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Jamie and Spencer from militarymoneymanual.com discuss defining/re-defining the “finish line”, the benefits of dreaming about what you want your future to look like after reaching Financial Independence and retirement, and setting short and long term goals to get you to that dream life.

Military Money Manual Podcast Episode #92 Links

• Free 5-day course to maximize your travel benefits and learn all about military travel hacking
• The Military Money Manual book
• Save Your First $1,000 $10,000 or $100,000 in the Military | Military Money Manual Podcast Episode 73
• portfoliovisualizer.com
• Sivers.org

Outline of Episode:

• Setting short term and long term goals
• Enjoying life during the process
• Dreaming about what you want your future to look like
• Defining/redefining the “finish line”

Military Money Manual Podcast Episode #92 Transcript

[00:00:00] Jamie: There is a day where everyone in the military is going to be done. And you need to think about what that's going to look like when you're done.me

[00:00:08] Spencer: Hello, and welcome to the Military Money Manual podcast. I'm your host, Spencer, from MilitaryMoneyManual.com, joined by my co host, Jamie. 

Hey, Jamie. A couple of weeks ago, we were talking about the topic of awareness.

So we want to know where we are financially, at least, before we can get to where we want to go. But on this week of the podcast, we want to talk about where do we want to go? Where do we want our financial life to get to eventually? And that's where I think dreaming comes in. One of the easiest ways to start dreaming is to think about if you already have the money needs covered. Then what are you going to do with your time? 

What are you going to do with your life? So let's say you win the lottery a million dollars per year after taxes, inflation protected the rest of your life. That's going to be life-changing money for just about every single person listening to this podcast.

Certainly life-changing money for me.

[00:01:28] Jamie: And if it's not, come be a guest on our podcast and let's learn about how you got there.

[00:01:33] Spencer: So what do you want to do? What does your life look like? If you have your money needs covered, you don't need to work. What are you going to do with your time? Another way to think about this is, what do you do on the weekends?

Or, if you're on a different schedule than the standard Monday through Friday, five day work week, what do you do on your days off? Just go ahead, daydream a bit, pause this episode, write it down, think about… If you're driving, then maybe write it down after you get to your destination, but think about what your dream life looks like and write it down.

It might be as simple as I want to be able to drop my kids off at school and then pick them up in the afternoon, cook dinner with them, put them to bed at night, and wake up with them the next morning, right? It might be that simple. You want to teach at a local community college, you might want to travel to see family and friends, it might be buying the truck that you want, it might be renting a house by the lake for a week in the summer for your whole family, whatever your dream is. It's okay.

It's your dream. Own it. And then let it motivate you. And we'll talk a little bit about what that's going to entail as this episode goes along.

[00:02:38] Jamie: Spencer, one of my favorite parts of the book you wrote, The Military Money Manual, A Practical Guide to Financial Freedom, really powerful question related to this same topic on page 18.

It's similar to if you had a million dollars winning the lottery. But in the book, you said if I had 20 million and could quit working tomorrow, what would I do with my time? And for some people, it might be, I wake up and eat breakfast with my kids every day or I vacation every year. And like you mentioned, this is the perfect time to start dreaming and looking at what the future would look like.

Because if you don't know how to establish your dreams, then we can't figure out how to get from where we talked about a few weeks ago with becoming aware of your current net worth to getting to where we want to go in the future. How we get there is we set goals. So we'll talk more about that in a second.

[00:03:25] Spencer: Yeah, that's right, Jamie. It's easy to break it down, I think, into short term versus long term goals. So short term goals might be a week from now, a month from now, six months, a year, two years. It really depends, really, on how much your effort can influence that goal. So if it's a goal that you can work towards, setting a goal that's 10 or 20 years in the future, that's a long time to be spending actually every day or every week waking up and working towards that goal.

But a lot of people do that. A lot of people can do that. But sometimes for those longer term goals, it might be easier to let some other tools or some other systems help do the heavy lifting, such as compounding interest, which is another topic we'll have to talk about on the podcast.

[00:04:15] Jamie: Yeah, I think both short term and long term goals have a very important part in your dreaming and goal setting as you look at your financial future because there are some immediate things I can control.

