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Welcome to personal finance for long-term investors, where we believe Benjamin Franklin's advice that an
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investment in knowledge pays the best interest both in finances and in your life. Every episode teaches you personal
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finance and long-term investing in simple terms. Now, here's your host, Jesse Kramer. Welcome to Personal
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Finance for Long-Term Investors, episode 117. I'm Jesse Kramer. By day, I work at
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a fiduciary wealth management firm helping clients nationwide. You can learn more at bestinterest.blog.
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blog/work. The link is in the show notes. And by night, I write the best interest blog and I host this podcast. I
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help busy professionals and retirees avoid mistakes and grow their wealth by simplifying their investing, their
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taxes, and their retirement. Later today, I'll be joined by Spencer Ree. Spencer is an Air Force veteran who
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reached financial independence and now shares advice mainly for other military vets. But it is really interesting how
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retiring from the military shares so much in common with a more traditional 9-to-five retirement, especially when it
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comes to some of the non-financial aspects of life transitions. You know, life transitions like retirement can be
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so much harder than they appear on the outside. And we made sure, Spencer and I made sure that even if you're not a
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military service member or a veteran, you're still going to find a lot of value in Spencer's story and in some of
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his lessons learned. But first, we have a review of the week. This one is from uh Hemo Mojo Filter who said,
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"Meaningful content delivered concisely. Jesse is one of my favorite content
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creators in the personal finance space. His style is matterof-act and straightforward, and he explains complex
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financial concepts in easy to understand language. Jesse helps build confidence through improving financial literacy,
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and he focuses on data and facts, not personal opinions." Well, Mojo, thank
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you for the kind words, and I'll be happy to send you a Supersoft podcast t-shirt. Just drop me an email to
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[email protected]. And listeners, if you have a question, a concern, or feedback that I can answer,
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especially for a future ask me anything AMA episode, you can send those questions to my email,
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[email protected]. Before we get to Spencer today, I want to share two bigger thoughts with you.
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The first one is about the only constant in retirement, and the second one is about something that I'm calling the
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retirees financial decathlon. Your only retirement constant will be change. It's
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like that Pete Seager song or the bird song, you know, to everything there's a
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season. Turn, turn, turn. A time to weep, a time to laugh, a time to mourn, and a time to dance.
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>> Some of us retire at 70, others retire at 40. But no matter your retirement
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age, your retirement will change over time. It evolves. It's not just a point
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in time. It's not just one age. It's decades long and it's going to change.
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At times, it's literally seasonal. I think of my parents. My parents love to
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garden. So spring through late summer, it's their number one retirement pastime
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is out in the gardens. But their daily schedule undergoes a change, a big change in winter. You know, turn turn
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like the bird said. Now, what else changes? Well, you get older pretty obviously. I was speaking to a client
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recently about the go- go, the slowgo, and the no-go phases of a typical retirement. They took a trip to Europe
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together. And after they got back in Italy, I think they were on their feet for 5 or 6 hours a day, putting in 6, 8,
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10 miles of walking a day. And they felt a little less go- go and a little more slowgo than before. And that trip kind
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of brought it into focus. Uh, what else changes? Well, everyone else gets older,
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too. I think this is a really interesting one. You know, your grandkids, I I've seen this in my own
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life with my parents and their grandchildren. My my daughter are my nieces and nephews. The grandkids go
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from diapers to kindergarten and next thing you know, they're kind of too cool
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for you and then they're off to college and beyond. All in the span of your retirement. Your own children are
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probably going to go from young professionals to married with kids and eventually they'll become empty nesters.
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All within your retirement. So these people, these other people in your life, they are changing too. Your health
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rhythms will change. Even if you start retirement feeling great, your body changes. A bum knee will alter those
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daily walks will alter those golf habits. A doctor's order will shift your diet or exercise. For some retirees, the
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biggest health change is simply more doctor's appointments in the first place, filling your calendar.
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Friendships and social circles will change. Friends will move away, chasing their grandkids. Other friends are going
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to pass away. Other people might actually surprise you and get closer. Your people will change over time. And
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with that comes new rhythms of connection or loneliness, especially if you don't adapt. From the Stacking
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Benjamin show, Joe Saul Seigh frequently shares a story about his friend whose main goal was to retire to the
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mountains, which I think a lot of us can relate to. The mountains are beautiful.
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I'm going to retire to the mountains. So, he had decades of hard work, years
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of planning, and he made it happen. He retired to a beautiful home in the remote mountains. And then within months
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of doing so, he realized he had completely isolated himself, physically isolated himself from all his previous
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social circles. And he couldn't wait to undo his choice of moving to the mountains and move back to civilization.
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So that's a pretty interesting uh anecdote. Finances and markets change, too. You know, the 4% rule, it's only a
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guidepost. Your retirement withdrawal strategy will change over time. It has to. It has to be dynamic. Markets don't
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move in a straight line. Inflation, tax laws change, even just your own spending
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patterns will shift and will change how you approach your money. Your community and environment will change, too. Your
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neighborhood, your town, your city will change. A coffee shop closes, a new park
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opens, neighbors will come and go. Or maybe you move yourself, downsizing, moving closer to family, chasing warmer
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winters, becoming a snowbird. Our neighbors moved just last month. They're probably 70 years old and they they're
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still in our town, but they just wanted to downsize out of the family home where
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they raised their kids, you know, the 2500 foot home into a smaller 1,300 ft² onele ranch style home. Very common. And
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then what's kind of funny, the new neighbors who moved in after them are also retirees. They're also about 70
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years old. They're moving 6 hours north from New Jersey. Why? well, to chase
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after three of their adult kids who happen to settle in greater Rochester and their multiple grandkids, all of
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whom are close by. So anyway, different reasons for moving all for retirees in this particular case. Uh your energy,
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your priorities will change. Your mileage may vary. At 60, you'll be up for adventure. At 70, a slower routine
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starts to feel better. And at 80, you're only focusing on simplicity. You know,
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again, your mileage may vary on that. But the point is, the things that you want from retirement will evolve, and
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that's not a bad thing. the the juice you squeeze from daily life will also eb
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and flow and it will it'll eb more than flow as time goes on. Technology certainly changes. I know it sounds like
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a small thing, but it's pretty huge and it's probably bigger than it's ever been
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before. I mean, just look at this example. How long do you want your retirement to be? I think would a fair
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number fall between 20 years and 40 years. Let's use that range. The worldwide web is 35 years old. Wi-Fi is
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25 years old. It became commonplace, at least here in the USA, starting about 20
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years ago. iPhones are 18 years old. Simple stuff like GPS, maps, FaceTime, video calls, streaming TV shows, even
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text message. These weren't like proliferated, ubiquitous, popular technologies until the last 10 to 15
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years. So technology will keep changing by leaps and bounds all within the time frame of your single retirement. So
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adapting to that technology can either expand or limit your personal world. Purpose and meaning can change a lot too
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for retirees. Some retirees discover purpose in volunteering, in mentoring, in a faith community. Others lose steam
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after the honeymoon period of their retirement, and they need to reinvent some way to find fulfillment. And again,
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20 or 30 or 40 years is a really long time. That fulfillment cycle can turn and turn and turn over and again. We all
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know people who have reinvented themselves throughout their 20s and 30s and 40s. And I don't think that ceases
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just because we're in our 50s and 60s and beyond. It might slow down for some
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people, but it speeds up for others. It rarely halts altogether. So no matter your age, no matter your retirement
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plans, I believe the only constant in retirement will be change. And now for this other idea I alluded to before, the
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retirees financial decathlon. While that first little stanza, the first little topic focused more on the softer side of
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retirement. This is going to focus on some of the nuts and bolts finances of retirement. If you're not familiar with
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Peter Aia, that's how I'm going to start this little uh story. Peter Tia is a
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doctor, a scientist, an author, an all-around health advocate. And he came up with this concept that he calls the
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centinarian decathlon. And it's a framework that asks, "What 10 physical
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tasks do I want to be able to do at age 100?" Centinarian 100. So very lofty.
