Military service has long been a path for social and economic mobility – the gateway to the middle class – for thousands of young American men and women. Service is both a way to see the world and learn valuable skills that can be transferred into civilian life – and many enlistees would not have the opportunity to attend college or purchase a house without the benefits associated with military service. Furthermore, veterans who forego college are likely to earn higher pay than non-veterans who do the same. According to Jay Teachman, a sociology professor at Western Washington University, interviewed in The Fiscal Times, “Even if they [veterans] don’t earn more education, they certainly earn more money.”
The opportunity to learn responsibility, focus, and discipline from military service can benefit enlistees for life. People in the military are taught how to make decisions in extreme conditions and function in periods of stress – traits critical in civilian life. However, it is important to have a thorough understanding of the risks as well as the benefits of military service, and what the commitment to a career in the Armed Forces involves.
Military Experience and Success
In addition to the financial benefits of military service, the training and experience it provides have enabled many to achieve high positions in politics and business. Since World War II, 10 of the United States’ 12 presidents have served in the country’s military. While the percentage of senators and representatives with military service has steadily declined since the 1970s, veterans continue to represent a significant portion of Congress. According to the Congressional Research Service, 73% in the 92nd Congress (1971 to 1972) had military experience, while 18.7% of the 114th Congress (2015 to 2016) were veterans.
Executive offices of the country’s largest companies are full of military veterans. These include:
Frederick W. Smith: The founder and CEO of FedEx served with the Marines in two tours of duty in Vietnam.
Roger Staubach: Staubach, a former Heisman Trophy winner and founder of a national real estate firm, graduated from the U.S. Naval Academy and served two years in Vietnam.
Alex Gorsky: The chairman and CEO of Johnson & Johnson graduated from the U.S. Military Academy and served six years in the U.S. Army.
According to a 2012 report by the Center for New American Security, companies are likely to pay higher starting salaries for employees with military service. The reasons cited for the employers’ preference include:
Leadership and Teamwork Skills: Typically, veterans have led colleagues, accepted direction from others, and operated as part of a small team.
Character: Veterans are perceived as being trustworthy, dependable, and drug-free, and having a strong work ethic.
Structure and Discipline: Companies, especially those that emphasize safety, appreciate veterans’ experience following established procedures.
Expertise: Companies value veterans’ technical skills, job-specific experiences, and understanding of the military community.
Veterans are responsible for a significant percentage of start-up and small businesses using the experience and education provided during their service. According to Marianne Hudson writing in Forbes, 30% of all American businesses are owned by veterans. As a consequence, the National Veteran-Owned Business Association proudly proclaims, “The lessons learned and lived in military service like leadership, teamwork, competitive spirit, mission-orientation, and ambition are the same attributes needed to succeed in business.”
From 1998 to 2013, the number of Fortune 500 companies offering pensions to their employees fell from 60% to 24%, according to The Washington Post. With the decline of unionism and loss of employee bargaining power, corporate managements have aggressively replaced pensions with profit-sharing plans, essentially transferring the risk of retirement planning and investment management to their employees. It is possible that the Social Security program will be similarly transformed, making retirees responsible for investing funds through private accounts. However, the truth is that few people are prepared to manage their own retirement funds – as Howard Gold writes in MarketWatch, “Most investors have no idea of what they’re doing.”
In the last half-century, the financial markets have become increasingly complex with new products, new markets, and changing tax laws. Technology makes it possible for investors to remain informed 24-7 about events that may affect their stock positions and to enter trades from the comfort of their home. At the same time, they must compete with robo-trading programs that react to news and market activity faster than any human can. As a consequence, according to Rosalind Resnick writing in Entrepreneur, even people capable of managing their own capital should carefully consider whether a go-it-alone approach to investing makes sense.
Whether due to a lack of training, interest, or time, many individuals are turning to professional advisors to help them navigate the perilous waters of personal finance. In some cases, advice covers the entire spectrum of financial services, ranging from budgeting, to creating specialized trusts and estate plans. In others, the consultant’s primary responsibility is limited to a specific need, such as managing a portfolio of investments or developing effective tax strategies.
Seeking and finding the perfect advisor is not always easy, especially in an industry filled with confusing acronyms. According to the Financial Industry Regulatory Authority (FINRA), there were more than 160 different professional designations. In addition, terms such as financial analyst, financial advisor, financial consultant, and wealth manager are generic titles and can be used by anyone without registering with securities regulators or meeting educational or experience qualifications. To add further confusion, many consultants add multiple titles and designations to their resumes, making it difficult to determine which services they actually provide.
Do You Need Financial Planning Advice or Portfolio Management Services?
While the terms “financial planning” and “investment advice” are often used interchangeably, they refer to different skill sets. As a consequence, two of the more popular designations – certified financial planner (CFP) and registered investment advisor (RIA) – are regulated under different authorities.
Many Americans are now discovering that a comfortable retirement and adequate healthcare are beyond their means. As a consequence, we are working later in life, lowering our expectations, and going without not only luxuries, but essentials as well.
The decisions we make through our lives come with financial consequences. These choices include the careers we develop, the colleges we attend, the people we marry, the size of our family, and the lifestyles we adopt. While many of these choices may seem out of our control, it is possible to make adjustments along the way to minimize their worst financial consequences. The advantage available to everyone is time: The sooner we understand the long-term impact of our decisions and make the necessary changes, the more likely we are to reach our financial goals.
Major Lifetime Expenses
People incur common expense categories as they pass through different stages of life. However, the magnitude and timing of each vary from individual to individual. For example, one person may have $25,000 in student loan debt, while another has none. One person might get married at age 22 and have two children while another gets married at age 35 and has three children – another may not marry at all.
As a consequence, the following categories are necessarily broad, and a specific expense category may not apply to everyone. Nevertheless, a rough timeline projecting the cost of future expenses can enable you to save a portion of your income through each phase of life, helping you comfortably pay expenses when they occur, and ultimately leading to a substantial retirement fund.
1. Student Debt
According to a recent report by the Institute for College Access & Success, seven out of ten graduating college seniors in 2013 had student loans averaging $28,400. The median debt for those who earn post-graduate degrees is an additional $57,600, according to New America – one in ten graduate students owe $150,000 or more.
The cost of obtaining an undergraduate or graduate degree continues to escalate. While there are differences in everyone’s loan limits, interest rates, and repayment requirements, every borrower has to decide whether to focus on repayment as quickly as possible or make minimal payments and begin a savings program.
According to a 2014 Pew Research report, Millennialsthose born after 1980are the best-educated generation in the history of the United States. More than one-third have bachelor’s degrees, compared to one in four of their parents and grandparents.
This statistic may surprise many readers, considering the exponential increase in the cost of education during that period. According to the National Center for Education Statistics, a graduate in 1979 incurred less than $10,000 in education costs (in 2012 dollars), including room and board. By contrast, according to CollegeData, a 2013 graduate spent almost $120,000 for the same degree and owed more than $33,000 in school debt as of graduation.
In an effort to stem the rising costs of higher education, colleges, universities, and for-profit institutions have turned to technology. Many now offer online classes, bachelor’s degrees, and even master’s degrees in which some or all work is done over the Internet. According to a Pew Research Report, 90% of public four-year colleges and universities and 60% of private universities offer courses online. And in 2011, one-third of all students were enrolled in an online course.
Perception of an Online Degree
The question of whether an online degree has less value than a traditional degree has smoldered for years. While online courses certainly have advantages and disadvantages as compared to their traditional counterparts, employer “gatekeepers” – receptionists, HR recruiters, and resume screeners – tend to be most concerned about the reputation and quality of the educational institution.