So if I'm thinking short term, maybe within six months from now, something like that versus long term, which is maybe three, ten years from now, short term goal might be something like I want to pay off this crazy credit card debt. I have $750 balance at 28% interest and I want to be done with it within two months.

That is a really great goal, but it's also a really great goal to say, I want to have a fully funded emergency fund of six months of expenses saved up in the next five months. And it's also a really great goal to say, I want to buy a house in seven years or 25 years from now. I want to have a million dollars saved up.

All of these are great examples and you have to balance that and consider both short term and long term goals in order to fully dream. For your future, there's no right or wrong. When you're talking about goals, you and your partner, if you're married, your spouse, you have to figure this out together of what you want your future to look like.

And that's where the dreaming comes in. And we don't want to get cheesy and say to go out and do a vision board or a dream. But it's that kind of exercise of asking each other these questions, the $20,000,000 questions of what does it look like for you to not be stressed about money? Or what are some things that you saw in your parents or your family of origin that you didn't like about money?

And how can we do better for our children or our generation? And those deep and meaningful conversation starters are where you can start to identify your goals and dreams.

[00:05:49] Spencer: I know when I was starting my journey to financial independence. And we did the exercise where we added up how much cash I have, how much cash does my wife have.

How much emergency fund do we have? Where are our investments? Do I have any money in my Roth IRA, my TSP? And where are my student loans at? How much do I owe? How much does my wife owe? And at first it can be pretty overwhelming, right? Like we were facing down the barrel of 40, or by the time we got married, $53,000 of student loan debt.

And we were making much less than that per year. And so when you go and you put it into the loan payoff calculator, you can see okay, if I make the minimum payment, I'm going to be paying this for maybe six or seven years. But then you're like, Okay what if I add $100 a month? And you're like, Oh that takes the time down a year.

And then it's what if I just round up the nearest thousand and I make a $1,000 payment on it? My student loans and all of a sudden now it's drawn back maybe two or three years and you can see that finish line is moving closer and closer to you. And to me that was motivating when I saw that.

Okay, this is a long term goal. It's going to take some discipline. It's going to take monthly. Action and for us, actually, it was really just setting the intention early and then setting up automatic payments and then adjusting our budget based on the amount of money that we had left over while still meeting our other obligations, such as investing, getting our 5% match in our TSP and building our emergency fund and paying our bills, right? 

Life still goes on when you have to make $1,000 a month student loan payments, but that's the reality that a lot of people are facing. But we didn't let that create a hopeless situation for us, right? We looked at that as, hey, if we stick to this for the next 2, 3, 5 years, whatever your loan payoff date is, that day will come and either you're going to be debt free or you're not because of the actions that you took along the way.

But that day is coming no matter what. One thing that we noticed is as we stayed focused on that goal, we would have extra income come in, right? Like we had a mortgage and we had overpaid the escrow. So we had put too much money aside for, I can't remember what it was, maybe. County taxes or homeowners insurance or something.

And so we got a $2,000 check in the mail from our mortgage company. They said, you overpaid for the last couple months. Here's some money back. Wow, that's awesome. So let's take a little bit of that. Maybe a hundred bucks, 200 bucks go out for a nice dinner. And guess what? We'll put $1,000 and we will each take $400 so I can go buy a new tire for my bike and my wife can go buy whatever she wants to buy and we'll put $1,000 towards our student loan and that moves that date one month closer to us.

And that's what you'll find as you're working towards these goals. There's these opportunities to move that finish line even closer to you. And when you stay focused, Dave Ramsey likes to talk about this gazelle-like intensity. You can flip it on its head and think about, okay, what if you're the lion chasing that gazelle, and that gazelle is your student loan payoff date.

And if you've got that intensity, if you're focused on it, you're going to find opportunities along the way that's going to move that goal even closer.

[00:09:03] Jamie: Yeah, that became a game for us trying to figure out just how to make the month ticker just move a little bit more. And one thing we struggled with, though, was balancing it.

And this may be one of the things that Dave Ramsey philosophy is not as great at as you're doing that gazelle-like intensity and never seeing the inside of the restaurant while you have debt. Spencer, I would both encourage you to think about the right amount of balance. If you are $100,000 in debt.

