In today’s episode, Cody and Justin bring you a story that’s just beginning. This interview with The Incredible Cash Dummy steps through a life quickly changed by having a child in high school and joining the Navy soon after. He then went for years with no financial direction.
A recent military move was compounded with his wife getting pregnant again and her losing her job, he had a major light-bulb moment. A little over a year ago he discovered the financial independence space and has become hooked. Tune in to see how he is correcting his path and taking ownership of his finances.
- Grew up in normal middle class family where they weren’t rich but didn’t have to worry about money
- Then during his junior year of high school he gets his girlfriend pregnant and had his son at 17
- At this point all he knew about finances was trying to avoid impulse purchases
- He continued living with his parents and graduated high school and working part-time at a steak house
- The Cash Dummy realized college wasn’t for him so he decided to enlist in the Navy
- He was clearing $800 per month and paying $155 per month of child support
- His housing and food was covered through the military and he lived on base so he was able to save
- His first investing was through the Thrift Savings Plan which is the military’s version of a 401k where he put in 7% of his check monthly
- Realized he should take his finances more serous around 2010 when he heard everyone complaining about their stocks and the recession
- He then noticed he had been investing unknowingly into nothing but the G fund which is government bonds that are basically just a shelter against inflation
- He mentions being lucky that he worked with other sailors who talked to him about finances and walked him through how all the funds work
- Gets stationed in Japan and where he receives some extra location pay and benefits from the yen conversion
- At this point he is more conscious about investing but still not a great saver
- He mentions how the military culture and surroundings of the base can be troublesome for young enlisted and their finances
- He talks about the need for military services to make financial training an annual requirement
- At 20 he started using credit cards which he struggled to use responsibly
- While he struggled with credit cards he never fell into the fancy car trap
- He ended up with $10k in credit card debt
- He got married in 2013 after 8.5 years in the military and was now an E-6
- When the finances got combined their total debt was $15k
- They blew all their extra money on eating out and travel and only saved the 7% TSP
- He got promoted to E7 and had to move for his next military assignment
- His wife was pregnant with his third child and she was going to have to quit her job
- All of this led to his light-bulb moment in 2017
- She took unemployment for 9 months
- His child support has now increased to $900 per month
- A coworker introduced bigger-pockets to him and showed him the quad chart video from Brandon Turner
- He dove in hard to bigger-pockets including the forums and podcasts
- That led him to all the other members of the financial independence space
- He sat back for a couple months trying to understand everything before he acted
- It then took a few more months before him and his wife were both on the same page
- At this point he went from 7% to TSP to 10%
- He borrowed against his 401k to pay off high interest credit card loans
- He also took on a second job for a while at $16/hr to pay off loans doing janitorial work
- There was a fear that all of this would negatively impact their lifestyle but they didn’t notice that at all
- He tried YNAB but that didn’t stick
- Instead he went to the Anti-budget which fit much better
- Now he’s started his own blog, TheCashDummy.com, to help people who found themselves in the same situation and mistakes he did
- His number one tip is education, there are so many resources so go find someone who has a path that fits yours
- You’ll also want to listen in to hear his accounts of his first FinCon experience where he met all his financial heroes
- Surprise! You never know what is going to happen in life and it could be a massive financial change. Don’t simply plan for what your plan is, plan for what happens when that plan gets flipped upside down. Kids, divorce, sickness, job sector changes, these can all be devastating if you’re not prepared.
- Today is better than tomorrow. It can be intimidating reading about young people who have it figured out. It might sometimes feel like there’s no point but the reality is that you can make massive changes in such a short period of time. There’s nothing you can do about the time past but you can take control of your future.
- Check your pride. The Cash Dummy explains how he picked up side jobs as a janitor to help pay off debt. That’s commitment. It can be easy to turn down opportunities that seem beneath us but when it helps you get to your goal, nothing is off limits.
Call to Action
Part 1: If you’re a military member reading this prior to Jan 1, 2019, take a serious look at the new Blended Retirement System. Many dismiss it without giving it a serious look. It can be a great option if you put in the work.
Part 2: Continuously educate yourself and find that person who has made it from a starting point similar to your own.
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Links from the Episode
Contact Cash Dummy:
Learn More About Your Hosts:
Fly to FI (Cody’s Blog)
Saving-Sherpa (Justin’s blog)