What’s going on Ambitious Vet,
We just recently dove into the trenches with yet another industry leader spotlight, this time in the financial world. We had the pleasure of hosting both Lawrence Lagud and Jason Surya, of First Command Financial Services based in San Diego, CA.
The intention of the interview was to empower you Ambitious VET with the tools to plan out your next steps financially during the disruptive times we find ourselves in currently.
First Question:
Q: What inspired you to go from SSgt from the Marine Corps after 13 years to the financial world?
Lawrence’s Answer:
I started a long time ago as a young Corporal in Okinawa. My MSgt told me he was going to go over my finances. It wasn’t a question. He’s a great leader for having “interrupted my life” in this way.
Back in the beginning, I joined the Marine Corps with $20 which was my High School graduation gift. I don’t come from money. I grew up in the dirt of Missouri, 45 minutes east of Kansas City, and there were times where my parents had to play “bill roulette” – deciding which bill could stand not to be paid that month so we could eat. There was a time when I was young that we were living in the living room of a family friend because circumstances put us briefly without a home. So anyway, I spent seven of those 20 bucks at the airport for a sandwich on the way to boot camp. I remember in boot camp on the day we got our personal effects back, one of my drill instructors looked in the box of my personal effects. A stained white t-shirt, a pair of jeans with holes in them, and shoes that were about 50% duct tape by weight. “You joined for the money, didn’t you?” he asked. And it was true. I had more money coming out of boot camp than I had ever seen in one place. How sad is that? Private pay!
So my first duty station was in Okinawa, and as part of the newcomer brief, a finance guy told us, “you get all this COLA that you don’t get anywhere else. You don’t need it, you won’t always have it, so don’t get used to it. Save it for later. And so I did. It was just a couple hundred bucks. I was only doing the 1% TSP to start but later I increased it to max out at like $14k or 15k/yr back then. I just lived on less money than I needed. I drank a lot of my money once I was old enough, and I ate a lot of food out in town, but I didn’t spend money on much else.
So around the time this MSgt looked at my finances, he saw that I had around $20k just sitting in my savings account. I had been just saving like a third of my income, investing a third in TSP, the government was taking like 15% and I was just living on 15% or so. It also helped that I had ComRats and COLA. Part of how I did this, I limited my hobbies to $200 a month. I cooked ramen noodles in the barracks a lot even though I wasn’t supposed to. I did slip for a time and had a bit of a Popeye’s addiction which resurfaces every now and again, even today. It happens to the best of us, you just have to recognize that you have slipped, which is part of what I do for people when I look at their statements.
So the MSgt didn’t know a lot about investing, but he knew who did. He scheduled time for me to sit with the Major who gave me a very barney style talk about priorities in investment. Of course TSP is a given, but he told me about Roth IRAs and Mutual Funds. Another big piece of good advice he gave me was to not take my money out when the market was down, think of the long game: Retirement. And so it was then that I started investing. Then the market crash of 08 happened. I lost about 30% of my investments in a day. If a month of Private pay looked like a lot to me, you can imagine how GUTTED I felt. I freaked out, alone in my room looking at this negative number. But after a long period of thought, I stayed the course. I didn’t take my money out, because that would have guaranteed me a loss. And the strategy worked. A couple of years later I had made that money back and more, and I had continued to put money in monthly. It took discipline, it took an internal freakout, fear, it was wild, man. Same thing again. People wonder why the COVID market dip didn’t bother me. They said, “oh, you must not be getting any clients, huh?” but the fact of the matter is, I teach my folks the same things I have learned. Don’t act on your fears. Mull them over, pick them apart, consult a professional. Really think ABOUT what you think, why you think it. You may have to adjust expectations, which is really hard for people, myself included.