Maybe going to Disneyland every spring break might be a little bit too much, but there is some way to find to enjoy the ride. If you don't, you might go crazy and not be able to sustain it. Just like you jump into a diet where you're going to only eat 900 calories and you're used to eating 3,000 a day.

You're probably not going to be able to sustain it, but small and measurable changes are going to make it a lot easier. Every once in a while, you got to find whatever it is that you enjoy, that you enjoy to allow you to let your hair down. Go out with your friends every once in a while, maybe sometimes you say no, or maybe you propose a different venue or something like that.

You can't never go on vacation, you can't never eat out. At some point, you're going to give up on that. It might last a few years, but we'd encourage you to find some balance there. And that's something that we struggled with when we were young and trying to dig out a debt. When you keep it in mind that we want to be sane and enjoy our money, it helps you balance instead of just having a bunch of money there, but you're so miserable in life and you have no friends and you have no experiences to share with your kids or your siblings or anything like that.

So definitely balance those out as you go along the way. But make sure you stay focused with finding intentional ways to build in relief and pleasure and enjoyment into your budget. As long as it's intentional, there is nothing wrong with enjoying the ride along the way.

[00:10:51] Spencer: Yeah, the author Ramit Sethi likes to talk about guilt free spending.

And I think that's such a great concept. Even when you're on this journey towards financial independence. Some people get obsessed with it and they dive into the coupon culture and they dive into the rice and bean culture of I have to cut my expenses to the bone because every percent that I'm saving means that I'm that much closer to financial independence.

But if you get to financial independence because you had a 90% savings rate, you're only spending 10% of your pay and you get there and I don't know what that would be like three or four years or something. You might find that the life that you're living on that 10% of your pay is not really a great life.

It doesn't have a high quality of life. And I'm not talking about business class flights. I'm not talking about driving fancy cars. I'm just talking about the simple joys in life. Sometimes you just want to go out with your family to Chili's, and that's okay. 

[00:11:50] Jamie: Chili's? Really? 

[00:11:53] Spencer:Yeah, sure. I love Chili's. 

[00:11:54] Jamie:I don't think I've eaten at a Chili's in a long time.

[00:11:55] Spencer:Alright Jamie, I'm trying to connect with the audience here. 

[00:11:59] Jamie: That was a deep moment I interrupted, but…

[00:12:01] Spencer: I haven't been to a Chili's in a while, but… I'm sure Chick fil a. How about that? Chick fil a.

[00:12:04] Jamie: Okay, since they shut down the one in Ramstein. It's like I got no Rest in peace.

[00:12:10] Spencer: Rest in peace.

Wasn't it a Chili's and became like a Chili's 2?

[00:12:14] Jamie: Yeah. Yeah, either way It was terrible, but it was something. Yeah. Anyway, it was about the deep moment. I interrupted. Sorry.

[00:12:21] Spencer: I was just going to say that like you were saying you have to enjoy the ride and you have to find that balance and I think I definitely tended towards the saying no to things that I probably should have said yes to and I do have some regrets now that I'm much further along on my financial independence journey that there were weddings that I said no to.

Because I didn't think I could afford it. There were ski trips that I said no to because I didn't think it fit into the budget and I was still paying off student loan debt. And guess what? Some of those guys don't invite me on ski trips anymore because I said no too many times when we were younger.

So it is difficult to find that balance. And a lot of people, especially in the military, I find, and maybe this is just something on the officer side, but it seems especially if you're an academy graduate, There are like 20 weddings a year that those people are going to. 

[00:13:23] Jamie: What else are you supposed to do when you graduate from college?

[00:13:25] Spencer: I don't know. But it just seems like it goes on and on forever. Where you're going to, your friend of a friend's wedding and, hey, it's always back in Colorado Springs. But I think it's important that you do enjoy the ride and you try to find that balance and you assess. I think that the important thing is that you might have to experiment a little bit along the way.

And assess like have we cut our expenses too much, right? Are we saying no to things that we're going to regret saying no to in the future? And it's hard. It's hard to make that choice at the moment. And it's also hard when. You're working so hard to reach whatever gold is, saving your first $1,000, $10,000, $100,000 or getting back to a zero net worth, right?

