“I Would Have Started My Reserve Pension By Now!”

I get that pension comment every month from readers who are in their 60s… or even older.

Most of them are doing fine, both financially and in life. They usually served some active duty before the Reserves or National Guard, and a few were even drafted for Vietnam. They decided not to gut it out to 20 years of active duty and they moved to the Reserves or Guard.

Image of military vehicle in Middle East with windshield sign "One weekend a month my ass!" It's a sarcastic comment on the Reserve and National Guard drill routine of "one weekend a month and two weeks a year." | The-Military-Guide.com

Rumored to be a Reservist from early 1991 in Kuwait.

They attended monthly drill weekends and went on their annual two weeks of active duty. They did their unit’s administrative readiness requirements for a good year. If they had kept that routine for long enough then those years of active duty (and their good years of Reserve or Guard duty) would have added up to a total of 20 good years.  At that point they would have received their service’s Notice Of Eligibility that they could file for “retired awaiting pay”. They would gone into their gray-area years and started their Reserve pension at age 60.

But for various reasons, they decided not to keep going for 20 good years. The perpetual sacrifices of work/life balance were too much.  Their benefits as drilling Reservists weren’t enough incentive to stay in uniform. They finished their service obligation and saw no reason to continue. The prospect of an inflation-fighting pension and cheap healthcare in their later years was not worth the current cost in life energy.

Leaving the military seemed like the best option at the time.

Now that they’re older, these vets have a life perspective which servicemembers in their 30s or 40s might not have thought about yet. I’m not trying to change anyone’s mind about staying in uniform, but it’s worth considering their experiences as you make your plans.

What About Other Benefits Before The Pension?

For those Reservists who left before 20, their immediate benefits of retired awaiting pay (until age 60) weren’t enough. They gave up their Tricare Retired Reserve health insurance (if they ever had it in the first place) and their Reserve Component Survivor Benefit Plan. (They’d either reached financial independence or they had similar corporate benefits.) They no longer had Space A military aircraft flights or military base access.

Why Did They Stop Drilling And Deploying?

Image of Jeff Bacon "Broadside" cartoon of a military spouse giving her spouse their fitness report for supporting the family. The caption is "If Spouses Wrote Fitness Reports" and the recipient is saying "Brutal." | The-Military-Guide.com

Sure, it’s funny now, but…

Quality of life is the biggest problem with drilling in the Reserves or Guard, even when they’re not on active duty.

There’s a saying that you’ve achieved work/life balance when your civilian company, your unit, and your family are all equally annoyed with you.

If you’re holding a civilian job alongside a Reserve drill billet, then just about every month you have 12 straight workdays (including the weekend). Even if you’re not drilling that month, you’re probably doing extra days of Reserve paperwork and correspondence. Sometimes those extra days (often unpaid) are every week.

Then there’s the vital war-fighting skills of mobilizing and deploying. (The active duty troops need the practice just as much as the Reservists and Guard members.) Ideally they’re exercised every few years– not every year, and not just once a decade.

Unfortunately it’s tough to perceive that they’re adequately planned and well-executed.

Is it worth mobilizing in your unit to work at the command where you drill and do your active duty? Sure. That’s aligned with your mission and you already know the people you’re supporting.

Mobilizing and deploying to the desert because it’s “your turn” and you need the experience? That’s good too. It would help if the chain of command (I’m lookin’ at you, BUPERS) would pick a set of dates and stick to them, which would enable families to make mobilization plans (and stick to them). It would also help if families had more flexibility in planning those dates (and committing to them) instead of “Oh, hey, it’s your third year since your last deployment, let’s do it again somewhere!”

Along with mobilizations or training orders, it would be a happy surprise to have a Defense Travel System that works for the

Image of ancient, moldy, ragged hardcover books to make fun of the military's Joint Travel Regulations. | The-Military-Guide.com

“Yeah, you just need to check the Joint Travel Regs.”

servicemember instead of only for DoD’s databases. (Note to active-duty members: if you think DTS sucks now, wait until you take Reserve 89-day orders across two fiscal years to travel thousands of miles for a training course where you’ll need base lodging and a rental car. For extra bonus points, do it while you or your spouse are pregnant.) Do we really need to make the Reserves and Guard services suffer just as much as the active-duty ones?

As you can tell, I don’t have solutions to these problems. (I’ve watched the military “solving” them for at least 40 years.) Be aware that they exist and cope with them as best you can. Consider them in your personal list of why you’d want to stay in a drill billet or go to the inactive Reserves.

What About Their Civilian Career?

Every corporation where you want to work should support the Guard and Reserves. It’s the right thing to do.  (Especially if there’s financial incentives from the government.)  If they don’t support your military career then you won’t want to work there anyway.

But “supporting the Guard and Reserve” and “supporting your workload” are two completely different priorities. At some point the daily routine piles up into overload. It might be a quarterly report (at work or in the unit), the final week of a challenging project, or excessive travel. It might be difficult supervisors or teammates at either place. It could simply be an exceptionally bad case of chronic fatigue or burnout that accumulated over months.

If you’re running your own business then you end up juggling clients with your military duties. It’s never easy to separate one from the other, and compromises are inevitable. When you’re on active duty for training, or mobilized, or even deployed then you have to bring in a business partner or simply suspend operations.

Even so, the military can boost your civilian career. Here’s a quote from a retired Reservist to keep in mind:

“One other aspect is that while in the Reserves, you get training in areas that may complement or enhance your civilian skills and help you progress more rapidly in that career. Juggling can get difficult and you may end up sacrificing in one or both of your careers, but it does expand the opportunities available to you and provide another pre-retirement stream of income.”

(Thanks, Deserat!)

The military can also help cope with unemployment. Drill weekends won’t replace your income (unless you volunteer for a great set of orders) but the money can certainly help pay the bills and maybe even network to your next job.

Ironically, a successful civilian career can stop your military one. If you’re promoted at your job or move to a new location or simply take on more responsibilities, there may be “no time left” for drill weekends and unit administration. How’s your family feel about this? How hard do you want to work?

If you’re suddenly earning a lot more money from your civilian career then it’s easy to choose to go inactive– or even resign.

Heading To The Individual Ready Reserve (or the Voluntary Training Unit)

With all of the issues between a military career and a civilian one, at some point it might make sense to transfer to the IRR.

From what other readers have shared about their Reserve or Guard service, this is the beginning of the end of the military career.

Without drill weekends, life suddenly gets easier. The problems don’t disappear, but they’re easier to handle. You have more bandwidth for other opportunities– or crises.

While you can hypothetically earn enough points in the IRR to keep logging good years, it’s a new challenge. Opportunities are limited. It’s harder to access the resources you need, and it’s a lot easier to get behind on your milestones. One small step at a time, family and civilian career assert their higher priorities until there’s scant attention paid to your military duties.

I haven’t seen any statistics on IRR retention rates, but they’re well below those of servicemembers on active duty or in drill billets. And, depending on your branch of service, it can be very difficult to earn enough points in the IRR to qualify for retirement.

It’s Personal Now

I’ve had these thoughts sitting on my hard drive for years. When I was in my 40s and 50s there were lots of other things to write about, and this post didn’t have a very high priority.

However I was born in 1960. In 2020, this subject suddenly gained an entirely new relevance.

In 1993 I’d been on active duty for 11 years and my career hit its nadir. We had started our family (a personal zenith!) and our midwatch baby kept me short on sleep (for a good cause). I was on shore duty but it was a combination of on-call operations staff (endless crisis management) with two bosses who were… difficult… in the middle of the biggest drawdown since WWII. I was technically selected for submarine XO but I never got the job, and I was at my terminal rank.

