5 Worst Financial Mistakes to Avoid for Military Members

Maybe you’ve made some of these mistakes military members make.

I made a few of these mistakes myself, but I’m still here today doing relatively well.

Let’s see how you measure up.


I want to use a few other phrases to signify what kind of mistakes get military members or families in trouble.

It’s living large when you haven’t made that money yet.

Spending money you haven’t earned.  Otherwise known as… Keeping up with the Jones’s

The funny thing is, the Jones’s are going into debt to keep up with you too!

Here are some things that will really put you into debt:

Buying or renting much more house than you need

I see it time and time again in the military.  A married couple with one newborn buying a 4000 sq ft property.  Not sure what they will do with 6 bedrooms and 4 baths!

You want to be well off? Get the smallest property that will fit your needs. (Awww, that’s no fun!)

Having a new house custom built…

But it’s so nice to have a big house built to your specifications.  You deserve it!

Big houses need lots of things to fill them up.  They just don’t look right without expensive furniture and nice cars.  They are also expensive to heat and cool.  Good luck!

New or expensive cars…

Whatever you do, don’t buy a new car.  On top of that, don’t ever fall for that crap where you think you are getting some special benefit through military car sales.  You are still overpaying and getting KILLED on depreciation the day you put the first mile on it.

I like buying used cars with one previous owner and low mileage. Ideally, you pay cash for it.

Vacationing while overseas…

You are stationed in Germany, and there are LOTS of 4 days weekends, so you are hitting a different country on each one.  You are in Japan, and it’s the perfect gateway to Southeast Asia.  Everybody will be filling their Facebook and Instagram feeds with travel while stationed overseas. 

Don’t overdo it.  Take advantage of existing geography and vacation in areas around you that you.  Try to drive there instead of flying, and try to Airbnb instead of hotels.

The cardinal sins of debt…

Read more5 Worst Financial Mistakes to Avoid for Military Members

How to Get a VA Loan

What Exactly is the VA Loan?

The VA Loan is a mortgage that helps veterans finance the purchase of homes with good loan terms and interest rates that are typically better than what you would see on other types of mortgages.

VA home loans aren’t made by the VA itself, but by private lenders such as banks, savings and loans associations, and mortgage companies.  VA guarantees the loan if and when the applicant is approved. 

People often say the VA guarantees loans, but that’s not accurate.   Actually, the VA typically guarantees 25% of the loan. This still gives lenders a lot more comfort in lending, because if you stop paying, there is a higher chance they won’t lose any money on the deal.

What’s the Most I Can Borrow?

The way VA loan entitlement amounts are tracked is strange to say the least.

I think government entities love doing things in a way that’s not straight-forward. I’ll explain.

Everybody who qualifies for a VA loan starts off with a full entitlement.

You can be sure you have a full entitlement by viewing your certificate of eligibility, or COE.  It’s a document you get from the VA.

How to get your Certificate of Eligibility (COE) 

If your COE say that your entitlement is $36,000, then you have a full entitlement.

This number is $36k because the VA previously used $144,000 as a baseline for tracking entitlements.  25% of $144,000 is $36,000, which is a full entitlement.

This means the VA will guarantee 25% of a $144,000 loan.  This allows VA loan lenders to offer you no money down.  

Under new rules which went into effect January 1 of 2020, borrowers with a full entitlement (which is $36,000) don’t have a limit on how much they can borrow with no down payment. 

The previous limit of $144,000 doesn’t mean anything now. It’s a leftover number from old rules.

So no limit on the loan amount, but you have to qualify for the loan under your lenders credit and income rules

The VA does not limit the loan amount that can be guaranteed, but your lender will still want you to prove you make enough for this additional loan.

There are two ways to have a full entitlement. 


  • Haven’t used your VA loan entitlement yet – or –
  • You used it, repaid it, and now have the original VA loan entitlement amount reinstated.

Getting Additional VA Loans

You may be able to get additional VA loans, even if you still have VA loans that you owe money on.

You just need a valid reason to move.  It can be PCS for your job, retirement, upsizing, or downsizing.  Talk to a VA lender to confirm your reason is ok.  The property that you move out of can become a rental property.

Your new VA loan will be guaranteed up to the conforming loan limit in the location you want to buy minus the loan amount you’ve already got.

Check your county loan limit

The standard 2022 VA Loan limit for a single family property is $647,200.  It’s higher in expensive cities, and even higher if you buy a multi-family property.

