I have talked a lot recently about wealth generators. It started with “Use Real Estate as Your Wealth Generator” and then “Cash Flow 103: Choose Your Wealth Generator.” As I reflect on why I am still in the military after 22 years, I realized that the Marine Corps was my wealth generator. Also, check out “Is Doing 20 Years in the Military Right for You?”
There is not one single reason why the military is an excellent wealth generator, but it is a combination of benefits that make it a unique avenue to wealth. Let’s look at some of the inherent ways that the military can build wealth, then review some of the external reasons how it can help develop passive income during your military career.
Pay. Military pay is nothing to write home about earlier on. However, the longer you stick with it, the better it gets. I cannot complain about my salary after 22 years. I am 40 years old and would need a job paying me $133,000 a year to replace my military salary. Only 9% of Americans make over $100,000, so I am in good company.
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Retirement. Retirement planning is where the military shines. I know that military retirement has changed some with the move to a combination of defined benefit and defined contribution total package. I still believe that military retirement is still the best in America.
There are not too many jobs where you start collecting retirement pay as early as age 38. Retiring young is how the military begins to compound over other wealth generators. To leverage real estate or business as wealth generators, you will move along an unwritten path. You will be an entrepreneur.
The military is an entirely structured approach. If you do not want to be an entrepreneur, then the military may be your path, a sturdy foundation of wealth. Once you retire, you can then use your skillset to continue your journey, or you can then try your hand at a business or real estate.
Taxes. The tax benefits of being in the military are excellent and one of the reasons why I enjoy staying in the military. We receive a housing allowance depending on the location of our home base. This housing allowance is tax-free. For example, San Diego, California, has a housing allowance of $3,500/month, tax-free. This tax-free income adds up, especially when you start to do your taxes. Nice.
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Education. As you stay in the military, specific educational opportunities will begin to arise. These opportunities may be in your military occupational field, leadership, business, or external universities. The education benefits are hands down second-to-none.
My friends are getting masters’ degrees and project management profession certifications. The military will assist with your educational aspirations while you are in and pay for college when you get out. If you have any ounce of motivation, you can get a degree while you are in the military.
I took a different route and took management courses throughout my career- some studies included senior aviation maintenance, aviation maintenance manager, and lean six sigma. These courses have helped me form a business mindset and, along with self-education on the side, have prepared me for my next wealth generator, business.
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Relocations. Moving is the most challenging part of being in the military, at least for me. When I was younger, it was sort of fun. As I grew older and accumulated more family and things, it has been burdensome. However, relocating brings with it specific opportunities.
As you move around, using your tax-free housing allowance and your VA loan, you can build a nice stable of property. Moving also gives you a chance to scout an area completely risk-free. There are not many other programs that can provide you this type of experience, free of charge.
Networking. Probably the most significant benefit of the military in the long-term is networking. Military folk come from all over, and all have different aspirations. Over time you will build a massive network of people who cover the swath of professions.
Even if you do not know a particular person, your credentials as a 20+ year veteran are second to none. They understand that you are a committed, hard-working, and dedicated individual. You can leverage your reputation while building wealth in business and real estate.
Now that we have reviewed the wealth generation tools while in the military let’s look at the other external passive income goals that we can achieve while in the military.
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Retirement Income. There are opportunities to teach online to other military personnel. I currently do remote learning through a military contractor. I believe that this will be the way of the future, and the military will want to leverage other military personnel to teach their current warriors. While not entirely passive, I can teach from anywhere in the world.
Investment Income. Military pay increases like clockwork. In January, you will get a cost-of-living pay raise. Every two years, you will get a seniority pay increase. Throw promotions in the mix, and you have a lot of pay bumps. If you can learn to live at a particular pay level, say E-6, you can invest pay increases into your money system.
I did not spend most of my career investing in the stock market because of my ignorance. However, now that I have started, it is a fantastic journey. The steady pay is excellent for building wealth in the stock market. If you can start young, the sky is the limit.
Rental Income. As I said before, relocating can bring certain perks to the forefront; one of them is buying lots of homes. Many military personnel start their rental property empire in the military. I started mine, and the military has been a great place to leverage real estate. With the steady salary, it helps with getting financing from baking institutions. When I retire, I have learned enough about real estate to start growing my empire immediately.
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Business Income. The intangibles of being in the military are what will make me successful in the business world. These intangibles include discipline, integrity, and trustworthiness. Leadership built during my time in the military is what will set me apart in the business world. You can also start building out your business while in the military. Also, don’t forget the networking opportunities as you begin looking into growing your business.
As you can see, the military has a lot going for it. When you throw everything in together, you have a society of professionals that share a common background. These professions then move on to various occupations and businesses across the spectrum. You can tap into this network for the rest of your life.
As much as I am ready to be my own boss and begin my real estate and business journey, the military still offers me a lot. Every day, I talk to someone who has a different retirement dream than me. I learn so much daily that I am intrigued enough to stick around for a bit longer. Can the military be your wealth generator? Or can it help develop the opportunities for your children?
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Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. I am an Amazon Affiliate. Please research any investment vehicles that are being considered. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
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