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EPISODE 17 - MONEY IN THE MILITARY WITH JANEIL PIERRE

podcasts work benefits Nov 07, 2019

​The military offers a lot of perks, but sometimes those perks can lead to irresponsibility when it comes to money.  Join Tiffany as she speaks with former soldier Janeil Pierre as they unpack what it is like, financially, to be in the military and making smart decisions while enrolled.  Also, they discuss buying cars and their budget killers aka vices.

About our Guest
Janeil Pierre is a financial success coach and owner of The Wealth Factor, a blog dedicated to financial independence.

Like her on Facebook: https://www.facebook.com/thewealthfactor1/

Follow her on Twitter: https://twitter.com/TheWealthFactor

Follow her on Instagram: https://www.instagram.com/thewealthfactor1/

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Transcription:

Welcome to Money Talk with Tiff, a podcast where we discuss everything money – from tips and tricks to current events. Follow me on my journey to become debt-free, and meet other cool people along the way. I’m your host, Tiffany Grant, now let’s talk money.

Tiffany Grant (Host): Hey everyone. Welcome to another episode of the Money Talk With Tiff podcast. Today, I have Janeil Pierre, she is a financial success coach and the owner of the Wealth Factor.

Hey Janelle, how are you?

Janeil Pierre (Guest): Hey Tiffany, I am well, how are you?

Tiffany Grant: I’m doing pretty good. You know I’m struggling a little bit today, but it’s okay.

Janeil Pierre: It’s okay, I think we’re all struggling. I’ve had school this weekend, I was in school on Friday from 12 pm – 9 pm, we had a social after school and I had to be back in school on Saturday morning at 8 am – 2 pm and then I had a peer coaching event after school which took me till 5 pm. So we’re all struggling right now. *laughs*

Tiffany Grant: Oh yes. Definitely. So I want to talk to you today about the Military and Personal Finance because you were in the army for about 8 years. You recently got out but I think we had a little discussion before we hit record and you know, with the military all of your basic necessities are covered.

So, I’ve always wondered what the spending habit of someone in the military is like. Are they stacking all that money? Or is it just getting spent away? Just dive into that a little bit, on that perspective.

Janeil Pierre: Oh my gosh! From my personal experience in the military. As you said, I spent 8 years in the military (September 12th would have been my 8th year, but I got out at the beginning of July, so I’m a tad a bit under 8 years).

From my experience, it all depends on the person. I have seen everything from living from paycheck to paycheck to being responsible to having cars with 24-25% interest rate, to having sneakers that cost $1,000. I’ve seen it all across the military, but I think the overarching impression that I got is that we can be a little bit frivolous with money, because we know that regardless of what, everything is covered. Our needs are covered. We don’t have to worry about medical and dental. We don’t have to worry about anything. If we should get sick or anything like that, we still get paid on the 1st and the 15th of every month.

So with that in mind, there are times we can take what we have for granted, and we’re not encouraged to be more careful with our money. That’s the experience that I’ve had in the military, with some of the people that I’ve been around.

Tiffany Grant: Right. And then Especially because most people get into the military fresh out of high school mate. So it’s like they haven’t had a chance to live life for real.

Janeil Pierre: Yes!

Tiffany Grant: And they haven’t understood money and how to use it, but you were kind of different, right?

Janeil Pierre: Yes. I wasn’t one of those that got into the military at 18, I joined the military at 27. I left for the army literally 4 days after I turned 27, so I had already had a lot of different life experiences.

I was living on my own in New York at that time, and I was struggling. I was working for rent money, at that time, because New York is expensive. So if you have your apartment, that’s $2,000+ a month, and I was barely making that. So I was in a situation where I was subletting from someone else. Thankfully, then, I could have walked to work, so I walked to and fro from work to save $103 (at that time) for a Metro Card, to ride the bus every month. That was a lot of money for me, and I worked to and from work every day so I can save that money to buy something else.

There were times where I had to sleep because guess what? When the rent is paid, I don’t have money for food, so I would go to sleep. You know, ramen noodle was my friend at that point in time too. So I was looking at myself like “there has to be more out of life, I’m almost 30, and I’m living like someone that just got out of high school, and is trying to find their way for the first time,” and that was not good enough for me at that age.

“There is more to life than surviving.”

– Cassandra Clare

I had already been through that in my early 20s, and I was still doing it in my late 20s and that was just not working because the reason I kept doing it for so long is because I didn’t want to get myself into debt. I don’t want to borrow money or live off credit cards. I didn’t want to do anything like that! So I was just living off the cash that I made.

So when I woke up that year, I was like “I’m not doing this for another year” so I started brainstorming. I wanted to go to college, college was a big thing for me. I wanted to be a nurse, but I could never go to school on what I’m making. I applied to college anyway, and I got accepted into 5 different colleges, and that broke my heart. It was happy and sad, I got accepted into 5 different colleges in New York and I couldn’t go to any one of them, because there was no way I could have afforded to, but I was like I’m not doing this another year.