I couldn’t see any other path than active duty. Out of fear, ignorance, and fatigue, one decision point at a time I spent the next nine years gutting it out to 20.

In 1993 if I’d left active duty for the Reserves, then I would have taken a contractor job at the tactics shop on the same staff. I might even have become an at-home parent while my active-duty spouse supported the family. As a lifelong computer nerd, my free time would have eventually gravitated toward the Web and I would have refreshed my programming skills.

There would have been plenty of life changes and a few more disruptions, but the money would’ve worked out about the same. Instead of waaaaay overshooting the financial independence goal in 2002 with an active-duty pension, we would have reached FI at about the same time while knowing that our assets only had to last until my Reserve pension would have taken up the slack in 2020.

Back in 1993 I was too tired and burned out to make the time to learn about the Reserves, let alone think about life in 2020.

Your Call To Action

As I’ve said many times before, I am not a role model member of the Command Retention Team.

I’m a competent author, but I certainly can’t assemble a magical combination of words and logic to suddenly motivate you to rack up those 20 good years.

All I can do is call your attention to the analysis and sentiments of those who’ve gone before us you.

If you’re no longer challenged & fulfilled by active duty, then it’s time to move to the Reserves or Guard.

If you’re at that Reserve work/life balance where everyone’s equally annoyed with you, then maybe it’s time to rethink your career priorities. Just be sure to give it enough thought today to avoid having regrets in your 60s.

[Note: The Reserve pension generally starts at age 60. Servicemembers who were mobilized after 28 January 2008 may be eligible to start their pensions three months earlier for every 90 days in a combat zone, or for a natural disaster, or during a national emergency.
The laws behind this benefit have been modified several times and there are additional restrictions & caveats, so read the post at that link carefully and then check your DD-214s.]

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Related articles:
Don’t Gut It Out To 20: Leave Active Duty For The Reserves Or National Guard
How To Calculate A Reserve Retirement
National Guard and Reserve Early Retirement Age
Should I Stop Drilling And Go To The Individual Ready Reserve?
What You Need To Know About National Guard Retirement
Finding Your Military Work-Life Balance

Posted in Career, Military Retirement | 19 Comments

Lessons Learned (So Far) From a Money-Savvy Book Launch

Now that my second book has hit the presses, we’re doing the promotion. This is a marathon, not a sprint, and my version of marketing looks an awful lot like “talking with hundreds of people while drinking coffee.”

[This post is about writing and marketing. You can read about the creation of the book here and you can buy the book here.]

The first lesson: “15 years of effort to an overnight success.”

Image of a computer desk in Doug Nordman's familyroom where he writes his books. | The-Military-Guide.com

Where the magic happens.

We’ve all seen the apocryphal starving-author stories about rejection letters and discouraging book reviews. I went through that with my first book and I gained the valuable experience of patient persistence. While I was learning about self-publishing, I developed the self-confidence of writing for my readers instead of for gatekeeper publishers.

A (very) few readers made me question whether writing was worth the effort. If you want to collect discouraging book reviews, try convincing people that they can save and invest for financial independence. A very vocal (yet very tiny) minority would prefer to blame their financial challenges on your writing skills instead of their lifestyle. Their criticism used to offend me, and I’d spend way too much time discussing it. (“But I can convince them!”) Today I know that it’s better to wait for the hostile skeptics to decide that they’re ready to change their lives. I’ll be over here, patiently working on my next book.

In retrospect, I was slow to recognize that many more people had questions about raising money-savvy families. I was still enjoying the victory lap from my first book, attending financial conferences, and learning about slow travel. While I was nerding out about savings rates and asset allocation, it took me months to realize that opening Roth IRAs for 14-year-olds was a hot topic.

My most important epiphany between my first and second books was using an editor’s feedback to clarify my reader avatar. (I failed at this during several drafts of my first book.) Editors are guides who can point out the potential destinations for your writing, not just critics who know grammar. If an editor doesn’t see the compelling value of your writing, then it’s going to be a problem for your readers too. The solution to that problem involves doing more research and writing better, not being frustrated with editors.

Between starting my first book in 2005 and publishing the second in 2020, I’ve written keyboarded millions of words. I’ve learned to type a little bit every morning (right after waking up, along with my first cup of tea).  After all of these years, the phrase “Just write it” still applies.

I’m perpetually exchanging e-mails and social-media comments with readers. I’ve also learned from other authors. (Thanks, MK!)

I’ve written over a thousand blog posts, about half of which are still online. (The rest have been recycled elsewhere.) I’ve posted hundreds of thousands of times to social media and online forums.

My two manuscripts (so far!) came from crafting a half-dozen drafts before editing and publishing, and I still have a couple of new drafts awaiting my attention.

The ratio of <words written for your next book> to <words in your published book> is at least 10:1. I’m only counting the words that you’re willing to show to other people, too.

Why in the world do I keep going? Well, I am obstinate persistent, and the occasional success certainly creates more sustainable confidence. At my core, though, I can’t stop writing. It’s perpetually challenging and fulfilling, and I get to do it at my pace. The more I write, the more I produce. My family is also very grateful that I can focus my words on the entire Internet instead of just them.

Someday I’ll have to update that header to “30 years to an overnight success.”

The second lesson: “Not all those who wander are lost.”

Why yes, that is a quote from a J.R.R. Tolkein character.

I’ve wandered metaphorically and literally all over the world. I started drafting my first book over 15 years ago, and I had no idea where I was going. Before I started that, I wasn’t even trying to get somewhere.

Image of Carol Pittner and Marge Nordman at Gaudi's La Pedrera apartment building in Barcelona Spain in 2015. | The-Military-Guide.com

Co-author on the left, her other parent on the right.

I’m a computer nerd raised in the 1970s with mainframes and teletypes. Our family got online in the late 1990s, and I started poking around USENET. I discovered a whole new world of people talking about financial independence. As J.D. Roth can tell you in his “History Of FI” post, this conversation has been around for centuries, but it rarely happened among my co-workers or neighbors. I’d find an occasional shipmate to dive into saving and investing, but we all thought we’d need paychecks until our 60s.  And of course, the writing I had to do at work completely killed any desire to write recreationally.

I retired from active duty in 2002 to “spend more time with family & friends.” By then I’d moved from USENET and bulletin boards to forums, and I stumbled across Early-Retirement.org.  In retrospect I’ve realized that I got to write when I wanted, and there were no more deadlinesI never saw that coming when I was in uniform.

I enjoyed learning more about financial independence (to verify that I wasn’t making a horrible mistake), and in 2005 Bob Clyatt asked the forum a series of questions that eventually became the book “Work Less, Live More.” (Today Bob evokes both of those verbs with his sculptures.) I asked the military members of the forum a bunch of similar questions about military personal finance, and over the following months we crowdsourced “The Military Guide.”

I also spent a surprising amount of time reading about… writing. If you think I write better today than in my forum posts of the early 2000s, you should see what I was writing in the 1990s. (Or maybe you shouldn’t see that.) Answering thousands of questions on a forum helps you explain stuff better.

I still leisurely created a chapter every few months, and I actually set aside the draft several times for family travel or other projects. I spent nine months simply getting through the query letters with traditional publishers.

Now that the self-publishing industry has swept away the gatekeepers, it’s much easier to see your book in print… or in electrons… or in audio. Yet you still have to write it, and that still requires a certain amount of learning about writing & publishing along with researching your book topics.