This limit means if you default on your loan, the VA will pay your lender up to 25% of the county loan limit minus the loan amount you have already used.

This means it is possible that you could have no money down, but if you don’t have enough entitlement remaining, you may be required to contribute a certain amount towards the downpayment.

Calculate Remaining VA Loan Entitlement

Let’s use my situation to calculate how much more money I can borrow no money down from the VA.  I’m going to adjust my numbers a little to make the math easier to follow.

I own one property with a VA loan.  It is my current primary residence.  The loan amount is seen on my certificate of eligibility (COE) and is $400,000. 

I want to buy another property in Montgomery, Alabama.  The loan limit in this city in 2022 is $650,000.  

Lets subtract:

$650,000New loan limit minus $400,000Prior loan amount

equals $250,000 remaining borrowing power.

This is the amount I can borrow without needing a downpayment.

What if I wanted to buy a house that cost more than that?

For VA loans, the lender wants a 25% downpayment for the amount of the loan exceeding the loan limit.


We’ve determined that I have $250,000 remaining in borrowing power by subtracting my prior loan amount from the loan limit.

$650,000 – $400,000 = $250,000

For every dollar over $250,000, I need to contribute 25 cents (25%) as a downpayment.

If I want a loan for $350,000, but I only have $250,000 left in no-money-down borrowing power, then I’m $100,000 over the loan limit.

I don’t need to come up with the entire $100k.  I need to come up with 25% of that.

$100,000 X .25 = $25,000

So on a $350,000 loan, my downpayment is only $25,000, because the VA is still guaranteeing $250k (my remaining entitlement), and I’m only making a downpayment on the remaining $100k.

I have no idea if I did a good job explaining that.

Call your lender with you certificate of eligibility in hand, and they can walk you through the calculation.

Read moreHow to Get a VA Loan

How to Invest in the TSP 2022 – 9 Strategies


Do you know how to invest in the TSP in 2022?

You want to invest in your TSP, but you’re worried about inflation, COVID and the markets crashing.

I’ll show you exactly how to invest in the TSP in 2022 including:

  • What changes to make to your portfolio in 2022
  • Fatal TSP Mistakes to Avoid
  • Nine TSP allocation strategies for 2022
  • How to Protect your TSP balance with bonds

This shows how to invest your TSP in a way that will lead to financial independence at or before retirement.

Through using these types of investment strategies (I’ll tell you exactly which one I used), I became a military millionaire well before retirement.

Anyone can duplicate this.

The allocation strategies I talk about in this article are:

  • S&P 500 Index Allocation
  • Total Stock Market Index Allocation
  • Warren Buffett TSP Allocation
  • Dave Ramsey TSP Allocation
  • Paul Merriman TSP Allocation
  • Total World Stock Market TSP Allocation
  • Balanced Index Fund Allocation
  • Three-fund Allocation
  • My Rich on Money Personal Portfolio Allocation

Changes for 2022

My investment recommendations did not change in 2022.


The biggest mistake people make with retirement investing is tailoring their strategy year-to-year depending on what’s going on in the world.

This causes you to make far less money than you would if you stuck with the same strategy through thick and thin.

Global Pandemic? Inflation? Overheated stock and real estate market?

So what.

This tried and true method of how to invest in the TSP will make you rich in retirement if you stay the course.

Don’t bounce around with useless TSP investment strategies like timing the market, playing with TSP charts, selling before or after elections, buying on dips, selling on bad news, etc.

Instead, use these tools to make an informed decision about the best long-term TSP strategy for you.

Several of these TSP investment strategies are recommended by well-known money gurus such as Warren Buffett and Dave Ramsey

I’ve also added every TSP investment option I could find that will work with the available funds.

Click on title to go to Youtube


Below is a list of different potential TSP allocation strategies to show you how to invest in the TSP in 2022.

  I’ve pulled these from various sources and as I discover new ones, I will update this.  Please send me your recommendations with supported documentation.

The S&P 500 Index

This is the asset allocation I used most of my working life.

When I opened a Roth IRA in 1999, I called my bank and asked to put it in the S&P 500.  At the urging of an investment advisor (I’m not a fan of most), I put it in an aggressive growth fund instead.  In 2000, it lost half its value.

From that day forward, I decided S&P 500 would be the way I invest.  I had read before that Warren Buffett said something to the effect of, if you don’t have time to look at stock charts and read finance news all day long, you are better off investing in the S&P 500 index and never touching it.

