Podcast: Doug Nordman — Military Retirement Benefits

Podcast: Doug Nordman — Military Retirement Benefits

Doug NordmanEpisode 30 of the NewRetirement podcast is an interview with Doug Nordman — author and founder of The Military Guide — and discusses what life is like being financially independent and how Doug got there by being smart on military retirement benefits.

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Full Transcript of Steve Chen’s Interview with Doug Nordman

Steve: Welcome to the NewRetirement podcast. Today we’re going to be talking with Doug Nordman, a retired Navy submarine commander, author and founder of The Military Guide, about what life is like being financially independent and how he got there by being smart on military retirement benefits. Doug lives an amazing life in Hawaii and he travels the world.
I met Doug at FinCon a couple of years ago and have been a fan of his work and surfing adventures. Before we jump in, just a couple quick facts on the military. There are currently about 1.3 million active military personnel, representing a little bit less than half a percent of the total population. There are about 22 million veterans in the United States, this is as of 2014. This represents about seven percent of the population.
One interesting dividing line is that it’s about 1.4 percent of women and 13.4 percent of men, so pretty big gender line there. With that, Doug, welcome to our show. It’s great to have you join us.

Doug: Thanks, Steve. I really enjoyed your last episode with Cameron Huddleston. That was a good one.

Steve: Yeah, thanks. That was super-informative for me and makes me realize I need to get the power-of-attorney stuff fully set. My kids are getting older, too. Doug, I just wanted to first, jump in, explore what kind of like a day in the life is like for you. You’re financially independent, you’ve been there for a while. It looks like you kind of live this dream life. I see you on FaceBook, you’re traveling, you’re surfing, you’re going to some cool conferences. For you, what is a day in the lifelike and a year in the life like for you?

Doug: Like everybody else on FaceBook and social media, I only show the highlights. I literally start each morning with the surf forecast. I want to know if it’s something where I need to go out and do dawn patrol in the good surf or if I’m going to be free to do other stuff. I’m usually up pretty early in the mornings and one of my habits is to sit down and try to write first thing in the morning, every morning, as much as I can, and even if it’s just 20 minutes. I’ll work on the next blog post or an email or some book chapter or something like that.
Then surfing two or three times a week, usually at dawn when it’s a little calmer and my friends are out there. After that, I’ve got the rest of the day free to play. We all do chores, we all have projects around the house, all the normal stuff with life. We do travel. I like traveling an itinerary about 50 to 60 days, two or three months, twice a year. That’s pretty much as much as we can handle. We could travel for longer periods or we could make shorter trips, but I find about a two-month itinerary is pretty good.

Steve: You’re going off on trips for two months at a time, and you do that twice a year, so you’re traveling four months a year?

Doug: Yeah, pretty much. We’ll anchor that around something like FinCon. We’re going to start this next trip in September with FinCon, but then we’re going to go over to Europe and roam around Europe until we get cold or until we want to come back to Hawaii. We’ll probably be out there for all of September, most of October, maybe into November.

Steve: Nice. You realize that sounds pretty insane to most people, probably. Do you know a lot of people, maybe you know people in your demographic that are doing it, but for me, that seems like a third of my life spent traveling sounds incredible-

Doug: Exactly.

Steve: But very different than most people experience.

Doug: There’s two things, it’s empty nester travel. Our daughter’s launched from the nest so it’s just the two of us and the other one, I’m afraid, is travel while you still can. Don’t save it for old age.

Steve: Right. Yeah, I totally agree with that. It’s something I’ve been talking more and more about, that you only live once, nobody knows what’s going to happen with their health, and when health goes sideways, it kind of doesn’t go sideways in a small way and usually not in predictable way. Depending on what happens with your health, if you can’t recover from it, that’s it. You’ve kind of lost your opportunity. It’s great that you have that approach.
How long have you been living this lifestyle?

Doug: Since 2002, just over 17 years. We’re just going to keep going as long as we can. I retired from active duty in 2002.

Steve: Wow. I was reading your blog and you’re kind of saying, you were thinking about kind of doing a transition from the military to civilian life, working, and then I think you ran the numbers and said, you know what? I can just be financially independent now.

Doug: Yeah, and part of it, too, was when I was in the military as an engineer, a nuclear training officer and a mid-level manager, when I started looking at the transition, the things that came up as my subjects that I would do best in was nuclear engineering and mid-level manager. I’d had enough of that. I wanted to spend more time with family and this was just back when the Trinity study and all the things that led to the four-percent safe withdrawal rate, it just hit the street, so it was real early days, but it looked like we had enough then. When you get a military pension, it’s indexed to inflation, you’ve got cheap healthcare with an active duty retirement. That makes financial independence, when you’re in the military, fairly straightforward. Unfortunately, only out of six people that join the military actually make it to the pension. It’s relatively rare to have a pension.

Steve: Right. Evidently, it’s working out for you, seventeen years into it.

Doug: I think I can handle another 17 years of this and we’ll just keep going.

Steve: Nice. Do you feel more financially confident now? I would imagine, yes, right? Now with 17 years into this-

Doug: Oh, gosh, yes.

Steve: Than when you first set out to do this.

Doug: Yeah, and part of that is when you do the math for the four-percent safe withdrawal rate, the success rates and all the probabilities behind the calculators, one of the things that happens is you focus on the failure rates. That’s who we are as humans, we focus on the failure of your retirement planning. If you have a 95-percent success rate, that means that most of those 95 percent successes are going to come out with more money than you need. In our case, we’re invested to beat the rate of inflation and we’ve kept our spending fairly flat. It’s gone up a little bit, but not past the rate of inflation. After 17 years, its compounded to the point now where we know we’ve got more than we need and it’s sustainable for the rest of our lives, not just for the 30-year studies that the four-percent safe withdrawal rate looks at.

Steve: Your net worth has been going up in retirement?

Doug: Yes. It’s been volatile, right? 2008, 2009, the great recession. We had some numbers that just looked ludicrous but we’d also had some pretty high numbers in 2007 just before the recession. I don’t sit there and focus on my net worth every day. I just look at our checking account balance and how much money we have to cash out to fund our lifestyle and maybe I’ll check into the four-percent safe withdrawal rate and look at the numbers once in a while. Truth is, though, that our non-discretionary spending, the things that we have to spend money on, like utility bills, that has all held flat or gone down and most of our lifestyle spending, travel for example, is discretionary. If we have to cut that back, we could, but not needed.

Steve: Not needed?

Doug: Yep.

