Attacking Debt and Tenaciously Pursuing Financial Freedom

Mindy: Welcome to the BiggerPockets Money Podcast, show number 109 where we interview Airman Mildollar from Military Dollar and hear how she reached financial freedom without a partner or a career in tech.

Mindy: She’s a United States Air Force Officer, financial independence fan and passionate about helping you sort out your money questions so you can live your best life.

Airman Mildollar: I had always been spending what I thought was a very conservative amount, but I actually started paying more attention and I found out I could free another thousand dollars a month out of my budget by just not spending money on things that other people cared about that I didn’t care about.

Mindy: Hello, hello, hello, my name is Mindy Jensen and with me as always is my spectacular co-host, Scott Trench. Scott and I are here to make financial independence less scary, less just for somebody else and show you that by following the proven steps, you can put yourself on the road to early financial freedom and get money out of the way so you can lead your best life.

Scott: Wherever you are in your financial or life journey, you can begin rapidly moving towards a position capable of generating a great income, saving a huge percentage of that income, and setting yourself up to make larger and larger investments on your way to financial freedom and whether you want to retire early and travel the world, go on to make big time investments and assets like real estate or start your own business, we’ll help you put yourself in a position capable of launching yourself towards those dreams.

Scott: How’s it going? I’m extremely excited for today’s episode with Airman Mildollar. We’ve met a couple of times, she’s big in the personal finance community and has a great story of achieving financial independence during military service.

Mindy: Yeah, what I like about her story is that, like I said before, she does not have a partner currently. She got here all by her big girl self which is not the narrative that you hear so frequently in this community.

Mindy: There’s a lot of technology, careers, there’s a lot of men in this space, and I wanted to introduce her to our listeners because I want them to know that you can in fact do this by yourself.

Mindy: If you’re a man, if you’re a woman, if you’re young, if you’re older, you can get to financial independence on your own, it’s not that hard and what did she say today? Spend every dime you have and always look amazing by big cars, houses everywhere you go? No, she said, spend less than you earn.

Scott: Mm-hmm (affirmative).

Mindy: Don’t buy things to impress people if you don’t like them.

Scott: Yeah.

Mindy: You know what I love most about her story is that it is so repeatable. It is so doable for anybody listening. You can reach financial independence and Airman Mildollar is going to tell you how, but before she, let’s hear a note from today’s show sponsor.

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Mindy: Okay, huge thanks to the sponsor of today’s show. Airman Mildollar from Military Dollar, welcome to the BiggerPockets Money Podcast. I’m so excited to have you here today.

Airman Mildollar: I am so excited to be here. Thank you so much. I do have to give a quick disclaimer before I start. The views I express today are my own and may not reflect the views of the United States Air Force, the Department of Defense or the US government. So now that we have that out of the way, let’s talk.

Mindy: Oh, so I’m not interviewing the entire military. I’m just interviewing you. Good, because I don’t have any questions for them, but [crosstalk 00:04:54]

Airman Mildollar: Okay.

Mindy: … A lot of questions for you.

Airman Mildollar: That’s good. I should not think the same way as everybody else, that is for sure.

Mindy: Well, you know what? That brings up a really good point. So let’s start there. You don’t think the same way that everybody else because you have reached a level of financial independence, correct?

Airman Mildollar: I have. So based on my current level of spending and what I’ve been spending over the last few years, I technically if we go by the definition that so many in the Fire Community like to use of 25 times expenses, I have that level of financial independence.

Airman Mildollar: Now, that being said, I do want to spend more money in retirement because I have some pretty big plans so I’m not quite to where I’d like to be also because I would like to be a little bit safer than just using the 4% rule. So I still have ways to go but I could in theory quit right now and continue my lifestyle as is.

Mindy: Okay, so I noticed a couple of things about you. I noticed by the disclaimer that you gave about not representing the military in this conversation and the fact that you are Airman Mildollar, I noticed that you are in the military and not in tech. Is that correct?

Airman Mildollar: That is true. I do have kind of a technical job in the Air Force. I’m not going to get into details about that, obviously on here, but I am not a computer geek by any means. I can barely keep up with my blog. So I am not an engineer, I am not a tech geek, that’s not the background that I’m coming from.

Mindy: Okay, good. Another thing I noticed is that you’re not a man.

Airman Mildollar: I’m not, which is really surprising to a lot of people. So anybody who’s listening to this right now, just in case you’re confused, I am a female.

Mindy: Yes. Yes. So you are an anonymous female, so we don’t have your picture up, but I’m looking at her right now and I can guarantee she is in fact a woman. I think what those people off is it’s Airman Mildollar.

Airman Mildollar: Yes.

Mindy: And I have to say, I was just as guilty of that. You don’t really think about it, you’re like, “Oh, Airman Mildollar, that’s a guy, whatever.” And then when I met you in real life, I’m like, “Wait, what? I thought you were a man. I thought Airman Mildollar was a man. Not you personally was a man. Wow.”

Airman Mildollar: Yeah, so this is a great time to explain that to anybody who’s confused. Airman or an Airman is a person in the Air Force just like soldiers in the Army and the Marines in the Marines and a sailor is in the Navy. Airman is just people in the Air Force and that’s me.

Mindy: And that’s really good to bring up. So I apologize for my almost … For my sexistness in thinking that you were a man, but I did read that as Airman. So okay, so you are a woman. Are you married?

Airman Mildollar: I am not married.

Mindy: Do you have any children?

Airman Mildollar: I have no children. I do have a great dog.

Mindy: Okay, so you are a single woman who doesn’t have a tech job?

Airman Mildollar: Yes.