Clawing your way out of debt or one of our goals very early on when we got married is we want to be debt free and we've reached that goal and we became debt free. And I actually wrote about this on my website. It actually felt very anticlimactic. There's a brief kind of, hey, open up the champagne bottle, cheers.

But then you just go on the next day and nobody gives you a medal and nobody cares. And it's liberating because you get to decide what happens with every single dollar. Just to digress here for a second the mindset of debt freedom is probably even more important than actually becoming debt free because the numbers, it doesn't, and in the end would $50,000 of student loan have any effect on my net worth today?

No, not really, but. The mindset of paying off that debt and setting a goal, setting a long term goal and setting up the system. So basically we automatically achieve that goal, right? The payments were automated. The income was automated. The outgoings were automated. And so you make that initial effort.

It's going to require this much payment per month. I make this much money. We can make this work. And especially if you're in a relationship, if you have a partner or spouse, you have to have the conversation. You have to be on the same page because if you're not, it's probably going to lead to conflict.

So I guess enjoy the ride, but don't enjoy it too much and stay focused on the goal. But don't stay too focused on the goal. It's a very narrow bridge to walk on. A hundred percent.

[00:15:53] Jamie: Very delicate. And it takes some experimenting. Like you said, I also think there might be some people who are, “Do I really need to be doing this dreaming thing?”

It sounds wishy washy hippies. Like I don't know, this isn't really for me. I'm a grunt. Like I don't know about this dreaming and envision board setting stuff, but there is a day where everyone in the military is going to be done. And you need to think about this with you and your spouse, if you're married, think about what that's going to look like when you're done.

Do you want to work full time again, whether it's three years or 33 years from now, there's something you are each going to want out of life that you're not able to do right now. It could be being ridiculously generous with your time or your money, volunteering, taking your kids to school every day like you mentioned earlier, spending a lot of time with your grandkids or watching your grandkids more, whatever it is, there's something out there bigger than the military and post military life.

So you have to determine that. And at least your first guess at what you think your answer is going to be and help inform your decision of what your finish line looks like for you. And if you don't have desires to retire early, then that kind of changes the equation if you're interested or you want to work to your 65, let's say, then that changes what your finish line would look like compared to someone that doesn't want to work full time when they're done with the military like me.

So that's why I'm saving for financial independence by 45 and Spencer was saving for it by 40 while he was working full time. So that's how the military life and post military life needs to inform your goals as well. One day you're going to wake up and be done with the uniform and we'd like to encourage you to find a way to have the ability to say, I can do whatever I want today with whomever I want and as long as I want and no one's going to stop you from doing that unless it's illegal.

No one's going to stop you from doing it and nothing financially is going to prevent you from doing it either. Because 20 years ago or 10 years ago, you had this conversation with your spouse about setting goals and dreaming.

[00:17:56] Spencer: Yeah, that's a bit of a paraphrase of a Morgan Housel quote from the book Psychology of Money.

And I think that's extremely powerful, that control, and that can be your dream too, right? It's just controlling your time. That's something that can be so foreign to us in the military. There's so much hurry up and wait. There's so much just go here and stand here or go here and wait here, deployments spending 90 days and some godforsaken desert doing the same thing day after day working 12 hour 14 hour shifts, that's just having that control of your time back and being able to do what you want is so powerful and that was part of my dream.

I just wanted to be able to control where I went and who I went there with and when I went there and how long I stayed there. So that's something that i'm able to do now

[00:20:24] Jamie: So practically, Spencer, what are some examples or ways that you can help refine what the finish line, air quotes, the finish line would look like for some people?

Is it always going to be a dollar amount, or is that kind of the end result that we're trying to get people to, if you should say, I want to have X amount saved by the time I'm 40?

[00:20:43] Spencer: Yeah it's an interesting question. I think for most people, that's the first introduction to the idea of Financial Independence, Retiring Early or FIRE, might hear the FIRE movement or the FIRE community.