Steve: That’s awesome. You’re a pretty interesting case study because you have lived through the, you kind of retired at the tail end of the first dot.com bubble, then saw some appreciation, then lived through the the 2008, 2010 great recession. In the midst of that, you’re retired, you’re drawing down your savings. Did you stay-

Doug: It’s a little scary. Everybody goes through this cycle. When you first make that transition, you have white knuckles on the wheel, you’re a little concerned about over-spending. The first couple of years you’re probably paying a lot of attention to how much money is going out and whether or not you’re going to survive on the withdrawal rate. By the time we got to the great recession, that was six years into my retirement and we were comfortable with that but, still, looking at those numbers, it’s still emotionally jarring. You persevere knowing that you’ve got a good plan and you can cut back your spending if you need to. We just kept on with our asset allocation. We had faith in that asset allocation, we had a plan, we stuck with that plan and we’ve stayed with it for those 17 years.
The recession is never fun. It doesn’t necessarily get better with practice, but you are more accustomed to the cycle and you don’t worry about it as much the next time you go through it. Again, all the research that has been out there that finds the flaws in the four-percent safe withdrawal rate, that research can be applied to give yourself some variable spending, some human factors. We’re not four-percent robots, we can do some things to overcome some of the flaws that come around when there’s recessions. You do all that and you just hang on and it works out fine.

Steve: Right. I think right now there’s a lot of talk about, oh, the market, it’s kind of a, or least the ratios, like the CAPE ratios. I was actually reading Ben Carlson and he was like, oh, well, the CAPE has only been above 30 three times in history and this is one of them. One of them was in 1929. He went on to qualify that, we’re in a low inflation and a low interest rate environment, so when you factor that in, it’s not that extreme.
Does it make you want to adjust, do some market timing, like, okay, we’re going to adjust our portfolio to be more defensive?

Doug: It’s tempting, and the answer is no. The reason the answer is no is because it’s much easier to set an asset allocation, to do the research to find your comfort zone. If it’s working, if you can sleep at night, if you’ve had it for a couple of years and you don’t find any need to adjust it or worry about it, then that asset allocation probably matches your risk tolerance for volatility and your inflation. Those are the two I worry about.
After that, you’re probably going to have your assets compound faster than inflation. You’ll start out at a four-percent safe withdrawal rate but, if you’re keeping your spending under control and your investments are growing faster than inflation, then your withdrawal rate will actually go down over time, which has been the case for us. Right now our withdrawal rate is around two and a half percent. That’s considered indefinitely sustainable.

Steve: Right.

Doug: I know we’ve never had this in history happen before, we’ve never had different circumstances happen before, we’ve never had the economy as positioned for this time, the markets at a top, that we really mean it, oh, my gosh, the great depression is coming back. After a while you learn to turn off the news cycle and go live your life and enjoy your assets, knowing that you’ve got a good plan and that you’ve got a good asset allocation, and you’re going to just do the best you can.
I will point out that there are other contingency plans. You can always cut back on your spending if you feel you have to. You can always actually go out and earn some money. We joke about the Walmart greeter but, one thing I’ve learned from 17 years of retirement is that there is always a job out there. The nice thing about those jobs is that if you’re starting financially independent and you decide you need a little more money to tide you over during a rough patch, it doesn’t take a lot of money, and you’re willing to do work that doesn’t normally pay very well. For example, working 20 hours at a Starbucks might not be a living wage for most Americans, but you can do that because you might only need $10,000 or $20,000 in a year to tide you over, keep your portfolio going. Doesn’t take much to keep it going.

Steve: Yeah, I know, I think that’s a great perspective. I talk about that, too, that I think a lot of people, when they’re working, they’re like, oh, I’ve been making $100,000 a year. I go to retire, I need to be thinking in that $100,000 number of income. If you have Social Security and you have some passive income and your expenses come down and your tax rate comes down, maybe you only really need $60,000 and you’re most of the way there. Maybe $20,000 or an extra $30,000 is it and there’s lots of ways you can make that when you’ve been making a higher income previously.

Doug: An example of travel is a good one because when you’re traveling during your working years, you’re living like a two-week millionaire. You’ve got two weeks of vacation, you’re going to the resort hotel and you’re eating every meal out, you’re paying Disney prices. When you’re traveling on your own and when you don’t have to do a certain itinerary and you don’t have a time limit, you can travel at the offbeat periods. You can go places and stay somewhere for a month or two.
You can actually literally rent an apartment and live like a local at a much cheaper cost per day. It’s got a kitchen so you can cook. You’re probably going around and shopping at farmer’s markets and buying interesting food anyway, so you can cook a meal cheaper, or eat out at restaurants if you want. You just don’t have to live the resort lifestyle while you’re doing slow travel. Of course, travel hacking for airline miles and cheap airfare. It’s turned out that the slow travel we do costs a lot less per day than it did to go stay at a resort while we were working.

Steve: I think that’s a great perspective, living like a millionaire for a week. I like that. I never thought about it that way. I think that’s exactly right.

Doug: I’d rather live like one for 17 years.

Steve: Right. A couple of thoughts. First, I just went to Glacier National Park. I took my 10-year-old. We figured out that we could fly there from here for like, I ended up paying $175 each, but I think I could have actually done it for $100 each round trip, like on Allegiant Airlines, it’s really cheap. Then I rented, through Ourdoorsy, which is like an Airbnb of RV’s, this Jeep with a pop-up tent.

Doug: Perfect.

Steve: It was awesome. It was incredible. I think the whole thing cost $1,500 for over a week, like seven nights. I’ve gone skiing in Tahoe, I’ll spend $1,500 in a weekend. It’s ridiculous. Now I see how insane that is. I’m like, okay, we’re staying at a campground, $20 a night, we’re cooking outside. It was great and relatively inexpensive.
The other thing is, about the two-and-a-half percent draw down rate, it’s interesting to hear your perspective that that’s what has happened. I saw Michael Kitces, the average person living in retirement, their real expenses drop one percent per year on average. Over a decade, it’s a 10-percent decline in spending, not inflation-adjusted, so it’s pretty interesting to see that. I could see that that would happen.
You’re saying that even though you’re active and traveling, you’re still bringing your, are you bringing your spend rate down or it’s just that your assets have grown and so your withdrawal rate is lower, or both?

Doug: It’s both. They’ve grown because we have a portfolio that’s a very aggressive asset allocation. It’s over 90 percent equities because I’ve got that military pension coming in every month, so the equivalent of having an annuity anchoring your baseline spending and then being aggressive with the rest of your investment portfolio. We also kept our spending relatively flat. That retirement spending smile that Kitces refers to, that thing is real and it works great, because you’re able to spend the time and do the things that are important to you and optimize your spending and your activities around that. We joke about right after you retire, you fire the yard service and do your own yard work, you fire the cleaning service and do your own housecleaning, you stop eating out so much or having food delivered or picking up fast food and you start doing your own cooking.
Those are expenses that drop right away just because you have the time to design the lifestyle you want. Later on, you may go back and start that food delivery again if you don’t like cooking, but you do get a chance to figure out the optimum spending for your situation. While you’re controlling your spending and doing the things that you enjoy and optimizing those, your assets are probably growing faster than inflation.

Steve: Yeah, well definitely recently.