Mindy: And you have reached financial independence?

Airman Mildollar: I can’t believe it’s true myself. It’s amazing.

Mindy: I was going to say this is only for white tech bros. It’s actually not. Please don’t email [email protected] to complain about me saying that this is just for white tech bros, but when you read the financial independence blogs, you see a lot of men in tech who have made it and I don’t want to diminish their accomplishments because becoming financially independent is something to celebrate no matter how you got there.

Mindy: But, it’s even more exciting when you do it by yourself. I am financially independent, but I did not get there by myself. I married one of those tech guys. So is it wrong that he had a great salary? No, we’re cheap anyway, I mean frugal, so we don’t spend a lot of money, but we were able to save it because he had a tech job. You don’t have a tech job.

Airman Mildollar: Correct. I have a career that traditionally people think is underpaid. As a matter of fact, I do not think that I’m an officer in the Air Force and I think we’re actually very well paid.

Mindy: I’m going to say that you all go to war and I don’t, so you are not paid enough.

Scott: Well, let’s hear this story. I want to know how you did it and how you guys started there. Where does the journey begin for you?

Airman Mildollar: Okay, sure. So probably the beginning of my financial independence story starts in college. So I grew up middle class, sometimes at the higher end of middle-class, sometimes at the lower end of middle-class, but definitely very middle-class in our family and my mother had gone to college, but my father had not.

Airman Mildollar: My family didn’t really encourage college, so the fact that I wanted to be in the Air Force is really the only reason I went to college because I wanted to be an officer in the Air Force and you have to have a college degree to do that.

Airman Mildollar: I originally had planned to apply to the Air Force Academy, but then when I was in high school, I started talking to some people who had been in the Air Force and I decided I didn’t want to do that because it actually sounded like not the best college experience.

Airman Mildollar: So I want it to have a real college experience. So I decided to go to a very expensive private university and in order to afford that in a family that didn’t force you to go to college and therefore had not saved any money for me to go to college, I had to start getting scholarships or take out loans and I ended up doing those.

Airman Mildollar: So I got scholarships, luckily for most of my college expenses and then I took out about $27,000 in loans. So I graduated college with 27,000 in student loan debt and then between a new car when I graduated and also some credit card debt that I had racked up. I had about 42,000 total in loans right as I started my career.

Scott: And was this an Air Force ROTC program? Sorry if I missed that.

Airman Mildollar: Yeah, I was in Air Force ROTC. That was where I got the majority of my scholarships from and then I got some smaller scholarships as well.

Scott: Got it. And then do they do the … I know that when you go to a Military Academy, there’s a career starter load of, I think right now it’s like 35-ish thousand dollars that you get access to, that an option for you in college or is that only for the academies?

Airman Mildollar: That is an option for anybody starting out their career, at least for officers. I’m not positive whether or not it’s an option for enlisted members. I don’t see why it wouldn’t be, but it wasn’t an option that I had.

Airman Mildollar: At the time, I didn’t want to take out any more loans, so I did not do that. Looking back, it probably would have been a better idea because it was a lower rate than my student loans, but I didn’t know all that much about personal finance at the time.

Airman Mildollar: I started learning when I was in college, but I still wasn’t smart enough to realize that paying off some loans with other loans can sometimes be a good deal.

Scott: Got it.

Airman Mildollar: So then in college I or I graduated college with all this debt and I entered the Air Force and I absolutely loved it. It has been a fabulous career since the very beginning and I didn’t want to do anything else.

Airman Mildollar: So I decided that’s the only thing I was going to do and I decided back when I first got in the military when I was young and naive that I was going to stay in for 30 years and that was totally up to me, which is not up to you.

Airman Mildollar: And so I decided that I needed to be financially independent between the pension when I got out at 30 years and myself that I would never have to work again. So I was thinking at the age of 51 I would do that.

Airman Mildollar: As time has gone on and I’ve learned more about what it takes to stay in for 30 years and whether or not I actually want to stay in for 30 years and what it means to be financially independent. That has shifted somewhat.

Airman Mildollar: So I’m not 51 now, but I am already financially independent. So my plans have changed a little bit over time, but I knew from the very beginning that I wanted to do that. So I paid off all my debt as soon as I could and started investing a couple of years before the great recession started. So I did have money in the market during that time and got to experience all the fun there, but hey, it’s worked out so far.

Scott: After graduation, it sounds like you had $27,000 in student loan debt plus a car loan plus maybe a little bit of other personal debt. Is that right?

Airman Mildollar: Yes, yup.

Scott: What was the timeline to getting rid of that, or maybe how did you handle the first couple of years until you got more serious about creating financial freedom earlier?

Airman Mildollar: I set a deadline for myself that I wanted to pay it off before I pinned on the rank of captain. So in the Air Force, the rank of captain is the third officer rank and it comes at your four year point. So I set a goal for four years to pay off 42,000 in debt.

Airman Mildollar: I did it in about three and a half. So this was back in the 2004 to 2007 timeframe to give a little idea of how much $42,000 in debt comparatively is. So I paid that off as quick as I could and I also started investing a little bit in 2005 because luckily while I was in college, I started reading books about personal finance, even though I didn’t have any money back then. And so I started learning about how you don’t want to not invest entirely while you’re paying off debt because usually, investing gives you a better return. So I did both during that time.

Scott: Love it. So you are able to invest and pay off debt in three and a half years, and you were able to do that because you made $250,000 a year more throughout that period, right?

Airman Mildollar: Cumulatively, it probably only took me about seven or eight years to take to make that much money. No, I was making, I think when I first graduated college, I was making right about $40,000 so right about the same amount that I had in debt is how much my total income was.

