can get wild & crazy on Oahu anytime I want, (try to) stay out all night, and recover on my time. Travel is a chance to explore new places and new opportunities without being hung over exhausted, so we take a more thoughtful approach.

Travel when you’re… older.

I have to render a respectful salute and a “Well played, sir!” to the 80-year-old military retiree who we met at the Norfolk passenger terminal. He uses a cane and his spouse kept a careful eye on him, but he moves well and he hauls his own roller bag. He’s flown Space A for longer than I’ve been alive(!), and their stories were fascinating. They weren’t going to Rota like us– they were going to “Europe, hopefully Germany, but Italy or Spain would be nice too.” Their itinerary was “Whenever, but we don’t have visas so after 90 days in Europe we’ll fly back to America, and we’ll probably head home before the holidays.”

Their travels were surprisingly inexpensive because they didn’t have to be anywhere. It took 11 days to get a Space A flight from Norfolk to Rota, but we all had plenty to do and see in the Tidewater region between roll calls. Instead of spending thousands of dollars (or frequent-flyer miles) for commercial airline tickets, they used their money for nice AirBnB apartments or military lodges. They rode public transportation or rented a car, and ate at cafes or small restaurants. They didn’t really budget but they had saved up for this trip and knew how much they could afford to rack up on their credit cards over the next three months.

Their real budget effort was on their energy. They knew that they could handle one or two events each day, and they knew that they needed to take it easy. They spent a lot of time reading about their destinations and the culture, and (once they knew where their plane would land) they planned their visits for the cool mornings. They didn’t scamper all over the country (let alone on staircases). They settled in a neighborhood and lived like locals.

While they were talking about their limits, I was imagining all the possibilities for my next 25 years.

Military Space A travel

We’ve done most of our 2015 travel on Space A military flights. It’s ranged from the sublime (a C-17 and a KC-135 from Rota to Hawaii in just 31 hours) to the “good enough” (a C-5 from Rota to Norfolk, delayed for several hours on each end with repairs and Customs inspections) to tedious (11 days and six roll calls in Norfolk to finally make a charter 767 to Rota). Even when a terminal is full of people we feel that Space A is less hassle than a commercial airport. We enjoy the military camaraderie… and the price is right, too! We’ll try to use it whenever we have the calendar flexibility.

I won’t post an entire travel guide here, but today’s tools are much better whether you’re an active-duty family (Category III) or a military retiree (Category VI).

The biggest Space A improvement is Facebook, where unclassified departures schedule are posted 72 hours in advance. (I’ve heard that the long-range schedule requires a CAC login on a secure network.) Search Facebook for your passenger terminal and “Like” it to follow its flight updates and learn about its facilities. Learn all of the system’s rules and tricks from SpaceA.net. Sign up with Facebook’s “Military Space Available Travel” group page to ask questions or share info.

Since you’re saving thousands of dollars on military flights, spend $6.99 for the Take-A-Hop MilSpaceA app. Use it to research your passenger terminals for everything from accommodations (on base and out in town) to transportation, dining, and shopping. Then use its e-mail module to enter your personal data and automatically send all of your requests to your chosen passenger terminals. As you gain more experience, you’ll learn what questions to ask at the customer service counter.

Active-duty families may have a better chance of traveling during school vacations, while retirees can be totally flexible. Either way, you can sign up for multiple destinations by e-mail, and while you’re in one passenger terminal you’re slowly gaining priority on the list in another location. Retirees can stay on a destination list for up to 60 days, so when we landed in Rota we immediately signed up in the terminal for return flights to “anywhere in the U.S.” and planned to start showing up for roll calls 50 days later. Then a few days later we signed up by e-mail for flights to Hawaii from the Mainland bases where we expected to land.

Get a smartphone

(If you’re a Millennial or Gen Xer then the next few paragraphs will seem funny– and stupid. You can skip down now, or feel free to mock this post on social media.)

If you’re a fellow Baby Boomer then here’s a “Well, duh” tip for your next trip: get a smartphone.
Yeah, I know. Nobody likes to see zombie geezers shuffling through the streets, heads down with eyes glued to those screens. You’ll miss all the sights and get run over by a bus!

Image of the city of Toledo Spain at dusk | The-Military-Guide.com

Toledo at dusk (from outside the walls) You definitely need a smartphone for these streets.

Um, no. Get over yourself and just use the phone for navigation & planning. Our unlocked $175 used iPhone 5c and a $50/month T-Mobile “Simple Choice” international calling plan paid for itself many times over while navigating the labyrinthine streets of every Andalusian town and city. “Real” paper maps are getting hard to find (even at a reasonable price) and their fonts are so small that you’ll need a magnifying glass. (And at night, you’ll want a bright light.)