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What 10 things do I want to be able to do at age 100? And from there, Peter Aia works backward identifying the strength
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and mobility and endurance that we need today at our current age in order for us
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to kind of age gracefully into those goals in the future at age 100. So this decathlon, it reframes fitness as
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preparation for longevity and for independence, not necessarily for pure performance or aesthetics. The idea is
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is kind of simple. We train today for the functional life that we want decades from now. And my thought was, well, can
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we do the same thing for retirement, retirement finances? What are the 10 most important aspects of a financially
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sound retirement? And how do we start preparing for that future today? So, the 10 items in my retiree decathlon. What
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matters in retirement? It's crucial to focus on yes, family, lifestyle, purpose, all those other soft aspects of
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retirement. If you haven't listened to episode 106 of this podcast that it's a
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really good one to listen to that focuses heavily on that side of retirement. In fact, most postretirees
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actually end up realizing that the soft stuff of retirement is much more important than the financial nuts and
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bolts. But nevertheless, I'm going to focus on the finances for today for this
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retirey decathlon. The 10 nuts and bolts tasks that we should start today and work on throughout retirement. The first
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one is to understand your future paycheck or you know in quotes paycheck. Your cash inflow during your career is
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really easy to understand. It's mostly your paycheck. It's really simple. But
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obviously there's a significant change in retirement. No more paycheck. All pre-retirees need to understand where
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their future retirement paycheck will be coming from. Some people assume it's
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100% from social security. Other people assume it'll come 100% from their 401k
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savings. The truth is usually more nuanced. Your retirement paycheck will likely have multiple sources. It will
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change over time. It'll be unique to you. It should be optimized for your lifestyle, for your long-term
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sustainability, for tax minimization, other things like that. And even if you're years away from pulling the
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retirement trigger, it's not too early to consider uh where your retirement paycheck will come from. On that note,
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if you're interested, I wrote a a free PDF white paper. It's called the step-by-step guide to building your
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retirement paycheck. And if you sign up for my email list, you can get a free copy of that PDF sent straight to your
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inbox. You can sign up at bestinterest.blog at the homepage or you can follow the link in the show notes to
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this uh article, the retirees financial tool. And there are multiple places in the article where you can sign up. You
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can download your free copy of the step-by-step guide to building your retirement paycheck. But now on to event
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number two of our decathlon. Allocate and build your portfolio. It's fine advice to say just save more money, but
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we all need to dig a little bit deeper. How much should we save? How do we allocate those dollars into different
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asset classes, stocks, bonds, etc. And then why do we make those allocation decisions? Uh what assumptions should we
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make for future returns on investment? Like how will our money grow? And then how do those allocation and growth
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assumptions change over time? Your portfolio will be a significant part of your retirement lifestyle, your
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retirement finances. It might be the only part of your retirement paycheck for a few years if you plan on retiring
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early, right? You won't be able to turn on social security yet. So, your portfolio is going to be the only
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probably one of the only inputs into your retirement paycheck. So, we need to focus on the allocation and and the
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structure of our portfolio. Event number three in this decathlon is to understand
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your social security strategy. On its face, you have to decide when and how to claim social security for a maximum
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lifetime benefit. But yes, it's more nuanced than that. So, I suggest asking
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a lot of different questions. Uh, I wrote an article I'll link in the show notes. It's called when should I take
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social security? And I suggest asking questions like, uh, what's your family
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health history? Should you delay social security in order to make it into more of a longevity insurance for your plan?
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Do you plan on part-time work during retirement? How might spousal benefits and/or survivor benefits impact your
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family and your specific social security strategy? How how risky, how threatening
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is the sequence of returns risk for you and will early social security claiming actually alleviate that risk? Maybe just
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one of the basic ones, one of the more basic ones is is social security like this fundamental pillar of your
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retirement or if it disappeared, do you have enough money saved up that you you don't really need social security in the
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first place? It's not that important. All those kind of questions can help us
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provide more color in determining when you should take social security and what your family social security strategy
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needs to be. So that's the third event of this decathlon. The fourth event is
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to develop a taxefficient saving and draw down strategy. There is a generally accepted retirement withdrawal order of
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operations to minimize retirement taxation. Uh, if you're curious what that generally accepted order of
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operations is, I suggest reading the article that I linked in the show notes called your retirement withdrawal order
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of operations. But it begs the question, is there a taxefficient accumulation strategy? Yes, but involves forecasting
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some uncertain futures, especially around tax rates and investment returns, and then acting now on that limited
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information. That's why the best strategies are kind of a it's a dynamic
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year-by-year evaluation. It's a decision tree rooted in what we know now, but
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then branching out to evolve based on how today's facts might change. So, you
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should ask yourself these kind of questions every year. What's my income and what's my marginal tax rate this
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year? What tax advantage accounts are available to me this year? What does my current tax diversification look like?
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Meaning, do I have monies in traditional pre-tax buckets, in Roth post tax buckets, and in in taxable buckets? So,
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that's that tax diversification. what do I expect future tax rates to be for me
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personally based on my income future income but also for the broader tax system and then last what non-ax
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considerations might impact these decisions things like liquidity simplicity employer matching getting an
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inheritance etc so all of those play into developing a taxefficient saving and a tax efficient draw down strategy
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the fifth event in this decathlon is to plan for healthcare costs in episode 108
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of personal finance for long-term investors I answered a listener's AMA question by diving deep into health care
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costs before, during, and then after retirement, I mean, you know, Medicare, kind of the long-term play of retirement
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healthcare, because yes, retirement healthcare can be a scary proposition. But I would urge you to consider this.
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Millions of people have walked this retirement path before you, and their lessons, good, bad, or ugly lessons are
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out there for you to learn from. More specifically, we do know, you know, it's
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been figured out how health care costs fit into a broader retirement financial plan. That information is readily
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available. So, the the work that remains for you is to consider how you'll tackle
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that question in your specific life. The answers are out there. We just need to put in the work to consider how they
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apply to our lives. Event number six in the decathlon is to make an estate plan.
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And I'd ask you is preparing for retirement and preparing for death. Are those two separate tasks? Ultimately, I
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see them both as thinking ahead and doing so quite prudently. So, as you age, as your family grows, as your
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balance sheet becomes more complicated, it becomes increasingly essential to review and revise your estate plan. Are
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your loved ones protected from the vicissitudes of fate? Who will receive assets upon your death and in what
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amounts and with what stipulations? Are those gifts tax optimized? those kind of
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questions. Do your loved ones know about your plans? Have you communicated with them? And if not, why not? All those
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questions are really important and I I can't uh emphasize enough the importance
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of making and editing, reviewing, and revising your estate plan. Event number seven is to change or alter your
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portfolio over time. So again, one of my foundational financial planning and investment management principles is to
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think about goals first and then timelines to those goals and then the appropriate risk for those timelines and
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then the appropriate assets based on that risk level. So what are the goals for your money? What are your preferred
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or required timelines to reach those goals? How much risk can you afford to take across those timelines? And then
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what assets can you invest in based on that amount of risk? As you age, your goals might change. Your timelines will
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undoubtedly change. I mean, time is going by. It's the only constant, right?
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And your portfolio should adjust in concert with those facts. Surprisingly, you might even reach a point where your
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timelines are no longer actually your timelines. Instead, you'll invest based
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on your estate plan, based on the timelines of your descendants, of your heirs, or of charities that you plan on
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bequesting money to. It's not uncommon to see a person's uh recommended risk
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start high in their younger years, glide lower into retirement, but then eventually increase again toward the end
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of their life. Event number eight is to stress test your plan. Will your financial plan survive market
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volatility, inflation, longevity, or the other curveballs that life can throw your way. It's worth asking those kind
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of whatif questions. There are various software packages and various professional experts who can help you
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stress test your plan. Event number nine is to consolidate and simplify. What's
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the point of compounding wealth if it also comes with compounding stress? Most retirees see a big psychic benefit from
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simplifying their financial lives. It's a bit like cleaning your house. Now,
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what's the best way to do it? Probably by keeping it clean in the first place.