Scott: Got it. So what was your lifestyle like? How did you manage your finances to be able to save, to pay off all your debt and still invest?

Airman Mildollar: So I did a few things. Number one, while I did buy a new car, I didn’t go crazy. So a lot of people, when they first joined the military and start getting money, it’s very popular to buy either a big truck or a Ford Mustang.

Airman Mildollar: Those are the two main ones that people go for. I bought a Honda Civic, so I bought a new car, but it wasn’t a crazy new car. I lived alone and so I wasn’t house hacking. I know you love house hacking. I decided not to do that because I wanted to live on my own for the first time in my life, but I got a modest one bedroom apartment a little bit farther out into town than a lot of people lived in because that allowed me to save a little bit of money. So I just was making slightly more conservative choices.

Scott: Love it. Now, as a military member, were you getting a housing stipend? I forgot what the term is.

Airman Mildollar: Yes, it’s called the basic allowance for housing. So you get a stipend for that and then you also get an allowance for food to eat, for groceries and I have always made a point of having housing that’s no more expensive than my allowances.

Airman Mildollar: So you’re not limited to how much you can spend. If you can save money, you’re allowed to do that. If you want to spend more than the allowance, you can do that too. So a lot of people will spend more than the allowance, I always went less.

Scott: Fair enough, and that allowance is tax free, right? It’s after-tax?

Airman Mildollar: It is which is very nice. That has saved me quite a bit over the years.

Scott: Got it. All right, so you were getting a housing and food stipend and you live within the basic housing allowance. Are you also eating and living within the food allowance? Was that another part of your strategy?

Airman Mildollar: Yes, I’ve always lived within the BAS allowance. It’s actually, in my opinion, fairly generous allowance, so like right now, it’s only supposed to cover the military member. Unlike the housing allowance, which is supposed to cover your whole family, the subsistence allowance is only supposed to cover your own food, and right now, it’s $256.

Airman Mildollar: I can buy groceries with $256 no problem and that’s per month. Obviously it is not intended to cover eating out, so if you want to do more of that, then you might go over, but I’m able to live within it.

Mindy: Do they just give you money? Do they just say, “Hey, here’s your $250.”

Airman Mildollar: Yeah, basically, it’s included in your paycheck. There are some people who don’t get it, but if you are not getting the allowance, that means the thing that the allowance is meant to pay for is provided to you. So you can either live in base housing, sometimes you’re forced to, so it’s not necessarily a choice or you get money for housing. You can either eat all your food on base which is what I do when I’m deployed or you get a subsistence allowance. It’s one or the other.

Mindy: Okay, but you’re not having to provide receipts and show them what you’re spending it on. So you could be like Saving-Sherpa and spend like 12 cents a month on your groceries and just pocket the rest?

Airman Mildollar: Yeah, I could in theory. I do not want to spend 12 cents a month on my groceries.

Scott: Yeah.

Airman Mildollar: He doesn’t really spend, for anybody who’s listening, who doesn’t know Saving-Sherpa. He spends about $60 a month on groceries and he seems to have really good meals. I have no idea how he does it. I spend about 125 to 150 a month on groceries and then the rest just goes into my pocket.

Airman Mildollar: The one exception that I’m aware of other than the if they actually give you the food is if you are receiving a housing allowance while you’re overseas, you do have to give them your lease and they give you up to the amount of your lease.

Mindy: That’s fair.

Scott: Okay. How do you contrast your behavior with the spending here with the other single people who are at the same stations that you’re at?

Airman Mildollar: It’s hard to answer that question. I am an introvert, so I just naturally didn’t enjoy going out to the clubs as much as everybody else. I usually would go out, but I also don’t drink much, so I didn’t have those expenses.

Airman Mildollar: I was able to spend or save money that way. I don’t get a lot of joy out of a car, so a Honda Civic was just all right for me. I do spend money on other things. I love to travel and I will happily spend thousands of dollars on travel, but I also really like research so I’m not going to just hand over $4,000 to a tour company and say, “Just tell me where to show up.” I’m going to plan everything out and I like the challenge of saving money and figuring out how to do that same thing, but cheaper.

Scott: Got it. Well, to take a quick little dig at the Navy. I love the Navy, I grew up near the Naval Academy. The term spending like a sailor is kind of what people associate with the expenses of folks in the military when they come onto base and go out to the club or buy the big pickup truck. Did you find that to be true to a certain extent based on your observation or is that largely a myth?

Airman Mildollar: I would say it’s fairly true, especially as people come back from deployments, which happens a lot in the Navy, so that’s probably why they have that association. When you’re on a ship for six months at a time or when you’re deployed for a year at a time, like I’ve been, all this money just accumulates in your bank account and you’re not spending it because there’s no place to spend it.

Airman Mildollar: And then you come home and you just have thousands of dollars and you probably moved somewhere new and so you probably want to outfit your new house with wonderful furniture and whatnot, a brand new TV. So I may be after a couple of deployments, definitely went on a Target run or two that I’ve done it myself. But again, I’m buying things at Target instead of buying new cars. So that’s the difference.

Scott: Got it. Okay. So three and a half years go by and you’re largely living within your housing budget and your food budget and that’s provided by the military. So that means you’re able to pocket a large percentage of your income as I understand it which helps you pay off your debt and invest. What kind of comes next?

Airman Mildollar: At that point, I had my first deployment not too long after that and on my first deployment, my job was largely sitting around and waiting for things to happen and so I started reading blogs and that’s actually, we didn’t call it this back then, but that’s when I discovered the Fire Community and I started finding them out like earlyretirement.org, the forums that have existed there and a couple of the early blogs and I found out that I was not the only person who had this goal.