Actually, here’s exactly what he said in 2013 in his letter to shareholders:

“In the 20th Century, the Dow Jones Industrials index advanced from 66 to 11,497, paying a rising stream of dividends to boot. The 21st Century will witness further gains, almost certain to be substantial. The goal of the non-professional should not be to pick winners…but should rather be to own a cross-section of businesses that in aggregate are bound to do well. A low-cost S&P 500 index fund will achieve this goal.”

Additionally, instead of investing his wife’s inheritance in Berkshire Hathaway stock, he plans to invest it in the S&P 500 index.

That should tell you something.

If it’s good enough for Warren, it’s good enough for me.

To mimic a full investment in the S&P 500 index, just invest 100% in the C fund.

The Total Stock Market Index

This investment choice is a popular one and is the main recommendation of JL Collins on his blog www.jlcollinsnh.com and in his book The Simple Path to Wealth.

Instead of just investing in the largest companies that make up the S&P 500, you invest in those plus mid and small cap companies as well.  This index encompasses the entire U.S. stock market (as the name suggests!)

Financial Independence Retire Early (FIRE) enthusiasts will swear to the superiority of this index to the S&P 500, and to suggest considering anything else is heresy!

It’s clearly more diversified than the S&P 500, and small caps have been known to outperform large caps over the long term, albeit with potentially a little more volatility.

Over long periods of time, the total stock market index fund and S&P 500 had similar performance, and it would be hard to say for sure which will outperform in the future.

In my opinion, you are doing great with either one.

80% C and 20% S will closely mimic this popular index.

The Warren Buffett TSP Allocation

Image from moneycrashers.com

While I mentioned earlier I got my idea for an all S&P 500 index allocation from something Warren Buffett said in a newsletter, he actually has more specific instructions I want to address here.

I talked earlier about how he had a plan for how the money left for his wife would be invested.  I said he would invest in S&P 500 index instead of Berkshire Hathaway, but that’s only part of the story.

He also has a plan to throw bonds into the mix to smooth out the ride a little bit, which is a common investment strategy.  The amount of bonds you throw into the mix will dampen the volatility, but will also limit your upside potential during booms as well.

In the same newsletter in 2013, he talked about his specific advice to his trustee on how to invest the remaining money that will be left to his family:

“My advice to the trustee could not be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund…I believe the trust’s long-term results from this policy will be superior to those attained by most investors – whether pension funds, institutions or individuals – who employ high-fee managers.”

As luck would have it, this is easy to mimic with the funds offered in the thrift savings plan.  90% C fund and 10% F fund.

Thanks Warren!

Next is Dave Ramsey’s strategy.

Dave Ramsey TSP Investment Advice

dave ramsey tsp allocation

I’m a huge fan of Dave’s book Total Money Makeover.  His baby steps for getting out of debt are legendary!

He also has TSP investment recommendations on how to invest in the thrift savings plan.  His caveats are typical of Dave’s approach to money.

In typical Dave fashion, he suggests that you first pay off all your debt besides your primary residence before you begin long term investing and have an emergency fund of three to six months of expenses as well.

He has two sets of recommendations.  One slightly more aggressive than the other.

More conservative:  80% in C, 10% in S, 10% in I.

Less conservative:  60% in C, 20% in S, 20% in I.

Here is the link to his recommendation.

Next: Money Guru Paul Merriman’s TSP Allocation Reccomendation:

Paul Merriman TSP Allocation Recommendations

Paul Merriman is a successful advisor on mutual fund and index fund investing.  He’s an accomplished author, speaker, and is well known for the ultimate buy-and-hold portfolio.

This portfolio is comprised of index funds and has an amazing track record.  Unfortunately, due to the various types of funds held in this portfolio, it is impossible to mimic with the TSP funds available.

If you are curious, I wrote an article about this how to invest in this portfolio:

9 Proven Ways to Boost Your Index Fund Returns

He explains that most notably what is missing from the TSP funds is value funds, which is a key component of his strategy to boost typical index fund returns.

He does make specific recommendations for TSP owners using what is available to us.

He has 3 separate TSP allocation recommendations based on your risk tolerance: conservative, moderate or aggressive.

With all three of these portfolios, the equity part of the portfolio is split the same way:

50% in S, 25% in C, 25% in I.

With the aggressive portfolio, the entire amount is invested this way.  The conservative and moderate portfolios have a portion of the total invested in the F and G funds.  This portion is not exposed to the risk of the stock market, as the C, S and I funds are.

