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Saving is simple -- do it early & often

May 24th, 2019 at 02:33 am

So I guess for my kickoff post, I'll lay out the foundation of everything that has brought me to where I am. And honestly, it's a mind-boggling reality. As I was putting together the numbers for my 'About Me' section, I was shocked to realize where we actually stand. As a 32 y/o military officer, I have built up a net worth of nearly $1M... I almost don't know how it's possible.

I went to college in 2004 with $3k to my name. I had gratefully earned a full scholarship to an outstanding university, and my small income of a few hundred dollars a month was sufficient for my needs (not much, obviously). In 2006, an instructor pulled me into his office with a few of my friends, and he taught us about retirement accounts, budgeting, debt, investments & mutual funds, and a bunch of other financial topics. In a way, he's my inspiration, because that's exactly what I want to be able to do for other people. I want to help them learn how to be successful with their money. And successful I have been, and I credit him with starting me on that path.

Soon after, I started my Roth IRA, and set up automatic transfers into the IRA and into my savings account. Mind you, I had a $10k annual income, so it wasn't much... But that didn't matter -- I had started! The next year, as a senior, I managed to max out the IRA, and have never stopped doing so ever since. That has been a cornerstone of my financial life.

When I commissioned as a military officer, I was young, inexperienced, naive, and relatively well-funded (suddenly earning $40k). Gratefully, I applied the lessons I'd been taught, created a basic budget, and started saving aggressively. I had been living on almost nothing, and with 2 roommates, continued to do so. That meant that saving 40% of my income was no problem, even in spite of my car payment (man, if I could go back & not get an 11% car note on a new Civic... Lol).

From then on, 40% toward savings has just felt right. In spite of living in (and enjoying) Florida, Oklahoma, Japan, Oklahoma again (stinking tornados), and now Alaska, I (and eventually my wife) have always managed to save right around 40% of gross income. "Live on less than you make." It's simple advice, but so very fundamental to financial success.

Which brings me to my point: by starting early, saving consistently, and living well within my means, I find myself in the strange position of nearly being a millionaire in my early 30s. I started my career with absolutely no expectation of wealth (after all, who joins the military for the money?!?). I simply created my budget based on priorities: 1) tithing; 2) basic essentials of housing, food, utilities, transportation; 3) saving; 4) everything else. By taking out & sending away my savings before I spent any of my disposable income, I simply never missed it, and it was always there when I needed cash for something: a car, buying a home, emergency airfare, paying for our wedding & honeymoon, or wiping out my new wife's student loans. Saving early & often has given me the freedom and flexibility to do a great many things. With the foundational philosophy of saving aggressively, as I've moved up in rank and pay, the dollar figures involved have grown, but it has merely accelerated my small family's financial strength. We stick to the plan, safe regularly, and we want for nothing. When something is important enough to merit spending our money on it, we do so with little hesitation. That freedom is directly enabled by the savings habits that I learned in college and have applied ever since.

6 Responses to “Saving is simple -- do it early & often”

  1. creditcardfree Says:

    Welcome to the blogs, Kork! Oh how I wish we were saving 40% of our income that young! Nice work, I think you were likely in the minority for the young military with that savings rate. I see so many very nice cars here that I'm sure the young service members are buying or leasing.

  2. FIRE and I Says:

    Saving 40% of your income is absolutely amazing! I wish I had started doing so sooner.

  3. kork13 Says:

    CCF,
    You're definitely correct -- not many military folks are saving like this, and it's unfortunate that there isn't better awareness about good financial practices in the military. Folks all too often get caught up by the car lots & loan shark places that tend to proliferate right outside the gates... Tragic.

    Anytime I have an opportunity to talk to people about good money practices, I try to do so. Right now I'm working on slowly convincing a 24 y/o guy that works for me to start saving more of his paycheck vs. blowing it on toys and restaurants .... he goes out for lunch literally EVERY DAY! Yikes, the wealth he could build with just $50/week! He could half-max a Roth IRA every year with just that one change!

  4. MonkeyMama Says:

    Welcome to the blog side!

  5. rob62521 Says:

    Welcome! You will find most of us are pretty friendly!

  6. Dido Says:

    What a great story! I had to be a college professor before I had a clue about finances (and some of my former colleagues still don’t have much of a clue. Having a PhD doesn’t mean you will be smart about money!). Great that your instructor was able to get you started on the path to FI so young!

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