Airman Mildollar: And so I started learning about all of the investments that other people did and I actually lucked out quite a bit because my parents had been urging me very strongly to buy a car right in the 2006, 2007 timeframe, right as I was paying off my debt.

Airman Mildollar: They said, “You’re going to have so much cashflow, it’s going to be great.” Or I’m sorry, I said, buy a car, I mean, buy a house. They said, “Go buy a house.” In 2006, 2007 and I decided not to do that. I was going to wait until I had a little bit more money and that ended up obviously working out very well for me because all of my friends who did buy houses right at that timeframe ended up obviously being underwater for quite some time.

Mindy: [crosstalk 00:22:14]

Airman Mildollar: Yeah. So that worked out great.

Mindy: Yeah. So, okay, so 2008 happens. You still have a job because frankly, I would love it if we could all … The whole military would go out of business because then we’re not having any wars, but that’s not going to happen. So you still have a job and that’s very interesting. We haven’t talked about that yet is you have job security, right?

Airman Mildollar: I do have job security, but it’s not quite as secure as some people assume. So like I said, when I was a Lieutenant and naive and had just gotten in, I thought I could stay as long as I wanted and I did not realize that we fire people too.

Airman Mildollar: So there are reductions in force in the military. I have been through five of them myself. It’s usually based on career field and your group. So my career field in my year group has gone through five of these reductions in the forces.

Airman Mildollar: Luckily during a lot of them, I never ended up having to make it to the board because enough people volunteered to get out that they ended up not actually kicking anybody out, but a couple of them, they ended up kicking people out.

Airman Mildollar: So that’s something to think about and then the other thing to think about is if you do not promote on the time schedule that has been established, you also end up reaching high year tenure and you get kicked out for that too.

Airman Mildollar: So you have more job security than I think a lot of other jobs, but it’s not, you never have to worry about it. You also have to worry about things like medical concerns that would not be so big of a deal to you would be something that could absolutely get me kicked out of the military.

Airman Mildollar: I could be forcing a medical board or facing a medical board and I luckily have not had to go through any of that, but plenty of my friends have and they have left the military earlier than they intended.

Mindy: Oh, I didn’t realize that you guys fired people.

Airman Mildollar: Yes, we do.

Mindy: I mean, that it makes sense. I mean, not everybody’s going to be a good soldier … Military. How do you say that?

Scott: Airman.

Mindy: Military member?

Airman Mildollar: Military member, service member, troop. Any of those.

Mindy: Service member. Okay. Not everybody is going to be a good service member. So I mean, there’s bad people in every company, I guess, not ours, we have the best, but …

Scott: That’s right.

Mindy: So you said something that I thought was very interesting. You said that you started reading and discovering that there were other people just like you.

Airman Mildollar: Yes. So I don’t remember the first Fire Blogger that I found. I don’t remember the first personal finance blogger that I found, but definitely, I started reading, for instance, J. D. Roth very early on. I have been a fan of his for a very long time.

Airman Mildollar: I found Mr. Money Mustache probably in his first year of blogging. So I kind of grew up with people. A lot of people don’t know that blog punched debt in the face anymore, but that was a really fun blog for me to read. There’s also a guy who paid off his Harvard debt very fast in like four years.

Airman Mildollar: So I was reading all these and even though I had paid off my debt at this time, I was still reading the debt ones because it was really motivating for like normal everyday people can do this. This wasn’t the people on the TV screen, this wasn’t people who were rich from the time they were born. This was people just like me and so I really liked that.

Scott: And so you just covered these around the 2008, 2007 time period, is that right?

Airman Mildollar: Definitely by 2009 I was into several blogs. I couldn’t tell you exactly when I found them.

Scott: Got it. So let’s walk through you were thinking about buying a house and you decided not to. What kind of comes next to your story?

Airman Mildollar: So actually that was a deal that I made with a friend of mine as we were both looking at houses, we decided we were kind of tired of living alone. So we made a deal that whoever bought a house first, the other person would live with them and she bought a house first and I lucked out and I did not buy a house.

Airman Mildollar: And so I moved in with her and obviously saved quite a bit of money on that. My rent went from a thousand dollars a month to $600 a month at that point living in a three bedroom house with her and so I just started putting money away.

Airman Mildollar: I focused first on maxing out a Roth IRA and then as soon as I did that, I started adding money. I had done a very, very small amount of individual stock picking, so I started doing a little bit more in a taxable account and I also opened up TSP, the Thrift Savings Plan, which is the federal government’s version of a 401(k) so I started doing … At this point, I had a Roth IRA, I had a TSP and I had a taxable account.

Scott: Love it. How much were you able to accumulate at a given year with this plan?

Airman Mildollar: It really depends on which year. So if we go with 2008 at that point, I had pinned on captain, that was my four year mark so I was earning considerably more at that point. I don’t have the records in front of me, but I think at that point, I was earning about $65,000 a year.

Airman Mildollar: So I was maxing out a Roth IRA, I was which I think might have been around $4,000 at that point and then I was putting several thousand dollars into TSP and I was also putting even more into a taxable account. So around 2008, 2009 timeframe, I was probably putting around 12 to $15,000 a year away I would say something like that.

Scott: Fantastic. So about a 20% savings rate.

Airman Mildollar: Yes. Wait a minute, you’re making me do math I haven’t done.

Mindy: On the fly too.

Airman Mildollar: Yeah.

Scott: Yeah.

