11 Ways To Invest Money While Enlisted (By Rank) | Wildchildretire

Key Takeaways:

• As a junior enlisted member, you must decide your retirement age before choosing your investment strategy.
• NCOs can begin to invest in buy-and-hold real estate and house hacking.
• Senior leaders will need to focus on 529 plans and life insurance policies.

Do you have some extra funds and looking for ways to invest money while enlisted?

We got you covered.

Here we’ll show you how to invest while you serve your enlisted contract, all broken down by each rank category.

These tips below allowed my wife and I to become military millionaires before 16 years of service!

So if you’re interested in finding out how an E-3 can invest in mutual funds, how an NCO can make significant gains by house hacking, and more…

Check out the helpful read below!

How To Invest Money While Enlisted (Simple, Easy, Effective)

Investing would be great if you want to become a military millionaire.

But it can be intimidating because you have to know what to invest in and what time to invest.

Well, we made that nice and simple for you. The list below will show you how to grow your hard-earned funds at each enlistment stage.

Enjoy!

Junior Enlisted

As a Junior Enlisted military member, you have all the time in the world to invest.

But you need to make the right investment because if you don’t, it can negatively impact your future.

Don’t worry, though. 

Below, we’ll show you what to invest in as a new service member.

0. Determine Your Retirement Age

The most important thing to do before you invest in the military is to determine your retirement age. This will help you figure out how much you need to contribute and where you want to invest your money. 

If you want to retire at the average retirement age of 63, you need to start taking advantage of that TSP now for two main reasons: Compound interest and the military matches up to 5%.

For example, if you invested $500 a month from age 21 to 65 in your TSP, you could have over $2,400,000! The only downfall is that you cannot access that money until 59 1/2; otherwise, you will be penalized.

Let’s say you’re doing a 6-year enlistment and out. Or, you just want to access your funds whenever you please. Well, this is where you may want to invest in a taxable mutual fund or Exchange-Traded funds (ETF) with Betterment.

For example, you just downloaded the Betterment app, invested the initial $1000 in VTI, and did so every month for the remaining of your 6-year contract. You could have over $100,000! And if you didn’t invest, you would have roughly $29,000.

So rule number 1 before you invest in the military is…

Figure out your retirement age!

This will help you laser focus your investments on getting the highest returns.

1. TSP

As a Junior Enlisted military member, you may be wondering how to invest your money best. One option is the Thrift Savings Plan (TSP). The TSP is retirement savings and investment plan that offers tax advantages for eligible federal employees and members of the uniformed services. Contributions to the TSP are made from your salary before taxes are deducted. This reduces your current taxable income and may lower your annual tax bill.

There are two types of TSP accounts: Traditional and Roth. You can choose to contribute to one or two kinds of accounts.

The Traditional TSP account is similar to a 401(k) plan. However, contributions are made with pretax dollars, and they grow tax-deferred. This means you don’t pay taxes on the money you contribute or on the earnings on your investments until you take the money from your account.

The Roth TSP account is similar to a Roth IRA. Contributions are made with after-tax dollars, and they grow tax-free. This means you don’t pay taxes on the money you contribute or on the earnings on your investments when you withdraw the money from your account.

You may want to consider investing in a Roth TSP account, especially if you are a Junior Enlisted member (that’s what I did). When you retire, there’s a high chance you will be in a lower tax bracket than you are now. This means you will pay fewer taxes on the money you withdraw from your Roth TSP account than you would from a traditional TSP account.

Another reason to invest in a Roth TSP account is that the money you withdraw from your account is tax-free. As a result, you can use the money for anything you want without paying taxes. This differs from a Traditional TSP account, where you will pay taxes on the money you withdraw.

The Roth TSP is an excellent option if you are investing in retirement. You can start small and contribute more as you get older and your salary increases. The earlier you start investing, the more time your money has to grow.

2. Invest In An IRA

Like the TSP, IRAs are retirement savings and investment accounts that can offer tax benefits. The money you contribute to an IRA can be used to grow your wealth and provide income during retirement.