On our second trip, we fearlessly (and flawlessly) navigated routes which had confused the heck out of us on the first trip. (“Oh, now I understand– highway N-IV really is parallel to A-4!”) One of our rental apartments was at the end of a barrio alley and a change of plans required us to phone the substitute “greeter” for the keys– neither of which would have been achievable without a map app and e-mail bandwidth… and being able to phone the greeters to tell them we were at the door.

My presbyopian eyes need the iPhone’s “large font” setting, and occasionally a magnifying lens. The flashlight app was used a couple of times, too. We still ended up doing the zombie shuffle for the first couple strolls in Sevilla, but old dogs really do learn new tricks.

Home Maintenance

Much better than the last trip! (See the “Related links” at the end of this post.) This time we emptied our fridge, propped open its doors, and had no problems. (Unfortunately, when we returned home and plugged it in, however, it immediately fried its motherboard for a $200 repair.) We didn’t have any water leaks because we shut off water to the entire house and shut off the fridge. Our photovoltaic array made hundreds of kilowatt-hours of extra electricity (at 30 cents/KWHr) while we were away. We’ll have $18/month electric bills for most of 2016.

Image of pile of mail held for three months of a trip to Spain | The-Military-Guide.com

Three months of mail.

Our mail pile was pretty small for three months.

Green waste was a challenge. Our yard got a lot of rain while we were gone, and our bougainvillea hedges grew at least three feet. Our palm trees dropped a lot of branches, too. Oahu recycles all of its green waste into mulch, and they pick up twice per month. We have four 65-gallon cans for our green-waste exercise but a month later we’re still catching up.

Did You Miss Home?

One reader asked very interesting questions:

Do you get homesick? I know you were used to lots of travel due to being in the Navy, but that was quite awhile ago, did you get used to being comfortable at home?

That’s a complicated question, and maybe the answer is that it’s part of our personalities. People are always asking me how I could live on submarines or on a 30×40-mile island, yet from my personal perspective, I wouldn’t enjoy being an aviator or living in a city.

I travel for the experiences. I love sharing my daughter’s sea stories and watching her make her way in the world. (Every time we see her she’s more mature and she’s tackling bigger projects.) I enjoy hanging out with my spouse and having the deeper, more reflective conversations that we don’t usually achieve at home (amid all of its chores and projects). During our trip, we met up with one of my cousins who I haven’t seen in over 30 years. And, of course, every once in a while I’m astounded to realize that I flew 8000 miles around the world for amazing sights in 3000-year-old towns, to (try to) speak a different language, and to eat incredible food.

I know that I’m not a perpetual traveler like the Kaderlis or the Terhorsts, and I like having a home base. I love watching sunrises from our family room, and when we’re home I hardly ever miss one. I enjoy working on my desktop computer’s speedy solid-state drive and my 23″ monitor instead of a tiny iPad screen. During our trip, we slept in 14 different bedrooms, and it felt great to come home to our mattress. I appreciate the irony of that emotion coming from a submariner who used to sleep on a 72″x28″x4″ block of foam-rubber-covered Naugahyde.

I don’t feel homesick when we travel, but I get tired of being cold and dressing warmly all day (and all night). I really enjoy coming home to our Hawaii lifestyle.

Of course, I don’t miss yard work or broken plumbing or noisy neighbors or Oahu traffic. And I’m considering upgrading my three-year-old iPad2 to an iPad Air 2 or even an iPad Pro.

We’re already planning our next trips. We’ll return to Spain in July for a two-week Mediterranean cruise (and a week in an Italian villa) with a couple of shipmates. (We’ll have to deal with Europe’s summer humidity and crowds but it’ll be good to hang out with old friends.) There’s FinCon16 in San Diego next September and maybe other conferences. After that, we don’t have any plans, but someday we’d like to return to Bangkok. We also want to go diving in Palau or Truk or even spend a few months in Australia. On balance, a little homesickness seems to be a fair trade.

But we’re not extreme voyaging to Antarctica or climbing Kilimanjaro or even taking an Alaskan cruise. I’ll watch those on the Travel Channel.

Were there any holiday traditions that had to be altered due to being on the wrong continent?

No worries: military families know that you celebrate your holidays when everyone’s home together, not just by the calendar.