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But if you've come to the point where your uh financial plan, your retirement
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plan, your financial picture is a little bit out of control, there are many ways
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to consolidate, simplify, and just end up with a uh a less stressful, a more simple plan going forward. And then
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event number 10 of our decathlon, it's a one-word event. I'll pause and let you
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take a little guess at what this one word is. The word is spend. The last event on the retirey decathlon is to
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spend your money. Spending and saving are these two separate muscles. And too often a frugal retiree will enter their
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golden years with a a massive savings muscle, but with atrophied spending muscles. So an important thing to do
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even before retirement is to start flexing, start exercising your spending muscle. If you feel like a habitual
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saver, if spending money gives you anxiety, if your only pair of pants is 17 years old and fraying at the seams,
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spend. Start now. You don't have to go crazy, but you shouldn't wait until
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retirement. You can go out and buy a new pair of pants. So, thank you for listening to that retirees financial
00:19:01
decathlon. I hope it was interesting and entertaining for you. Here's a quick ad
00:19:05
and then we'll get back to the show. You probably know that I love listener inspired content, but this is my first
00:19:10
listener inspired advertisement. Frank asked me in short, Jesse, is there a best time to start working with you as a
00:19:16
client? And the short answer is yes. There are two ideal times. One is at the beginning of a new year for probably
00:19:22
some pretty obvious reasons, but the second one is right about now, September and October. It's the perfect time for
00:19:27
year-end tax planning to ensure you find the correct balance of Roth conversions,
00:19:31
tax gain or tax loss harvesting, making charitable gifts, spreading out any portfolio changes over multiple tax
00:19:37
years, or whatever other tax dials we can turn for you. Working backward from the December 31st tax deadline, the time
00:19:44
to start those initial conversations is right now, August, September, maybe into
00:19:48
early October. You want to give yourself and us enough runway to make sure we get
00:19:52
this right for you. So, if you're interested in starting a conversation with me and my colleagues, you can go to
00:19:58
bestinterest.blog/work and fill out the form there. Again, that's on my blog on the work with Jesse
00:20:04
page. The address is bestinterest.blog/work and fill out the form. And with that,
00:20:10
we're now going to introduce Spencer Reese onto the podcast. Spencer separated from the US Air Force in 2022
00:20:16
after 12 years of active duty. And he helps military service members mainly and their families through his book, his
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podcast, his course and website, which all fall under the the branding umbrella of the military money manual. So if you
00:20:30
hear us stay military money manual, that is really Spencer's brand. His book, his
00:20:34
podcast, his course, and his website all fall under that brand. And again, all those media channels are dedicated to
00:20:39
enriching military families, helping them reach financial independence as quickly as possible. I know most my
00:20:45
audience, you're probably not in the military. You're not a military veteran.
00:20:48
There are so many parallels, especially when it comes to the life transitions, and you'll hear Spencer and I dig into
00:20:54
that today. So, without further ado, here is Spencer Ree from the Military Money Manual.
00:21:00
[Music] >> Spencer, I'm glad we're able to do this, man. and and something that I was
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thinking about one one potential place to start this conversation is that you know my listeners are used to me hearing
00:21:12
hearing me say that financial planning is a function of specifics right it's
00:21:16
your life your family your income whatever is unique and specific to you but to that end I'm thinking about your
00:21:23
expertise and the world that you're coming from some of the military world where there are some like it's kind of
00:21:29
funny to think about as like unique generalities so it's like a generality to military service members but it's
00:21:35
this very unique thing that separates military service members and their finances from say the civilians, the
00:21:41
general populace. So, at some point, and maybe we can do it right off the start,
00:21:44
I mean, what are some stories that you have when it just comes to some of those unique financial aspects of military
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service? Is that is that too broad a place to start? >> No, that's a great place to start, I
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think. Jesse, thanks for the softball uh softball start there. We were talking about this just before we hit record,
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but there is a universality between civilian money and military money. The name of your podcast, you know,
00:22:06
long-term investing, and that's that's what I've been talking about over at my
00:22:11
website and my podcast for years now, but the vehicles that we use to do that might be a little bit different. You
00:22:17
know, we might say TSP, thrift savings plan, instead of 401k, but the basics of it, the fundamentals of it are exactly
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the same as a civilian 401k. But so what are the big fundamental differences that
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you'll see on the military side? Well, one thing is that you might have on the
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enlisted side, you might have lower income for a longer period of time. So that so you might have to adjust
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basically your expectations if you're going to stay enlisted for a full 20-year career, especially compared to
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an officer in the same branch. You're just going to be making a lot less money. And probably towards the end of
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your career, it might the difference might be as much as half. you might be only making 50% as an officer. So,
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that's one thing there is just you have to kind of cage your expectations of of
00:23:01
your income potential while you're on the enlisted side. But that being said,
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there's still tremendous opportunity to live below your means and save and invest and build wealth while you're on
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active duty to set yourself up for a very nice transition to the civilian sector. I think the one of the other
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things that that really comes up with military service members is a lot of times it's all they know, right? They
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they join right out of high school, right out of college. It's their first and their only real adult job for maybe
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just one enlistment, right? Two to four years or maybe even longer. Like pilots have a 10-year commitment and that
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starts after the training's done. So now you're at looking at 12 years and that's
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after you graduate university. So, you're in your mid30s before you ever have an opportunity to really think
00:23:48
about what you're doing and what you want to do next. >> What kind of day-to-day stuff is covered
00:23:53
in the military, Spencer? I mean, shelter, right? I mean, am I living in the barracks and is that covered? Food.
00:23:58
Like, so for the enlisted, for the officers, they might be getting maybe lower pay than maybe some of their
00:24:04
corporate civilian counterparts. I don't know. But then what parts of the lifestyle are actually covered by the
00:24:10
government, by the military? >> Yeah. So you're always going to have your housing covered in some way. So if
00:24:15
you're provided government housing, whether that's the barracks or housing
00:24:19
on base, you're going to have your housing covered by the government. And if there isn't housing available on base
00:24:25
or if you're high enough rank or you have or you're married, this is that's
00:24:31
another interesting factor of military service is especially on the younger enlisted side, there's a big push to get
00:24:37
married because as soon as you get married, you get to move out of the barracks and you get to go live in your
00:24:42
own house and and live your own life. So that creates this financial incentive and your pay goes up too because you'll
00:24:49
start collecting BAH basic allowance for housing with a dependent which is higher
00:24:54
than the basic allowance for housing without a dependent. There's this financial incentive to get married which
00:25:00
is probably much more intense than the pressure a civilian might feel where you might get a there's a tax advantage,
00:25:08
right? married filing jointly versus uh single, but most people aren't really
00:25:12
thinking about the income tax implications of of getting married. Although listeners of our show, our two
00:25:19
shows might might be thinking about that. So your your housing is always covered. On the enlisted side, a lot of
00:25:24
times you have access to a chow hall or, you know, some kind of food usually discounted and you either get you know a
00:25:31
card, a meal card. Everybody receives a basic allowance for sustenance, a BAS, and that's only like a couple hundred
00:25:38
dollars a month though. But for, you know, for most, this is another interesting thing is even though
00:25:43
unlisted pay might be quite low compared to their civilian counterparts, it can be quite good to someone who comes in
00:25:52
with only a high school education. And you get to learn a skill, you get to learn a trade, and all that's paid for.