Doug: Yes, it has been a very long bull market, but I’ve been through these before. If it’s going up two-thirds of the time, it’s going to keep going up two-thirds of the time, I think, even though we do have the recessions.

Steve: Right. One other last point before we move on, and I know we’re kind of going long on this part of it. Steve Vernon, he works for the Stanford Longevity Institute and he and some researchers came out with, it’s essentially a two-part best practice, which is, one, delay it for civilians, delay Social Security until 70 to maximize it. Use that higher income to hedge against your minimum non-discretionary spending. Then, take the rest of your savings and be more aggressive, which is what you’re doing. You have essentially the same strategy. You had your pension earlier in your life cycle and you’ve been more aggressive with your portfolio allocation, and that’s worked.

Doug: It’s worked very well, and it can work in a way that is comfortable for the person who’s doing their own asset allocation. It doesn’t all have to be invested into Tesla and Apple and Facebook. It can be invested in just large cap stocks that you have good growth rate or pay dividends. There’s many ways to invest in a 90-percent asset allocation to equities without feeling like you’re going to have a highly volatile portfolio.

Steve: Do you just do this all yourself, manage it, through Vanguard or something like that?

Doug: Exactly, we’ve been using Fidelity for almost 35 years, just because my father did and his father did before him, and our daughter does now. There’s really no reason to stay with Fidelity other than the customer service. Vanguard or Schwab do just as well. We’ve been simplifying. We used to have a more complicated asset allocation that had some dividend exchange-traded fund and some small cap and some international. I can see now that I’d rather simplify and, over the next few years, we’re going to just do the total stock market index. We’ve got a low withdrawal rate and we might even be able to live within the dividend rate of the stock market.

Steve: Got it.

Doug: It just makes it easier.

Steve: Are you going to buy like VTSAX or something?

Doug: Exactly, we’re buying the exchange-traded fund version of it. The exchange-traded fund shares that we’ve owned since 2004 or 2005, those had expense ratios of around .25 percent, .39 percent. Of course, in 2004, that looked pretty good, but it doesn’t look so good today. If you go into the total stock market index, it just drops our expense rate to 0.03 percent, and that works out to another vacation a year or some more lifestyle expansion. I’d rather keep that money than spend it on expense ratios.

Steve: Just as an aside, I think it’s really interesting to hear you say this. I know, in general, Vanguard has kind of dropped the expense ratio and fees.

Doug: Oh, yeah.

Steve: It used to be, back in the day, hey, one percent from mutual fund, manage mutual fund. Then it became like, now it’s 30 basis points. Then it was like, okay, it’s 20 basis points. Now, it’s three basis points. That 15 basis points you’re saving or 20 basis points you’re saving, one fifth of one percent is, for you, another vacation a year.

Doug: You’ve got to look at those percentages when you’re looking at expense ratios, but if your asset allocation is very rigorously tracked, you can look at your account, you can put them into a tracker like personal capital, and it’ll tell you what you’re paying every year in expenses and what you could be paying. Of course, people can do the math and figure out what that is to them. I’d rather have the money in my pocket. I don’t feel like I’m getting any better returns from being in an exchange-traded fund and having it split three or four ways when I can just do the total stock market.

Steve: Yeah, yeah. This same discussion is happening with advisors right now. Many advisors charge 80 to 100 basis points and you’re like, oh, well, fine, one percent I’m making. I think if someone’s making seven percent a year, they’re like, oh, that’s great, no problem. When you look at it and, I wrote about this and a lot of people have written about this, it ends up eating about a third, up to a third, of your total returns because you’re losing that year and you’re losing the future compound growth on those returns forever. So much of this is being efficient and really monitoring it. Okay, cool.

Doug: If you’re paying 100 basis points, if you’re paying one percent per year for active management and you return the four-percent safe withdrawal rate, that means essentially a quarter of the money you’re withdrawing every year goes to your advisor.

Steve: Yep, exactly. If you have a million bucks, ten grand a year, plus you’re not making returns on ten grand a year, so yeah, you’re definitely-

Doug: Exactly.

Steve: All right, awesome. This is super-helpful. For financial independence, can you just share a little bit about, like the two-minute version, of like, hey, how I got here. I think it would be interesting for our audience to hear how you got to this point or that point and the thinking and learning that went into it.

Doug: Here’s the secret: High savings rate.

Steve: Yeah.

Doug: Next question. It sounds simple, and it is simple, but it is not easy. You sit there and you look at what you want to spend your money on. I tell my readers the first thing you have to do is track your spending for a few months to figure out where the money is going in the first place. Then when you look at your money, I can’t tell you what you’re wasting your money on, but I can certainly help you track your money and, once you look at your expenses, then you can easily figure out where you’re spending more money than you want, or you’re wasting it on a car or on going out every night or a house that’s too big for what you need to do.
Once you start focusing on the numbers and doing the things that are important to you and spending on the things that you value, then your savings rate starts to climb up there. Half the savings rate is cutting your expenses, the other half is raising your income. I tell my readers that if you can keep a 40-percent savings rate, which is a little hard when you’re starting out but, once you get your savings rate up to 40 percent, if you can keep that up for 20 years, you’ll be financially independent from the military, even without the pension. That gives you the flexibility to change jobs, change careers, change your life if you want.
You don’t have to necessarily stop working once you reach financial independence. Even when you’re not yet financially independent, even if you still have enough savings to cut back work and maybe take a year off or find something you really like to do that pays the bills and gives you enough money to save for true financial independence and then later on, retirement, you have choices. You have enough flexibility instead of having credit card bills, consumer debt, large mortgages, that flexibility is priceless, especially if you’re not sure that you’re going to have a job in your field, and if you’re not certain that your company is going to keep you there.

Steve: Right, right.

Doug: High savings rate.

Steve: Yeah, high savings rate, definitely. That’s what you hear across, kind of fire first, figure that out. For your own trajectory, for a lot of the FinCon and FIRE bloggers you talk to, it’s like, well, the first part of my story was a disaster, like, I didn’t know how to save, I wasn’t money smart, I’ve got all kinds of debt and then I hit bottom, and then I figured out to start paying down my debts, saving like crazy and getting austere, then I figured out investing and now I’m good.
Does your story sound like that or is it like, hey, I got some good financial education early on and was making good choices the whole way?

Doug: No, that was not me. I did not get the financial education that I have today, although we’re fixing that for my next generation, right?

Steve: Yeah.