We celebrated our daughter’s birthday together (on the actual anniversary date of her birth!) for the first time in six years, and we celebrated Thanksgiving together the week before we all left Rota. Her ship deployed early due to “world events”, and they celebrated Thanksgiving at sea. Since our daughter was underway, my spouse and I leaped for a flight that was going from Rota all the way to Travis AFB. We were mildly concerned about being “stuck” in northern California during Thanksgiving week with too many Space A crowds going home for the holidays (and too few flights), but our fears were groundless. We didn’t even need to fly commercial. Six hours after we landed we scored a second flight to Hawaii. We got home so quickly that we celebrated Thanksgiving on Oahu with friends… instead of in a Space A passenger terminal… or Napa Valley.

Are you back up to 100% surfing time?

I’m not gonna lie: Andalusia surfing is not up to my Hawaii expectations. I really miss Hawaii surfing when we’re on travel, although I got in two small fixes. The breaks at Cadiz’s Playa de Santa Maria and the town of El Palmar were cold and windy, with long drives and difficult parking. I wore a full 3mm wetsuit plus booties and gloves. I’m going to enjoy Hawaii surf for as long as I can remember how to paddle back in, even if I could live anywhere in the world with one of Kelly Slater’s wave machines in my yard.

As soon as we returned home, I renewed my passport. (It’s my third one in 13 years of retirement.) We’ll be ready for the next trip!

Here’s a question for you readers: what are your travel plans for financial independence? How much do you set aside in your budget?

Related articles:

Fast Personal Growth Through Slow Travel
Surprising Secrets Of Slow Travel
Your Mortality

Posted in Travel | 13 Comments

Fisher House Foundation – Helping Our Military Families

Posted on December 10, 2015 by Doug Nordman

[Nords note: I donate all of my writing revenue to military-friendly charities, including Fisher House Foundation. Please consider them for your giving plans.]

So, this is my first ever blog post of any kind so take it easy on the new kid. I currently work for a web-based company that was looking for a great charity to partner with and give back. Since I drew the short straw it became my job to find one and I went right to work.

It wasn’t hard for me to determine what area of charitable giving I was going to lean towards. My dad, uncle, brother and sister-in-law all serve/served in the military so this was a no brainer. The question was, which one to choose? There are so many great charities out there that serve our nation’s military that narrowing it down can be mind-numbing. However, after several days of research, emails and phone calls, I found the perfect fit!

Click to check the finances.

At this point, if you haven’t already figured it out based on the title of my post, I’ll tell you: I went with Fisher House Foundation.

There are many reasons that Fisher House won out: they have a great organization of people that are a pleasure to work with, they have received a 4 star rating from Charity Navigator 12 years in a row – I mean, if you’re going to ask people to give money, they want to know it’s being handled wisely – but, most importantly, they have some amazing programs! What programs do you ask? Well, scroll down my friend for even more information.

Comfort Homes

Fisher House Foundation is a charitable organization that provides “a home away from home” for military and veterans’ families while their loved one receives medical care at major military and VA medical centers. The homes provide free temporary lodging so military and Veterans families can be close to their loved ones during a medical crisis. Fisher Houses are normally located within walking distance of the treatment facility it serves, and is provided at no cost to the families. Since the average length of stay can range from 10 days to 60 days, depending on the seriousness of the illness or wounds, the savings are tremendous.

The Best Medicine

Fisher House Foundation believes that the best medicine for a wounded or ill service member is to be close with their loved ones during their time of need. It is this commitment to service that has made Fisher House so successful.

Not only do they offer comfort homes for families but they also have a program called Hero Miles, which allows donated frequent flyer miles to be used to bring family members together. To date, Fisher House Foundation has provided more than 58,000 tickets to wounded, injured and ill service members and their families.

Hotels For Heroes

Although there are currently 66 Fisher Houses located on 24 military installations and 24 VA Medical Centers throughout the US and in Europe, sometimes a service member is being treated where there is no Fisher House. It is for this reason that Fisher House Foundation has another program called Hotels for Heroes. Similar to the comfort homes that Fisher House provides, this program provides hotel rooms to the families of the service members. These rooms are made possible through the donation of rewards points by the hotels rewards members.

More Great Reasons to Get Involved

Not only does Fisher House Foundation provide travel and housing to service members in their time of need, they also support some great scholarship programs such as: Heroes’ Legacy Scholarships, Scholarships for Military Children and Scholarships for Military Spouses.

“Fisher House Foundation has been serving military, Veterans and their families for 25 years,” said Dave Coker, president of Fisher House Foundation. “But we don’t do it alone. We depend on partners like The Plan Collection to help us build awareness and homes.”