There are two main types of IRAs: Traditional and Roth. 

With a Traditional IRA, you make contributions with pretax money. This means you will pay taxes on the money you withdraw from your account during retirement.

With a Roth IRA, you make contributions with the money already taxed. This means you will not have to pay taxes on the money you withdraw from your account during retirement.

As of 2022, the limit for IRA contributions is $6,000 per year. If you’re 50 or older, you can contribute an extra $1,000 per year, for a total of $7,000.

You may not have much money to spare as a junior enlisted member. But if you can afford to contribute even a little bit to an IRA, it can go a long way in helping you reach your retirement goals.

For example, let’s say you’re 25 years old and contribute $50 per month to a Roth IRA. If you continue making this contribution for 10 years and earn an annual return of 8%, you’ll have over $9,000 saved by age 35.

If you stop contributing and let your money grow for 30 more years, you’ll have over $200,000 saved by age 70!

Not bad for investing just $600 over 10 years!

So if you’re looking for a way to invest money and grow your wealth, investing in an IRA is a great option. Just be sure to research the different types of IRAs and choose the one that’s right for you.

3. Invest In a Taxable Mutual Fund or ETF

If you plan to retire before 59 and 1/2 (or 41, like me), you may want to invest in taxable non-retirement funds such as VTI. VTI is an excellent choice for a long-term investment because of its low expense ratio and broad market exposure. And, if you happen to be in a high tax bracket, the lower-taxed dividends and capital gains can be beneficial.

Investing in a non-retirement fund such as VTI is beneficial because you can withdraw as much as you want without penalty. This is in contrast to investing in a traditional retirement account like a TSP or an IRA, where you would be subject to a 10% early withdrawal penalty.

Betterment is a solid choice for investing in VTI. They offer automatic investing and rebalancing, which makes investing simple and easy. Plus, there are no account minimums or fees to worry about.

If you are looking for an easy and effective way to invest your money while enlisted, investing in VTI with Betterment is a great option.

4. Invest in Yourself

I cannot stress this enough, as a young enlisted member, you must invest in yourself if you want to make millions while enlisted! And what better way to invest in yourself than to learn new skills to help you succeed in life?

Skillshare is a great platform that offers online courses in various topics, from programming and graphic design to piano and marketing.

After you got the skills, you can start your blog with Bluehost and potentially make millions a year with your website like Michelle Schroeder of Makingsensecents.com.

So do yourself a favor and start investing in yourself today! It will pay off in the long run, I promise.

Middle Enlisted

As an NCO, you now grasp things in the military, such as schedule, training, and work.

That means you know how to balance your duties as a service member and what you can do in your off time. And that will give you a better shot at investing in things that are a little more hands-on.

Check out the list below for some money-making ideas that require a little more time but could net you BIG RETURNS.

5. Buy and Hold

As I type this, I am in the active duty military and am bringing in about $4,000 (NET) a month from buying and holding rental properties. I have just hit my 17-year mark and have never been so excited about my future!

There are a lot of people in the military who are looking for ways to invest their money. And I want to share with you how investing in rental properties while you are enlisted can be simple, easy, and effective.

Rental properties are a great way to invest your money because:

• They provide a steady income stream: Rental properties can provide you with a steady income each month, which can be helpful when trying to save for retirement or make TSP contributions to your account.
• They are a long-term investment: Unlike stocks or mutual funds, which can fluctuate in value, rental properties tend to appreciate over the long haul. This means that your investment will be worth more in the future, which can help you reach your financial goals.
• They are tangible assets: Rental properties are physical assets you can see and touch. This can be helpful for people who are looking for more tangible investment.

Suppose you are interested in learning more about investing in rental properties while enlisted. In that case, I highly recommend the book “The Book on Rental Property Investing: How to Create Wealth With Intelligent Buy and Hold Real Estate Investing.” This book was instrumental in helping thousands of people start investing in rental properties, and I believe it can help you too.