Doug: When I was growing up, money was something you just didn’t discuss. It wasn’t a polite topic of conversation. You were told why you have to save money, you have to spend less than you earn, those kinds of generic pieces of advice. Otherwise, that part about hitting rock-bottom was my freshman year in college. Then I eventually got tired of living like that.
One nice thing about the military, I say “nice” in the aspect of saving money, is that you might be very busy with training, schooling, going out there and getting qualified, learning your job, getting some promotions. For those first couple of years after you join the military, it’s fairly straightforward to focus on your career and not spend a lot of money on consumer items. I was like that right after I graduated from college. I spent the next two years running around getting qualified and doing training, and I really didn’t have much spare time at all.
We always talk about being frugal to the point where, suddenly, you feel deprivation. I tell my military audience that the advantage of being in uniform is that you’re keenly aware of where deprivation starts. You know when you’ve lived a life and you’ve stumbled over the line into deprivation and you can back off a little bit and be frugal again. That helps a lot. Deprivation has uses, right? If you have to pay off a lot of debt, you might live with deprivation for six months or a year to get that debt paid off, but it’s not sustainable.
Anyway, you know how to cross back and forth on the line between frugality and deprivation. You live a good quality of life, you’re spending on the things you want to spend your money on, you’ve minimized the waste and optimized your finances. That’s how you build the wealth for financial independence. I started doing that right out of college and kept on going over the years. At first, you don’t really see much of a difference. You’re putting away a couple of hundred dollars a paycheck into an investment account. Maybe it grows or maybe the volatility wipes you out. You really don’t see a lot of progress for the first few years.
After ten years of that, you can start to see it progress. We used to joke it was just like having a third person in our household near the end of our careers, earning that money every year.

Steve: Yeah, putting your money to work for you.

Doug: Oh, yeah.

Steve: On your side, in retirement, what does your income come from? Obviously, you have your savings and investments and you’re drawing down against that.

Doug: Right.

Steve: We talked about that. I think you also have a rental house or maybe more than one? Is that true?

Doug: We do, just one. First off is the pension. The pension and then after that is dividend income, interest income, just like everybody else. We also sell shares because, selling shares, you can usually sell shares from your investments at a capital gains tax rate of zero percent. It’s a little more efficient, but we do both, dividends and capital gains. We do own a rental property. The reason we own it is more for family than for finances. Are you familiar with the BiggerPockets real estate investing thing?

Steve: Yep.

Doug: It’s like the one-percent rule for having one percent of your, your rent be one percent of the value of the home, the monthly rent. Out here in Hawaii, it’s more like 0.4 percent, 0.35 percent. The numbers just do not work out here as well as they do on the Mainland. We bought the house that we’re renting out now in 1989. We’ve literally owned it for 30 years. We bought the house where we’re living now back in the year 2000. Back then, the Hawaii real estate recession meant that the first house was worth less than we paid for it. We held onto it over the years. My parents-in-law were living in for seven years. I can tell you that you don’t make much money when you’re renting a house out to family. That’s not a good way to riches.
It’s finally started to return some cash flow and we’ve been pushing that right back into the rental property with upgrades and improvements. We just did the traditional kitchen and bathroom overhaul. It’s the first time that house has had that in 38 years. We’re finally starting to get a little bit of cash flow from that property, but it’s nothing to make you financially independent all by itself. I have learned that I don’t enjoy land-lording, that I’d rather just invest in a passive index fund and then have the returns without having to be a landlord.

Steve: I’ve done a little commercial real estate investing and that’s much more passive, but I see people, I know some folks from FinCon that are like, okay, I’m going to build a portfolio of houses. One of the guys I’m friends with, Nate Wilson, is starting to buy properties in Toledo, Ohio. It’s interesting to hear his stories, like, listen, I think I can buy a duplex for $70,000 and each one will generate $600, $700 a month in rent, and then so one half covers the mortgage and the other half is cash flow. He has to start spitting up a series of these things so that it’s doable. I think he’s really into it. Then you see these folks that build up big portfolios and it’s like a cash machine for them, but it is a job, too.

Doug: Some people feel a better sense of control and feel like they can control the expenses much better with real estate than in the stock market. It’s an allocation question and you find your comfort zone.

Steve: Anything else? I know that you have your book and you had your blog, and I know the blog income, you donate to charity.

Doug: That’s right.

Steve: Anything else on the income side, or that pretty much composes how you do things?

Doug: No, that covers it. We could go out and earn more money, but we’re living off the portfolio, we’re living off the pension and life is good. My wife did 25 years of active duty in the Navy Reserve. When you’re in the Reserves, when you retire from the Reserves, your pension starts at age 60. In a few years, of course, she’s 39 years old, right? In a few years, her Reserve pension kicks in, and when the Reserve pension kicks in, it’s just like the active duty pension at a slightly reduced rate to compensate for the fact that you’ve been working a weekend a month and two weeks a year.
We do have more income coming in when she reaches age 60. She’ll start that pension in 2022 and that’s another source of income. If you’ve got a dual working couple and you both get a pension, then life is really good. Social Security, like you said, like Steve Vernon advises, we’re going to let that go until age 70 just to make sure we maximize it. If nothing else, the Social Security is lots of income to pay for long-term care and self-insure that way.

Steve: You’re well-hedged and you’ve got a clear plan, which is good.

Doug: Yes, very well-hedged and very well-protected against inflation. That’s been our biggest concern, children of the 1980s, when inflation was in double digits for most of the decade, and also, I’ve been through a long-term care experience with my father, so I’m keenly aware of setting things up to make sure that you don’t dump a big crisis of financial mystery on your adult children.

Steve: Right, which when you look at the data, I think it’s like a third of people are going to need some kind of significant long-term care. When we model in our planning, we forecast for folks, hey, your healthcare expenses are likely to spike in the last 18 months of your life. That’s what the data shows. Most people don’t plan for that. Healthcare spending, we’ve recently, I don’t want to make this too much blowing our horn, but we’ve recently started to model those.
It’s kind of a holy smokes number, where you’re like, oh, a couple is going to be spending $250,000, $300,000, or potentially a lot more if you smoke or have pre-existing conditions, in out-of-pocket costs. There’s actually two big phases. There’s the healthcare costs between when you stop your traditional working career and 65, when Medicare kicks in. Then there’s the cost after Medicare. Before Medicare, it’s still, for a couple, easily $1,000, $1,200 a month of spending for paying their own insurance, if they’re doing it that way.

Doug: I tell people not to join the military for the cheap healthcare, but that is a very big benefit at a very low price.

Steve: That’s a huge benefit. I want to move into the military side of this and kind of the benefits there and how that’s unique and what’s different. Just real quick, you mentioned savings, high savings rate, 40 percent, is like a huge lesson. Any other huge lessons that jump out at you when you look back on your financial life?