The third lesson: All the editing is worth the effort.

Image of the screenshot of the book "Raising Your Money-Savvy Family For Next Generation Financial Independence" ranked at #1 on Amazon's Hot New Releases In Personal Finance. | The-Military-Guide.com

Thank you to all of our editors, and our readers!

Carol and I built the outline together, and then we each wrote our side of the story. It sounds like a collaboration, yet in execution, it was Carol writing at top speed with me scrambling to keep up.

At first, I e-mailed her my part of a chapter. She responded with the equivalent of “That’s cute, Dad”, and sent me the link to her our Google Doc. From then on we both worked in the Google Doc, sometimes simultaneously in our sections. We chatted about the draft in highlights and comments, and it was fun to watch her paragraphs grow as I wrote mine.

As a good co-author (and a parent), I knew not to touch Carol’s words. We’d discuss our parts of the outline, but her words didn’t need to sound like mine. After a while, I realized that our discussions helped me quite a bit to improve my writing. After talking with her I’d usually end up re-writing a lot of my words.

I also knew better than to complain about how hard writing could be. While Carol was raising my writing skills she was also leaving active duty for the Reserves, moving across the country with her spouse, growing a tiny human, giving birth, and raising their baby. I certainly wasn’t going to whine about the surf.

MK Williams of ChooseFI Media kept this book alive. She rescued us from our swamp of accidental (“oblivious”?) trademark infringements and well-meaning epigraphs of unauthorized Disney lyrics. At the start of each chapter, we’d list the goals (thanks for suggesting it, MK!).  At the end of each chapter, we’d write a summary reviewing “our” advice, along with a call to action.  And then she pointed us at the editors. These days she’s tracking due dates and metrics and rallying the ChooseFI team along with the printer and all of the distributors.

One editor pushed back *hard* on Carol & me at our aspirations of a back&forth narrative with chapter epigraphs. The editor recommended a traditional combined voice (with more authoritative parenting advice) instead of “stories around the kitchen table.” Carol and I immediately doubted our self-confidence, and we defaulted to checking with our readers. (It included social-media polls.) Our readers are overwhelmingly in favor of back&forth narrative (including our favorite chapter epigraphs), and their support boosted our confidence to tell the editor that we’d do the extra work. The editor was totally professional about the whole discussion. Once we’d made our decision, they supported us– and they held us to the harder standards of that back&forth style.

MK (and the other editors) helped us stay in our lanes. There were times when I’d obliviously tell Carol’s side of the story along with mine, and times when Carol would bounce back & forth unpredictably between her “kid” and “adult” perspectives.

Editors also ask questions like “Who’s writing your foreword?”  It really helps your book’s credibility if you score a foreword from an international best-selling author like JL CollinsEspecially when his foreword starts with “I should have written this book.”  Jim, we really appreciate your time and your thoughts and your recording for the audiobook.  I hope you’ve leveraged your wisdom to another 100,000 readers!

After all of that editing, we still had a typographical error sneak through. It’s my fault– I was convinced that I was remembering the correct words, and it never occurred to me that I should fact-check them. When I did, it was too late to change the print editions.

Thankfully it’s one word that’s relatively easy to correct. We’ll add it to the typo list that the printer will fix on the next run.

Other lessons re-learned:

4. It’s really easy to spend all day clicking on your Amazon rankings. It’s a lot more fun than watching blog statistics or podcast downloads. But it doesn’t help with answering reader questions… or creating the next book.

4.a. Someone in an author’s house still has to clean toilets and do heavy yardwork. I’ve checked with my spouse, and apparently it’s still me. Maybe I need to stop clicking on Amazon rankings.

5. I answer a ton of questions online (Linkedin, Reddit, Facebook) and it takes a few hours a day. I’ve answered questions since USENET– I regularly show up and give away my time & experience. Those practice hours make me much better at answering the same FAQs, and eventually I collect enough Q&A for a book.

If you’re surprised that I’ve responded to your e-mail or message, it’s because your question is helping hundreds of other readers. Ask me anything.

6. My audience told me to write this book for months before I was ready to listen. I never thought that I’d sucker persuade a co-author to join me. When Carol lit up, I’m glad that I was finally open to the improv comedy technique of saying “Yes, and…

I thought a co-author would be half the labor, but it was actually double the writing (and audiobook recording, and podcasting). Better yet, it was 10x more fulfillment than being the only author. Or maybe that’s simply the fun that comes from spending more time with family.

For me, this book is passing a torch. Or maybe I’m helping her light a new, bigger torch.

What’s next for me?

Personally, I’m going back to my writing roots with updates to The Military Guide. The first task is an audiobook edition. (We never got around to that with the first printing). I even have my own podcasting microphone and editing software and everything.

While I’m working on the audiobook, I’ll also collect new material for the second edition of the print and eBook versions. The audiobook will have that bonus material, and we’ll update the second edition for all the things that the Department of Defense has changed since the first edition went to print. Yes, the book is still evergreen, but the next edition will add the words “Blended Retirement System” along with some words about not getting suckered into lump-sum pensions.

After we launch those, I have a third book in me about the long-term sustainability of financial independence (tentatively titled “FI For Life”). And yes, my spouse told me “Nords, you have to write that book too.” She did it while we were attending FI Chautauqua 2019 in the Douro Valley of Portugal, and we actually brainstormed most of the outline there with people who know a lot about sustainable FI.

Finally, I want to write several 100-page summaries of various parts of military insurance programs. You readers are telling me that it’s worth the effort. I’ll do that after the third book, although I’m allergic to deadlines.

Well, by “after”, I also mean “after I catch up on surfing.”

Keep reading this site. This is where I’ll write the posts that get combined into book chapters!

Enough lessons.  What’s your call to action?

Please test-drive the book from your local library before you spend the money on it. I’m financially independent, and we’d rather that you spend your money on the book after you know that it’s worth the cost. We want you to refer to our advice over and over again.

When you read the book, please leave a review on Amazon or Goodreads. If you like it and leave a five-star review, that’s great! If you hate it (and leave a one-start review) then please let us know what needs to change to turn it into a five-star review!

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Related articles:
About “Raising Your Money-Savvy Family For Next Generation Financial Independence”
Update To The Post “Just Write It.”
Starting a Roth IRA For Your Kid
Learn more about self-publishing from MK Williams at Author Your Ambition
Slow Travel Is Wonderful, Yet We Still Had Challenges
During Retirement: You Will Change. Your Plans May Change Too.

Posted in Financial Independence | Leave a comment

From The Mail Buoy: “The Truth Behind Budgeting– It’s Not The Budget”

A reader writes:
“My spouse and I need a budget. What should we do?
What type of budgeting do you recommend?
I know it’s not a ‘one size fits all’ world, but how much is too much saving?
It feels a little unsustainable at times but my wife and I make it work. We do love to get fancy and enjoy nice things but a lot of times the budget doesn’t allow it.”

Image of a man with his head down on his laptop keyboard, crushed by a concrete block representing a budget. | The-Military-Guide.com

“Your first budget.”

Here’s the dirty little secret among personal finance experts: just about everybody hates budgets. (Sorry, J. Money…)

No matter how many different ways you build a budget, nobody likes to live with them. If you’re responsible for maintaining one, then you know how it feels when everyone else complains about it.

This is not a listicle about the top ten budget apps or their affiliate links. We’re digging deeper to find better ways to live with any type of budget. Once you’re clear on how you’re going to make a budget work for you (not the other way around) then you’ll have an easier time picking one.