Since its inception in 1990, by Zachary and Elizabeth Fisher, the Fisher House program has served more than 250,000 families with over 6 million days of lodging and a savings of more than $282 million for military families. If you’d like to help make a difference please visit their website at www.FisherHouse.org.

This article was submitted by Laurel Vernazza from ThePlanCollection.com

Posted in Military Charities | Leave a comment

Book Review: “Work Rules!” By Googler Laszlo Bock

Posted on December 3, 2015 by Doug Nordman

When you’re starting your bridge career after the military, “Work Rules!” can help you ask a few questions during your interviews.

You’ll be encouraged if the interviewer notes that their company is considering the book’s ideas. You’ll be disappointed if the interviewer has never heard of the book, and you’ll use that as an opportunity to show your value to your new company.

If the interviewer thinks that the book’s ideas will never work at their company, then maybe you should never think about working there either. Your interview could be over– and the book might have saved you months of cubicle soul-crushing disillusionment.

You have to read this book if:

You’re a Human Resources professional, or
You wonder what it’s like at Google, or
You enjoy stories about Google’s startup phase.

Image of the book cover of "Work Rules" with a link to buy the book | The-Military-Guide.com

Try your library, or click here.

Google’s employee problems began when the founders tried to sell the company in 1998. Larry Page and Sergey Brin liked the freedom of graduate students to work on cool projects, and they didn’t want to run a company. After being turned down twice (by Alta Vista and Excite, for $1M and $750K) they reluctantly decided to grow the business.

They also wanted to hire and work differently, and it’s a good thing they started with that philosophy. During the next six years they hired over 1900 employees by more than doubling the payroll each year. Since the 2004 IPO they’ve hired nearly 5000 people annually, and today the company has over 50,000 employees around the globe.

Like every large corporation, the hardest challenge has been upholding the quality of their new hires. Google is admittedly a popular place to seek a job, but their hiring rate is lower than the military’s service academies and Harvard. After Google’s IPO, their attempt to scale up that hiring process was a miserable failure. Each candidate was subjected to more than 15 interviews over at least six months by the hiring staff. Even Google’s happiest employees hesitated to refer their friends for that gauntlet.

Google eventually developed some of the nation’s best hiring practices because they were desperate enough to try almost everything. Their programmers and engineers fell back on research, controlled experiments, and relentless optimization. As they learned more about the best hiring practices, they worked with psychologists and analysts to develop (and test) their data-driven solutions.

When Google team leaders spend hundreds of hours on candidate interviews, they need to make the right hiring decision the first time. However, author Brad Smith in his book “Topgrading” found that half of all senior hires fail within 18 months of starting a new job. (The “senior hires” group would include military retirees.) Junior hires could fail even faster, or they’d simply add Google to their résumé and move on to a new job. Companies spend tremendous sums on employee turnover, and Google knew that they had to hire as few people as possible for as long as possible.

The answers are straightforward, but the implementation demands constant experimentation. Your “dream company” should hire you through committee interviews with standard questions. You want to be rated on your leadership, conscientiousness (completing the mission), and cognitive ability. You want structured discussions (standardized topics and questions) covering behavioral and situational issues. You want the committee to assess not only your abilities, but whether you’d be a good fit for the corporate culture and the teams. While they’re trying to decide whether to hire you, you should be trying to decide whether they’re still a company you want to work for.

At Google, the interviewers use a proprietary tool to develop their guide. They select the job with the attributes they want to discuss, and the tool generates a set of questions. They can share their interview guide with the committee before meeting the candidate, and everyone understands what the questions are designed to do. Google’s “People Operations” team has optimized those questions for over a decade, and nobody is winging it or depending on their gut reactions.

You won’t hear “Where do you see yourself in five years?” or “If you were an animal, what species would you be?” Instead, you’ll be asked about a time that your behavior had a positive impact on a team and a project, or how you managed a team to reach a goal, or how you dealt with difficult people. The answers are detailed stories with plenty of room for follow-up conversations, and the great candidates soon stand out from the good ones.

Hiring is hard enough, but retention is even more challenging. Google needs to not only hire the best, but train them and retain them. Stock options might work for a few years, but career employees will only stay at Google if they have Malcolm Gladwell’s environment described in “Outliers”: fulfillment, complexity, and autonomy.

Google learned very early that most of their employees are not motivated by money. The engineers knew that they needed money (and their financial advisors told them what to do with it) but the engineers really just wanted to work on cool projects with great people. Many of them feared being promoted out of concerns that they’d have to manage people instead of building great things.