Doug: The biggest lessons that I’m reviewing these days are mostly the emotional side, the behavioral psychology, the economics. For example, humans, really, we suck at estimating compound growth. You start out, the curve is very flat for a very long time and it’s easy to get discouraged. When that compounding takes off, suddenly you realize you’ve way overshot the mark and you cross the finish line and you’ve still got inertia, you’ve still got that momentum from the compounding. We also focus very heavily these days on all the flaws in the four-percent safe withdrawal rate. I tell people that, that’s human nature to focus on the flaws and the failures, but you can also take action to minimize that possibility.
The easiest way to take action against a failure of the portfolio is to have annuity income. You can just even go out and buy a single premium annuity to protect your portfolio. Again, the other side of the four-percent safe withdrawal rate is that, most of the time, you end up working longer than you need and you end up with more money than you need.
I’ll tell you from the perspective of having been financially independent and retired for almost a couple of decades that in your 50s and approaching your 60s, a lot of your friends and classmates start waking up dead unexpectedly and they regret that they had not retired earlier, that they had not gotten their financial act together earlier. Think about your future, think about the person you’re going to become in the future, and think about the fact that you might have to struggle with your finances much more in the future than you are today, and try to make that high savings rate.

Steve: I think it becomes very real. I see this in my life where people start getting sick or people are passing away. I think it resets folks and that’s why I think people get really serious about this, many of them in their 50s, 45, you start thinking about it, 50 to 60, 50-55, they’re like, okay. They take a step back and also, hey, maybe I won’t be able to make this kind of money that I’m making from working forever. That jumps out.

Doug: One of the nice things about the military is that you end making a transition sooner rather than later and so you’re forced to get accustomed to having to go through that transition, instead of somebody who has a traditional civilian corporate career for 40 years with the same employer.

Steve: We’ll have to do an episode on the psychology of buying an annuity or just taking steps to guarantee, take almost all the risk out of your minimum non-discretionary spending so that you can psychologically feel more comfortable dialing up the risk in other places. I think a lot of folks don’t understand how their underlying fears affect their behavior in the choices they make.

Doug: How we feel about that failure rate that causes what we call “just one more year syndrome” where you stay in the workplace longer than you need to, to earn additional income to lower your withdrawal rate later on down the road. I’ll point out that annuity, for most people the only annuity you ever might need, is Social Security. If your portfolio is sustainable in your 40s and 50s but you’re worried about a sequence of returns, you only need to make it to age 62 if things get really bad.

Steve: Right. I want to dive into the military side of this. Really quick on my side, this is my limited understanding. My father was in the Army for a couple of years. He was going to get drafted, so he enlisted. He’s gotten lifetime VA benefits, which have been very useful for him. My half-sister was in the Marines for six years. She just got out. She did it largely for the GI Bill.

Doug: Oh, yeah.

Steve: She’s going to get some amazing benefits for education, she’s going to go back and become a nurse, and also on housing. She got engaged recently and they were like, oh, well, we could potentially move to San Francisco, go to school there and we’ll get an allowance for housing. That’s significant, and will easily cover living in San Francisco, which is tremendously expensive, as a couple. They can go to school, so that’s pretty amazing, and she’s going to get VA for life, but no pension because she didn’t, I think you have to do 20 years to hit the pension.

Doug: Unless there’s some kind of early retirement program or unless you’re medically or disabled retired, yes, 20 years.

Steve: I know that the benefits have been very good for them. I’d love to hear from your side. I know that you were in the Navy and doing submarines. How long were you in for?

Doug: I did the full 20 years after four years of college, so that’s 20 years of active duty. My spouse did nearly 18 years of active duty and another seven years in the Reserves, so she’s getting her Reserve pension at age 60.

Steve: Got it.

Doug: I’ll go one more generation. Our daughter and our son-in-law both went to college on scholarships, ROTC and the Naval Academy for him. When they graduated, they owed a five-year obligation to pay back that scholarship for college. Our daughter has just finished her five years of active duty and she went into the Reserves and she says life is awesome, because she’s not working one in six duty sessions, she’s not going to sea two weeks a month and she’s not getting phone calls at 2:00 in the morning very much. My son-in-law, the Navy is sending him to graduate school for his degree in the field he’s in, so he’ll get an advanced degree. He’ll owe a few more years after that. It’s very easy to just have your career go one obligation at a time and suddenly, you’re 10 or 12 or 14 years. Now you begin to wonder if you should stick it out for that 20.
I’ve had many conversations with people who have had a high savings rate for a while and they can see that they’re going to reach the financial independence finish line before they reach 20 years of active duty, and they wonder if they should really stick it out for the pension. The safe answer is, “Oh, you should stick around for that pension and the cheap healthcare.” The financial reality, though, is that I tell people, don’t gut it out the 20, don’t stick it out just for the pension.
If you’re challenged and fulfilled, then stay on active duty. Do that as long as it stays challenging and fulfilling. When that fun stops, you’ve been taking it one obligation at a time, that’s when you should think about leaving active duty and move into the Reserves or the National Guard. You can still get those 20 years of service in the Reserves or the National Guard. That’s the one weekend a month, two weeks a year option. Once you get the 20 years, that 20 good years in the Guard or Reserve, then you’re eligible for a pension that starts at age 60. It’s also got the cheap healthcare at age 60.
Again, you can earn the finances to bridge the gap, even if you’re buying civilian health insurance between the time you get out of active duty and the time you reach age 60. It’s finding what you want to do and finding a career that you can become good at and that’s challenging and fulfilling, whether you’re in uniform or out of uniform, whether you’re on active duty or you’re in Reserves or Guard or whether you go total civilian, it’s about having that high savings rate, having that quality of life, having those choices. You’ll reach financial independence without the military pension.
On my side, a child of the fear of getting out, I was the product of the fear and ignorance of leaving active duty, so I stayed on active duty all the way to 20, mainly because I couldn’t envision a future where I wasn’t on active duty. I couldn’t imagine going to the Reserves or getting, I just didn’t know enough. I was too worried, I was working too hard, I didn’t learn how that works. I got out after 20, I way overshot the mark on financial independence, I spent longer in the workforce than was necessary and, even today, I regret those lost family hours, that lost quality of life.
That’s the rule that I tell people to follow. Stay on active duty one obligation at a time, challenged and fulfilled, keep going but don’t gut it out to 20.

Steve: Does the military provide any financial education?

Doug: There’s financial responsibility, don’t sell your secrets to the enemy. There is a certain amount of financial literacy but, as we all know, financial literacy depends on not just the teacher, but having the student ready to learn. You’re surrounded by financial literacy in the military, but you might be too busy to take advantage of it. There’s free financial literacy classes on base for you and your family. There’s a command financial counselor at every unit you’re attached to, but everybody’s busy, you might be deployed, this might not be a very good time to sit down and discuss all the intricacies of your Roth IRA.
Financial literacy, like many civilians, it takes a back seat while you’re dealing with life and career and all the other things that are going on. The information is out there, but you have to be ready to learn or, frankly, sometimes service members get so deeply into debt trouble that they have no other choice but to learn about it and to get their spending under control.
I will say that, you talk about your dad’s VA benefits and we talk about what a good deal it is, but the grim truth is there’s a survivor bias to VA benefits and so the pension, all of that is reflected in people who didn’t make it to 20, people who were seriously injured or even killed during their military years. The VA disability compensation, you already paid for that. You earned it, and now the government is just trying to make it up to you with money and, hopefully, that can restore your quality of life, although I’m skeptical that anybody can bring their quality of life back after whatever it is that caused you to be disabled in the first place.
I do think the GI Bill is a wonderful deal. We used to have struggles with people being able to get a college scholarship, but they couldn’t afford the cost of living in their area. Giving that housing allowance to somebody who’s eligible for the GI Bill and they get that housing allowance for a few years, your half-sister must be really happy to have that financial security that lets her focus on doing a good job in college and not having to worry about working part-time to have the income to afford living in the Bay area.