That’s where the whole idea to join the military came from. I also wanted to do it, but I was scared; that became my motivation to push past that fear. I knew in the military I would have job security and I would be able to go to school, and that’s basically all I knew about the military when I signed my contract for the first time. I knew there was going to be job security, I knew there was going to be some level of danger, and I knew that I would be able to afford school.

So I joined the military and I left for basic training – like I said – 4 days after I turned 27. It was just off from there.

Tiffany Grant: I got you. Well, kudos to you first of all!

Janeil Pierre: Thank you.

Tiffany Grant: I always say that I am a big punk, I could never be in the military or police because I’m just too scared, I’m just being serious. *laughs*

Janeil Pierre: It is very scary. It is a very scary thing especially when you know nothing about the lifestyle. Nothing! I didn’t know anyone in the military at that time. I hadn’t even been exposed to soldiers. I wanted to do the Air Force, but when I called the Air Force, they were like “you have to call back in two years”. I was like “ok?!” *laughs*

Tiffany Grant: *laughs* You were like, “I need this now!”

Janeil Pierre: “I need to do it now! You’re telling me to call back in two years? Oh no!” So I called a military recruiter, so he was like, “Sure! Let’s have the conversation,” and then I signed my contract, and in less than six months I was on. It was so weird, things were so bad at that point.

When I signed my contract, and he (the recruiter) said, “You’re leaving in six months,” I was like, “are you sure there’s nothing sooner?” It’s like I was willing to walk into fire just to make sure that I didn’t live this lifestyle anymore.

Tiffany Grant: And that’s very important because it’s like how bad do you want it. But there’s another aspect to your story. You know we talked briefly before we got on air; we all have our vices when it comes to money. You’re really good with money, but we all have something that we love to spend on. So while you were in the military, if you wanted to touch on that, what you were spending your money on.

Janeil Pierre: Well. I left because it’s funny but it’s not. I’m not a typical girl at all. Don’t show me shoes and purses and dresses and handbags, don’t show me! I have no interest in those things, but if I see a nice car pass by, I am all eyes, ears, and attention going wherever that car goes. So that’s my bad vice. That was my only money mistake, when I made that, I was in the military.

For the first 4-5 years in the military, I switched out my cars. When I first joined, I didn’t have a car at all, obviously. My first duty station was Fort Stewart, Georgia. So when I graduated Advanced Individual Training (IT), I had 10 days in between graduation and reporting to my first duty station, and I needed a car. I was like I have to go to work every day, I don’t want to depend on anybody, I was already grown at that point. I didn’t want to have to say, “Hey, I need to go to Walmart, can you take me to Walmart?.”

So I went out and I did a little bit of research before, and I bought my first car. It was a brand new 2011 Toyota Corolla, it was this little tiny car, base package, there was nothing nice about it, but it was in my budget and it was new. It had to be new because I don’t know anything about cars and I didn’t want to spend a bunch of money at the mechanics. So, if it was new, I knew that it probably wasn’t going to have any issues whatsoever. Anyway, that was my first car.

I kept that car for exactly 7 months and then I switched it out to something bigger, something nicer, something with a little bit more bells and whistles. I was happy! That was good! My payment went up slightly less than $100 a month.

Then I kept that car for 12 months and saw something else that I liked. And then I was like “I always wanted an SUV, Oh my gosh! I just live SUVs, they’re just so high, and I’m short, so I can sit further, and I’m sitting higher.” I said all these little nonsense things that didn’t matter, and then after 12 months, I switched up my nice mid-size car to an SUV. The SUV ended up being a downgrade when it came to features.

So now I had this car – I can see further, I can sit higher but it’s a downgrade. It doesn’t have as many features as I thought, but the monthly payment fitted perfectly into my budget. So, I was like “ok, it is what it is, I have this car, fine!”

So I kept that car for 2 years, and then I got stationed in Hawaii, and I think at that point that I made my emotional purchase – my 4th car was an emotional purchase. I was going through stuff in Hawaii and I just needed something new. I remember having this conversation with my best friend in Hawaii, and he was livid with me that I switch my car up. He was like “You couldn’t go buy a dress?!” I was like “A dress wouldn’t have made me happy.”

Tiffany Grant: *laughs*

Janeil Pierre: *laughs* I switched up my car again! I bought another brand new mid-size car, again with all the bells and whistles. So that was my money mistake in the military – I bought 4 different cars over a 4-5 year period and I probably spent about $80,000 doing that.

Tiffany Grant: Wooo!

Janeil Pierre: Yes! I’m kicking myself!

Tiffany Grant: $80,000 just in cars. For these car purchases, did you roll over negative equity?

Janeil Pierre: Absolutely!

Tiffany Grant: Maybe we should explain that a little bit because most people don’t understand how that works. So, go ahead and explain negative equity and the impact it has.