The root cause of the problem is our attitudes, not our budgets.

The scarcity mindset

When humans build budgets, we feel constrained by limited resources“This is how much I earn, this is how much I should save, and this is how much I can spend.”  We immediately focus on shelter, food, transportation, and investments. We try to boost our savings rate as high as possible.

Image of a budding plant growing out of a dry cracked lakebed with a pair of hands protecting it from the environment. | The-Military-Guide.com

Is it really that scarce?

What about having fun? “Nah, we can’t afford that.”

The scarcity mindset turns life into a zero-sum game, where everything you “win” means that you lose something else. That type of budgeting only highlights where you’ve sacrificed today’s quality of life for non-discretionary expenses and your future quality of life.

The budget can make you cross the line from frugality to deprivationMaybe deprivation is a worthy pursuit of a short-term goal (like finding a better job or paying off credit card debt) but it’s unsustainable.

Military families are keenly aware of the line between frugality and deprivation. (Mostly because we have too much experience with deprivation.) Frugality makes you feel challenged & fulfilled. You’re winning, and you might do frugal for a life of philanthropy and legacy.

Yet are our resources really that constrained?

People may not even realize we have a scarcity mindset, especially if you were raised in a dysfunctional family or dealt with childhood poverty. In those situations, with little control over your health and safety, you really may have been in a zero-sum game. (See the note about poverty and “Broke” at the end of this post.) Maybe that childhood taught you to spend all of your money before it’s confiscated, and now you feel trapped by your new budget.

Or maybe you’re still learning to manage your money, and your scarcity mindset was formed by the culture and people in your neighborhood. If you’ve struggled with your finances and recently discovered financial independence, then your new budget might inadvertently cause problems with your old lifestyle– and people will complain that you’re no fun anymore.

Now that we’re adults, we can manage our money to improve our quality of life. We’ll also try to replace old money dialogues with a new mindset.

The abundance mindset

Paula Pant says it best with her theme: “You can afford anything, but not everything.”

Reframe your questions:

Image of a word cloud around the phrase "Abundance mentality." | The-Military-Guide.com

This takes a while to develop.

“How could I find a way to afford that?”
“Am I willing to work for it?”
“How would I impact my future financial independence if I wanted to have more fun now?”

It’s hard to evolve to an abundance mindset. The first step is to gain enough financial security to know that you’re going to reach your goals, even despite the inevitable surprises & setbacks. It took me several years to appreciate that, and it’s even more difficult when you’re trapped in the fog of work.

Your new mindset starts with shelter, food, and transportation. They’re the biggest expenses in a budget, and anything you don’t have to spend on them can be put toward other goals– whether that’s a better quality of life, or investing for retirement, or simply a night out.

Maybe the obstacles to your fun budget are an excessively large home, or buying convenience food and takeout, or indulging in a fancy car.

Are you held back by those three choices while you’re trying to save for more fun and an occasional splurge on fancy? Are you inadvertently trying to recreate your parents’ living standards now, even if it took them decades to achieve? Are you being suckered into buying the consumer spending shown in social media and advertising?

I won’t belabor the solutions: house-hacking, roommates, living in a cheaper/smaller place, cooking more meals from ingredients, living closer to work, and using public transportation or a bicycle. The entire Internet is filled with those blog posts.

My point is that you might feel constrained to live in an expensive area (because of your job or career), and to spend more money on takeout (because of your working hours), and to endure a horrible commute because of… the job.

All of those expensive problems have solutions, and you can build a better budget for them. Yet maybe the core problem is where you work.

Instead of accepting high costs of housing, food, and transportation because of the job and a scarcity mindset, maybe it’s time to change the job and build your abundance mindset.


It’s not the budget, it’s your job.

Image of a bed covered with dollar bills. | The-Military-Guide.com

“Just earn more!”… right?

I’m not trying to say “Just earn more!” and suggesting a side hustle. That never worked very well for me, either.

Instead, I’m suggesting a long-term plan. Your “side hustle” could be developing more job skills and then negotiating a raise– or finding a higher-paying employer. If those aren’t in your town right now then 2020 has reminded all of us about remote work: maybe you could uncouple “your job” from “your housing location, your food habits, and your commute.” Maybe your office job can be done in a home office as well as a corporate office.

Maybe it’s as straightforward as posting your resume on a remote-work site to pick up projects of a few hours a week. There’s a little money, sure, but you’re also gaining entrepreneurial experience and developing more workforce skills.

Building your tremendous human capital can lead you to an abundance mindset, but you have to find the opportunities. It’s hard to pull your head out of that fog of work for the thinking and the planning, but this problem is worth solving. You’re changing your life to match your goals.

Let’s move on to a different question: is your budget really the problem, or are those problems a symptom of a more severe issue?

It’s not the budget, it’s a communications problem.

It’s one of the most frequent questions in personal finance: “How do I get the people around me to agree with my life goals and my budget priorities?”

Maybe you don’t have a budget problem. Maybe you have communications troubles or even a relationship challenge.

When this happens with friends, then the answer’s relatively straightforward: maybe you don’t have the right friends yet. If they’re willing to change their mindset too, then those friendships are worth keeping. But if they insist on basing their friendship around spending money instead of enjoying hanging out with you, then you need new friends.

With parents and in-laws… well, I never figured out that challenge. You’ll have to try to build your best life even without their support, and hopefully, someday they’ll come around. Even if they don’t agree with your goals or your career path, they should want you to feel happy about your life and they should help you celebrate your milestones.

If it’s your girlfriend or boyfriend then maybe you’re ready to talk about building your lives together and whether your different goals can be reconciled. Compromises shouldn’t involve sacrifices or abandoning your goals to support theirs. Instead, your team plan should accommodate both of your goals and work out the timeline for reaching them.

Image of two communications wires with frayed ends that have shredded apart. | The-Military-Guide.com

Yeah, sure, easy to fix.

When a budget problem happens in a marriage, the answer’s a little more complicated: you’ve already committed to your lives together, and now you have to work through the obstacles to make it better. You might have more of a communications problem than a budget problem. Are you both still focused on the same goal, or is one of you more motivated than the other? Maybe it’s better to step back and re-negotiate your shared priorities.

Military families face these issues every day because at least one of the couple is moving so frequently in pursuit of their service’s mission. Dual-military spouses face career-limiting compromises just to be stationed together. Other military families have to let the location dictate one career while the spouse either waits their turn (for years) or finds location-independent work.

That still leaves the conflicts of long working hours and the time spent away from home.

These problems are not unique to military families, either. Veterans and civilians struggle with the same issues– move for the job, or find a new career? Is it worth gutting it out in the job, or are your priorities changing? Is it time for a new job?

Keep talking. Better communications can cure a budget problem. Here are two tactics to consider when you’re discussing the budget.

The Budget Police

The first tactic is: avoid turning into the Budget Police.

Image of a piggy bank with a police officer's hat representing "The Budget Police." | The-Military-Guide.com

“The Budget Police.” Too niche?

It’s very common in the financial independence movement. One of a couple discovers FI and then persuades the other, or one is a submariner far more enthusiastic about deferred gratification. That money-minded person immediately researches their new resources and starts building a budget. They took the initiative, and the other person is being asked to join the team.

It doesn’t matter whether the new budget is zero-based, or a flexible 50/30/20 plan, or whether it builds sinking funds for every expense. It could be hand-written in a spiral notebook or a multi-tab spreadsheet covering the next three decades.