Airman Mildollar: That sounds about right. I want to say it was … I did have spreadsheets, so while I never added it all up, I was tracking savings rate and I want to say it was about 23%.

Scott: Love it. All right, so what comes next? Does this structure continue for another couple of years?

Airman Mildollar: Yes. So I pretty much did all of that, just continuing on every time I got a raise, I committed to putting at least 50% into savings and investment and the next big thing that changed was in 2011, I decided now at this point where the market was pretty much at the bottom, I decided I was going to buy a rental property.

Airman Mildollar: So I bought a rental property in 2011, actually right as I was deploying for a year. So I bought it, put people in and then left for a year and then I came back and bought another house to live in. So in 2012, I had two houses.

Scott: Where did you buy?

Airman Mildollar: They were both in Las Vegas, Nevada. I currently still own the rental home. I do not have … The one that I lived in, I plan to turn that into a rental, but by the time that I left, it had accumulated so much equity because the market had gone way up that it just made sense to take the money and run while I was going to have the tax advantage of not having to pay the long-term capital gains on it.

Scott: Awesome. Love it. So, okay, so how did you finance these two properties?

Airman Mildollar: Both were just done with normal conventional loans. I didn’t use a VA loan. I had 20% down on the first one and I put 10% down on the second one.

Scott: 10% down on the one that you … Was your owner occupant property?

Airman Mildollar: Correct, yes. Yup.

Scott: Great. And was that, sorry I missed this. Was that rented out while you were deployed?

Airman Mildollar: The one that’s always been a rental had been rented out the whole time, yeah.

Scott: And your primary was vacant or was vacant while you were deployed?

Airman Mildollar: I bought it when I returned from the deployment.

Scott: I’m sorry, okay. Great. Yeah. Sorry, I’m confusing the timeline there. Great. So you return home and when did you sell the property? How many years later?

Airman Mildollar: It was about two and a half years, not quite two and a half years later. So I had met the two years out of five years to get the exemption for the taxes on the gains which was awesome and I was deploying again, so I didn’t need a house so I saw how high the market had gone. I knew I was going to make a bunch of money and I just sold that sucker and didn’t worry about it again and it was great.

Scott: But what I love about this is you’re saving 23% of your income, things are going really well, you buy a rental, you’re probably approaching the six figures-ish net worth range, maybe modest six-figure net worth range when you buy that first rental and you do it strategically around this deployment, come back and buy the house and now things are starting to pick up and accelerated it seems like with the appreciation you’re getting and all that kind of stuff.

Airman Mildollar: Yeah, the biggest change after that. So I had the rental house in 2011, I had the new house that accumulated a lot of equity in 2012 and then in 2013, I had a … Man, that was a big year. I had a whole lot going on that year, but one of the things that happened was I read Your Money or Your Life and that book changed everything.

Airman Mildollar: So one of the things that I did was I took a real good look at my budget. So I had always been spending, what I thought was a very conservative amount, but I actually started paying more attention and I found out I could free another thousand dollars a month out of my budget by just not spending money on things that other people cared about that I didn’t care about.

Airman Mildollar: So tiny little things, the $20 here to go see a movie that somebody else wanted to see that I didn’t want to see or to buy a Coach purse that I don’t actually care about clothes at all, but my friends convinced me I deserved it.

Airman Mildollar: You stopped doing those things and now I have even more money and so now I really bumped it up and between paying off the mortgages and paying off the principal, specifically in the mortgages that I had and the increase in cashflow that I had by not spending on things that I didn’t really care about, now I bumped up my savings rate to about 40% and then I got a raise in 2014 and I bumped it up to 50%.

Mindy: Okay, I want, because we’re BiggerPockets, real estate is our thing. I want to just really quickly look at the numbers for your rental because I have a in-laws who live in Las Vegas. I have been watching the Las Vegas market for 20 years and I watched it go way up and then crash spectacularly around the time you bought your house for what? A dollar?

Airman Mildollar: That would be awesome. They’re actually, I’m just going to do a side note. A lot of people don’t realize this. Vegas had been building so many houses that they actually did sell houses for a dollar. So what the companies did, they had built brand new houses and they had entire neighborhoods that were sitting empty.

Airman Mildollar: So they did buy one house for regular price, get the second for a dollar, and they were making landlords by doing that. That is not what I did. I bought a house that I think originally sold in 2004 for about $365,000 somewhere right around there and I bought it for $180,000 in 2011.

Mindy: Wow.

Airman Mildollar: So half price.

Mindy: Yeah, half price. I love half-price houses when they’re … I mean, it was still nice, right? I’m assuming that they just lost it to foreclosure. Did they destroy it on the way out?

Airman Mildollar: They actually didn’t. You could definitely tell that … So both the house that I bought in 2011 and the house that I bought in 2012, the owners, that was their dream homes. So that hurts a little bit when you’re taking their dream homes from them, but they weren’t going to stay in them anyway.

Airman Mildollar: And on the second one, it was a short sale. So I actually got to help the person get out from under their loan, which was nice, but they were gorgeous. They are gorgeous homes, so both are about 2,700 square feet. The first one, 2011 home actually has a four car garage, gourmet kitchen, marble countertops. The second one didn’t have a four car garage, but also had a gourmet kitchen. These are really nice houses.

Mindy: What does it rent for now? The first $180,000 house?

Airman Mildollar: All right, don’t get mad at me real estate people.

Mindy: Too late.

Airman Mildollar: Because I did not know the 1% rule back then. So my concern was covering the mortgage. So my mortgage on the 2011 home was just a teeny bit over $1,000 a month. I actually rented it out to a family member for 1250 a month, so it covered my mortgage, I didn’t have a property manager that I needed to pay for and the family member actually took wonderful care of my house.

