I am a very risk tolerant person and therefore my retirement account is invested heavily in stocks.  In fact more than 95% of it is in stocks.  I know most out there would say that I am crazy and that I am going to loose my shirt.  Well you would be right I did loose more than 40% last year in my account.

Why I can be so aggressive

I can afford to invest so aggressively due to the fact that I am a career military man and I I have a defined pension.  The military pension is one of the most lucrative out there.  I will receive 50% of my base pay upon completing 20 years of active service.  This pension is payable once I exit the active duty ranks.  I do not have to wait until I am 55, 62, or even 65.  Nope I get to start receiving a retirement check when I am 38 years of age (that is when I am eligible for retirement).

This pension I count as having retirement funds in cash.  That is why I feel that I can invest the 10% of pay that I place into my TSP account almost entirely into stocks.  If you are lucky enough to have a defined pension plan as well as the option of a 401k I think it makes perfect sense to invest aggressively while you are young.

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The majority of the Marines that work for me are under the age of 21 and are getting a steady paycheck for the frst time in their lives.  Up until the time that they joined that Corps most of these guys have been living at home with mom & dad and have not had to worry about their finances.

The first thing that I do when a new Marine checks into the unit is sit down with them and talk to them about what I expect from them.  I let them know that I am not a financial advisor and what I tell them are just recommendations and suggestions.

First I advise them to live within their means and budget.  I let the know that credit cards are not bad but to make sure that they are not living on them.  I tell them my story of how I got myself into a financial hole and how I am digging out of it.  I explain to them how i am spend over $500 a month on payments to get me out of this hole.  I let them know that of that 500 bucks more than half of that is going to absolutely nothing in the form of interest.

My next piece of advice is to be careful when buying a car.  Unfortunately there are dealerships and used car lots around military installations that provide easy credit on subpar cars and take care of young inexperienced service members.  My advice for this is to go to a reputable dealer and to secure financing through their financial institution prior to setting foot on a car lot.

My third piece of advice for these guys is to start an emergency fund.  Even with a steady paycheck for another 3-4 years I explain to them the importance of having a safety net for not only when they get out, but also to have some money set aside in case of a true emergency (car problems or emergency flight home).

Last but not least I explain the Thrift Savings Program (TSP) to them.  The TSP is the Government form of a 401k.  While there is no matching contribution for active duty military members I explain to them that importance of saving for retirement now vice later due to the powers of compound interest.

I hope that by doing this my Marines won’t make the same mistakes that I did.  I know all the guys wont listen to what I have to say but I hope that I can keep some from going down the path that I did.  Hopefully the lessons that I try and teach them now last them for the rest or their lives and they can be financially reponsible individuals.

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