His advice is that, generally, younger investors can afford to be more aggressive, and as you get older, you become more conservative, but this is a generalization and everybody’s situation may differ.

The conservative portfolio: 18% G and 42% F, and the rest in S, C and I at 50/25/25.

The moderate portfolio: 12% G and  28% F, and the rest in S, C and I at 50/25/25.

The aggressive portfolio: 50% S, 25% C, 25% I

Here is the link to his article on TSP recommendations:

How to pick smarter investments in your U.S. Thrift Savings Plans

Attached is a graphic from his website outlining exactly how to do this strategy.

TSP investment strategies
From www.paulmerriman.com/tsp/

Maybe you know how you want to invest your TSP, but you are concerned about huge drops in the market?

Protect your TSP from large market drops.

Total World Stock Market Portfolio

This portfolio mix is a TSP investment strategy modeled loosely after the Vanguard Total World Stock Index Fund (VTWSX).

It will allow you to have exposure to stock markets around the globe, including the United States and developed foreign markets.

The weakness of this portfolio compared to the Vanguard one is exposure to emerging markets. 

The I fund currently only has developed economies, and not emerging markets.  There supposedly is a plan in place to change the I fund in the future to include emerging markets, but it hasn’t happened yet.

This matters, because the I fund isn’t as diverse as it could be, and that could affect returns.

The Vanguard fund I am modeling after has roughly 60% of the portfolio in U.S. stocks, and the rest are international.  To model this portfolio:

Use 48% C and 12% S to make up the U.S. stock market, then use 40% I for the rest.

The 48/12 mix comes from splitting 60% into an 80/20 mix to achieve the Total Stock Market Index.

Balanced Index Fund Portfolio

This portfolio is meant to mimic the Vanguard Balanced Index Fund Admiral Shares (VBIAX).

It is a way to have access to the entire U.S. stock and bond market.  It has far less volatility than the Total Stock Market Index by using bonds to smooth out the ride.  The balance of this portfolio is 60% stocks, and 40% bonds.

This can be accomplished through 48% C, 12% S, and 40% F.

Obviously, you could adjust the stock/bond ratio to meet any level of risk that you would like.

Three Fund Portfolio

This is a favorite among Bogleheads (Those who love Vanguard and its founder Jack Bogle).

This fund is comprised of 1/3 each of the following:

  • Vanguard Total Stock Market Fund
  • Vanguard Total International Stock Market Fund
  • Vanguard Total Bond Market Fund

This fund is broadly diversified, but heavily weighted in large cap stocks.  Remember, the I fund lacks the exposure to emerging markets that the Total International Stock Market Fund has, so the thrift savings plan version won’t be identical until the I includes more countries and emerging markets.

To mimic the Total Stock Market fund, I split the 33% in an 80/20 C/S split.  This is where I get my weird percentages from.

A way to closely mimic this portfolio is: 27% C, 7% S, 33% I, 33% F.

Make sure you use these recommended allocations correctly!

Most people screw this up.

Here’s how…

My Current TSP Allocation for 2022

There are literally thousands of people who google “Rich on Money TSP Allocation” every millennium. They want to learn from a true master how to invest in the TSP in 2022.

Thank you!

Until now, nobody has ever known how the brilliant mind of a master invests.

I like the idea of being a little heavier weighted on the mid-cap stocks as opposed to being just all S&P 500 index fund.  Of course, I’m going against Warren Buffett’s philosophy.

Not sure how wise that is!

I used to have international sprinkled in there at 10%, but I gave up on it.  There is enough international exposure between C and S IMHO.

Here it comes…

The Rich on Money world-wide dominance TSP portfolio:

50% S / 50% C

I know, I know. I should be charging for revealing my personal portfolio. I just have too much love and altruism in my heart (and no one reads this blog).

Best TSP Strategy for 2022

Now this is the important part. I reveal secrets here that nobody else knows…

How should you make changes to your portfolio based on current inflation, overheated economic markets and with the uncertainty of the pandemic?

The question of what is the best TSP strategy for 2022 gets asked all the time.

It’s a fundamentally flawed question.

If you are asking which TSP fund is best in 2022, you may think that jumping between funds at the right times depending on cycles, economic data, politics, etc. will yield you superior returns.

You may also believe that experts scouring the market for data and gifted chart readers have some way of knowing which funds will outperform in the near future.

I’m here to tell you, people with those abilities do not exist.