Airman Mildollar: I have bumped it up now to … I’m getting 1,600 a month on that and my mortgage with full PITI is 1,050 a month all these years later, so I’m making a profit on it still. Not as much as all the geniuses in BiggerPockets I know, but it’s been good to me.

Mindy: Well, and not only are you making a profit monthly, but you’re also … It’s not still worth $180,000.

Airman Mildollar: No. The one that I still have is back to about 350, 360 now. It’s back to what it originally sold for in 2004.

Scott: Wow.

Mindy: That’s fantastic. So I do want to point out that if you’re renting to family members, sometimes that doesn’t work out so well. I’m very glad it worked out well for you. What I want to know more though is $1,600 a month the going rate for that neighborhood?

Airman Mildollar: I could probably get about 17 to 1,750 for it. I chose to go a little bit lower because it is a military member. I actually went to college with his commander so I have a little bit more a feeling that he’ll be a reliable renter.

Mindy: Yeah, and you’re still making money off of it and frankly, this is your property, you could rent it for a dollar if you wanted to.

Airman Mildollar: I could. That would be weird on taxes.

Mindy: Very weird, I don’t recommend it, but this is … Okay, so that’s awesome. I love that you got this house. I’m so jealous because I don’t have numbers like that at all, but that’s fantastic.

Airman Mildollar: Yeah, what’s been really nice about it too is because I do have some family who lives there, it’s also always a backstop if anything ever happens to them, I know I at least have a safe, cheap place for them to live.

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Mindy: So you bought this house, you were deployed, you bought another house, you lived in that house, you were about to deploy again. So you sold it and took advantage of the section 121. When you came back from that deployment, what did you do housing wise?

AirmanMildollar: I moved to a new state. So I moved to a place that I had no interest in owning and I rented.

Mindy: Okay. And that’s valid.

Scott: And what year is this?

Airman Mildollar: 2015.

Scott: 2015, okay.

Mindy: Okay. So 2015, you’re renting, military moves again I’m assuming?

Airman Mildollar: Yes.

Mindy: Did you buy another property when you moved again?

Airman Mildollar: No. So in 2015, I moved to a place that I didn’t want to buy just because I don’t want to own there and then in 2016, I moved to DC and DC is extremely expensive and I wanted to be able to get to work easily and not deal with traffic.

Airman Mildollar: I actually got rid of my car while I was in DC so that meant I was living right in the middle of everything, which meant million dollar homes. So I rented while I was there and then I moved again in 2018 and the place that I live right now does not have a really great market for renting out homes.

Airman Mildollar: So the houses here are typically selling for about 250 to $300,000 and those houses are … They’re selling for like … If a house that sells for 250 here, only rents for about 1,300 so I decided not to buy here.

Mindy: So you live in my neighborhood then? I think that’s really smart to look at. As I was growing up the American dream, the pinnacle of life was to own a house. So I love real estate, I want to own more than one house. I would just buy a rental, but you look around and you’re like, “Oh, I’m actually going to have to pay to own this rental.” Not every place makes sense to to buy a rental. So that’s good that you didn’t, well done you. It’s like you know what you’re doing with money.

Airman Mildollar: I’m trying.

Scott: All this while from 2015 when you got to about a 40% savings rate, was your savings rate continuing to creep up throughout these moves?

Airman Mildollar: Yes. So it’s ebbed and flowed as I’ve moved from low cost of living to high cost of living and back. So it’s been consistently over 50% for the last few years. Right now, it’s actually over 60% because I live in a low cost of living area.

Scott: Got it. And so you recently, we just bogged up through 2018, you recently said that you’ve crossed the finish line to lean fire. This is kind of how I understood what you were talking about earlier. Can you walk us through what that looks like and then what’s next?

Airman Mildollar: Sure. So in 2019, I spent after-tax, so only not talking about taxes at all. I spent about $30,000, a little less than $30,000, so at this point a millionaire. So I would be able to support that with a withdrawal rate of 3% if we are looking at it that way.

Airman Mildollar: That being said, I don’t want to live here forever. This is a very lovely place for a couple of years, but it’s not where I want to end up long-term and more importantly, once I retire, I want to have a lot of travel in my life.

Airman Mildollar: I want to do a lot more giving because right now, I give money, but I also give a lot of my time, the service to our country. When I retire, I’m planning to open up a nonprofit and I want to have money available for that. So I am looking at a more expensive lifestyle when I retire, probably more around the 45 to $50,000 range and then I might end up getting married. Somebody can consider me their sugar mama and we’ll see what my expenses go to with that.

Scott: Love it. So what’s the plan to get there? You’re just going to continue doing the same thing with keeping the saving rates strong and pilot in money into investments or real estate or what’s going to go on there?

Airman Mildollar: Everything is possible, so for sure I’m going to continue maxing out the thrift savings plan and a Roth IRA as long as I’m working and then in addition to that, I’m moving again this year because that’s what we do. We move a lot, so I’m looking at real estate in my next location, trying to decide if I’m going to rent or buy.

Airman Mildollar: I haven’t made a decision yet. I long-term would love to have a series of condos all around the country and then be somewhat nomadic and just go between them and when I’m in town I’ll live in them and when I’m not in town, I’ll rent them out on Airbnb is kind of what I’m thinking. So definitely more real estate eventually. I just don’t know exactly when.

Scott: Awesome.