Unfortunately, the budget enthusiasm can inadvertently set up an adversarial relationship where one person runs the budget and the other person plays along… until they suddenly realize that they’re giving up more than they’d like.

One of you has turned into the Budget Police and the other one is begging for money.

Nobody’s happy.

“Begging for money” is when you feel that you need more money for your standard of living, let alone your goals. You’d like to join your co-workers for a monthly lunch or a happy hour, and suddenly that conflicts with your family budget. You want those sports tickets or that TV subscription, but nobody else in your family supports it. You’re maintaining a wardrobe but you’re getting pressure to find it in thrift stores or (even worse) sew your own. The kids make their case for a higher allowance– do you traumatize the next generation by telling them it’s not in the budget? (“Good luck with that.”) The entire family squabbles over who left the lights on, how long a shower should take, or why the thermostat is at the wrong number.

The Budget Police are equally unhappy. The budget is supposed to be a guide, and a roadmap to a goal, but now your partner wants to go their own way. The whole family agreed on it (or at least let you make the key decisions) and suddenly you’re getting pushback. You enjoyed creating the budget (and imagining the possibilities in your new goals) but you never wanted to be in charge of handing out the nickels. Everyone’s shooting the messenger!

The solution? If you find yourself in either role, then switch roles for a while.

Stay in that other role for as long as necessary. Develop an understanding and a sense of greater empathy for what that other person was doing. Along the way, you might discover that you want to run the budget a different way, or use a different method. You might even split up the assignments– one of you tracks expenses and pays the bills while the other does the monthly summaries and handles the income-tax returns.

Everything is negotiable as long as you understand the challenges and issues of the other person’s tasks. If you find yourselves both “begging for money” then you’ll definitely want to implement the second tactic.

Allowances for adulting

The second tactic: give yourselves an allowance.

Bear with me. This technique is deceptively simple yet incredibly empowering.

It’s the same kind of allowance that you may have received when you were growing up– only this time there’s no critiquing or judging. Allowances should be big enough for you to “get fancy and enjoy nice things” without adversely impacting your other financial goals.

Each of you gets the same monthly allowance. If the two of you can’t agree on that then you have bigger issues with your communications skills or even your relationship.

Image of the book cover for "Raising Your Money-Savvy Family For Next Generation Financial Independence" by Carol Pittner and Doug Nordman | childFIRE.com

Click the image to order.

Whether the allowance is $50/month per person or $500/month per person, you both agree to live with the same rules:
1. It’s yours to spend as you wish. The budget categories are “My allowance” and “Your allowance”, and you don’t have to discuss how it was spent. How you handle your allowance is your business, and it’s a judgment-free zone.
2. You can spend it all on the first day or spread it out over the month, but you don’t have to discuss that either. When it’s gone then you have to wait for next month’s allowance. No advances or borrowing allowed.
3. You can spend it all every month or you can save it for a bigger (personal) goal. Again, it’s your allowance. No accounting is required and you can even stash yours in a separate account.

[Note: those rules are for an adult allowance, not for kids. You’ll still want to talk your kids through their emotions, their plans, and their feelings when they make mistakes. Maybe you shouldn’t judge a kid for their spending either, but you’d certainly want to help them discuss it and learn to make better choices. My daughter and I wrote a book about allowances for your money-savvy family.]

If you two adults disagree on whether to spend for a thing or an experience, then whoever wants it might have to buy it out of their allowance.

Image of a longboard breaking the windshield of a car on a highway. | The-Military-Guide.com

“Oh, that’s definitely comin’ outta your allowance.”

One rule carries over from your childhood: if you break something, that’s comin’ outta your allowance. I’ve survived many chaotic home-improvement projects, and I can affirm that this part of the system works very well. Hopefully this time it’s part of an adult conversation, like “Well, I wouldn’t do that, and if you break it then it’s coming out of your allowance.

The adult allowance also… allows… both of you to express your money preferences. If one of you is a spender then you’ll probably use your allowance for yet another longboard the things which bring you joy– even if you have to carefully ration those opportunities every month to make the most of them.

If one of you is a saver then you’ll gravitate toward personal goals that require a bigger pile of cash, like a milestone birthday or a family weekend trip.

It’s your allowance and your choices. Don’t judge, and you won’t be judged.

The budget’s bottom line

When you add up last month’s expenses and compare them to your budget, you’re not just reviewing your net worth.

You’re also checking your net happiness, and your progress toward your financial independence lifestyle. (“FI gives you choices.”) Your progress might slow down or even wander aimlessly once in a while to enjoy an experience, and that’s the part that helps you stay happy even as you pursue your life goals.

You’re still tracking your spending and cutting the waste. You still get to decide what you value and what’s wasted. If something brings value then you’re willing to work for it, and if it’s wasted then you can cut it back (or cut it out) and still feel as if you’re winning.

Use your budget reviews to adjust your categories & limits whenever it makes sense. Maybe you’ll deliberately choose to spend more on a holiday or anniversary month, or maybe you spend less during summers or winters.

In the long term, as your spending stabilizes and your net worth is on track, then you could decide to change your budget strategy. You could choose to stop tracking every penny and shift to something like the big-picture 50/30/20 budget. Maybe you’ll start in full accountant nerd mode (like me) and track everything to the penny with new categories and monthly reviews… then suddenly 30 years later decide that you no longer need a detailed analysis.

Once you reach FI you might have your spending dialed in so well that you no longer need to track it very closely. If your net worth (or your passive income) continues to grow then you might even ignore expenses under $20/month. (Or under $100/month.) As long as your net worth is more than you need for your withdrawal rate, then you can focus more of your attention on generational wealth and philanthropy.

Maybe that’s your personal shift from scarcity to abundance.  Or so I’ve heard…


If you really did grow up in poverty, or if you feel trapped in it, or if you think poor people are victims of their own problems… here’s a way to achieve a deeper understanding of the issues.

My high-school classmate Dana Gold grew up in poverty. (I never noticed, or perhaps she hid it well.) She’s spent the last 40 years working in shelters and community services, and she has a very broad and personal perspective on the issues. (The solutions? Welp, we’re still working on that part.) Dana has tried for years to help more people understand how poverty affects your decision-making skills, and she’s created “Broke: The Game.” It’s a free mobile app and a free PDF of her book about the subject. (You can also buy the board game and the eBook.) Playing the game and reading the book will show you how poverty forces hard choices when you don’t have the mental bandwidth (let alone enough food) to make the best choices.

You might not be able to stop poverty. (Dana’s worked on that for most of her life.) However, you’ll understand the issues and perhaps empathize with people who are still trapped in the poverty cycle.

For another stark example of behavioral economics, the Center for Financial Services Innovation has created the FinX exercise. You can watch the video of how life happens when you’re unbanked, or read how FinX has affected financial professionals, or learn more from the FinX site.

It turns out that people dealing with poverty are solving their money-management problems in logical ways that you’ll never see when you’re affluent. When you’re trapped in poverty then even the traditional choices are expensive. Maybe we Americans need to change that tradition, and CFSI can help you spread the word.

[earnist ref=”book-raising-your-money-savvy-family-for-next-generation-financial-independence” id=”82363″]

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Yes, the mail buoy is a Navy thing. Don’t get fooled!

Posted in Financial Independence, Military Life & Family, Money Management & Personal Finance | 2 Comments

How I Planned 8 Months of Travel

This post is brought to you by Mark Delaney at The Veteran Professional. 
If you’re interested in contributing at The-Military-Guide.com, please see our posting guidelines.

