I know, I know, the headline sounds like a stupid catch phrase. Look, I’ll be up front with you, I’m not a financial prophet or guru. Much of my success revolves around luck and circumstance. A lot of it revolves around timing. A lot also revolves around hard work, dedication and resolve. You can’t be permanently successful and free without all of these things.
So when I say my wife and I paid off $65,000 in student loans (and 2 cars, and bought 2 houses) in 3 years, it’s not to blow smoke up your ass. It’s to illustrate that if we can do it, so can you.
Believe it or not, I’m not trying to sell you anything in this post!
I just wanted to write about our personal success and how we accomplished it. Here are the basics (I’ll get more detailed in other posts, I’m sure).
I married into $65,000 in student loans. I had about a $5,000 loan on a truck, my wife had a $12,000 loan on a car and $65,000 in student loans for New York University. At the time of our marriage, I was a Corporal in the Marine Corps (Pay Grade E-4). To give you an idea of income, an E-4 in the military makes $27,000 annually. My wife made about $35,000 from her job. In addition to this, we received some less tangible benefits from the military, such as health insurance, and a housing and food allowance. With these, it boosted my income to about $50,000 pre-tax. And here’s the real kicker: those housing and food allowances are not considered taxable income!
So in total we had about $75-80,000 in debt when we started off. The numbers vary because I wasn’t tracking things so intently at the time.
Our total taxable income was around $70,000. Living expenses, bills, dogs, food, housing, etc. all took their toll. At the end of the day we were spending about as much as we were making. We hadn’t really aggressively implemented our discretionary spending protocol yet.
So how did we make such a dent in such a short time?
The secret to military service! Deployments! Assuming you make it back (and most do), deployments are the not-so-hidden secrets of military service. They offer tremendous opportunity for service members to make significant financial advancements in a short time.
While married, I deployed 3 times. All 3 times we pocketed a ton of extra cash. While deployed I had negligible living expenses and even less leisure expenses. Food was paid for and I didn’t have to worry too much about sleeping arrangements, whether it was a rack, a shack, or the floor. With each deployment, I came back with at least $15,000 in cash, sometimes more.
Upon each return we took a quick glance at our swelling bank accounts with pride. We thought of all the great trips we could take, cool things we could buy, and fun things we could do. And then we sighed and used it to pay off student loans. We decided paying off the loans served the same benefit as paying off our cars; we considered the loans to be depreciating assets.
In a short 3 years, after a few 7 month deployments, we were the proud, debt-free owners of two cars, with an addition lump sum to put down on a house (coincidentally we didn’t need this, because the VA offers zero-down mortgages to service members).
All extra money was wisely invested and has earned us considerable returns since, growing our investment portfolio to six figures very quickly.
So there’s not a huge secret here. Like I said before, there’s a lot of luck, circumstance and resolve involved. But really it’s what you do with your money that matters. I’ll paraphrase Ben Shapiro and say that if you’re poor for your whole life it’s not because your circumstances suck, it’s because you suck with money!
Now not everyone can join the military and take advantages of all of these benefits. And true enough there are a lot of other intangible sacrifices that service members make in order to receive these benefits. I don’t think they’re undeserved, and I just wish there was more education provided to military members as to how best take advantage of their benefits.
For us, the Marine Corps provided so much more than a family of friends, lifelong memories and incredible stories. It set the foundation for our financial footprint to grown. It took us from almost six figures in debt to half a million dollar net worth in a total of 7 years.
I can only imagine where we would be now if I had known these kinds of things sooner in life.
Thanks for reading.