Steve: Yeah, I think for her it was great. She came out of high school, she was trying different things. She was like, maybe I’ll be a chef, maybe I’ll be a physical therapist, maybe I’ll do this or that. Went to two years of school first, wasn’t quite sure what she was going to do, and then she joined the Marines. My dad is Chinese and my half-sister is fully Chinese, so they’re not your, when I envision people in the military, kind of John Wayne types or whatever. I think it was great for her because she had this time where she got some skills, traveled the world. Now she’s come out and she’s got some resources and perspective and can be really thoughtful about like, what do I want to do, where do I want to live, how am I going to get educated.
Just as an aside, she was asking me questions when she was in the Marines, I remember. She would be like, how should I invest my money, where should I save my money? It felt like she was picking up some of this financial stuff, where there was some culture of it. Obviously, there’s you, right? How many people do you think are pursuing financial independence or are relatively literate in the military? Any idea on percentages?

Doug: It’s probably pretty much like it in the civilian community. It’s probably about the same percentage. Couple of things, though. Your half-sister, when she came out of the Marine Corps, she not only came out with some benefits but, what she really brought with her coming from the military was motivation, focus and discipline to make it happen. That’s completely the product of the Marine Corps training, and she knows that she had a lot of other things in her life and her motivations and her quality of life that got peeled away to make her the person she is today, and built back up.
I would say that if somebody in the military is trying to figure out their finances, they already have the motivation, the discipline, the skills to figure out how to carry that plan through and reach their goal. It’s just being ready to learn. She had some questions, it was a little hard to find information. You had to take some time out of your day but, you’re working a long day and now you’ve got duty or you’re deploying next month, and those all get in the way. I don’t think that the military has a percentage of people that are necessarily more financially literate than the rest of society. I’ve often asked, with all the training we do in the military for financial responsibility and a minimum level of financial literacy, what are we doing at General Motors or Google or your average Walmart? I don’t know if we’re doing that same level of financial training.

Steve: I know what the answer is in high school. The answer is, in 20 percent of high schools, it’s mandatory that you take some kind of personal finance course. It’s available in about 60 percent of high schools. There’s this group, kind of next generation personal finance, that is working on this and educating teachers and providing curriculums and stuff like that. I think there’s a general movement, there’s more awareness that, hey, this should be mandatory. It’s like home ec, right? Or-

Doug: Oh, yeah.

Steve: Phys ed. You should take some personal finance in high school, learn how to balance a checkbook, learn how credit works, learn about savings, learn about investing. That would change our society. Think about the number of people that get into debt, are paying 20 to 30 percent interest rates on credit card debt. It’s crazy and that changed their lives. Student debt, it’s ballooned. People are graduating with $100,000 in student debt. You graduate with that much debt, your thought number one is, how do I pay that debt back and where can I make enough money to pay that debt back? Then they’re grinding away and focused totally on that and not necessarily thinking about, okay, what’s the whole landscape look like of my life, so it’s these decisions you make really early on that can dramatically change your outcome.

Doug: I hope so, and some kids in high school are ready to learn that, some people aren’t ready to learn that kind of financial literacy until they’re in their 30s. I think the same number of people join the military as there are on the civilian side that have that financial interest.

Steve: Yep, exactly. Can you just give me the summary of what does it look like from a pension and healthcare benefits that makes it so different for the military?

Doug: One of the things that the military starts off with is breaking your compensation, your total package, down into base pay and specialty pay for advanced skills, and a third category of allowances. When you look at your total compensation, it’s relatively equivalent to the similar occupation that you’d have in the civilian world. There are actual guidelines that try to get the compensation up to 90 percent of, at a minimum, of what it would be in the civilian world. The whole idea is that if people aren’t staying in uniform working in the galley if they’re cooks, for example, then you need to pay them more money. You need to pay them bigger allowances or a bigger bonus or something to make them want to stay in uniform.
The military pays people as they think they can afford. They look at retention rate and if the retention isn’t there, then they start handing out a little more bonus money. About a third of your total compensation is tax-free allowances or things that you get for being on a base. Your pay will probably double, at least double, in the first four years that you’re in the military, from beginning as a raw recruit to the point where you’ve got four years of experience.
After that, your pay will continue to rise with promotions but, again, some of it is base pay, some of it is specialty pay and some of it is allowances. It depends on where you live and what you’re doing in your careers. If you’re going to go out there and take the tough jobs and spend a lot of time at sea or spend a lot of time at combat zones, you’re taking a lot more risk, but you’re going to get some more money. I’m skeptical that the money is worth the risk, but the money is there if you choose to take the risk.
At that point, again, every obligation you have, you’ll probably have an obligation between three and five years, maybe six years, every time you re-enlist or sign on for another obligation. When you get to 20, now you’ve got 20 years in. If you do 20 years of active duty, your combination of active duty and Reserves time to get to 20 good years, now you’re eligible for a pension. Now you can keep going. If you keep getting promoted, you can keep going as long as 40 years, to age 60, 62, right around in there. It’s depends on your rank and your specialty and your service.
When you’re eligible for that pension, we find that most people who reach 20 years, they don’t stick around too much longer. The majority of people who qualify for a pension will immediately retire at 20. Having said that, out of all the people who join the military, only one of six actually make it to that pension at 20 years, one out of six. In some parts of the military they have a higher retention rate. Marines, the retention rate for a pension is way down there in the single digits, so your half-sister made the right choice, probably, at six years.
Once you get that pension, it’s half of your base pay and, in the new system that just went into effect, the blunted retirement system, it’s 40 percent of your base pay. We bat these numbers around, it sounds like a pretty good deal but, if you look at your total compensation and then look at your pension, your pension is about 25 percent of your total compensation. It’s not the half-base pay, all the words we use to make it seem like it’s much bigger than it actually is. Total compensation that you had the day before you retired versus your pension the day afterward, about 25 percent.
However, it is indexed to inflation for the rest of your life. You also have very cheap health insurance. When I say very cheap, I mean I’m paying less than $50 per month for health insurance with a primary care manager and an HMO system. Others can take insurance that’s considered pay as you go, you pay a cost share about 20 percent and your catastrophic cap is about $3,000 a year. Those are the big picture outcomes for what military health insurance involves after retirement. It’s a very good deal. Again, there is some survivor bias and relatively few military service members make it to 20.