00:26:00
And then, oh, by the way, you're going to get a GI bill as well. So now, if you
00:26:04
want to go to college, you can do that. But you can also just go to college while you're on active duty. There's a
00:26:08
thing called tuition assistance, and that will pay for, the numbers change, but let's say up to like $4,000 a year
00:26:13
of college tuition. So, so there's an opportunity, there's a tremendous opportunity to
00:26:19
essentially upskill yourself and make yourself more valuable. And you can use those skills while you're on active duty
00:26:26
or you can transition to the civilian world eventually. you know, apply those skills, especially, you know, if you're
00:26:31
in IT or any kind of computer connected cyber field that you can get all your certificates and then you can come out
00:26:38
and you can go, you know, walk straight into Microsoft or Apple or any, you know, any of Google, any of the big IT
00:26:44
companies in the world. They'll be glad to have you because you're qualified and
00:26:48
you you've been doing it for real while you've been on active duty. So, yeah.
00:26:52
Yeah. So, there's a lot of things that the government covers and then there's a
00:26:54
lot of things that because like on the enlisted side, what the classic mistake that a lot of people make is they buy
00:27:01
too much car because they say, "Well, I've got my I've got my housing covered.
00:27:06
I've got a I got a steady paycheck and I want to go get the 2026 Camaro that's,
00:27:11
you know, $80,000 and it's right out the lot and oh, the guy gave me a great
00:27:15
deal. 96-month loan only at, you know, 19% interest." And you're like, "Oh,
00:27:20
boy. You just paid $200,000 for an $80,000 car. >> No. >> Uh yeah, you're in trouble. So that's
00:27:28
the interesting thing is but it happens on the officer side too. You know, we call it the lieutenant mobile where as
00:27:33
soon as people graduate the Air Force Academy or any of the militarymies or or RTC, they think, "Oh, I got to, you
00:27:39
know, an officer drives a nice car. I got to go buy the BMW or I think right now it's the um Toyota Tacoma. they're
00:27:46
just snapping them up and they there's there goes another $80,000 on a vehicle
00:27:50
and it's like okay I mean if that's what you want to do but can I interest you in
00:27:55
something that's a little bit cheaper and you know explain to you the value of
00:27:58
compounding interest and all of a sudden it's like as an officer like you could
00:28:01
easily be a millionaire in 10 years but a lot of people don't they don't think
00:28:05
about that. >> I mean it sounds like you're you're kind of pointing it out but I I never really
00:28:08
thought about it before. There is such a natural hierarchy of rank in the military. I mean, is there some sort of
00:28:14
like keeping up with the lieutenants, keeping up with the colonels? Like, especially as you move up in the ranks,
00:28:19
you kind of start to look around. Do you feel like you need to spend more money to keep up with the equally ranked uh uh
00:28:24
officers? >> It goes both ways. I think some people see that as the game to play and they
00:28:32
keep, you know, up upskilling or or upranking the the vehicle or, you know, the kids go to the Monasuri school
00:28:38
instead of the the school on base. And, you know, the lifestyle creep is real. Whether it's because they're comparing
00:28:43
themselves to their peers. I mean, the crazy thing is is it's the most transparent organization in the world.
00:28:49
Everybody knows how much everybody is paid. Now, if there's a civilian spouse,
00:28:54
right, you don't know how much they're getting paid. But the the pay scale is
00:28:57
set by Congress and is publicly available. So, you know how much you as a captain is making, you know how much
00:29:03
your colonel boss is making. You know how much the airman that's working for
00:29:06
you is making. And what I find is that it usually splits around on the officer side around the captain rank where you
00:29:14
have some people realize like this is a stupid status game that I don't need to
00:29:19
play and I can play a different game. And those are the people who become who rank up and eventually they're colonels
00:29:25
who are driving the 20-year-old Honda Civic and they're like, I I got nothing
00:29:29
to prove. like I get all my status and recognition from from my job, right, and from my rank or from what I do for the
00:29:35
organization and I don't need a Porsche or a BMW 7 series to to show off. Like a
00:29:42
lot of times the cheapest, rattiest looking car in the parking lot is the Commander car.
00:29:47
>> Yeah. >> They're just like, "This isn't a game I want to play." But like I said, it does
00:29:50
split. And so you have some people who say, "Okay, now I'm starting to make
00:29:53
it's about captain where you're starting to make six figures as an officer over
00:29:57
$100,000 a year." And there are some people who are like, "Okay, now I'm
00:30:01
making the real money and I can really start upgrading my lifestyle." And you know, it's crazy, but we've had
00:30:08
people, we've talked to people who have listened to the podcast and they're
00:30:12
they've been in as officers for 10 years or 15 years or almost even 20 years and
00:30:17
they're still living paycheck to paycheck and you just want to like grab them and be like, "What what are you
00:30:22
doing?" Like if they're not stressed about it, okay, fine, whatever. But
00:30:25
they're always stressed about it, right? Like there's there's never someone who's
00:30:28
living paycheck to paycheck that is enjoying that situation when the car repair bill comes in and you're like, I
00:30:34
have negative $10 in my checking account. How am I supposed to pay for this? >> Where do you find in those cases? Where
00:30:38
is the money going? Cuz I mean, we talked about the cars, but from the the lay person right here, I am the the
00:30:45
ignorant lay person looking in. I think to myself, well, most of the, you know, if we think of the big three is
00:30:50
transportation, food, and housing. Well, two of those three are covered or at least covered in large part. So then I
00:30:57
mean is there just a lot of like spending on toys for lack of a better term or or where do you see that money
00:31:01
is usually going? >> Yeah, toys, lifestyle, alcohol maybe. Yeah, >> vacations possibly um you know spending
00:31:09
on the kids or the family. But like you said earlier, you know, with financial planning it being a very individualized
00:31:14
sport, the reasons people get into trouble is always individualized, right? And most of the time it's just because
00:31:21
there's a lack of communication with the spouse and or there's there's a lack of
00:31:25
vision for what I say spouse but it could be a single person as well where they just don't have a vision for their
00:31:31
life or they never had a role model. Usually that's what it is. You know, it's usually money was not a topic that
00:31:37
you talked about at home and then you just you don't know any different and so
00:31:42
you just keep doing it. And people tend to treat money as something that comes and then something that goes and they
00:31:48
don't realize that all you need to do is carve off 5 10 15% of that stream and
00:31:55
invest it in the long term and let compounding interest go to work. And nobody's ever sat down and and taught
00:32:02
them that. if you could. That's why I started the podcast and started the website and wrote the book was because I
00:32:08
wanted to be that resource of look like here's what to do and also here's why
00:32:14
you do it >> because I think a lot of times people are like why, you know, why would I save
00:32:19
more than 5% on my TSP? It's only matched up to 5%. you just want to like you just want to show them and be like
00:32:25
look like living paycheck to paycheck is painful and like not having money in the
00:32:30
bank means that you don't have options and so when you have more options you
00:32:34
have more freedom in general you're you're happier and if that's not the
00:32:39
game we're playing then that's fine we can play a different game but for most
00:32:41
people I mean that's that's really what they want right they want freedom they
00:32:44
want choices they want happiness >> and so do their spouses and thinking back you you mentioned something in that
00:32:48
answer Spencer about about communication with spouses and and And again, forgive
00:32:52
my lack of nomenclature, but whether it's a deployment or active duty, I if those are not synonyms, you you can
00:32:58
probably inform me and my audience on exactly what those mean. But I think to myself, well, boy, if someone is
00:33:03
spending, it's one thing if they're living on base with their spouse, but
00:33:06
what if two spouses are a world apart because one of them is deployed. And now all of a sudden you you still have I
00:33:14
mean obviously they they have bigger fish to fry at the moment than thinking probably about their household fi
00:33:18
finances if they're deployed but someone has to be thinking about it and now you
00:33:22
have this challenge in communication. I mean did you live through that yourself or or you have stories to share from
00:33:27
that angle? The story I would share is from my personal experience, it became positive, but initially when my wife and
00:33:36
I got married, I'd only been in on active duty for a year and I was still in pilot training. So, I was still going
00:33:44
through my initial training course. So, I wasn't even a real I didn't have my
00:33:47
wings. I wasn't a real pilot yet. And I I kind of showed her like how I was budgeting and like how much money we had
00:33:53
