8 Years Ago

Eight years ago I had just graduated from college. I felt lucky because I actually had a full time job waiting for me when I graduated. I had always wanted to be in the army and ROTC (Reserve Officer Training Corps) was my route in. I was awarded a two year scholarship which not only paid for my tuition and gave me a monthly pay check as a college student. The scholarship also guaranteed me active duty. Believe it or not but back in 1995 when I was freshman, active duty assignments in the army were extremely competitive to get. By 1999, when I graduated, active duty was not as competitive. How times have changed.

Three days after graduation my car was packed and I was headed to my Officer Basic Course for training. For the first 5 ½ months of active duty I was being paid my salary as a 2nd LT and also a monthly stipend equal to about an additional pay check to compensate for my in transit for training status. I felt rich..Honestly…I had gone from a college student to collecting what felt like a huge pay check three times a month. My living expenses were also extremely low. The army covered just about all of my living expenses including housing. For me this was a small two bedroom apartment just outside post. They also offered cheap alternatives for eating etc. At the time I had about $8K to my name made up of a checking account and a fidelity brokerage account. I started to quickly pay down my car loan which was in my parent’s name. My parents agreed to pay my student loan for the first two years of my in state tuition. My parents were nervous about me being in the army but were thrilled that the army had paid for the last two years.

With the army paying for my housing, giving me a salary of about $900 dollars take home pay twice a month and an additional stipend of $900 more dollars I felt in great shape. $2,700 dollars a month in take home pay and next to no living expenses. Within two months of being on active duty I had signed up for a Roth IRA and set up automatic payments to max it out. I also set up automatic payments of $150 dollars to contribute to my brokerage account. Within the next few weeks I remember realizing that I had a lot more room within my budget (remember I was totally new to the real world…well the army). I gradually increased my automatic savings or would manually transfer money over to my mutual funds. My brokerage account began to grow. While other young officers were buying new clothes or fancy cars I was watching my savings grow. I was hooked.

If I had it all to do over again, I think I would have focused more on building up a large cash savings for an emergency fund. However, during 1999 it was hard to ignore the gains of the stock market.
Overall, I would say looking back 8 years ago; I had a huge advantage of having an immediate job after college and one that paid relatively well. I also had supporting parents who helped cover college costs and an Army scholarship that chipped in a huge amount. What I remember most was the excitement I had over seeing my brokerage account increase on a monthly basis. It was during this time that I wrote down that I wanted a 6 figure net worth by the time I was 30 years old. At the time I was quickly crossing from $8K to $10K. The hardships of the army helped me save more money. I was deployed or in the field training for over 50% of the time I was on active duty. While deployed I had the advantage of not paying federal taxes and receiving hazardess duty pay. During one 7 month deployment I only spent $2,000 the entire time I was away…and that included my plane ticket home to see my family. The rest went into my saving account or mutual funds.