Military benefits for investing?

[Christopher Lane]

Here’s a strategy that I haven’t seen many (if anyone) talk about and I’m curious to see how the BP family would do it.

Below are the benefits (I know of) that I can use:

Please let me know if I’m missing anything.

4% interest on credit cards

No annual fee on AMEX charge cards

USAA and NavyFed banking

VA home loan

6% max interest on any other lines of credit (home depot, etc.)

10% Military discount from Home Depot and Lowe’s

How would you use these programs to benefit your REI journey?

[Ben Zimmerman]

@Alexander Felice

The benefits are actually borderline obnoxious, just not explained very well by the OP, or perhaps he wasn't aware of some of the ways to take advantage of the situation.  Let me try to break it down a little better.

4% interest on credit cards: This is part of the Servicemembers Relief Act or SCRA. By law any PRE-existing debt obtained prior to joining the military is capped at 6% interest rate. This applies to any debt. So if your mortgage was at 7% interest rate and you joined the military, you simply call your mortgage company and they will be forced to lower your interest rate to 6%. This applies for mortgages, credit card debt, student loans, car loans, you name it. Some credit card companies go one step further for our vets and offer 4% interest on PRE-existing debt, while others yet (I think it's Citibank and Barclays issued cards) offer an eye popping 0% interest on pre-existing credit card debt. New charges you make AFTER you join will still be at the regular APR rate, however if you plan on joining the military soon and plan accordingly, you can turn that 0% APR into a free loan for up to 20 years while you serve.


No annual fee on AMEX charge cards:  This is done by both Chase and AMEX issued cards (AMEX also applies this to their business credit cards) as they have taken the MLA (military lending act) requirements and have gone above and beyond.  They essentially remove all fees from their cards, to include late fees, foreign transaction, annual fees, etc including on cards opened AFTER joining the military (several other CC companies offer the same thing but only if you open the account prior to joining the military).  While this doesn't sound impressive, it actually is.  There are 'premium' credit cards that offer some benefits, in exchange for a ridiculously high annual fee.  The AMEX Platinum card has a massive $550 annual fee, but is completely free for military.  The AMEX Platinum offers $200 in free travel reimbursement per year, $200 worth of UBER credits per year (I use them on UBER eats), a $100 in hotel credit, and $100 in Saks Fifth Avenue credit per year.  (I use all of the credits to buy gift cards online and then use them as I please, the Saks gift cards I resell online at 85% face value since I have no interest in buying a $400 T-Shirt).  Essentially you get multiple hundreds of dollars worth of stuff completely free.  There are many different credit cards like this and if you collect them all it can turn into a fantastic annual benefit.  I currently get roughly $4,000 worth of airline gift cards for free every single year and have an email box stuffed full of virtual gift card codes that never expire.  You can upgrade cards like the green and gold card to additional platinum cards so currently I have 6 AMEX Platinum cards, which translates into $1200 worth of free UBER eats food every year, 1200 travel credit and $510 in cash after I liquidate 600 bucks worth of Saks gift cards online.  All told I get probably 12k worth of free stuff from my cards every year.  Several of these cards I've never actually opened the card and taken it out of the envelope they were mailed to me in, yet I still get the benefits of 'owning' one of these cards.


USAA and NavyFed banking: Nice in the fact that they are very service oriented. They are very easy to work with during deployments or other situations where you don't have the luxury of walking into your local Wells Fargo bank and talking to someone. They will lower your credit card APR every time you PCS for 1 year after you move, which in the military can be very often. They also both offer a real estate referral network where if you are either buying or selling a home, you can use one of their agents and USAA will write you a check after you close on the home. The last house I bought on the MLS was for 215k, and a week after I closed USAA wrote me a check for roughly 1k because I used an agent that they recommended.

VA home loan - more of a trap than a benefit for investors: I'm not sure how the only 100% down payment assistance program in the nation (currently) is a trap? Since it is backed by the government, interest rates are about the best you will likely find. While it does have a funding fee, this is easily offset by the fact that you will never pay PMI. I would 10x rather wrap a funding fee into the loan price than pay PMI for the next 30 years with an FHA loan. Additionally the funding fee is waived if you are receiving at least a 10% service disability (which is extremely easy to get).

6% Max interest on lines of credit - false:  It's actually semi true.  The 6% is part of the SCRA benefits and only applies to loans obtained prior to joining the military.  If you are in the guard or reserve, this also applies to any loan obtained prior to being drawn up to full time duty on Title X orders during a deployment etc.



10% discount at Lowes and Home Depot - this is the best one!  Of all of the options this is actually my least favorite perk listed.  The discount only applies to product, and not other options such as delivery and installation services.  In addition the discount does not stack with any other specials the store may be running during various holidays or sales specials.  

Not mentioned are other items such as the GI Bill, which now pays a housing allowance in addition to paying for the school itself.  If you live in CA or other expensive areas, the GI bill could pay you as much as $3000-4000 per month in cash to pay for rent for a few years while you knock out your schooling.

Retirement: With the new retirement system that rolled out, members will only receive 40% of their base salary per year in benefits if they retire at 20 years (as opposed to the previous 50%). However all members in this system will automatically get a 1% contribution to their TSP retirement account, and a matching contribution up to 5%. This is given to everyone and not just those that stick around long enough to retire which means you can have a decent 401k style nest egg set up due to the 5% match if you decide to get out after your first tour.

Downpayment Assistance: Many states will offer additional downpayment assistance programs for service members which can be used in conjunction with the VA loan. Some states offer a 5-6% assistance which can save many thousands of dollars off the purchase price.