How to turn that military bonus into a nest egg?

February 13, 2020 Posted by : Todd Flores
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As service members, we make huge sacrifices. Every enlistment, re-up, change of station, training cycle, and deployment takes time away from our family and friends. The military recognizes the challenges faced by service members and has recently increased the re-up bonus from 40,000 to 80,000 USD for the most in demand jobs. These sizeable lump sum payments and the of 3-6-12 month periods of deployment, make it an ideal opportunity for service members like yourself to invest your money in financial vehicle while you are serving your country.

These payouts are a part of a selective retention bonus program that is designed to incentivize service members to either maintain their current roles or to reclassify into another occupational specialty based on demand. Individuals reclassifying into new roles will receive payment upon completion of training. Bonus amounts vary depending on soldier’s primary Military Occupational Specialty (MOS), rank, time in service with skills, or reclassification into high-demand roles. Bonuses are categorized into tiers 1-10, with 10 having the largest payouts. Some examples of these top tiers include cyber security, special forces, or intelligence roles. In addition to these roles, there are a variety of cash options for soldier’s re-upping for longer commitment periods.

Let’s say that you are early in your military career and re-enlisted, at a tier 1 and extended your reenlistment for a 1-2-year period. At this tier you could receive 1,000 USD bonus that you could invest in a pre-selected portfolio of aerospace and defense (A&D) stocks that grow during your time in service. With A&D outperforming the S&P 500 over the last several years, you would be able to put this money to work by investing into industries that you know firsthand from your experiences serving in the military.

Perhaps you have been in the military for longer and have accepted and average to high re-enlistment bonus of 20,000 USD and are contributing the minimum level of investment of your military pay (10% or less) over the course of your 3-6-year enlistment period. If you invested half of your bonus into A&D stocks leveraging insights from SCI, you could be looking at potentially sizeable returns. Historically, defense stocks outperform the S&P 500 by more than double during the 6-month period after a crisis event. Given the current geopolitical tensions it seems that conflicts will continue to arise, driving demand for aerospace and defense investments.

No matter whether you are new service member with limited investing experience or a veteran with extensive experience, our investment advisory platform can help take your investment strategy to the next level. Utilize your pay raises and bonuses to optimize your gains.

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About Author

Todd Flores
Todd Flores

Our Founder & US Army Veteran, OIF / OEF

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