But really what in my mind is what it's doing is it's just, it's setting a target. It's setting this very, it can be a, depending on your savings rate, it could be a 10 year goal, a 20 year goal. It could be a 40 year goal, or it could be a never goal, right? If your savings rate is so low or negative, where you're spending more money than you're taking in, then you're probably just going to have to rely on social security when you get to a standard retirement age of 62 to 67 for anybody's listening to this podcast, I really encourage you to investigate the 4% rule and Financial Independence, Retiring Early or fire and the idea that if you have saved 25 times your annual expenses where that 25x number comes from is just the inverse of 4%. If you've saved 25x of your annual expenses into, let's say, a 90% stock, 80% stock, 20% Vanguard bond fund, then you've achieved financial independence. You can draw 4% of that money down every year and that money will probably outlast your lifetime.

If you have kids or you have beneficiaries, like they'll be receiving some of your money after you die. So I think initially, and that's to me as a numbers guy, an econ major having that finish line, having that dollar amount was super motivating because while it can be an extremely large number, especially if you're starting from negative $50,000, like my wife and I were 12 years ago, it's still a fixed amount, right?

It's a finish line that, okay, let's pop the numbers into a calculator. Oh, if we save $20,000 a year of our $100,000 a year salary, we'll be there in, I don't know what the numbers would be, but let's say 25 or 30 years. And that's before, if we're 20 years old, that means we can retire at 50.

That means we can be done at 50. If you start putting in bigger numbers in there what if we save $30,000 a year? Or what if we saved 30% of our income and our income goes up? 7 or 10% of a year because we're promoting or we're getting a different job and you can start to see this compounding interest snowball.

And your assets grow quicker and quicker than you can even throw money on it. And all of a sudden you can start moving those financial independence dates from, Okay, maybe I could have retired when I was 60. Now it's 50. Now it's 40. Now it's maybe even in your 30s. And you can go look at guys like Mr. Money Mustache or you can look at Doug Nordman. He was a little bit older. He was in his 40s because he retired with a military pension. He has lived off the 4% rule for the last 20 years. In addition to his military pension. And so it's fascinating to see a real world example of this where he retired into a pretty rough stock market where 1999, the market was down in 1999.

The market was down in 2000, the market was down in 2001. So if you've been investing and you remember 2022 last year. The market was down 20%. Imagine that again this year, like the markets, up 15% this year. But what if the market was down another 10% and then what if next year the market was down another 10%?

People would gloom and doom. It would be terrible. Everybody would be saying the FIRE movement's dead. This isn't going to work. And that's exactly the environment that Doug Norman retired into 20 years ago. And it did work and he has more money now than he knows what to do with even though he's been drawing down to 4% every year.

So I think for a lot of people setting that target of living on $60,000 a year or $80,000 a year, $100,000 a year and then just running the 25x that number. And so if it's $100,000 a year, you need to save 2.5 million dollars. And initially that might be extremely overwhelming, especially if you're in debt or you haven't even saved your first $100,000 yet.

But like we've talked about in the other episode on saving your first $100,000 in the military, the crazy thing is once you've saved that first $100,000, the next $100,000 comes much quicker. And the next one after that comes much quicker. And you start getting this compounding interest, but not just compounding interest on your assets, but also on your income as well. What you'll find is that you just…

Become better and more efficient and you can generate more income and I think that's that can be extremely powerful for people and it's hard to recognize when you're first beginning your financial independence journey that the first year or two, you might be like, man, I'm not getting anywhere.

It seems like I'm just falling backwards, but stick with it. There is an inflection point where all of a sudden you're like, I just saved my first $10,000. And then a couple months later, Oh, now I've got $20,000 in there. A couple of years after that, Oh, I've got my first hundred thousand. And then you start to see, you can actually see if you've been charting it out in Excel or in any kind of net worth tracking app, you can see where that graph starts to curve up a little bit.

It can be pretty rewarding if you're into graphs like I am. But setting the target and then starting to move towards it is a great initial step, but you might realize on your way to that target that's not your real target, that either you can reduce the target, so maybe you need less money to live on.

Or you reach your target and you realize, you know what, I still feel good. Let's keep working. Let's keep throwing money on the pile. And let's create an even more extravagant, more generous, a richer life than we ever imagined.

[00:26:52] Jamie: So it's not a one time conversation, you can have an initial target, move out in that direction, and then adjust your vector, your direction as needed.