People often comment on things they don’t know. I was chatting with a friend of mine who is in real estate and I said, “dang, I bet clients are scarce for you now, huh?” and I was wrong. Same thing someone said to me, and I was guilty of it now, too. So I stay in my lane now. So before I had thrown my money in the market, I did a ton of research on various funds and stuff, and people started asking me about it since they would see it up on my screen. I got to talking to people, fellow Marines at the time, and it kinda spread that I was “the money guy”. I was just, to me, regurgitating simple stuff. Budgeting mostly, but would get into the basics of investing. I kept reading over the years and always talking to junior Marines. My Marines, other people’s Marines, whoever would listen. When you’re a Sergeant and you start talking to young PFCs and LCpls, they can’t just leave. They have to stand there and listen unless someone higher ranking comes by. I used that to my advantage. Hip pocket classes all the time. I did what my MSgt did to me. “Lemme see your finances. What are you doing with TSP? Do you know how to read an LES?” Then when I was a Sergeant for a long time, I started teaching Corporals. And as a SSgt I was teaching all Sergeants and below. There’s a reason that there’s that stereotype of the Marine with the Mustang and 29% APR. Officers are not immune either, there’s a reason there’s a Jag dealership right out the north gate of Miramar.
So back to your original question, it happened because of my MSgt’s “intrusive leadership”. It got me started on the path and I ran with it. I would still be in the Marine Corps if I hadn’t been medically retired, but I am not serving in another way now. And it’s great, because now I can have a beard and go a month between haircuts if I want. I put my hands in my pocket all the time. It’s great. It was a very natural transition for me, but now I have all these financial licenses to back me up, too. Those tests are grueling. I’m out here working longer hours than I did for most of my time in the Marine Corps and I love what I do and I have an awesome team of folks who inspire and challenge each other.
Second Question:
Q: How do you define personal finance? Why is it important?
Lawrence’s Answer:
1. Budget: Really look at the lifestyle you lead. Once a quarter, look into your statements and add up the dollars. Some banks or credit cards will kinda classify things, like this is a bill, this is dining, etc. They don’t always get it right but it’s something to look at. It can be better if you go and change the classifications of things to be correct. But yeah really add up every dollar. You’d be surprised. I take people’s incomes and subtract all their bills as well as their estimates of what they spend, and it’ll tell me they have, say like $1k left every month. I ask em “Does that seem right to you?” and often it doesn’t. So I dig into those statements and do the math. Society nickel and dimes us, man. 13 a month for a Netflix subscription, 119 a year for Amazon Prime subscription. $5 a day for coffee for some people, around $10 a day for lunch if you go cheap. $30 on a doordash order. God help you if you smoke or dip. Simple changes can save you a ton. Sure, making your dinner sucks. Meal prep is fine and dandy until you eat chicken and rice seven days in a row. I’m not saying sap the joy out of life, but a decent coffee shouldn’t cost you more than a dollar. K-Cups man. Costco is great for non-perishables. Just the savings from all the Monster I drink more than pays for my membership. You can get a big box of K-cups at Costco and it works out to like 27 cents per coffee. Round that up to a dollar, the other 73 cents per cup going towards the cost of the Keurig that you bought. You’re saving $4 per coffee still, and the machine is paid for by your 137th coffee and that $4 per coffee of savings has added up to $548. If you add that $4 to your math instead of counting it as a savings, you pay the machine off after 22 cups of coffee. People don’t think like this, but math is always on my mind. When I started to brew beer, I kept a spreadsheet of all my costs and broke it down to the 12oz bottle until I was confident my running average was around $2 for a beer. Do this for your finances once a quarter. It’ll take you like two hours, tops. You can see where all that money is going, it’s like a hole in your boat. You gotta plug it.If I offered to pay you $250 an hour to do a job that takes two hours, would you do it? Almost certainly.
If you think about it, you do two hours of work and you found a hole in your financial boat where you leaked $500. If you patch that leak in your spending for the next quarter, you basically paid yourself $250 an hour. I’d love to make $250 an hour.
