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This post, “A Current Military Officer Shares His Five Step Process to Achieving Financial Success,” was contributed by Nolan Martin, a military officer and graduate of the United States Military Academy at West Point, NY. He is currently completing his Master’s Degree in Financial Planning and pursuing his Certified Financial Planner designation.
Nolan’s experience in the military allows him to share incredible lessons he learned and apply them to the fundamentals of personal finance. You can find his free eBooks, Military Retirement Dilemma and Making Sense of Retirement Investing, and more on his blog, www.BudgetChaos.com.
I was sitting in one of the seats on a C-130 airplane, looking around at the other Soldiers and mentally getting ready for our night mass tactical airborne operation—a fancy way of saying a night airborne jump with a bunch of heavy gear, a rifle, and a parachute. We had already been in the harness for a couple hours and at that point, you give up on the thought of getting feeling in your leg that has fallen asleep. If you are lucky, you are able to fall asleep in one of the most uncomfortable positions in the world.
Suddenly, the jump doors opened and I welcomed a large breath of cool, fresh air. Just what I needed to fight the thought of nauseam typically brought on by a C-130’s unstable flight.
The jumpmasters, or the Soldiers responsible for a successful airborne operation, were standing in front of us preparing to issue us commands.
The first command they gave us was “10 minutes”. This was your last opportunity to fix yourself mentally. For the rest of the jump commands and through the process of exiting the door, you had to be switched on and observant because the lives of other Soldiers can depend on your actions.
At the command “Get Ready” followed by “Out board personnel, stand-up,” I collapsed my seat into the side of the aircraft and moved closer to the door. The next command that applied to me was “Hook up.” At this point, I took my static line (or the cord that is responsible for opening the parachute) and connected it to a wire cable. Once connected, I completed the remainder of my safety checks when the jumpmasters ordered me to. Finally, it was time to take the door and stand facing the dark abyss.
On my left, I noticed the red light turn green, followed by a slap by my jumpmaster with the command “Go.” I took one large step and took a bigger jump to exit the airplane.
In the first five seconds, you have an immediate adrenaline rush while you wait for your parachute to fully deploy. You get about 15 seconds of enjoying the feeling of floating down to the ground. Then, you have about 10 seconds of frantically untying your equipment and lowering it to the ground. For about three more seconds you try to keep your feet and knees together as you hit the ground at a fairly fast speed. Once you are on the ground, you get about 3 seconds to wiggle your toes and fingers before determining that you are good to go. You immediately disconnect the parachute, grab your rifle, and continue on with the remainder of the operation.
I tell this short story because it is extremely important to understand that I never got to this point without focusing on the fundamentals.
And you will never reach your financial goals if you don’t focus on the fundamentals either.
The lessons I have learned throughout my ongoing military career have led me to develop The Financial Targeting Process. The Financial Targeting Process encompasses the actionable steps that will help you navigate the complexities of personal finance. The steps are based on a targeting process the United States Special Operations community uses to find the enemy. These steps are Find, Fix, Finish, Exploit and Analyze.
In Step 1: Find, I want you to figure out where your money is going and determine your monthly household income. If you don’t have a will and don’t have term life insurance, get it. Living a healthy financial life involves more than just the money aspect and you can’t determine a budget if you don’t know where your money is going. I want you to think of debt as the enemy.
Step 2: Fix, involves creating a monthly budget and saving $1,000 in an initial emergency savings account. In this step, you are going to determine your exact game plan on how you are going to destroy the debt.
Now, you have to grit your teeth and get to work. In Step 3: Finish, I want you to mass all of your excess money on your debt. Destroy every bit of it until it is out of your life. This step isn’t easy, but you will be glad when it is all out of your life. Don’t be afraid to dream with your spouse or accountability partner to give you the motivation you need to keep fighting until the end.
Once you are debt free, I want you to focus on prioritizing your money to achieve your financial goals! First, finish your emergency savings account. Build it to hold 3-6 months of expenses. If you are going to purchase a home, save for a significant down payment. If you haven’t already, open a Roth IRA for both you and your spouse. Save 15% of your monthly income in your retirement savings accounts, not including a match you may receive from an employer. If you are going to have children and plan on paying for a portion or all of their college, open a 529 plan or Education Savings Account. Lastly, I want you to plan for all of your future purchases.
In the final step, you are going to mature financially and mentally. In Step 5: Analyze, I want you to pay off the mortgage early and plan your retirement. I want you to find an organization, animal shelter, or family that is struggling and give them a hand-up, not a hand-out. Hopefully, I can get you on this process early enough in your financial life that you will get to enjoy the remaining 40 years of your life financially stress free!
If you are in the military and are still struggling on your decision between the Blended Retirement System and the Legacy “High-3” Retirement System, I wrote a free eBook called the Military Retirement Dilemma to help you out. Simply click on the image below to learn more about both systems, the TSP, the different funds in the TSP, roth vs. traditional TSP, and more.
Special thank you to Nolan for sharing this piece, and a Happy Veteran’s Day to all!