Steve: The healthcare benefit is a massive benefit.

Doug: Yes, the healthcare and the inflation rate. In 17 years of my pension, three of those years the consumer price index, the cost of living adjustment was zero. Yet, in that 17 years, my pension has gone up 40 percent. That’s supposed to be the reflection of what the consumer price index has done during the last 17 years.

Steve: Inflation is a silent killer and a lot of people don’t realize it. At three-percent inflation over 20 years, your hundred bucks income or spending that you have now in 20 years and buying groceries and a gallon of gas, 20 years later it buys half of that. If you don’t have an inflation adjustment, you’re going to be getting a lot less for your money.
How do you think the military pension compares to Social Security? Have you written about that at all, in terms of like a relative basis, like, hey, I’m going to get Social Security, maybe it’s going to be $25,000, $30,000 a year. It would be less than 25 percent, I’d have to look at my average. I know they average your 35 years of income. I’ll have to look at that.

Doug: I’d say that the active duty pension that a service member could get in their late 30s or early 40s would be about that range, about $20,000 to $25,000 a year, and I’d say that Social Security, that that same person would get if they were magically age 62 or age 66 or 67, it would probably be a little less than than $20,000, $25,000 a year. I think Social Security is more of a safety net than a thank-you for your service.

Steve: That’s for sure and also, you don’t get it until you’re older. When did you start collecting your pension, at what age?

Doug: I started collecting my pension the minute I retired from active duty at age 41.

Steve: Wow.

Doug: Reservists and Guard members get their pension at roughly age 60. You can get it a little earlier for taking extra risks, but 60 is the number that most people in the Reserve or Guard start their pension at. Then Social Security follows shortly after that, anyway, when you’re age 60. I see the Reserve and the Guard pension, I see Social Security as backstopping your portfolio if you’ve had 20 years of financial independence and a couple of recessions and sequence of returns risk has put you at a point where maybe your portfolio isn’t going to last 30 years in the first place, so get your annuity income.

Steve: With Social Security, after your full retirement age, you get essentially an eight-percent bump in benefit every year until 70. With yours, if you had delayed until 45 or 50, would you have seen a pretty significant escalation in your benefit? Probably, right?

Doug: Right. If you’re doing good, if you want to stay past 20, if you’re feeling challenged and fulfilled, those are all significant problems because, if you’re staying past 20, it implies you’re fairly competitive, you’re getting fairly senior. If you’re going to be able to continue doing what you enjoy doing, the reality is after 20 years, the rise of promotions, you’re at the pointy part of the promotion triangle and there’s very few billets up there and you might not have the quality of life you had when you were only at 10 years of service and much more junior. Unless you’re in a leadership position and really enjoy that life and you really want to continue that on, then it can be much different and you might have decided that staying for that extra two percent per year in your pension calculation, maybe that extra 2.5 percent per year, maybe it’s not worth it.

Steve: Got it. I meant just if you, could you just delay? Instead of claiming it at 41, could you have just said, hey, listen, I want postpone the claiming date of my pension? Did you have that option?

Doug: No, we don’t currently offer that option for an active duty pension. There was a way to kind of gain that as a Reservist that was a big deal in the ’70s. The reason I say this is, there are a few people who are still in the Reserves that would have been affected by this when they turn 60 in the next few years. Largely, no, you can’t say I’m just going to delay the start of my pension and you’re going to give me more pension. In fact, the survival statistics, longevity statistics, indicate that if you get an active duty pension, grab it and go. Don’t sit around and try to delay it. Don’t count on your longevity. Reservists, actually same issue. They’re probably going to have the average life span and if they can get their pension at 60, take it right away.

Steve: Got it.

Doug: Social Security, a little different, because you know you delay Social Security, you get a return that you might not be able to get, I know it’s actuarily neutral. If you keep waiting, you’ll end up with about the same amount of money overall. I see Social Security as a way to bolster your older age income in case you do end up in long-term care, at least you’ve got that higher income to be able to pay your medical bills.

Steve: One of the things that I’ve thought about and we’re considering building into our tools, you can model this, but you could buy a deferred annuity and it kicks in at 70, 75, 80 or something like that. That gives you an end date to plan until, especially if you buy it to like 80. It’s pretty cheap because you’re not expected to be alive, so you can buy a lot of income for a relatively low amount of money and you can have a finite planning window. That’s one of the big risks. People have this unknown planning window and they’re like, okay, how long will I live, what’s going to happen with inflation, what’s going to happen with the markets? It’s a lot to think about. I think for someone like you, you obviously have thought about it and you’ve got it all figured out but, for many people, they’re kind of like-

Doug: No, you need that tool in a planner. That’s a very good tool to have, and the military doesn’t have that feature. Frankly, the military pension system is so complicated already that I’d say half of my questions come from people in the Reserves and Guard, trying to figure out exactly what their pension is going to be when they’re 60 years old.

Steve: If you can get the Navy to adopt our financial planning tool, let me know.

Doug: Yeah, I’m a fan of that. The more financial literacy we get, Heaven forbid we should all learn how to manage our money while we’re still in uniform.

Steve: This is super-helpful. It’s great to kind of get an overview of how you’ve approached it and what the day in the life is like. Jumping back, I was actually just curious, what kind of submarines did you work on?

Doug: Both kinds. I started my career on an older ballistic missile-carrying submarine, that was the one that launces nuclear missiles as part of a nuclear triad. I did one tour there. On my second submarine, my department head tour, I did that on what’s called an attack submarine, a fast-attack submarine. You’ve read, The Hunt for Red October?

Steve: Yep.

Doug: The fast-attack submarine from the Americans was chasing after the ballistic missile-carrying submarine from the Soviets. Frankly, if I had to advise anybody who’s considering joining the submarine force, the fast-attack submarines give you the tactical skills and the experience that you need to continue to promote as an officer. The ballistic missile submarines give you the reliable schedule and the family lifestyle, knowing when you’ll be in and out of port, that’s very comforting to junior officers and mid-grade enlisted but, if you want to go far in the submarine force, personally, if you want to maintain the will to live, I’d stick with the fast-attack submarines, where every day is different, you never know what you’re going to have to go do.

Steve: How many people are on a fast-attack versus a ballistic sub?

Doug: The fast-attack crews are roughly about 100, 110 people. If you’ve got something special going on, you might get a bunch of people that we don’t talk about coming on board, maybe an extra 10 or 15 to come and join the crew for a special mission. Ballistic missile submarines, you’ve got a bigger submarine and you’ve got more things to take care of. Those crews tend to be about 135, 140.

Steve: How long are they going out at a time?