So this conversation is saying, hey, our target for retirement, we want to have 1.5 million or 2.5 million saved up. That doesn't mean that's the final answer and you can never change it. So don't be so intimidated by this conversation of getting the right goals or the right dreams, because you have to get it right the first time.

You can adjust. As long as you and your spouse, if applicable, are in agreement, you can adjust. If you really decide that you like traveling and you want to dedicate more of your budget to traveling, then do that. And that's okay. It's just getting you pointed in the right direction by these initial conversations of setting goals and having these big dreams.

Really extravagant, rich lifestyle dreams get you focused on what the future could hold and then you can continue to refine as you go.

[00:27:50] Spencer: Yeah, and one initial goal for your investment portfolio might be maxing out your Roth IRA. Or it might be maxing out your TSP and what you might find is along the way of contributing to those accounts, you might run some numbers and there's a great website portfoliovisualizer.com where you can run like a Monte Carlo situation. Or Monte Carlo scenario, and you can project out, okay, what are my assets going to look like in 20 or 30 years? And what you might realize is that you can reach coast that you'll see it referred to as coast FI as in, you're just coasting down the street on a skateboard, rolling down a hill on a bike.

And what you realize is that, Oh, I can pretty quickly reach coast FI where as long as I don't touch my retirement assets, they're going to grow in the next 20, 30 or 40 years and they're going to provide plenty of income for me in traditional retirement. And so once you've got that covered, then you can, you might want to relax a little bit and say, especially if you've got a military pension coming in a couple of years.

You might just say, you know what, I'm going to reduce my savings rate. I'm not going to save as much as I was previously, and I'm going to, I'm going to increase my spending a little bit because let's maybe you've got kids going to college and maybe you've got whatever your dream, right? Go back to the dream exercise and whatever was your dream.

You don't have to wait for retirement to start living that dream. And I think that's something that a lot of people make the mistake is that they dream these dreams, they write these things down and then they think, Oh, I'll do that one day, or I'll do that when I'm retired, or I'll do that after I get military retirement, or I'll do that when the kids move out or whatever it is, right?

We're always finding excuses for not achieving or attaining our dreams, going out and grabbing them. And I think for a lot of people, I think there's two things there, right? Either A, it's not really your dream and that's okay. Go reassess, figure out what your actual dream is. Or B, we're just making excuses because we're scared.

And maybe if we go and try that dream, it turns out that we don't actually like sailing that much and we don't want to sailboat. And that's okay again. I think a lot of people, if they just experimented a little bit earlier in life and tried something like, okay, you say you want to get your private pilot's license when you retire.

Have you taken any PPL classes? Like they're not that expensive. They are pretty expensive, but in the grand scheme of things, if you're on the journey to FI, they're not that expensive. So go sign up and take a week in class. And if it turns out that you love it, it's a lot easier to get your pilot's license when you're younger than when you're older.

So it might behoove you to talk to your partner and say, Hey, I really want to get flying lessons. And I'm going to go do that now. And that's going, and if they're a numbers person and they respond to that kind of thing, you might show them like, look, it's going to delay our financial independence date a couple of months.

Or it could, right? And that's the other thing too, is we're projecting out in these like 10, 20 year projections. You have no idea what's going to happen in that, right? The stock market could be flat for the next five years. It could go into another bull market for the next 10 years. It could drop 50% tomorrow.

And not only that, but maybe you don't stay in the military for 20 years, right? If you're listening to this and you're just a recent graduate, or you just enlisted, you might be super gung ho, you might be in the Air Force, we call it super blue, right? You might be all blued up, and you get to the real Air Force for a couple years, and you realize, I don't think I can do this for 20 years.

And again, that's okay, but you have all this experience. From the military and hopefully from this podcast where you understand how to set goals and how to dream a little bit and then you can go and update and you can experiment and figure out, OK what do I actually what am I working towards?

What am I actually doing all this for? And if you can figure that out, so many people go through life and they don't know what they're doing it for, and they don't know why they're working so hard and why they're saving and investing and they don't know what the finish line is. That's if you look at my book, that's one of the reasons why I went so deep into personal finance, into researching all this stuff, is because even though I knew all the, I knew what a stock was, I knew what a bond was.