My commander looked at my packet of paperwork to leave the military and saw that I was planning on signing out on terminal leave in December. When she asked me what my plans were for after the army, I told her I would be starting my MBA the following August.

“What, then,” she asked, “are you doing until then?”

“I’m going to travel the world.”

Why travel for so long?

Why not??

I saw this as the perfect time in my life to head out and see as much of the world as I could see. The next step in my post-military life would be to start my MBA at the University of Virginia, followed by working to start my business. I knew that this might be one of my last opportunities to take a big trip like this.

Travel has provided me a lot of perspective. It’s shown me how other people live and how their culture affects everyday aspects of their life. And traveling practices my patience and ability to adapt. When things go wrong in travel- it turns into an adventure.

And, sometimes, you just need some adventure in your life.

Where did the money come from?

The money I was planning to use for this adventure all came from saving extensively during multiple deployments and numerous TDY trips. Both of these events presented unique opportunities to save.

I wasn’t able to make it work for my first deployment, but on my next two, I was able to significantly cut my housing costs. For the second deployment, I found someone to live in the house I bought and charged him rent. This effectively cut my mortgage payment in half. On the third, I had already rented out that house and moved everything into storage, so my housing payment was just the cost of the storage unit.

Each deployment and TDY trip also presented an opportunity to save more. Basic expenses like food, gas, and utilities were all reduced during these times so I would take that difference in spending and save it. Additionally, the per diem, combat pay, and saved taxes all went into savings.

Take advantage of military-specific offers

The first part of my journey was two weeks of skiing in Park City, Utah. Sounds extravagant, right?

Image of the Park City Utah skiing resort on a sunny winter day with a snowy mountain and bright sky in the distance. | The-Military-Guide.com

“Park City, here we come…”

The major expense in skiing is the lift ticket. You can expect to pay a minimum of close to $100/day, and closer to $200/day at a premium resort like Park City. But while on active duty, I bought the Epic Pass, which gave me season access to some of the best mountains in America.

The price for active duty, active duty dependents, and retired military? $169. That’s less than a single day at Park City. And for veterans, the price is still unbelievable at $559.

For housing, I stayed in a hostel. Instead of spending what would likely have been $200/night for a hotel, a hostel cost me about $40/night. This also let me buy groceries and cook my own meals instead of eating out the whole time.

For the last few days of the trip, when some family arrived, I stayed in a Marriott Residence Inn. That was paid for via points earned through TDY travel where I always stayed at a Marriott. And because rooms at the Residence Inn have kitchens, I again made my own meals.

After skiing, I kept my winter activities alive by going on a dogsledding trip with Outward Bound. This nonprofit offers free trips every year for veterans. They even paid for my flight there and to my next destination. And the best part? I adopted one of the dogs that was set to retire.

Image of a dogsled viewed from the rider's perspective with dogs pulling the sled through a snowy forest | The-Military-Guide.com

View from the dog sled


Healthcare can absolutely be a concern for anyone after the military. Especially if you aren’t retiring or going into the reserves, the worry over what you will do for healthcare can be quite real.

During my brief from the VA during a transition class, I learned that since I deployed to a combat zone, I would be eligible for free healthcare (although not dental or vision) for five years after my service. I applied for the VA benefit and received it. I even went to the VA before my trip and they gave me various medicines that I might need at some time during my travels.

Additionally, I purchased a travel insurance policy through World Nomads. Travel insurance is absolutely worth it so this was a no-brainer for me.

Air Travel

The “travel” part of traveling is usually one of the most expensive. Rides on airplanes are not cheap. But there are ways you can make it cheaper.

I went into my adventure with only some broad intentions, but no real itinerary. This gave me a lot of leeway in booking flights, as I could maximize cheaper options over trying to fit them into my schedule. Typically, I would search through Skyscanner.

One of the best perks you can get while in the military is the American Express Platinum Card®. They waive the yearly fee for active duty, and the travel perks are amazing:

  • $200 airline fee credit
  • 5x points on travel when booking through American Express
  • Fee credit for Global Entry or TSA PRE✓®
  • $200/year credit for Uber

And while flying you get access to the American Express Centurion® Lounges and a host of other lounges via the Priority Pass, membership which is free with the card. There’s nothing like being able to kick back and relax at an airport lounge while traveling. And it surely helps with layovers.

Even though I am no longer on active duty and the $550/year annual fee is no longer waived, I still have this card. The price is made up for through all the perks.

Budget hotel options

I traveled solo and so was looking for ways to meet people. For me, that meant staying at hostels.

Lots of people have reservations about hostels, not helped by the fact that there are a few horror movies based on living in hostels. But I have found them to be quite enjoyable and a great way to meet fellow travelers. Hostels tend to be most popular with younger travelers (I was often considered “old” at the ripe age of 31). But many have strict quiet hours, private rooms, and can be conducive to anyone looking for a cheaper option.

To find cheap options, start with Hostelworld and AirBnB.

Embrace the unknown, but have a backup!

I went into the trip knowing that if somehow everything failed, I could go back home and move in with my family. Not ideal- but I knew that I could do that. I gave myself the permission to take risks, but took the precautions to mitigate those risks and let myself enjoy the experience.

I encourage anyone to think about taking some extended time off after the military. Take the time to enjoy family and friends, explore, and reflect on your time in service.

Unfortunately, my plan was cut about halfway through because of COVID-19. It didn’t seem wise to keep traveling amidst a global pandemic!

As I left the military and saw some opportunities for improving the transition process, so I started The Veteran Professional. The site shares information with veterans interested in graduate schools, entrepreneurship, and professional careers. Thanks for stopping by!

[earnist ref=”the-military-guide-to-financial-independence” id=”70177″]

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Posted in Travel | 4 Comments

“I’m 59.5 Years Old And Done Writing About *My* Money”

We’re aging out.

As many of you know from your research, 59.5 is the minimum age for starting optional withdrawals from an IRA. Nearly everyone worries about how they’ll tap their IRA for living expenses when they reach financial independence before 59.5.  (Although there are many penalty-free exceptions to this tax law.) I hit that dubious age milestone in April 2020, yet after decades of planning for our IRA withdrawals– we won’t need to. Today my spouse and I are pretty sure that we’ll never need to touch our Roth IRAs for the rest of our lives.

In late 1999 we reached financial independence on our high savings rate. We did it through 17 years of saving 40% of our gross income and investing it in equity mutual funds. We didn’t even realize we’d reached FI until 2001, when I finally understood the 4% Safe Withdrawal Rate.

I retired from active duty in 2002 at age 41. In addition to my military pension, we started withdrawing from our investments at the 4% SWR. We also began converting our Thrift Savings Plan accounts and traditional IRAs to Roth IRAs. We finished that process in 2018.

Back at the dawn of a new millennium (and the pit of the Internet Recession), reaching FI was unusual. Retiring in your 40s was controversial and bordered on foolhardy. People wanted to learn more. How did we get that much money? Did we have any clue how long it would last? What if we ran out? What about <insert myths and legends of early retirement here>… and “You’ll be so bored…” and “What will you DO all day?!?

Image of bed covered in fake dollar bills from display room at Zero Box Lodge in Porto, Portugal | The-Military-Guide.com

(Not our actual bedroom.)

The 4% SWR is working just fine.  In 2020, at age 59.5, we have more money than we need and we’re withdrawing less than 3.5%. It’s sustainable for life.

We used to discuss our plans to avoid running out of money before we died. Now we’re planning to avoid estate taxes. Today we’re nowhere near anybody’s estate-tax limits, but we can project the compound math for another 40 (60?) years of our FI lifestyle. We’re also spending more time on philanthropy and next-generation financial independence.