coming in and how much money we had going out. I I was living paycheck to paycheck because she would be like,
00:33:58
"Okay, well, we just got paid $1,000." And I'm like, "Right, but I have to pay
00:34:03
off the credit card bill from last month, which was $1,000." And she's like, "So, we have no money." I was
00:34:07
like, "No, no, like we're going to get another $1,000 in two weeks." My phrase
00:34:10
was always, "Just wait till next paycheck." And she was like, "I can't I
00:34:15
can't live that like that. That is not going to that is not going to work for
00:34:18
us." >> Good for her. >> Well, and it's funny because, you know,
00:34:21
I became the face and the voice behind the military money manual. If if I'm being honest, a lot of the ideas and the
00:34:29
motivation came from her. And really, I'm I'll give her a lot of credit for
00:34:35
fixing my personal financial situation because I was living paycheck to paycheck. And it was it was painful. It
00:34:41
sucked. And initially, we had I mean, every dollar was allocated to a job, which is good, but we each got $20 every
00:34:51
two weeks and that was our spending money. like that was our the money that you could decide whatever you wanted to
00:34:57
do with it. $20 and this was like this was not 100 years ago, right? This was this was 15 years ago. So, it didn't go
00:35:04
very far and it and it sucked and it was painful. And a lot of that was because I
00:35:09
was obsessed with paying off my student loans. We were putting a lot of like a third of my income essentially towards
00:35:15
paying off my student loans. And we did. We paid them off very early. It caused a
00:35:20
lot of friction, but it also forced us to learn to communicate really efficiently. And so when I was on
00:35:25
deployment, so I I deployed three times supporting operations in Iraq and Afghanistan. We were always checking in
00:35:32
with each other. You know, we knew how much money, you know, we both had access to our checking account. You know, she
00:35:37
was home, so she was in charge of the bills, but like almost all of our bills were on autopay and all of our
00:35:43
investments were on automatic transfer. And so there was really other than her just making sure that she didn't spend
00:35:51
too much on groceries or going out to eat. You know, her hobbies are are are relatively cheap. There really wasn't
00:35:58
anything for us to talk about. We had set up a system. And I think that's the
00:36:01
critical thing that I would I would want someone who's listening to this podcast,
00:36:05
whether they're civilian or military, is create systems. And yes, you do need to
00:36:09
check in with your partner. And you do need to communicate. And you especially when you're setting up the system, you
00:36:14
need to have that communication and decide like what are your values? What is important to you? What do you want to
00:36:19
spend your money on together? And how much money do you want to for yourself so that you can spend on whatever you
00:36:26
want. But when you're setting up those systems, it's it's extremely important
00:36:30
to communicate with each other. And when you go, we used to say going out the door, right? That's the phrase that we
00:36:36
would use when we were going on deployment. You want to have it set up such that if you don't have
00:36:42
communication, right, you don't have internet for a couple days or or a couple weeks. You know, during the Iraq
00:36:50
war, there was guys and gals out, you know, in Iraq and Afghanistan who didn't
00:36:54
have contact, didn't have internet for months, like literally just communicating by by letters. That can be
00:36:59
pretty tough. And you know, today we've got Starlink and all these other services where you'd have to be pretty
00:37:05
remote to not have internet contact for like a month, let's say. Even a month,
00:37:10
like could your plan survive for a month, right? Like if you went off the grid for 30 days, would your bills be
00:37:16
paid? Would your investments happen automatically? Would the rent be paid? And if the answer to that is no, then
00:37:23
it's like, all right, let's talk. Let's make a plan. Let's figure this out.
00:37:26
That's I mean it's a great test that that month away that weeks away that
00:37:30
quarter away test like I I can think about myself or I can think about people I work with and depending on that length
00:37:36
of time I think it's understandable that maybe a few things start to fall through
00:37:40
the cracks but at the very least it's you know can you go for the civilians like can you go take that two week
00:37:45
vacation with nothing falling through the cracks exactly right could you go away for a month could you take a summer
00:37:50
off without anything falling through the cracks those are questions worth considering and I think the closer you
00:37:55
get to perfection on that axis. I think more people would be better served if if they moved in
00:38:01
that direction for sure. But you kind of struck at something there, whether it was early in your relationship your
00:38:06
behavioral differences with your wife or whether it was later on where you said like, okay, we need to systematize this
00:38:12
and try to take some of our behavioral shortcomings just out of the equation altogether. I I'd love to dive down that
00:38:18
that rabbit hole a little bit more, Spencer, with are there any kind of repeated behavioral traps that you just
00:38:26
found like yes, they're general behavior traps that affect all of us in personal
00:38:29
finance and we can all learn a lessons from it, but you see them as just being especially common for military families.
00:38:36
>> I think for military families, the most common traits I see are those of
00:38:44
avoiders. So by that I mean it's usually not a will problem, right? They usually
00:38:49
want to be better with money, but it's a skills problem. They never they they
00:38:54
never got the training. They never saw it modeled by their family or their parents. And then they they marry
00:39:01
someone who also doesn't have those skills and probably also has the will, but they just can't bridge the gap
00:39:10
because they don't know who to turn to. And I mean the great thing is is the
00:39:13
military does offer a lot of free resources to service members. So I'll just throw out a couple. Military one
00:39:21
source. So that's sponsored by the Department of Defense. You can go to military1source.com
00:39:26
I think it is. But just Google it. Military one source. Free financial counseling there specific to your
00:39:32
situation. So you'll tell them, you know, hey, this is what we're struggling
00:39:35
with or this is what we want to know about. like they're not going to give you great investment advice other than
00:39:41
you should contribute to your TSP and they're not going to tell you like which
00:39:43
funds to select inside your TSP. If you want to see stuff about that, you know, check out my website. But they will be
00:39:50
able to just like have that budget, paycheck, that communication and that, you know, just kind of that initial like
00:39:57
rip the band-aid off moment where you go to your spouse and you say, "Look, like
00:40:01
I I don't know about this money stuff. I don't think you know about this money
00:40:04
stuff either." Maybe maybe skip that part, but you can just talk about yourself and be like, I want to be more
00:40:08
confident with money. In the Air Force, we call it the family service member and
00:40:12
family readiness center. And you can go there and you can sit down with a with a
00:40:16
real person face to face and they'll have you build a budget. They'll have
00:40:20
you, you know, talk about, okay, like what are the three big expenses of most American households? Housing,
00:40:25
transportation, and food. And like you said, for the military, well, food's mostly covered. Housing's mostly covered
00:40:33
unless you're renting something that's way above your housing allowance. And so
00:40:37
then your only factor that you really should worry about there is transportation. And so many times
00:40:42
military service members make the mistake of buying too much transportation for their rank, for their
00:40:47
paycheck. And if they could just not make that one single error, they'd be so
00:40:53
much better off. They'd just have so much more room to maneuver with their money, with their paycheck. That's the
00:40:59
kind of the overarching theme I see for military families is it's usually two
00:41:04
avoiders who just don't have the skills. And because they're avoiding addressing
00:41:11
the money issues, they don't ever get the will really either. So, I think the
00:41:16
best thing to do would be to go to your partner and say, "Look, I want to I want
00:41:20
to get a handle on this money thing and I want to I want us to stop living paycheck to paycheck or I want us to get
00:41:25
out of debt." Right? There's probably some part of your money story that
00:41:29
you're like, man, like that. Why do I have to send a,000 bucks a month to my
00:41:34
student loans? Like, can there's got to be a way to fix this? And just go to
00:41:38
your spouse and be like, imagine if we had $1,000 more a month. I mean, for some couples, it might be a matter if we
00:41:42
had $100 more a month. Wouldn't it be nice if we could like go out to Olive Garden and and not worry about it? or,
00:41:48
you know, go like have buy some beers and and drinks and and invite people over on the weekends and just kind of
00:41:54
like starting the conversation with a positive and then them being like, "Yeah, that sounds great. How are we
00:42:00
going to do that?" And like I said, Military One Source, Airmen and Family Readiness Center, the Navy, the Army,
00:42:06