2.Savings: Savings is usually the only thing people know. The stock market seems like magic to most people. That’s what it looked like to me before I started investing. But people can save money if they try, and they know how it works. The big problem for people with their savings is that when they get on the website or open their app, that amount is shown right under the checking. It’s too visible. It’s a pile of money and they start mentally considering that part of their spending money. Hey I can afford a down payment on that Mustang if I just pull out of savings… I’ll just put some more money into it later… People think this with the best of intentions but don’t do it. I usually recommend a savings account to be in a separate bank that you don’t look at until something bad happens. Out of sight, out of mind, a few years down the line you have some money tucked away to help when the car engine is toast or the dog needs surgery. Within the Ambitious Vet sphere, lots of vets want to get into a corporate job, or a government job, or start a business. None of these are fast processes. If it was a fast process, it wouldn’t feel as good when you get that job or start that business. My point is, you need a transition fund. Money tucked away in savings so you can live for as many months as it might take to reach that goal so you don’t have to take the first job you get offered and get trapped in the rat race. Or for you REALLY Ambitious Vets out there, so you only have to work ONE full time job while working on your dream instead of two full time jobs. So savings is a very important part of your overall financial plan. When bad stuff happens, that is like your first parachute. You rip the cord and when you get to the ground you have to re-pack that chute. Savings can’t be your only plan though. Think about it. If you are a young guy fresh off of one enlistment that puts you at around 22 years old. You’ve got at least like 40 years until retirement. So look at inflation, 40 years ago like 32 cents would buy you what it takes a dollar to buy today. You can’t beat inflation by saving, if you only save you lose two to three percent a year.
3.Investing: This is the sexy thing that people think of when they think of financial advisors. This is for your long term goals. We have a lot of strategies both in how you might invest and how to manage your behavior with regard to investing. We encourage people to make it like a habit, just like saving. You get a dollar, you save a nickel and invest a dime. Just like all the little nickels and dimes that companies get out of us, the nickels and dimes we put into our future can really add up.
4. Insurance: I talked about savings being like your main parachute, well investment is like the reserve parachute. It’s there in the background to protect your, your assets, your loved ones, depending on how you set it up. Investing in the market always carries risk, but I heard a saying I like that was, “Life insurance is the price of admission to the market.” You want to make sure that if you die, you aren’t leaving behind debts for your loved ones. Or if something happens and you become disabled or get some crazy illness. If you bought a house you want to make sure you are not leaving your spouse behind, grieving, and trying to figure out how to pay the mortgage without you earning income anymore, or having to pay for the car. There are so many kinds of life insurance, it’d take me hours to go over it. I can’t recommend one to everyone out there in podcast land because everyone has different needs and my recommendations must always be specifically suited to each person’s situation.
Money Mindset #Golden Grenade: “Murphy’s Law. People say plan for the worst and hope for the best. That is true with money. Plan for the worst with insurance and hope for the best with investments. Savings is on both sides of the equation since it is for emergency needs (the worst) or short term goals (the best).” -Lawrence Lagud
Third Question:
Q: What sets you apart from the rest of cookie cutter approaches that you will find in the financial advisor, planning, and consulting world?
Lawrence’s Answer:
- Fiduciary- This is key. I have a fiduciary duty clients, as do all of my colleagues at First Command. This means we have a legal and ethical duty to do what is best for the client above what is best for us.
- Education- This is another huge piece. As you have probably surmised, I will talk forever. I educate clients on everything that I can, and make sure that they understand what they are doing. I have at least two meetings before anyone invests a dime. I would rather clients know what is going on with their money and be confident it is the right thing for them, than for them to have some doubt that they don’t express or question that they don’t get an answer to.
- Top five military friendly brands for 2020- It’s ridiculous. In every category they measure, we exceed the standard by a long shot. For culture and commitment we exceeded their standard by over 70%, and for recruiting and sourcing over 90%. We are a very military-friendly company.
Here is how to catch the full action of the show by either video or audio.. choose your poison!
Watch the full video interview here:
Listen to the full recorded podcast episode here: 106: Industry Leader Spotlight – Creating Your Bullet Proof Financial Plan to Achieving Your Life Ambitions with Marine Corps Veteran Lawrence Lagud
If you are ready to get squared away in your finances for future plans or inquire about your next impactful career opportunity. Connect with Lawrence Lagud here:
Email: LELagud@firstcommand.com
Mobile Phone: 619.330.0416
Looking to be our next veteran or milspouse industry/business spotlight? Email all inquiries here: choffmann@vettrainingcoaching.com
By: Chris Hoffmann, Founder of the Ambitious VET Network