That’s what I gave you in this article. Options for great TSP allocation strategies that will work better than any other strategy.

Using any one of these recommendations over the long term is essentially how to invest in the TSP for 2022 or any other future year if you:

  • regularly contribute to your Thrift Savings Plan
  • ensure you are getting matching if it’s offered
  • stick with the same TSP investing strategy over the long term

Changing strategies or funds often is a recipe for low returns.

Want to know what to do with your IRA and real estate too?

3 Secrets to get Rich in the Military

One Change to Make in 2022

Now for the changes you should make to your portfolio in 2022.

What you can change in your TSP portfolio year to year is your exposure to risk.

I made a separate video about this which is deep in the weeds, but I will explain it quickly right now.

Many people invest in 100% stocks. When I say stocks, that includes mutual funds and index funds.

We often don’t have any fixed income (bonds and treasury bills) in our portfolio as a hedge against market risk.  Bonds and treasury bills are safe.  They don’t go up and down with the stock market.

It is wise to put a specific percentage of fixed income, which is bonds or treasurie bills into your portfolio of stocks to lower market risk as you near retirement.

For the thrift savings plan (TSP), stocks are the C, S, and I funds and fixed income are G fund treasuries and or F fund bond

Here’s a quick example of how to use bonds to protect your TSP.

If you have 50% or half of your portfolio in stocks and the other half in bonds, (f fund in this case), when the markets suddenly drops 30% in one day, you’ll only drop about half that, 15%, because your only half invested in stocks.

The bonds you have won’t lose value.  This limits your downside. 

Here’s the problem.  If the market shoots up 30% in one day, you only go up half of that or 15%, because you are half invested in stocks.  It’s a double edged sword, but smart to do this as you get older and have a growing need to preserve your portfolio.

Here is some simple guidance for achieving the right balance of stocks to bonds for your age and risk tolerance.

I use the law of 120.  

When it comes to the percentage of your portfolio that should be in stocks, you subtract your age from 120.

A 30 year old will be 120 minus 30 equals 90% stocks.  So you need 10% bonds, which means 10% F fund.

A 50 year old would be 120 minus 50, 70% invested in stocks.  30% in bonds. 

Some people use the law of 100 instead of 120.  You can adjust this number based on how risk averse you are.  

Here’s some questions you could ask yourself and decide between 100, more conservative, or 120, less conservative.

Do I have a higher or lower risk tolerance than other investors in my age group?

Is this my only source of income in retirement, or do I have a pension, real estate, a sugar mama, or other income as a supplement?

To understand all this TSP advice, it helps to know the five core funds inside the TSP and what they consist of.  This is important in understanding how they are used in building TSP investing portfolios.


  • The G fund contains short term U.S. Treasury securities with no exposure to the risk of the bond or stock market

  • The F fund is an index of world-wide government, corporate, and mortgage-backed bonds

  • The C fund is equivalent to the S&P 500 index.

  • The S fund is an index of mid and small-cap stocks not included in the S&P 500.

  • The I fund mimics the MSCI EAFE Index of international stocks in 21 developed markets excluding the United States and Canada.

  • The L funds are professionally managed investment funds tailored to a specific time horizon.

from opm.gov

Now we dive into each one a little more in depth before going into our TSP investment strategies:

The G Fund – The Government Security Investment Fund

Pros: No volatility and backed by full faith and credit of the U.S. government

Cons:  Can barely match the inflation rate; rate based on prevailing interest rate, which is currently low

This unique investment is only available for TSP investing.  It’s rate is equal to 10-year treasuries, but their liquidity and protection from interest rate fluctuations is superior to 3-month T-bills.

The interest rate resets monthly and is based on the average of U.S. treasuries with a duration of 4 year or more.

Read moreHow to Invest in the TSP 2022 – 9 Strategies

Military Millionaire – Seven Crucial Steps

military millionaire

It is possible to retire a military millionaire?


I did it well before retirement.

That’s with making plenty of mistakes along the way.

No trust fund, no help, wife didn’t work.

How can the average military member go from being in debt to military millionaire?

We all see websites, books, and courses from people who were deep in debt and somehow quickly made millions.


These gurus get rich off people looking for shortcuts.  Most that try the guru route fail miserably.

It often involves going into lots of debt or paying a lot upfront for a product, course, or coaching.

These products do a good job of making money for who’s selling them.

They do a poor job of making you anything!

military millionaire

It also requires no common sense

Read moreMilitary Millionaire – Seven Crucial Steps