The “work rules” quickly identified people who would behave like founders– and then Google gave them huge amounts of trust and discretion. Even with 50,000 employees, Google managers have far less authority than typical corporate execs. They do not have hiring authority, and they don’t even have promotion or firing authority. The company’s performance assessments are largely crowdsourced while pay raises and promotions are by consensus. Everybody knows who the good team members are, and everyone also knows who’s not so good.

Mr. Bock writes about many other aspects of hiring and retention:

Removing obstacles from employee success
Making decisions with data, not based on manager opinions
Setting goals correctly and reasonably
Learning how your best people do what they do…
… And having your best people train the rest of the teams
Privately helping those who are lagging performers– don’t just fire them
Using surveys and checklists to find truth and to nudge people to improve
Celebrating team accomplishments, not promotions or bonus checks
Paying large salaries for your best people, or they’ll go to another company
Rewarding thoughtful failures with spot bonuses

Mr. Bock has never served in the U.S. military, but every one of Google’s practices could be described as “covenant leadership”. Read the book to learn more about translating your military skills and accomplishments into civilian terms.

You’ll also want to read the book to learn the rest of Google’s hiring and retention practices. You may not want to work there, but you’ll want your chosen company to work that way for you.

Posted in Reviews | Leave a comment

Financial Advice To Start Your Military Career

Posted on November 19, 2015 by Doug Nordman

Last summer there were many graduation ceremonies, and millions of new employees joined the workforce. In the military version of this milestone, thousands of new O-1s received their commissions and tens of thousands of other new recruits started their basic training.

It’s a very busy time. These new servicemembers are getting an incredible education (some of it delivered in a loud voice) and frankly, they have new skills to learn. There’s too much going on in their lives for me to waste their time with 3000 words of financial life guidance.

But everybody eventually gets a few days of leave. They’re spending their paychecks and they know that they need to manage their finances. They realize that they have a Thrift Savings Plan account and maybe they should do something with it. By late summer and early fall, the reader questions are starting to show up in my e-mail:

I was hoping to seek some financial advice. I’ve started paying off debt and I have an emergency fund. I intend to put about 15% of my pay toward a Roth TSP. Any recommendations on my current plan and where to go from here?

Do you have a link to info about which TSP fund is the best fund to join?

Image of person paying the bills the old-fashioned way with a checkbook, wallet, and credit cards. Instead, put everything in autopilot. | The-Military-Guide.com

Don’t wait for “money chores” day.

At this point in your service, the best use of your time is learning your job and getting qualified. Unless you’re hardwired to be an investor like Warren Buffett, you’re too busy to spend any energy on saving and investing. Psychologists have done thousands of behavioral-finance experiments on many people like you, and they know how overwhelming life can be in your late teens and early 20s.

The researchers say that your biggest financial issues right now are hedonic adaptation, paralysis by analysis, and decision fatigue.

Your challenge is making a few financial decisions, minimizing your financial chores, and putting everything in autopilot. Then you can go back out and get qualified, because pretty soon you’ll have the midwatch and the weekend duty.

Hedonic adaptation

When those paychecks finally roll in, you’re ready to enjoy the finer things in life. Unfortunately this hedonism comes at a price: it’s very easy to jump on the consumer treadmill and fill your world with material possessions. However, you don’t have much free time, and some of you have debt. Do you really want to spend your scarce and valuable liberty hours taking care of stuff? Do you want to work for the rest of your life to pay for your lifestyle?

When you start spending, take a few minutes to track your expenses. Keep it simple: a smartphone app, or a spreadsheet, or just pencil & paper. Don’t criticize yourself or go on a financial diet, but learn where your money goes. After a few months you’ll review your data and you’ll start cutting out the waste. You’ll align your spending with your values. You’re the person who has to be willing to work the extra months for the extra spending.

But simplify your tracking systems. Don’t fill your life with financial chores or build elaborate financial life plans. Simply look at your expenses every 2-3 months to decide whether you’re spending on the things that you value– or whether you can cut out more waste.

As your earnings go up (annual pay raises, promotions, flight pay, sea pay) then give yourself a small party. (You’ve earned it!) Then try to throw at least 80% of the extra money at paying off debt and boosting your savings. The key is living a fulfilling life without wasting your money. Be frugal but don’t cross the line into deprivation. (Your military duties will give you all the deprivation you can handle.) Right now you don’t have the time for lifestyle expansion– keep it simple.

Paralysis by analysis

You have thousands of investment choices and asset allocations. Almost all of them are good, and most of them will get you to financial independence. Your key is optimizing a few factors and choosing your asset allocation. Create a good plan today, and in a few years you’ll tweak it to an outstanding plan.