Janeil Pierre: Ok. So, the first car that I bought, after taxes, titles, and everything it was $19,000. So, I signed a contract of $19,000 is what I’ll pay at the end of 5 years. After 6 months, I took the car in and they said the car was only worth $11,000 or something like that. So since I had paid a down sum, and I had some military discount, I rolled over about $4,000. So with the new car, the new car was somewhere around $21,000-$22,000, around that ballpark. So the $4,000 negative equity that I had for rolling over.

So instead of buying a new car for $22,000, I was buying the car for $26,000. So my second contract is now $26,000 with $4,000 in negative equity from the depreciation of the first car because the first car was bought at $19,000 and I sold it at $11,000, and I got some discounts and took advantage of some sales and stuff they had going on at the time, so there was a $4,000 difference that needed to be met. That $4,000 difference is negative equity and it was added to my new car.

So before I even start paying for my new car, I had $4,000 leftover from the old car, and I did that every single time. I think when I signed my last contract in Hawaii, with the car that I have now and this December would be 4 years since I’ve had that car. So I’m doing pretty good! I’m never switching cars out again!

Tiffany Grant: Yes, congratulations! You have hit a record. *laughs*

Janeil Pierre:  *laughs* I have hit a new record, it’s going to be 4 years in December! When I signed the contract with that car, I rolled over more than $6,000 worth of negative equity. So before I even started paying for that car, there was $6,400 worth of negative equity for the car before that and the car before that.

‘Everyone wants a piece of land. It's the only sure investment. It can never depreciate like a car or a washing machine. Land will double its value in ten years. In less than that. Land is going up every day.”

Sam Shepard

Tiffany Grant: Mind you, your interest rate is based on that total amount. So it’s like you’re paying super-premium for whatever new car you get.

Janeil Pierre: Well, this is another reason why I felt comfortable buying these cars so often is because my interest rates were always low. I never paid above a 2.5% interest rate because I always had good credit.

So one of my cars was a 0% interest rate, the other one was a 1.5% interest rate, the other one was 2.5% I think, and this one is a 2.2% interest rate. So with just a tiny bit of interest, at that time that was what it was to me because I wasn’t compounding snd doing the maths.

Another thing I didn’t factor in was the gas, insurance, and something else I was paying for on the car. I didn’t factor those things into my car, I was just looking at the monthly payment.

When I got to Virginia and I did my budget, I factored in those things, and guess what? I realized that I was spending over $800 a month on just my car, and that made me feel sick! It literally made me ill – that I was spending almost $1,000 (I roundly it up to $1,000) on a car! A car that depreciates. I probably owe more on the car now than what it’s worth honestly because cars depreciate that quickly.

Tiffany Grant: Especially the first 3 years or so. It gets hit the hardest, so if you’re buying new cars, you’re getting that depreciation even faster than if you were to get a used car that was maybe 3-4 years old. 

Janeil Pierre: Like I said, I was in the military as a single woman. So I didn’t have my family around me and all of that, so I didn’t trust used cars. I don’t trust buying it at all because if something went wrong, I felt like I would have been a victim.

For instance, if I went in for an oil change, they can be like, “Hey your chassis is broken, and it costs $10,000” and I’m like “Yea! if you say it’s broken, then it's broken” because, at that point in time, I didn’t know any better.

I don’t know cars. I know how to gas it, how to change oil and I know how to change the filters. Other than that, I don’t anything about cars, so they could have told me anything was wrong, and I would have been willing to pay for it because I needed my car for work.

Now, I know the value of research and now I’m around family so it’s a little bit different, but back then I didn’t have that option so I didn’t want to take the risk to buy a used car and it breaks down and I’m spending money out there trying to fix it!

Tiffany Grant: So well, thank you so much Janeil for coming on the show today. So if people want to follow you, where can they find you?

Janeil Pierre: First of all, thank you for having me. I can be found at thewealthfactor.org, I blog there, and I have this whole story about my cars and so many other things on that website. Also, I’m on Facebook at The Wealth Factor 1 and on Instagram at The Wealth Factor 1. On Twitter, it’s THEWEALTHFACTOR, you have to capitalize each word, I couldn’t get the “1” on Twitter, so I had to just capitalize each word because Twitter has 15 characters only and the characters would have made it 16. I was like, “Ugh!” So you can definitely find me on there.

Tiffany Grant: You’ve got to love Twitter and all of its restrictions.

Janeil Pierre: Oh yes! Absolutely!

Tiffany Grant: So thank you so much and I hope you have a wonderful rest of your day.

Janeil Pierre: Thank you, and you too. It was so much fun! Bye.

Thank you for listening to the Money Talk with Tiff Podcast. For free resources and materials, head over to moneytalkwitht.com, and while you’re there, why not sign up for our newsletter, so you’ll never miss an episode. Talk to you soon…

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