Doug: The attack boats are typically under weigh for 30 to 40 days at a time. That would be considered a longer mission. Usually, what you do on an attack submarine is you get under weigh for a couple of weeks, come back into port. Every couple of years you deploy to the western Pacific or to the Mediterranean or to the Middle East. When you’re deployed, you’re gone for six, eight months but you’re not under weigh the entire time. You’re under weigh for a couple of weeks or 40 days, then you come into port for a week or two.
Ballistic missile submarines, they’ve got two crews. The whole idea is to keep her at sea as much as possible. In the Cold War days, we would go under weigh and submerge and literally stay out there under water for literally 90 days. My personal record was 97 days. That’s not the kind of record you want to be proud of, but that’s what we achieved. These days, it might be 30 or 40 days with a break for a port call or to come in and do some kind of repairs, but it isn’t necessarily that same 90-day record from the Cold War.

Steve: Three months at a time, that’s a long time.

Doug: Yep. It’s an interesting lifestyle. It’s a good way to save a lot of money.

Steve: Sure.

Doug: Of course, that’s deprivation, not frugality. Even today I find myself saying, well what was it like when I was a junior officer, or what was it like when I was just beginning my career? Do I really need this consumer item? Usually, the answer is no, I don’t really need it but I’ve got to be willing to pay for it to give my life energy for the money for it, or I can figure out how to do without it.

Steve: That’s incredible to hear about. My first job, after my sophomore year in college, I was an intern at a company called Task, the analytical sciences corporation. They were a defense contractor and my job was to work on the targeting software for ballistic missiles launched from Trident submarines. This was a crazy thing. I would go in there, I got a secret clearance. This was a summer job. I worked with all these MIT people. It was MIT people, Navy people and there were some Special Forces people in there. It was crazy, or like retired Special Forces. You heard all these stories and these guys would go on the boats. We’re writing software to go in these boats and these guys would go deploy and ride along.
It was all passive navigation, but it was fascinating. They’re like, okay, here’s what happens, these boats go underwater, we’re measuring the accelerations for how the boat’s moving around, that’s how we figure out where we are. When we got to launch these missiles, the subs would surface, they would say, this is where I am, they would take a star fix and then they would launch the missiles and they know where they’re going. That was my exposure to the sub world, a little bit. It was fascinating, the technology that was being, this was 30 years ago. That was what they could do then, the kinds of stuff they were into at that point. That’s why I was asking all the sub questions. It’s interesting to get the first-hand account.

Doug: You’ve heard those submarine sea stories and there are parts of the submarine force that I miss every day, but I don’t miss them enough to go stand midwatches or weekend duty.

Steve: I can’t imagine being underwater for 90 days with 135 guys. That sounds daunting.

Doug: You develop some social skills, those soft skills we talk about, how to get along with a small team. The other side of it is, I still feel weird whenever I have an office that has a window on it, because I’ve spent my lifetime in offices without windows. It takes a certain type of personality, and that’s probably why I live on an island that’s only 30 by 40 miles today and I’m perfectly happy.

Steve: You don’t get island fever?

Doug: Not at all. I’ve heard of it, but I don’t have it.

Steve: With that, Doug, I really appreciate it. Any quick key influencers or communities or podcasts you want to call out that you think would be a good resource for our audience to learn more about, there’s obviously your site, The Military Guide, or your former site, I know you sold it, but places people can learn more about military benefits and financial independence, things like that?

Doug: For the military, come on over to The Military Guide. I no longer own that site but I still provide the majority of the content. The owner, Ryan Guina, also owns The Military Wallet and, between us, we’ve got 90 percent of the military market covered there. On the non-military advice, there’s always Facebook groups and there’s always the big podcast, something like BiggerPockets for real estate investors, ChooseFI for people that are just beginning their journey to financial independence. If you want to be hardcore frugal, there’s Mr. Money Mustache, a lot of that advice goes a long way. There’s plenty of other information out there on Facebook. I would say look up personal finance and financial independence on Facebook and find a Facebook group that works for you. There’s probably two dozen Facebook groups you can join that will help you figure out what kind of people you want to live with and what kind of financial independence you want to pursue.

Steve: Awesome, appreciate that. Any questions for me?

Doug: No, I think you should spend more time mentioning your planner and all the features it’s got. It’s one of the best ones I’ve seen. I tend to beat up on retirement calculators a lot, put them through their paces, and it also survived Darrow Kirkpatrick’s due diligence. You notice that not too many retirement calculators get through there unscathed. I really appreciate having that planner and it’s a very powerful planner for military as well, as you know, for military as well as for civilians. I really appreciate that ability to project what your life’s going to look like and realize what you have to do to get there.

Steve: I appreciate that. We actually want to add some more military-specific functionality around TRICARE and pension benefits and stuff like that. We’ve had some folks from the law enforcement and military say they appreciate the fact that we can add multiple pensions and kind of model working after that and stuff like that. I appreciate the feedback. With Darrow, I remember, I think he thought in the beginning, he was like, oh, you’re in this for just doing referrals and making lots of money. Once I got to know him and he got to know me, he was like, okay, I can see you’re a legit person. You have to kind of earn that in the community, like, okay, hey, we’re here for the right reasons.

Doug: Yes.

Steve: Here’s the work. It takes years. Then people start to see, oh, okay, this is what I want to do. [crosstalk 01:03:26]

Doug: You’ve been around long enough to have that credibility.

Steve: I’m sorry, what?

Doug: You’ve been around long enough to have that credibility.

Steve: Thanks, still working hard. Doug, this is super-helpful. It’s really great to hear from you personally what your life is like, what you’ve learned along the way, also just how thoughtful you are about this. I can see why you’re one of the OG financial independence folks and you’ve got, obviously, a very good perspective and a lot of experience and a lot of great insights about how to do this efficiently, and you’ve been living it. There’s so few people that, there’s more and more, but so few that have been financially independent for a long period of time and survived the ups and downs of a couple of decades of this. Congratulations on accomplishing that.

Doug: I hope to have many more years of experience ahead of me. JL Collins and I joke about getting more experienced.

Steve: Yeah, I want to get JL Collins on our podcast. I’ll have to get through to him. I actually talked to him quite a lot, probably 18 months, 24 months ago. His book, Simple Path to Wealth, is a fantastic resource.

Doug: Oh, yeah.

Steve: He shows it doesn’t have to be super-complicated. You’ve just got make some steps and take the action. A lot of it’s just taking the action.

Doug: That’s right.

Steve: With that, again, thanks, Doug, for being on our show. Thanks to Davorin Robison for being our sound engineer. Anyone listening, thanks for listening. Hopefully, you found this useful. If you’ve made it this far, I encourage you to check out The Military Guide, as we talked about in the resources that we pointed to, and we’ll post a lot of those up on our podcast. Also, check out our planning tool and give it a whirl. It’s free to build a plan and it provides a lot of education and structure around thinking about this process of getting confident in your future. You can find us on Facebook as well, and we’re on Twitter at newretirement. Anyone that wants to leave a review for this podcast, that’s appreciated as well.
Okay, so that’s it. Thanks again, Doug, and everyone else, thanks for listening.

Doug: Thank you.

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