they all have their own places on post or on base. And if you don't know who to
00:42:12
start with, just go to Military One Source and they'll find like the resources and they'll point you exactly
00:42:16
where to go. But you can even chat with them. I mean, you don't have to you don't have to sit on the phone and talk
00:42:20
to them. I know everybody these days just likes to go through the chat window. And you can do that. Like they
00:42:26
they even have they have email, so you can exchange emails if you want to. But there's so many free resources out
00:42:31
there. And it's such a shame to to watch military families continue to avoid the
00:42:37
problem when they're given so many opportunities and so many resources. I have, you know, success stories of
00:42:43
enlisted millionaires, you know, who are becoming millionaires like well before they reach military retirement of 20
00:42:49
years of service. Airmen who have saved over $100,000 after just a 4-year enlistment term. And I mean, are these
00:42:56
extreme examples? Are these outliers? Yeah, they are. But they're also proving
00:43:01
the point that, okay, maybe you can't have $100,000 in four years, but I bet
00:43:05
you could have $40,000. And if that sounds crazy to you, like the the data is out there and you are
00:43:12
getting paid enough to make that happen. It's just a lot of it is look at your
00:43:16
lifestyle, cut out the fat, and you know, focus on your opportunities to make additional income, which like you
00:43:23
were saying, deployments. Not only is it an opportune time to have those communication questions and discussions
00:43:29
with your partner, but you have the opportunity where now when you're deployed, all your food is free, all
00:43:36
your housing is free. You're going to continue to collect housing allowance for the station. If you have a dependent
00:43:44
back at your duty station, you're going to continue to get housing allowance for
00:43:46
them, but there's nothing to say that they can't downsize, right? like they
00:43:49
can move all their stuff into storage and move back home with their family, which depending on your family might not
00:43:53
situation might not be ideal. So, don't do that. But they're still going to have
00:43:57
expenses, but when you're deployed, you know, you don't have any expenses. Your
00:44:01
income goes up and you're making tax-free pay. Usually, if you're deployed to a combat zone, there's
00:44:07
tremendous opportunity there to get way ahead. And I just saw a post on Reddit the other day. I think a guy's on a
00:44:13
ninemonth or 12-month deployment. And the first three months, he paid off all his auto loans. you paid off. Oh,
00:44:18
student loans. And he's like, "Okay, what do I do next?" And it's like, "All
00:44:20
right, man. Let's like back out your TSP, Roth TSP, Roth IRA. Okay, what about what's next? Tackable taxable
00:44:26
brokerage, you know, let's go like in the like you can literally change your
00:44:29
life around in a single deployment." And I think so many service members just let
00:44:34
that just they just let it go to waste and they don't stay and it doesn't like
00:44:38
you don't have to stay focused on the goal. You just have to set up a system
00:44:42
when you first get out there and then you can worry about, you know, what you're actually doing on that
00:44:46
deployment. but and let your money take care of itself. >> Yeah, it's interesting that you point
00:44:50
out that because especially maybe the earlier career service members like you alluded to, I think you said Spencer,
00:44:56
that like once you reach captain, that's when you first hit maybe six figures
00:44:59
worth of income. So before that, you're on five figures of income. And if you do
00:45:04
make that really common mistake that you pointed out, which is just like buying too much car, you've got the money, so
00:45:08
you decide to spend it on a car. Like we all know that Camaro example that you pointed out that buying too much car and
00:45:15
getting too bad of a loan on that car is easily a five figure mistake. It might even sneak into a six figure mistake
00:45:21
over many years. And when you're quote unquote only making five figures, >> you can't afford five and six figure
00:45:28
mistakes like that. And if instead you could if people could make the better choice up front,
00:45:34
>> prevent that mistake, save that money, put it in their TSP. It really is the
00:45:38
difference between kind of like floundering throughout your military career and maybe pivoting postc career
00:45:44
and being like, "Yeah, I don't have too much to show for my military career. I
00:45:47
didn't save that much." Versus pivoting postmilitary career and being that
00:45:52
millionaire or having that flexibility to do whatever you want after the military. Here's a quick ad and then
00:45:58
we'll get back to the show. I still remember it was 2019 and a guy from Fidelity came in to speak to my then
00:46:04
employer about personal finance in general and about our 401k plan in particular. There were 60 or so of us
00:46:10
who attended, mostly 50 plus years old, clearly with retirement on their minds. And nothing against this individual from
00:46:17
Fidelity, but unfortunately the guy just didn't really know what he was talking
00:46:20
about. It ended up being a major disappointment. And a bunch of my colleagues afterwards said in short, you
00:46:25
know, man, we're really thirsty for good financial retirement information. Where
00:46:29
do we go find it? Now, does that sound true, listeners, for you and your colleagues? Last year, either in person
00:46:36
or via Zoom, I spoke to about 800 employees at 11 different organizations. Sometimes about personal finance in
00:46:42
general, sometimes about specifics of their retirement plans, sometimes about the the nitty-gritty details of social
00:46:48
security and withdrawal planning and retirement math. The point being, if you're interested in inviting me to come
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talk money to you, to your colleagues, where you work, that is absolutely something I'm interested in talking to
00:46:59
you about. Simply drop me an email to jesseb bestinest.blog and let's start a
00:47:03
conversation. And let's actually pivot and talk about that a little bit. Let's
00:47:07
talk about what postservice life looks like because I can just see all these parallels between the transition to
00:47:14
retirement for all civilians, which is something I talk a lot about, against the transition to postservice life for
00:47:21
military members, whether that means actual retirement for them or simply a transition to a different career. But
00:47:27
I'm I'm really curious like what are some of the biggest sticking points
00:47:30
financial or otherwise that that you've seen when it comes to transitioning from
00:47:34
active duty to post service life? >> Well, I'm actually I'm going to I'm
00:47:39
going to flip the question back on you, Jesse, because I want to hear what you have to say, but I'm going to I'm going
00:47:43
to frame it. I transitioned out of the service before I was eligible for a military retirement, but I did all the
00:47:50
classic veteran mistakes, right? So, I didn't have a job lined up when I got out
00:47:55
because I thought my side business was going to be enough. And on the income side, yes, it was enough. But on the
00:48:01
purpose and meaning side, no way. It It just didn't fill that cup that didn't it
00:48:07
didn't fill that need that I didn't realize was being met by my military
00:48:12
service. I got really depressed after leaving active duty for a couple months. And it wasn't until I started that first
00:48:20
job that I was flying for a a major US airline that that kind of that like that will for life just came back and I was
00:48:29
like, "Okay, like I I'm back in it. You know, I've got a team again. I'm doing
00:48:33
it." But then I made the other veteran, not mistake, but common thing that happens where 6 months later I quit. I
00:48:40
very quickly after a couple months flying, I was like, "This isn't it. This
00:48:45
doesn't it doesn't check that box. it doesn't fill that purpose and meaning
00:48:48
need. So my flip back to you is when you're talking to retirees who are transitioning, you know, from the active
00:48:56
workforce to whatever they're going to do in retirement besides the financial
00:49:01
stuff and we can get to that, but I'm more curious in the purpose and meaning
00:49:04
stuff like how and is that something that a conversation that you have with your clients? Yeah, that's a that's a
00:49:11
big part of the ongoing conversation and it varies client by client or if it's a
00:49:16
reader of the blog or listener of the podcast. It varies person by person because I will say, yeah, there are some
00:49:21
people who engage with me and they're like, Jesse, I just want you to run the
00:49:25
math. I just want you to focus on the numbers. I come to you for financial advice. You're not my therapist. You're
00:49:29
not my psychologist. Which I get. But in most cases over time, I can build enough
00:49:34
trust to build enough of a relationship with someone to say like, "Hey, here's
00:49:38
something we found with a lot of pre-retirees transitioning into retirement." What we found is, and
00:49:43
there's some awesome data to to back this up, what we found is most pre-retirees put their finances as one
00:49:50
of, if not the top priority. But then when you talk to people who are two or four or 10 years into retirement, very
00:49:57
few people still rank finances as their top priority. And almost all of them rank lifestyle lifestyle issues is maybe
00:50:05
what I'll say. It's a broad term, but lifestyle issues is your top priority.