Mindy: Our real estate podcast, the BiggerPockets Real Estate Investing Podcast just released an episode last week with Avery Carl. It was episode 364 and she talks, she’s got some good tips on Airbnb. One of the tips she said is pick a location that already has established Airbnb rules, that has been doing this for a really long time and she invests in and near the smoky mountains where people, there’s not a lot of hotels, there’s a lot of houses.

Mindy: So people have always been renting out houses, they’re not going to change their Airbnb laws anytime soon. So I don’t know if the smokey mountains appeals to you, but there’s a lot of other places like Orlando is another place that has a lot of Airbnb-able houses because they have such a favorable to owners Airbnb laws already established for decades.

Mindy: So I just want to throw that out there as a bit of advice. That was a great episode and you can find that at biggerpockets.com/show364. So, well that’s exciting. You can absolutely do that. That’s totally doable. How long do you think you’re going to be in the military? Do you have an idea? You originally said till you were 51.

Airman Mildollar: Yeah, so that would’ve been 30 years. I’m eligible for retirement at the 20 year point which is still a couple of years away for me, when I turned 41. I honestly don’t know. Like I said, my career has gone really well. I’ve really enjoyed it. I’ve gotten to do some incredible things so I’m not in a hurry to leave. At the same time, there are other things that I want to do, so we’re going to see, I don’t know.

Scott: When you leave the military, do you have to be there until your 20 year mark to one, receive the pension and two, receive the healthcare benefits in retirement?

Airman Mildollar: For the most part, yes. So there are some ways to get healthcare or even a reduced pension earlier. Those occasionally come up and if you end up leaving for a medical reason, they’re more likely to come up. So if I develop a medical issue over the next couple of years, that could happen, but if you wanted to get just a totally normal retirement, that’s at the 20 year point or longer.

Scott: Okay. So is that kind of influencing your decision here a little bit with some of the things about kind of grinding it out until the 20 year mark?

Airman Mildollar: It is influencing me staying. I wouldn’t say grinding it out because like I said, I’ve gotten to do some really cool things, I very much enjoy my job.

Scott: Oh, sorry. I didn’t mean that, I didn’t mean like that, but yes. Okay, so that is a factor in your decision making?

Airman Mildollar: Yes.

Scott: Got it.

Airman Mildollar: Definitely.

Mindy: yes, it should be, that’s a really huge benefit. I mean, what’s the most asked question that we get from people that are emailing us is how do you pay for health insurance in retirement? If the military is paying for your health insurance, that’s a sweet gig.

Airman Mildollar: Yeah, I know in the past couple of years, costs have gone up a little bit for retiree health care, but it’s still like 50 or $60 a month for a family to get coverage.

Mindy: Oh yeah. On this side of military benefit, it’s a little more.

Airman Mildollar: Yes. My parents were paying at one point 1,400 a month, so I definitely see I’m the only military person in my family, so I definitely get to see the other side and I’m very grateful for my benefits. Yes.

Mindy: Yeah, they’re pretty awesome benefits. Okay. It’s time for the famous four questions. These are the same four questions that we ask of all of our guests. Airman Mildollar, are you ready?

Airman Mildollar: I am.

Mindy: What is your favorite finance book?

Airman Mildollar: Definitely Your Money or Your Life. I’ve already discussed how it was life-changing for me. I’m not normally the type that goes for self-helpy kind of books, but that was one of the first books I ever read that actually changed how I saw the world.

Mindy: Yeah, that’s awesome. We had Vicki on and she said, “It’s not a finance book, it’s a lifestyle book. Ah, but it focuses on if you fix your finances, you can have whatever lifestyle you want. It is like the Fire Bible.”

Airman Mildollar: Yeah, she’s amazing and I will never not be grateful to her for what she has done for me and so many other people.

Mindy: Yes.

Scott: Love it. Yes, it’s an awesome book and we had Vicki Robin on episode, I’m pulling it up right now, number 98. BiggerPockets Money or biggerpockets.com/moneyshow98 if you want to listen to that one. It was a great episode and we had a great chance to talk about her journey with money and discuss the book as well. All right. What was your biggest money mistake?

Airman Mildollar: I would say probably not maxing out my retirement accounts earlier and focusing early on on taxable accounts. I like so many others in the Fire Community didn’t understand both the benefits of the tax advantages of retirement accounts and also all the ways to take money out from those accounts early if you want to. If I could do it over again, I would’ve definitely maxed out TSP many, many years before I ever ended up doing so.

Scott: One of the things I think is great about your story is you just were very efficient about moving towards financial independence and so your biggest mistake here is a relatively minor inefficiency in the scope of most people’s financial journeys that we’ve heard on the show. There was no crushing debt load or major loss or whatever. It was just, “Hey, I could have been more thoughtful about this earlier.” And I think it’s a good lesson.

Airman Mildollar: I attribute that to finding the community online so early and being able to learn from other people’s mistakes and not struggling through it on my own like so many people have to do because I did not grow up in a family that talked about money. Lots of people don’t ever know this stuff and they’re not exposed to it. So that’s why I’m here and that’s why I write the blog specifically so that I can help other people learn about this sooner.

Scott: Yeah, I feel the same way in my journey.

Mindy: Yes, and same, and I am going to go back and just reiterate what was your biggest money mistake? Not maxing out my retirement accounts early. I would like to point out to everybody listening and to Scott that maxing out or contributing to your 401(k) or TSP … Does the TSP have any sort of match?

Airman Mildollar: It does now. So I don’t have a match, but we went into a new retirement system in 2018 that if you were in the military for less than 12 years, at that point, you could enroll in the new blended retirement system. So I was already past 12 years so I could not enroll, but the blended retirement system does offer a match up to 5%.