I knew when an ETF was. I knew what a Roth IRA was when I was 16 years old, but I didn't know what the finish line was. Was it $1,000, 000? Was it $2,000, 000? I had no idea. And it wasn't until I discovered the FIRE community and the 4% rule that I realized like, Oh, whatever your lifestyle is, there is a number that you can get to.

You can fund that lifestyle. And now you have freedom and you can go do whatever it is you want. The author, Derek Sivers, he's at Sivers.org. He's got this great story about “How I Became Rich”. And his friend asks him, Hey, tell me about the time that you became rich. And he tells this story about how he made $6,000 a year.

And his lifestyle costs $12,000 a year. So he ate peanut butter sandwiches, and he saved all his money for a couple years, and he got to $12,000 of savings. And he was like, Oh, great. That's two years of my lifestyle expenses, so I can quit my job. And so he quit his job, and he just went and became a musician, which is what he always wanted to do.

And he played a couple gigs. And he was able to fund his lifestyle just based on those gigs. And his friend was like no. Tell me about the time you sold your company for 25 million dollars. And Derek was like that didn't matter. I was financially free when I had saved that $12,000 and I could go and do whatever I want.

So when I sold my company for 25 million 10 years later, that didn't actually change anything about my life. What changed was when I had that $12,000 saved and I was financially free and I could go And do whatever I wanted and sure. Yeah, eventually that enabled me to build a company up and sell it for 25 million dollars.

But having that money didn't actually change anything about my lifestyle because I was already doing whatever I wanted to. And there's so many powerful messages and takeaways from that story. But the biggest one for me is that the number can be so low, right? Like your financial independence number. Derek only had 2x of his expenses, but he knew that he wasn't going to just completely stop working for any income at all.

What he really wanted to do was go play music and get paid for it. And he did. And so I think a lot of people, especially when you're leaving the military, if you're leaving the military with a military pension, man, if you have any kind of savings. As long as you haven't backed yourself into a corner with a super aggressive mortgage as a percent of your income and the world is your oyster like you can go out there and you can do anything you've got this guaranteed pension coming in if you're young you get a GI bill go use your GI bill and that's more money and free school. So many opportunities out there and I think you know there's this old meme of Somebody retires from their military job, and then a week later, they come back in as a GS civilian employee back to the same job, right?

If that's your dream, okay, but I think a lot of people could dream bigger if they had started planning a little bit earlier and started building a little bit of savings and they could recognize, I can go back and I can do the job that I was doing before or maybe I can go try something else and something that fits more into my dream lifestyle.

[00:35:50] Jamie: Okay, listener. So what are your dreams? What are your goals? If you didn't pause earlier when Spencer told you to go ahead and pause now, we'll be here. We'll wait for you. And now that you're back now, I'm just kidding. But for real, we do think it's important to set the time aside to think about your dreams and your goals, whatever they are for you.

There's no right or wrong. Just have that conversation. Have that exercise with a friend if need be with your spouse and figure out what your future looks like.

[00:36:18] Spencer: Yeah, that's right. If you want to share your dream with us, we'd love to hear it. Podcast@militarymoneymanual. com or Instagram @militarymoneymanual.

And let us know what is the dream? What is your fine number? How are you going to get there? How long is it going to take? I'm super interested to hear from you.

[00:36:34] Jamie: We will continue to be here to guide you along the way of how you get there. But we hope that this initial question of what does the future look like?

What do we want it to look like? How do we want to spend our time and our money? And how we get there will be the next step that will come help you with in the future. We've already talked about the 4% rule. We've had a number of great guests to help inform the path there, but you don't know where you're going unless you set the destination. In the military planning process, MDMP joint planning process we talk about planning with the end state in mind. So what is the end state? You have to determine what the end state is and then you can plan on how we're going to get there. 

So hopefully today's podcast brought you a lot of value, and gave you some things to think about. If it did, the easiest way to say thank you to us is by leaving a five star review on Spotify or Apple and sharing it with a friend or co worker.

We hope that the Military Money Manual podcast is your go to source for personal finance advice for the military service members and their families out there. We appreciate you guys coming every week and we'll catch you on the next episode.

The post Dreams, Goal Setting, Moving the Finish Line, & Leaving the Military | Military Money Manual Podcast Episode 92 appeared first on Military Money Manual.