00:50:08
And it could be right. What am I doing just to fill up my days? How am I maintaining my relationships? You know,
00:50:15
a huge one, a really good example. So you think about the workplace. The workplace, okay, yeah, it gave you that
00:50:20
paycheck and we can find a way to replace that paycheck. But you might not be thinking about the fact that it also
00:50:26
just gave you this purpose, this drive to get out of bed every morning and to fulfill someone's need out there in the
00:50:31
world. Like you enjoyed doing that. That gave you purpose. Now you need to replace it. And the workplace probably
00:50:36
also gave you a lot of socialization. Whether they're your best friends or even sometimes if you're like, "Yeah,
00:50:42
you know, I don't love all my co-workers, but it's still nice to go chat with someone at the coffee machine
00:50:46
in the morning." Well, you have to find a way to replace that in retirement. And
00:50:51
news flash, your wife or your husband might get sick of spending 12 hours a day with you at some point. So like
00:50:57
shameless plug, episode 106, I I took some of this data from Fritz Gilbert of the Retirement Manifesto. Shout out
00:51:04
Fritz. It's called Retirees Mistakes and Wakeup Calls: Expectations Versus Reality. It was a deep dive on just this
00:51:10
topic. It's a little varied, Spencer, but still there's a through line. Like
00:51:14
there are some consistencies that you find over time having these conversations and it's really big. It's
00:51:19
so much more than just the the finances. >> I mean, the people who are listening to
00:51:23
my podcast, right, they tend to be the optimizer in the relationship. They tend to be the spreadsheet nerd, the one who
00:51:30
is like, "Oh, you know, like, oh, we got to save $20 on Netflix cuz like run that
00:51:33
compounding interest graph. Look how much it grows into." >> And my plea to them is you're going to
00:51:41
be fine. The numbers are going to work. You have run a thousand 10,000 Monte Carlos simulations. not over, you know,
00:51:50
20, 30, 40, 50 year time horizons. As long as as the United States continues to exist in some form and capitalism
00:51:59
continues to exist in some form and companies continue to pay their shareholders dividends, you will be
00:52:05
fine. Set it all aside. You know, buy your beans and bullets and your gold bars if you need to, but like you're
00:52:10
going to be fine. Now, what are you going to do? And people are just like, well, you know, I'll figure it out. I'm
00:52:15
like, no, you're not going to figure it out. I mean you you will because everybody figures it out. But this is
00:52:20
the hard question. The the money stuff for most people, the people who are usually who are hiring financial
00:52:26
adviserss or who are the DIY super DIY types that understand compounding interest and understand the point of
00:52:34
tracking your dollars and making sure that every every dollar has a job. It's
00:52:38
great. Every dollar has a job, but what's your job? Like what are you going to do when you've reached that financial
00:52:42
independence or that financial freedom? And it's often ignored both by the military service member who's
00:52:48
transitioning to the civilian world, whether it's separation, medical retirement, 20-year retirement, or
00:52:56
someone who's going from active duty to the guard reserves, which again, I'll
00:53:00
I'll throw that out as as a great option as just kind of easing your transition
00:53:05
is when you're done with active duty, but if you if you enjoyed it, if you liked it, and you want to be around
00:53:10
those people, take a look at the Garden Reserve. usually their commitments are not that ownorous and you're still going
00:53:17
to get to put on a uniform. You're still going to get a lot of that community.
00:53:20
You're still going to be able to, you know, it like if your civilian job sucks, you just take active orders and
00:53:25
go full-time with the guarder reserve and come back later to your civilian job. Or you might get to the garden
00:53:32
reserve and be like, you know what, no, like I'm good. I did it. This is a nice
00:53:36
transition, but I'm going to give these guys a year and then I'm I'm fully I'm
00:53:39
going to be fully civilian. But at least you're kind of like taking a slow, measured approach to it and you're
00:53:44
giving yourself time. And I think that's the thing that I want anybody who's
00:53:49
retiring from the military or transitioning out of the military to the civilian world or a civilian who's
00:53:56
retiring, I just want to say you're going to be fine, but it's going to take
00:54:01
some time. And for some people, it's no time at all, right? like they're like,
00:54:06
"No, I'm golfing every day and I'm so excited and and my wife, you know, is
00:54:10
going to go do whatever she's going to do and we've got the grandkids nearby
00:54:14
and like, you know, I talk to retirees all the time who are like or people who are financially independent. You look at
00:54:20
like Mr. Money Mustache or someone and they always say like, "I don't have time
00:54:23
to work. Like, my life is so full. I have so much going on. Like, I don't know how I had time for a job before
00:54:30
this." And that's great. If that if that's your situation, that's great. And
00:54:34
if that's not your situation and you've you've separated from the military or
00:54:37
you're retiring from 40-year career in your 60s and you're going into a more
00:54:42
traditional retirement as a civilian, it might take a couple years and there might be some dark moments in there of
00:54:49
you staring at the ceiling at 3:00 in the morning thinking what did I do like why like what and what am I doing here?
00:54:55
And it's a tough question, but it's okay if you don't get an answer immediately.
00:55:01
And when you in 2 years, 3 years, 5 years, you might say, you know, I still don't have an answer, but that's okay.
00:55:08
I'm working on it. You might have an answer. You might say in uh the book, The Second Mountain, David Brooks talks
00:55:14
about the four callings, and it's a vocation. And so like not just a job but
00:55:20
like you know a passion the work that you were meant to do in this world or the Japanese icky guy.
00:55:26
>> The icky guy. There you go. What you were meant to do. And then the other one
00:55:30
is um there there's four of them. Religion, philosophy, community and marriage. He kind of focuses on on on
00:55:37
those. For a lot of people, maybe they've neglected their marriage because of their work. Or maybe they've not been
00:55:46
involved as involved in their religious community because they were busy doing other things and raising kids. And you
00:55:52
know, life's busy. And you know, I see a lot of retirees, my uh my wife's
00:55:58
grandmother, for instance, turning 90 years old and she's still in the church
00:56:02
choir, right? Like she still goes and sings every every Sunday. and like her friends are there and she knows she
00:56:10
talks to the pastor and or the priest and it's such a you know joy for her to
00:56:16
have that part of her social calendar and have that part of her week and that's something you know the fact that
00:56:23
she has the time to do that and go practice with them and be there on every Sunday. Maybe that's something that
00:56:29
you're interested in doing and you just didn't have the time when you were
00:56:32
working full-time and here you go. Here's this opportunity. Here's this gift. Don't squander it. A few different
00:56:37
things that you were saying there, Spencer, just made me think of these two two different metaphors that both oddly
00:56:41
coincidentally have to do with our teenage years because, you know, I can picture back to like being a high school
00:56:46
freshman and heading into the summers off. You know, right now we're recording
00:56:49
in early July. It's summer off for high school kids. And a lot of my friends and
00:56:53
I had this mindset where it's like, "Oh, what are you going to do this summer?"
00:56:56
And it's like, "I don't really know. Just not school." That's the answer.
00:56:59
Just not school. And that's a good enough answer for that time in your life because summer's two months long. And
00:57:05
okay, if you don't have the most productive summer off kind of like who cares? But I feel like that is the
00:57:10
mindset that some retirees go into retirement with like what are you gonna do? I don't know. Not work. That's it.
00:57:16
I'll figure it out. And not work is good enough because I didn't like work. And
00:57:20
the answer of not work means I'm therefore going to like it. And that's just not the case. Because the second
00:57:25
metaphor is many of us can think back to this time in life where maybe we're 17,
00:57:30
18. Maybe we're debating like do I go to college? Do I go to the military? Do I
00:57:33
get a job? Or maybe it happened right after college where it's like, do I go
00:57:37
to grad school? Or for me, like I got this four-year degree in engineering. Do I even like being an engineer? And the
00:57:42
point is like you don't quite feel settled in life and you don't quite feel
00:57:46
like you have this defined path in front of you and you're just trying to figure
00:57:49
it out. >> There's a parallel between that and the early years of retirement. Like you're
00:57:53
trying something new. It's a big life transition. And for the first time in decades, you've got nothing but time.