We’re not shopping for yachts or private jets, but we’re certainly not worried about the next bear market or recession.

The FI conversations are changing.

I’ve belatedly realized that people have stopped asking me how we got to FI. Everyone knows how to do that now. “Heck, Nords did it with clay tablets and a wooden stylus– how hard could it be?

Today, the classic financial independence wisdom is so boring widely accepted that personal-finance websites break down FI stages into a half-dozen different levelsPeople are finally talking about ditching the 1990s FIRE acronym to focus on FI and career changes, not on retirement. If you enjoy your avocation then why would you ever retire?!?

Instead, people want to know about our 18 years of experience at not working for money. And raising your money-savvy family. And philanthropy. And taking care of aging parents. And estate planning. And how recessions feel when you’re FI. And slow travel. And surfing. And grandparenting. And oh by the way, are we bored yet?

Image of the Ol' Surfer Dude from Doonesbury's comic strip as an example of an older person growing a ponytail. | The-Military-Guide

Doonesbury’s Ol’ Surfer Dude.

I’m no longer asked about asset allocation. Instead I’m getting questions about the military’s Survivor Benefit Plan and life-insurance options, annuities, Medicare, Tricare For Life, and when to take Social Security.

Nobody even asks about growing a ponytail.

My spouse and I have even stopped talking about safe withdrawal rates. We’ve changed our lives quite a bit during the last couple decades and we’ve made important transitions. Along the way we’ve become much more aware of behavioral financial psychology, our evolving attitudes from scarcity to abundance, and… (*sigh*) our aging bodies.

I’m struggling to use analogies and cultural references that can be recognized by Millennials and Gen Z. But my whole point of this post is that even my second-millennium analogies are losing relevance– and you guys know how to use search engines.

I might be done writing about my personal finances. I’ll keep writing about general personal finance and I’ll certainly answer your questions– I’ll just stop writing about my specific personal financial independence.

Image of Doug Nordman's granddaughter Arya on the floor with a stuffed toy lion. | The-Military-Guide.com

Arya at 15 weeks– almost crawling!

Let’s clean up some random thoughts in a final blog post about Ohana Nords money.

Then you can tell me what else you’d like to see.

Don’t worry, we’ll still share plenty of baby granddaughter photos!


Understanding the journey when you only see the results

My spouse and I spent two decades achieving our overnight financial success. It must seem inevitable that we’re doing well today: I have a pension, she’ll get her pension, we have a rental property, and cheap healthcare!

It’s tempting to think “It’s so easy that anyone can do it!!” And many do, but not everyone.

Image of Jim Carrey in the movie "Dumb and Dumber" with the meme caption "So You're Telling Me There's A Chance" | The-Military-Guide.com

The 4% SWR in 2002.

However today you’re seeing the highlights reel of the director’s cut. In 2002 it was a very different documentary… as many people implied, perhaps it was “Dumb And Dumber.”

After my military retirement, my spouse and I thought we’d never earn another dollar during our entire lives. (My spouse’s parents are still alarmed by that thought.) My reasonable life expectancy was 40 more years, and the 4% SWR studies have struggled to extend their analysis past 30 years.

Back then our assets consisted of:

  • our equity mutual funds with two years’ expenses in cash,
  • our home (a live-in rehab project, mortgaged at 6%),
  • a rental property (leased to my spouse’s parents, mortgaged at 7%, with zero cash flow), and
  • my military pension.

We had a few financial issues:

  • The Internet Recession (and the 9/11 attacks) were still wreaking havoc on the stock market.
  • Our home needed a lot of work to become an actual house.
  • My spouse had left active duty for the Reserves.
  • I didn’t file a VA disability claim because I didn’t feel disabled. (Rookie mistake!)
  • Our rental property needed more work and was worth less than we’d paid for it in 1989.
  • Our rental might be a long-term care facility for my spouse’s parents.

Our math said it would all work. (Barely.) We projected that our expenses would actually drop after I retired because we’d stop outsourcing and start doing more sweat-equity labor.

Our biggest asset was our time. We finally had the time to become better parents, to enjoy our marriage, and to manage those troubled financial assets. We knew that we also had plenty of time to figure out whether this 4% SWR stuff was really sustainable. We had time to find other jobs, to move to a lower-cost area, and several other tactics.


The relentless math of financial independence

We still didn’t realize how our assets would appreciate with the 4% SWR, but we sure appreciated having more time in our lives.

I remember taking a lot of recovery naps in 2002. I had more time for surfing for exercise to get my weight and blood pressure under control. We ate healthier (and cooked more). The stock market finally bottomed out in October 2002, although nobody believed that until late 2004.

Image of a spreadsheet bar chart of Nordman family net worth from 1991-March 2020 with 1999 indexed to 100 | The-Military-Guide.com

2007 looked good!

We were still parenting a tweenager. We were still working on both houses. We wondered how we’d free up the money to buy all the materials (and pay the contractors) to fix everything. We started refinancing our mortgages, which is challenging when lenders only see pension income and capital gains.

By 2007, life was even better. I remember looking at our finances one night and shaking my head in disbelief about having over 200% of the money we needed for the 4% SWR.

That financial issues list was looking better:

  • We’d reduced our expense ratios from mutual funds (1.38%) to ETFs (0.25%).
  • Our home looked more like a house, but still needed more work.
  • My spouse had qualified for a Reserve pension starting in 2022.
  • Real estate values were rising, and our 30-year mortgages were now at 5.375% and 5.50%.
  • My parents-in-law had returned to the Mainland, and we raised our market rent by 87%.

Then 2008 happened.

The Great Recession hammered us right in the middle of our sequence of returns risk.
Our net worth dropped by 58% from its ridiculously high peak to its ludicrously low pit. Amazingly we still had 150% of the money we’d need for the 4% SWR, but at the low point in 2009 we were sure the recession would last for a decade. I stopped looking at our financial statements.

If there was anything good about that recession, it was our opportunity to have many thoughtful discussions of our lifestyle expenses and our asset allocation. We’d dropped our mortgage rates to 3.625% and 4.625%. We’d reduced our non-discretionary expenses with solar power and fuel-efficient cars. We were converting our TSP accounts and traditional IRAs to Roth IRAs. We’d made a lot of sweat-equity progress on our home and our rental.

In 2010 our daughter started college. (We’d invested for that that since 1992, and now her college fund was in I bonds & CDs.) The markets showed “green shoots” of recovery, yet we all expected a head fake and a double-dip recession. By 2012, however, we’d begun believing that the economy really was recovering. We had the courage to spend a big chunk of our own recovery on a major home renovation.

As our second decade of FI began, our aggressive portfolio (>90% equities) recovered almost as fast as it had dropped.

I’d published a book, and suddenly (after a decade of practice) I had a writing & blogging career. I donated all of my revenue to military-friendly charities, but I knew that I’d never need another Plan B.

Our cautious optimism was boosted by confidence. Life was not only good but our attitudes finally made the transition from scarcity to abundance. We didn’t need to earn a dollar ever again, and we saw opportunities everywhere.


Yet another recession! But…

Our net worth hit a seventh annual new high in 2019. We’ve already survived two recessions and we’re just about bullet-proof from future recessions.

Image of Nordman family's account balances at Fidelity Investments between May 2018 and May 2020 showing bear-market volatility | The-Military-Guide.com

Our bear-market volatility… so far.