Later in your career you’ll make time to develop your investing skills, or build your own side-hustle business, or rehab rental real estate, or choose individual dividend-paying stocks. Those will all accelerate your financial independence, but right now you don’t have the time. Your military duties have priority and you should simplify the rest of your life.

You can only control two factors of your asset allocation: diversification and fund expenses. For new servicemembers that boils down to passively-managed index funds with low expense ratios. Conveniently, the federal government’s Thrift Savings Plan fills all of those requirements. It’s the world’s largest collection of passive index funds with the world’s lowest expense ratios. The TSP doesn’t have all the features and convenience that you can find with investments from financial companies like Vanguard and Fidelity, but the TSP’s expenses are less than half of the funds from those industry leaders.

Yet even the TSP has two types of accounts, five main funds, and several “lifecycle” funds. Which should you choose?

Again, let’s start with a simple answer. The traditional TSP will shelter some of your income from taxes, but right now you don’t need that. When you do your tax returns, you’ll have enough deductions and credits to pay very few taxes. You’ll be an E-6 or an O-3 before your tax bill starts to rise.

One nasty side effect of the traditional TSP is that you’ll eventually have to pay taxes on its withdrawals (much later in life). However, you can avoid that issue today by putting your contributions in your Roth TSP account. You’ll probably use the traditional TSP later in your career, but for the next few years the Roth TSP offers more advantages.

Now you’ve chosen your TSP account. Which funds do you want?

If you don’t know which funds are best (and maybe you don’t really care) then pick the L2050 fund. It’s a mix of the TSP’s five main funds, and the L funds automatically adjust their asset allocation over time. Right now, at the start of your career, it’s an aggressive combination of stock indexes (the C, S, and I funds) with a little bit of bonds and government securities (the F and G funds). As the years go by, an L fund will gradually cut back on the stock funds and gradually boost the bond funds.

If you want to invest even more aggressively (because you have a steady paycheck for the next few years) then you could split your TSP contributions among the C, S, and I equity funds.

Decision fatigue

You’ve tracked your spending, cut back the waste, started paying down debt, and picked out your investments.

A few of you find this fascinating (welcome to the club!), but most of you just want to get it over with so that you can enjoy a little fun before you go back to work. You know, that weekend duty. And are you qualified yet? Yeah.

Imagine if you had to go through these financial decisions with every paycheck.

Decision fatigue is a well-documented behavioral psychology phenomenon. You start every day with a certain amount of willpower and cognitive focus, but as the day goes on you literally get tired of figuring out the right choices. By the end of the day you’d rather let someone else take over the dinner plans and the rest of the family duties so that you can just relax.

Your financial chores are just one more set of decisions to make– if you ever get around to that.

Instead of making the same decisions every paycheck, make them once and then automate them. When you figure out how much money you’ll put toward investing and paying off debt, then set up your myPay account to transfer the money to the TSP straight out of your paycheck. Set up your TSP account to invest your contributions in your Roth TSP account and in your chosen funds. Set up your bills to be automatically paid from your checking account.

Never miss a payment deadline again. Better still, you won’t even have to decide what to do about it.

What’s next?

After you put your financial life in autopilot, try to leave it alone for a year or two. Check your statements every 3-6 months but don’t obsess over them. You might have to tweak your savings and investment plan every few months until your paychecks settle into a routine.

If you’re cutting out wasteful spending then every month or two you might actually put more cash toward debt payment or savings.

As your earnings rise, consider this: if you can save at least 40% of your income for the next 20 years then you’ll reach financial independence on your own investments— you won’t even need a pension.

Let’s get the plan moving:

Now start tracking your expenses, set up a small TSP contribution in myPay, and sign up for the TSP.

Posted in Career, Investing & TSP | 4 Comments

Lifestyles In Financial Independence: Your Mortality

Posted on November 5, 2015 by Doug Nordman

I just had another brush with the uncertainty of life.

There was the time at sea on midshipman training when I fell overboard from a YP on the midwatch: miles from shore, pounding along at eight knots, seas of six feet. I was in a hurry, I let go of a ladder at the wrong second, and the small patrol craft bucked me off. I went over the rail and (as I was going down) I inadvertently stuck my foot through a closed chock. The torque (and the sudden deceleration) slammed my head into the hull and gave my ankle a heck of a sprain. I was dangling upside-down by my toes, and my head went underwater. But I piked my torso back up to the chock, pulled up to the rail, and climbed back on board. I didn’t tell anyone. The lieutenant in charge was a real jerk, so I kept my mouth shut and finished my watch on adrenaline… and I duct-taped my ankle for the rest of the trip.