00:58:00
It's a big deal. And it might take, just as you alluded to, it might take you
00:58:04
some time to figure out where your path will take you and what feels good and what feels comfortable. But if you can
00:58:10
do some of that work beforehand, that's where I think people tend to have some
00:58:14
more retirement success rather than just getting thrown into the deep end and hoping they can tread enough water to
00:58:20
keep their head above above water. If they ease their way into it by doing some work beforehand, usually there's a
00:58:26
better result. I don't know if the same applied to military transitioning out of
00:58:29
the military, but I got to think a little bit of uh preparation can go a long way.
00:58:34
>> You just triggered a couple ideas there for the transitioning military service
00:58:38
member. And the first one, the the most practical and tactical advice I can give
00:58:42
is there's a program called TAP, transition assistance program. And when you're within a year of separation, so
00:58:49
you've set a separation date or retirement, you can start going to TAP classes. And usually it's 2 or 3 days
00:58:56
and they have like an entrepreneurship track and a civilian career track and they'll give you a year free of LinkedIn
00:59:02
premium which I hate LinkedIn but there you go. I guess some people some people have leveraged it to succeed in life.
00:59:09
But the tap program I went to I went to one and you have to go to one before you
00:59:14
can separate. But that was a mistake. I think I should have gone probably as soon as I was eligible. So as soon as I
00:59:20
was at one year out, just gone to like the one or two day course and use that as an opportunity to get the brain
00:59:27
juices flowing and thinking, okay, like what is this going to look like? And I thought I was well prepared for my my
00:59:34
transition. I mean, we had a very large nest egg, we were essentially, if we weren't lean, we were coast fire. I
00:59:40
mean, we were we were well on the path to to just being straight straight up fire and possibly even fat fire in the
00:59:46
next couple years. And so financially I was we were very well prepared. You know, I had a little bit of work to do
00:59:52
with the the podcast and the blog and the book, but there was there was still a lot of things that I I hadn't quite
00:59:58
figured out. And I don't know if I would have figured them out because I'd gone
01:00:02
to a tap class earlier, but at least I would have started kind of the process and maybe instead of couple months of
01:00:09
wallowing in existential and we I I could have I could have shortened that a little bit. And so that that's that
01:00:16
would be my my advice for someone separating from the military is go to the TAP program more than once. Just go
01:00:20
twice and do it as soon as you are eligible for and then do it a little bit closer to separation because the other
01:00:26
thing is that they dump so much information on you while you're in there that it's very hard to absorb it in one
01:00:33
goound and you're going to pick up like you know just like listening to one of
01:00:37
Jesse's podcast or my podcast the second time you listen to the episode you're
01:00:40
going to glean even more information and different information. So, I highly recommend that for transitioning
01:00:47
military service members, you you look at using the TAP program to your advantage.
01:00:52
>> And you know, there are similar versions uh here in civilian life, whether it's
01:00:56
just like something as simple as a class at your community center or something from AP or I mean, the really nice thing
01:01:02
is so much financial content on the internet is written for the general audience. A lot of it is just free and
01:01:09
out there and you just have to go find it. But it is out there. But anyway, Spencer, you you've mentioned a few
01:01:14
times now, your book, your blog, and of course your podcast, which I know my I'm
01:01:19
sure my military listeners are want to go find it, and maybe even some folks who are listening who just they have
01:01:24
friends in the military, they have children in the military, they're going to want to forward it on to the people
01:01:28
they know. How can our listeners go out and and find your work? >> You could start at
01:01:32
militarymoneymanual.com. That's the hub of the uh the content universe of of uh all my my ramblings
01:01:40
and rantings for the last oh shoot I think I started in 2012 so almost 13 years now at the time of this recording.
01:01:47
And then if you uh enjoyed listening to my uh my snifferous voice then you can go to the military money manual podcast
01:01:55
Spotify and Apple. Finally, you can find the book which is creatively titled The
01:02:00
MilitaryMoney Manual and that's on Amazon and also at shop.mmillitarymoneymanual.com.
01:02:07
Check out all the versions there, audiobook and ebook and hardcover and everything. The podcast uh I do with my
01:02:13
uh my buddy uh Jamie. He's still active duty officer. We started it to promote
01:02:18
the book and it's just grown and we're almost up to 200 episodes. So, we're
01:02:22
having too much fun doing it. We've had some great guests on there and we'll be
01:02:25
publishing this episode on there as well. And so, where can people find what you're working on?
01:02:31
>> Ooh, thank you for that. I wanted to give you accommodation. That's a
01:02:34
military term, right? A commenation for branding consistency, Spencer. Excellent. The military money manual
01:02:39
everywhere you look. >> Everywhere you look. >> The hub, if you will, for me is
01:02:44
bestinterest.blog. That is my blog. That's where I do all my writing. And the homepage right
01:02:50
there, bestinterest.blog. That's where people can sign up for my my weekly newsletter, which is just an easy way
01:02:55
that people can keep in touch with my new articles and my new podcast episodes. The podcast is available
01:03:01
anywhere you're listening. If you're listening to it right now, you're at a
01:03:04
good spot considering it is this podcast. Personal finance for long-term investors is the name. And right, we do
01:03:11
deep dives on uh financial planning topics, tax planning topics, a little bit of the psychology that goes into
01:03:17
long-term investing and retirement. So, if you're looking to to deep dive and
01:03:21
learn more, it's it's a pretty good place to to do that. >> I love it when Money Podcast barely
01:03:27
touch like we didn't I don't think we use any percentages or or dollar amounts
01:03:30
on the show, but then the dollar amounts and and the math and really there's so
01:03:36
much more that goes into these questions. And the last thing I I wanted to leave your your listeners with,
01:03:41
especially because we tend to be optimizers, but the five types of wealth by Sahil Bloom, I just read it. And for
01:03:48
an optimizer, it's great because it gives you a different framework to measure yourself against rather than
01:03:54
just what's the net worth, what's the net worth, what's my income, you know,
01:03:58
what's the tax rate. And for retirees especially, you know, you're going to be
01:04:03
gifted this opportunity of you're going to have more control. Hopefully, you're
01:04:06
going to have more control of your time. And that's one of the, you know, the
01:04:10
five types of wealth that he talks about in there. I think it can give the person
01:04:15
transitioning from a civilian job to civilian retirement or a military job to a military retirement. It can give you
01:04:22
that framework of if you're rich in one area, if you're listening to this
01:04:26
podcast, you might be rich in the financial wealth, but you might be impoverished in another category. And
01:04:34
that just gives you as an optimizer. Now it's your job to increase your your net
01:04:39
worth, so to speak, in that other wealth category. So, five types of wealth to heal bloom. I really enjoyed it. Highly
01:04:46
recommend it to all your listeners. >> Awesome. That's a great recommendation.
01:04:50
Thank you, Spencer. Good to talk to you, man. >> Thank you, Jesse. >> Thanks for tuning in to this episode of
01:04:54
Personal Finance for Long-Term Investors. If you have a question for Jesse to answer on a future episode,
01:05:00
send him an email over at his blog, The Bestinest. His email address is [email protected].
01:05:07
Again, that's jessevestinterest.blog. Did you enjoy the show? Subscribe, rate,
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and review the podcast wherever you listen. This helps others find the show and invest in knowledge themselves. And
01:05:20
we really appreciate it. We'll catch you on the next episode of Personal Finance
01:05:24
for Long-Term Investors. Personal Finance for Long-Term Investors is a personal podcast meant for education and
01:05:31
entertainment. It should not be taken as financial advice and it's not prescriptive of your financial
01:05:36
situation.