6. Flip Houses

This is another one where you can make good money as a middle enlisted member. You can buy a house for cheap, fix it up, and then sell it for a higher price. This takes time and effort, but it can be very profitable.

There are a few things to keep in mind when flipping houses. First, you need to know what you’re doing. It’s not as simple as just buying a home and selling it. You must know how to renovate, stage the house, and price it correctly. Check out “The Book on Flipping Houses: How to Buy, Rehab, and Resell Residential Properties” to help you out.

Second, you must have the time and money to invest in a flip. If you plan to do it on the side, you must maximize your time and money. You must find good deals and do as much work as possible. You will also need the money to pay for materials and labor. And if you want to know how to buy a home with little or no money, I highly recommend “The Book on Investing in Real Estate with No (and Low) Money Down.”

Third, you need to be patient. Flipping houses is not a fast way to make money. It can take months or even years to find the right property, do the work, and then sell it. But if you are patient and put in the work, you can make a lot of money flipping houses.

So if you’re looking for a way to invest your money and make some good profits, consider flipping houses. You can make a lot of money doing this with time and effort.

7. House Hack

During my time in the Air Force, I came across countless house-hacking folks, making THOUSANDS of extra dollars a month while they paid off their mortgage. What is house hacking, you say? It’s when you live in a part of your house and rent out the other part (usually to roommates). Awesome right?!

But how do you get part of the action?

• Find a house that you can afford the mortgage on– You’ll want to find a place that you can comfortably afford the mortgage on. This is key because you’ll live in a part of the house and rent out the other part.
• Get creative with your financing– VA loans are an excellent option for veterans looking to buy a house. Depending on the lender, you can put down as little as 0-5%.
• Find a good property manager– A property manager will help you find and screen tenants, collect rent, and handle maintenance issues. You can find a property manager through websites like Simplifyem.com or become your property manager with Landlordly.
• Be prepared for repairs– As a landlord, you’ll be responsible for repairs. Make sure you have some money saved up for unexpected repairs.

The bottom line is that house hacking is a great way to make extra money while you’re enlisted. It’s simple, easy, and effective. So what are you waiting for? Start house hacking today!

8. Start A Blog

Oh yes, my favorite! As you read, I am an MSgt in the Airforce, with a 10-year goal to make $100,000 a month blogging. I might already be there if I had started 7 years ago as a TSgt!

So how do you get started on a blog? It’s straightforward and only takes a few steps. 

First, you need to choose a domain name and hosting provider. I recommend Bluehost because they are one of the most popular and affordable providers. Plus, they offer a free domain name when you sign up for their hosting plan.

Next, you need to pick a blogging platform. I recommend WordPress because it is free (when you sign up through Bluehost) and easy to use. There are other platforms, but WordPress is the most popular and user-friendly, in my opinion.

Once your platform and hosting are set up, it’s time to start writing content. Write about passionate topics and know people will want to read about them. Don’t worry about promoting your blog just yet. That will come later.

Lastly, don’t forget to set up social media accounts for your blog (Facebook, Twitter, Instagram, etc.) and start promoting your content. This is how you will get people to read your blog and how you will make money from it.

If you follow these steps, you will be well on making thousands of dollars a month from blogging! So what’s holding you back? Start now!

Senior Enlisted

You’ve finally made it!

You have served your country proudly and are now on the tail end of your enlistment.

A little scary, but mostly exciting because you now have a nice nest egg, and still a few safe investment opportunities left, if executed properly, will act as icing on the cake for your retirement portfolio.

Let’s check them out.

9. Invest in Individual Stocks

At this stage of your military career, you should now have a staple of products or services you use daily, such as Amazon, Costco, and Apple. You are comfortable with their products and believe in their future. What if I told you that investing in these companies could help you reach your retirement goals sooner?

Here’s how it works: let’s say you have $1,000 to invest, and you buy 10 shares of Apple stock at $100 per share. The stock price might go up to $110 per share in one year, and you would have made $1,000. Not too shabby!