We’ve also finished optimizing the “personal” part of our finances. We already had more than we need, and now we’re wasting even less of it.

Amid the chaos of the Coronavirus Recession, we’re checking off our list:

  • We’ve simplified our asset allocation in autopilot with a total stock market index fund.
  • Our portfolio’s overall expense ratio is 0.03%.
  • Oahu real estate values are at an all-time high.
  • Our home is in great shape with low maintenance.
  • Our 40-year-old rental property is finally rehabbed and has a little cash flow.
  • We consolidated our mortgages to one loan at 3.50% (and might go even lower).
  • My spouse’s pension starts in 2022.
  • We finished our Roth IRA conversions.
  • I finally filed my VA disability claim… 14 years late.
  • We’re driving electric vehicles with free power from our home’s solar panels.
  • We’ve finished our estate plan and we’ve figured out more of our philanthropy plan.

Just reducing our investment portfolio’s expense ratios has paid for a couple months of slow travel. Every year. For as long as we can travel.

My spouse is the real winner. When she declined yet another unrefusable offer of her active-duty career in 2001, she abandoned nearly $1M in pay and pension over the next two decades. I remember shaking my head and thinking “It’s only money.” She didn’t need to pay the price for it.

We gained far more than she gave up.

Not only did the Reserves improve our family’s quality of life, but it restored the career challenge and fulfillment which had withered for us in the 1990s. It turns out that we didn’t need the $1M, either, yet she’ll recover that several times over during the rest of her life.

Saving and investing for financial independence gave us choices.  As every military family knows, the assignment policies are rigidly hostile to dual-career couples. (They’re especially discouraging to dual-military couples, but that’s a whole ‘nother blog post.) I’m skeptical that assignment policies will ever get better, but the Web has at least improved the career mobility options for military spouses. We were able to save for financial independence in the last millennium, and today there are even more opportunities to do that during active duty.

My father passed away in 2017 after nearly a decade with Alzheimer’s Disease. My spouse and I are now self-insured for long-term care.  It makes me feel better to know that my family will have less caregiver stress, and if we don’t need the money then we’ll make a charity reasonably happy.

My VA disability rating came in at 30% for bilateral knee damage and tinnitus. I’ve waived a portion of my taxable pension for the tax-free compensation, and it’s saving me about $100/month of income taxes. Someday I might apply for a bonus round due to service-related hearing loss or (much later) a knee replacement. Otherwise, I’d like to avoid “upgrading” my membership in this unfortunately large club. We’ve already paid the price and the compensation doesn’t make up for the sacrifice.

Our life’s documentary started amid attitudes of scarcity and fear, yet now we’re finally living happily ever after.


Where do we go from here?

We’re no longer watching our withdrawal rate.

The 4% SWR may have its flaws, but they’re easily avoided– and its successes lead to new challenges.

Image of Doug Nordman's granddaughter Arya at one month holding a copy of The Military Guide book | The-Military-Guide.com

Start ’em young.

We’re boosting our philanthropy. It’s the right thing to do and it also avoids the perils of dynastic wealth. It turns out that when you raise a money-savvy family, the next generation takes care of their own financial independence without waiting for any of your assets. Our daughter and son-in-law already understand FI and career changes, and their lives are full of their choices.

Speaking of next-generation FI: our baby granddaughter is going to get two generations of coaching in it. We’re supporting her 529 account for a year or two, and we could leave her enough inherited wealth to do anything, but I doubt she’ll need it. I’ve seen what the Web has done for the career choices of our daughter and son-in-law, and I can’t wait to see what it does for Arya.

My daughter Carol and I are about to publish our book on raising your money-savvy family. The editing is done(!), the layout looks incredible, and we’ve recorded the raw tracks for the audiobook. We’re publishing in June 2020 and I’ll update this post as it approaches. September 2020.

UPDATE:  Here’s the Amazon link to Raising Your Money-Savvy Family For Next Generation Financial Independence.

Mahalo nui loa hana hou to MK Williams and the team at ChooseFI Media, and we can’t wait to see everyone’s feedback!

I’m writing my third book about financial independence for life. When my spouse and I attended FI Chautauqua 2019, we looked around the room and realized that we were the “most experienced” FI couple. I’ll keep writing books (while I still can), and this time it’s about an abundant lifestyle.

I’ll stop humblebragging blogging about our family’s financial independence. Now that my spouse and I are approaching what used to be a traditional retirement age, from here on our personal financial blogging will be about more traditional retirement issues.

I’ll still occasionally update the bar chart on our net worth post.

I hope we can convince even the 4% SWR skeptics what it means to reach FI with an 80% success rate. There are plenty of ways to counter the hypothetical 20% failure rate, and the benefits far outweigh the fears.

For you older readers– good news! I’ll share more golden knowledge nuggets about:

  • Medicare premiums (and IRMAA),
  • Tricare For Life (and other Medicare supplemental insurance),
  • Social Security (and its taxation), and
  • insurance programs (or self-insuring).

No worries– we won’t review chair lifts or other… “elder mobility independence products.”

We’ll also write about:

A better lifetime philanthropy plan. We don’t have to worry about signing The Giving Pledge but we could certainly give 1% of our net worth to charities every year. Right now the biggest bang for an American buck seems to happen with food banks, homeless shelters, and… AccesSurf.

Exit strategies for investment real estate. (Other than “probate.”) It’s possible that our next generation could move into our rental property during a Hawaii tour. It’s been a crappy financial investment (and a huge opportunity cost) with a great family benefit, and I don’t feel the need to optimize it any further.

The dreaded Income-Related Monthly Adjustment Amount of Medicare.  My spouse and I can’t avoid IRMAA, but maybe our higher premiums will help stabilize the program for the rest of us.

Social Security at age 70 in 2030. I know everyone’s concerned about the potential 2034 reduction in benefits, but that will be fixed. Between SS and my pension we might not even need our investment portfolio.

Speaking of investments, we might start doing that again with my spouse’s pension. This time we could buy shares with her pension income and donate an equivalent amount of appreciated shares for the income-tax deduction. Better yet, if we ever needed to cash in our gains from our newer investments then we’d pay much lower taxes. If we never needed to cash in our gains then we’ll make more charities very happy.


Your call to action

I think I’m done writing about our Ohana Nords finances. If you have any questions left over, please ask them in the comments or use the “Contact me” box!

What else do you want to read about (or listen to)?

[earnist ref=”the-military-guide-to-financial-independence” id=”70177″]

Related articles:
BiggerPockets Money video podcast on FI during a global pandemic (episode #119)
The 1980s-2000s: How I Wish I’d Invested Back Then
Good News! How Our Nords Family Financial Independence Life Will Change In 2019
Our Retirement – The Spending Smile Of Financial Independence
Fear And Despair In The Time Of Bear Markets
Yet Another Decade In Review Post
Family Estate Planning For Your Disability
“I Inherited Money And Now I Can’t Blog About Financial Independence Anymore”
CFP Michael Kitces’ site:  The Extraordinary Upside Potential Of Sequence Of Return Risk In Retirement
Michael Kitces explains the upside of the 4% SWR on this BiggerPockets Money video.
Don’t Gut It Out To 20: Leave Active Duty For The Reserves Or National Guard
“Hey, Nords: How’s Your Net Worth?!?”
Why You File Your Veterans Disability Claim (Not Just How)
Early Withdrawals From Your TSP and IRA After The Military
Our next book:  Raising Your Money-Savvy Family For Next Generation Financial Independence

Posted in Financial Independence, Investing & TSP, Military Retirement | 18 Comments