Mindy: Okay, so that match is what we in this business call free money? Meaning, you put your money in and then your employer puts 5% in or up to 5%. That is a 100% return on your investment and somebody pointed out, “Well, maybe there’s a vesting period. Yeah, maybe there’s a vesting period, but it’s still a 100% return.” Scott, what are you getting 100% returns on?

Scott: My match.

Mindy: Anything else?

Scott: That’s about it. Maybe a great house hack, maybe.

Mindy: And that takes more work than just putting money into account and setting it and letting it go forever. So, I don’t want to harp on this, but I absolutely want to harp on this. If you have a 401(k) as an option, you should be doing everything you can to at least contribute to the match if your company has match and not everybody does, but you should know about your company’s options, you should be contributing if there’s a match and you should be trying to max it out as frequently as possible.

Scott: Well, here’s a good way to not get the match is you go into service, you buy a $35,000 jacked up F-350 pickup truck, and then you buy an apartment in this wonky part of town and, fill it up with big screen TVs and now you can’t afford to put a little bit of my money and take the match, right?

Mindy: Well, don’t do that Scott.

Airman Mildollar: But we welcome you to join the military anytime.

Mindy: Yes, yes, not the joint military part. Don’t do all that other stuff, but yes, you should join the military. I mean, the military is a really valid option for, I mean, there’s a lot of opportunities in the military that I think people don’t really understand.

Airman Mildollar: Yes, I think everybody thinks about like Marines going in guns a blazing and there’s a lot more to the military than just that. In my job, I have occasionally carried weapon, but I have never fired a weapon in my job. I know I said earlier, I’m not a computer geek, but I do work on a computer all day.

Airman Mildollar: I’ve had jobs where I spent the majority of my time writing speeches and I have had jobs where I’m reviewing documents and I have had teaching jobs and I’ve had a variety of different things that I have done.

Mindy: Okay, but you’re still getting all of the benefits.

Airman Mildollar: All the same benefits.

Mindy: All the same. I mean, there’s no hazard pay and all that for people who are doing hazardous things. I would personally rather not be eligible for hazard pay stuff, but …

Airman Mildollar: Yeah. I just really encourage, I mean, the military desperately needs people right now with cyber skills, so I’m not a techie person, but we need techie people in the military, so if you are a nerd, you might want to consider it. We’ll occasionally have to do a pushup. I’m sorry.

Mindy: Okay. So if somebody is listening, there’s a lot of talk now that, “Oh, college isn’t for everybody and there’s so much college debt and yada, yada, yada.” Where does somebody go to get information about being in the military?

Airman Mildollar: The answer I should tell you is go talk to a recruiter. I would say before you ever go talk to a recruiter, definitely look online or people can obviously reach out to me and the reason I say that is the job of a recruiter is to get you into the military and they are going to tell you the good things. If you go online, you can maybe learn a little bit more about both the good and the bad.

Mindy: Okay. I’ll get some links from you and put them into the show notes which can be found at biggerpockets.com/moneyshow109, but we have taken a huge detour out of the famous four. We’ve only done the famous two so far. So back to this, what is your best piece of advice for people who are just starting out?

Airman Mildollar: I have noticed a lot of people lately in the Fire Community who are joining the Fire Community and going whole hog and burning themselves out after only a couple of months. So right now, anybody who’s looking at financial independence, please take a breath, do one thing a month, one thing a week.

Airman Mildollar: You don’t have to go from spending a thousand dollars a month on food to spending $60 a month on food. If you go from a thousand dollars a month on food to $800 a month on food, that’s huge and you need to recognize how well you are doing.

Airman Mildollar: So just take it a little bit easier. You don’t have to implement all of the hacks at once. It took me 15 years to get to this point. I don’t know how long it took you guys to get to where you are now, but you do not go overnight from knowing nothing about financial independence to doing everything, so relax.

Scott: I love that advice. That’s wonderful.

Airman Mildollar: Thank you.

Scott: All right, what is your favorite joke to tell at parties?

Airman Mildollar: My favorite joke to tell at parties right now, I actually already sent in to you guys and you used it. I had to find a new one. So I found the money one. It’s did you hear about the guy who invented lifesavers? They say he made a mint.

Scott: Oh, that’s so refreshing. I love that joke. All right, where can people find out more about you?

Airman Mildollar: I blog militarydollar.com. I talk about both military money stuff and just general money stuff there. You can also find me on Twitter at military_dollar or on Facebook, I am Airman Mildollar.

Scott: All right. Well, Airman Mildollar, this has been an amazing story. We really enjoyed it. Learned a lot. I love how repeatable much of your journey really is. Basically any service member to kind of repeat a similar journey here and I think your advice is outstanding. So thank you very much for coming on the show today.

Airman Mildollar: Thank you guys so much for having me.

Mindy: Yes, this was awesome and Scott, I’m going to correct you and say not just any service member, any woman, any man, anyone who is listening can do this because it is so repeatable. Don’t spend every dime you have to impress people you don’t even care about.

Mindy: Don’t buy things that you don’t want … Don’t see that movie. I mean, movies are $10 a pop now. If you don’t want to see it, don’t see it. Put that $10 in your piggy bank. There’s a lot of things that you can do that you have shared today and that was great. I really appreciate your time.

Airman Mildollar: Thanks and I [crosstalk 00:57:45]

Mindy: And your service.

Airman Mildollar: Oh, well, thank you so much and I appreciate everything you guys are doing. I do, Mindy, I don’t know if you remember us talking about this, but I did want to end with something that you reminded me of at FinCon. So in honor of all the military members who reached out to you and complained, over and out.