In June 1991, I was our submarine’s inport duty officer in the legendary port of Subic Bay, Philippines. Instead of epic Olongapo liberty we had front-row seats to the explosive volcanic eruption of Mount Pinatubo, amplified by a typhoon and even a minor earthquake. We did an emergency nuclear reactor startup in mere minutes (colloquially known by reactor operators as “latch ’em & snatch ’em”) and it still wasn’t enough to maintain lights and ventilation. Several FEET of volcanic ash was deposited on our submarine and in the engineroom’s seawater suctions (and in every orifice). Worst 36 hours of our lives, but we survived.

There was that 25-foot outside set at Chun’s Reef where I ended up in the toilet bowl, tumbling and spinning underwater and running out of air. My surfboard leash finally tugged at my ankle and I figured out which way was up. After a quick gasp of air (and three more waves) I got out of the churn.

There was the time at a Blue Öyster Cult concert when I drank so much Southern Comfort that I… well, I’m sure many of you have done that too.

The point is that I got into situations where I was no longer able to affect my fate. Initially, it seemed like a good idea, and then I lost control of the consequences. Each crisis was followed by the epiphany that I probably wasn’t invulnerable, let alone immortal. But eventually, I learned from all of those lessons, right?

And then a couple of months ago I had an emergency appendectomy.

You can’t control emergencies

Public health poster titled "Don't Gamble with Appendicitis" from 1944 (NARA-514142) | The-Military-Guide.com

Click on the image for more info…

The humiliating part is that I know about appendicitis! It’s the bane of the submarine force because it’s unpredictable and deadly. You have to be in agony to admit the severe abdominal pain to the corpsman: he’s going to take your temperature and “manipulate” your abdomen (like a Thai masseuse “manipulates” your shoulder muscles) and then stab you for a blood sample. If you’re running a fever and your white blood cell count is high, then he’s not even going to discuss your options. He’s going to call the CO about driving the boat to the MEDEVAC point, and within 30 minutes everybody knows why we’ve changed course & speed. “Pack your seabag, shipmate, the deployment’s over for you.”

Even with my sea-duty experience, I was surprised by the speed of my acute appendicitis. I felt a little discomfort after a big lunch, and I thought it was ~~gluttony~~ indigestion. At bedtime, the pain was worse, but I still went to sleep. By 11 PM I was awake and hurting, and I actually tried to walk it off. At 3 AM (thanks to MayoClinic.org) I was pretty sure it wasn’t gas, a kidney stone, or diverticulitis. Even then I took some acetaminophen and finally got two hours of sleep.

The next morning my spouse and I wasted 30 minutes at our neighborhood medical clinic. (I figured Tripler’s emergency room would just pat me on the head and park my butt in the waiting room for six hours.) But the clinic didn’t have any open appointments, so we arrived at Tripler at 9 AM. By now the pain was much worse.

It turns out that showing up in an emergency room with severe abdominal pain and a fever gets you head-of-the-line privileges. You’re probably not going to die, but the faster they can operate then the fewer problems they’ll have to fix. They had a white blood cell count by 10 AM and confirmed their suspicions with a CT scan by 11 AM. After that the surgeons were standing around ~~treating me to morphine shots~~ waiting for an operating room to open up. Our table was ready at 4 PM, and the medical students were gathering around.

A minute after the propofol injection, I stopped remembering. Two hours later I was in the recovery room, wondering when they were going to start the surgery. My spouse re-oriented me, I made the mistake of trying to sit up, and then we decided that a little more morphine would be yummy.

No, I won’t be sharing photos or videos. (I’m a writer.) You can find plenty of appendectomy gore on YouTube.

You can’t change your mind in the operating room

By the time the surgeons decided to operate, I’d abdicated my vote on that debate and chosen a large bolus of morphine. I doubt that I could have reasserted control of the process; the surgeons knew my appendix wasn’t going to heal itself with antibiotics.

If the appendix has not ruptured, a laparoscopy makes a couple of very small holes and your appendix is “extracted” through the navel incision. (Ouch.) If your appendix has ruptured and spewed its purulent gangrenous contents all over your abdominal cavity, then the surgeons set aside the laparoscopes and reach for the scalpels. They slash & mop and then stuff you with antibiotics, drains, catheters, staples(!), and other “support” gear.

The surgeons got in there before my appendix ruptured. Everything came out all right (so to speak), but it was ready to blow. The soreness and swelling around my navel (and subsequent comments from a few of the medical students) reminded me of the scene from the first “Alien” movie.