Now let’s say you have $5,000 to invest. You could buy 50 shares of Apple stock, but that’s a lot of money tied up in one company. Alternatively, you could buy 10 shares of Apple, 10 shares of Costco, and 10 shares of Amazon. This diversifies your investment and helps to protect you if one company’s stock price goes down.

The best part is that you can start investing with as little as $5 through the Robinhood app. So what are you waiting for? Start investing today and reach your retirement goals sooner!

10. 529 College Plan

As a SNCO, you might have kids, some just entering school. And if that is the case, it would be a good idea to look into investing in a 529 college plan. If you’re unfamiliar with a 529, it is a retirement account for college expenses. You contribute money to the account, and if used for education expenses, there are usually no taxes owed on the earnings.

There are two types of 529 plans: prepaid tuition and education savings plans. 

• With a prepaid tuition plan, you are essentially buying credits at today’s tuition prices to be used later.
• An education savings plan is like a Roth IRA because you contribute money after taxes have been taken out. All future withdrawals are tax-free as the funds go towards qualifying educational expenses.

There are benefits and drawbacks to both types of 529 plans. For example, in prepaid tuition plans, you can gamble on securing a better tuition rate and possibly win and save money n the long run. However, if your child’s college tuition does not increase or even decrease, you would have essentially overpaid for tuition.

The main benefit of the education savings plan is that you’re not locked into one school. Your child can use the money at any eligible college or university. The downside is that you are investing in the stock market, so there is always the potential to lose money.

Do yourself a favor, download the Betterment app, and open a 529 plan of your choice for your kid’s future. You can thank me later.

11. Life Insurance

And last but not least, Life insurance. 

But isn’t life insurance for the deceased?

Yes, and no. But a lot of people don’t know that. Here’s the lowdown.

Life insurance can be divided into two categories: term and permanent. Term life insurance simply pays out a sum of money when you die, while permanent life insurance has the ability to earn investment.

Permanent life insurance policies have what is called a cash value component. This is money that you can access while you are alive through policy loans or withdrawals. In addition, the cash value grows tax-deferred, so you don’t have to pay taxes on the money until you withdraw it.

You can think of it as a retirement account with death benefits. You can use the money to supplement your income in retirement, pay for long-term care expenses, or leave a legacy for your heirs.

And like any other investment, there are risks involved. But if you are strategic about investing the money in your life insurance policy, you can minimize those risks and maximize your growth potential.

Investing in a life insurance policy is not something you should do on a whim. Instead, you should consult a financial advisor for investment advice to see if it makes sense for your situation. 

But if you’re looking for a way to grow your money while also getting death benefits, try Policygenius. There’s a good chance you’ll find

FAQ

Can you invest money while in the military?

Yes, you can invest money while being a member of the uniformed services. Many investment options are available to military personnel, including investing in a retirement account. You can also contribute to an investment account, which can be used for various purposes.

What is the military 401k called?

The United States military 401k is called the Thrift Savings Plan (TSP). The TSP is a retirement savings account and investment plan offering military members tax benefits.

What should I do with my money in the military?

Many military members are unsure of what to do with their money. One option is investing in a retirement account. Another option is contributions to a Roth IRA.

How do you build wealth in the military?

There are a few key ways to build wealth while working for the department of defense as military service members. The best way is to start investing your basic pay early. It’s never too early to start investing in your future. Another way to build wealth is to make contributions to your retirement account. You’ll have higher returns when you start using your individual retirement account. Finally, try to live below your means and avoid debt.

Summary

So there you have it! Eleven great ways to invest your money while enlisted. Now go out and get started! Each of these options has the potential to help you build wealth for your future. Start small and be consistent with your investments to see the best results. And most importantly, consult with a financial advisor to make sure you are making sound investment decisions that align with your goals.

Related Articles:

• How To Become A Military Millionaire (3 Simple Steps)
• 22 Ways To Save Money While Enlisted (By Rank)
• How To Make Extra Money While Enlisted (16 Easy Ways)

Are you ready to get started? Let us know in the comments below how you plan on investing your money during your enlistment!