After the surgery, I was woozy from the anesthetics (and lack of sleep). I hadn’t eaten in 30 hours, and general anesthesia sort of shuts down your digestive system. However, the staff on the surgical ward wake you up every two hours to check your vital signs and to encourage you to use the bathroom. I’ll spare you the details of that night.

“You can check out any time you like”…

By the next morning, big surprise, I was ready to go home for some real rest (and bathroom privacy). Big surprise, they wanted my white blood cell count to be lower. We negotiated as only a military retiree can chat with a colonel. He broke off the talks with “Well, we’ll see how your next blood sample comes out” and I never saw him again. But by lunch the nurse and I agreed that they’d stuff me with more antibiotics, I’d sign the “against medical advice” waiver, and I’d take more antibiotics over the next two weeks before returning for a final white blood cell count. We all understood the rules, but the staff was legally conservative.

Tripler Army Medical Center has annoyed me mightily many times over the last 25 years, but they made up for it on this trip. Mahalo nui loa to Tripler’s emergency room staff, the surgeons, and all of the 6B1 Guardians. I was unconscious when I met some of you, but I sincerely appreciate everything you did to save my life.

But wait, there’s more!

About 18 hours after surgery, my spouse dropped by to help with my release. A few minutes after she arrived, our daughter called to announce her engagement. (It’s all good!) We had a great talk, and we’ll spend more time together in the coming months. There’s no rush. Her fiancé is on active duty too, so they’re going to synchronize their tours and probably have the big wedding party in 2017. As you dual-military couples know, the actual marriage license may have to happen sooner.

Happily, when she called I was awake, ambulatory, and unmedicated.

That’s when this appendicitis crisis really hit home: I was fortunate to not have a ruptured appendix or, even worse, be stuck in a diagnosis wait-and-see. I’m very glad that I didn’t have to ask my family to call back after the morphine wore off.

Lessons learned

Yeah, I know, but I’m a submariner. Every incident is followed by a critique.

Financial independence. I’m very glad to be financially independent and (mostly) in control of my time. I can’t imagine dealing with appendicitis if I was working a full-time job. I would’ve gone into the office that morning “just to check on a few things before I see the doctor” and ended up getting a free ambulance ride.

Stay in shape. I was warned that I’d need four weeks of recovery time. Yet three days after coming home, the pain was gone. By two weeks the incisions had healed and I was ready to paddle back out into a most excellent 4-6-foot swell. Two decades of military PT (and, in retirement, another 13 years of workouts) paid off when I really needed it.

Lose the weight. Speaking of exercise and a healthy diet, my appendix was easily accessible because I’m not fat. The anesthetist was happy with my cardiovascular health and he had an easier time with the drugs. I bounced back quickly because they had a smooth operation with less physical trauma.

Live near a major medical center. Oahu crams a million residents around the nation’s 12^th-largest city with its second-worst traffic. My spouse and I have talked many times about moving to upcountry Maui or north Kauai. But when I needed fast medical help, a highly proficient crew was only 30 minutes away. If I ever need chronic care, I’m close enough to tolerate the commute.

Buy health insurance. This has been an issue among a few people in their early 20s and late 50s. I’m sure my appendectomy cost more than my annual pension. Yet once the ER staff saw my military ID, nobody asked about insurance. Three weeks after the surgery I hadn’t even seen a benefits statement, let alone an invoice.

Get your stuff together. I was asked six times (between the ER and the OR) whether I had a medical directive. (Yes, I do!) This would’ve been a terrible ~~morphine~~ time to chat with my family about how to let me die if the surgery went wrong. Imagine trying to find a notary for a power of attorney, too.

Carpe diem. I had somehow decided that I was “too old” for appendicitis. Just like paddling into the wrong wave, my life simply smacked me upside the head to remind me about my mortality.

Postscript… two weeks later.

I drafted this post a couple of days after the appendectomy, and then I learned another lesson.

At the surgeon’s two-week follow-up, the pathologist’s report said my appendix had a “well-differentiated neuroendocrine tumor”, also known as a carcinoid tumor. “Well defined” means that the tumor cells looked “not very abnormal” (which seems oxymoronic) and yet not cancerous. The tumor is considered benign because it’s smaller than the minimum size for cancerous ones.

The surgeon thinks that the tumor was unrelated to the appendicitis. It’s just a data point.

I’ll accept his opinion for now, but I’m going to show up on time next spring for my second five-year colonoscopy.

And until then, carpe diem. As you read this my spouse and I are visiting our daughter in Spain, roaming Andalusia for the second time this year and snorkeling through more incredible cuisine. I’m already living the life I want to live, and there are certainly a few more life-affirming events to look forward to.

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