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How to Make a Million Dollars by Living like a Crackhead

By Edited Nov 13, 2013 1 7

A few years ago, I was working with an Army Master Sergeant for a couple of months.  This guy was getting close to hitting his magical 20-year retirement mark, and was talking about his plans for the future.  “V”, he said to me, “When I get out of the Army I’m going to work on a PSD team for Armor Group.  Those guys make $250,000 a year, tax-free, for doing the same job I do now!  Can you believe that?  I’ll do like 4 years of work, and I’ll have a million dollars in the bank!”

                Now, I’ve never been one to kill a man’s dream, so I just kept my mouth shut.  I didn’t want to burst his bubble by asking this E-8 how much money he’d already managed to save up over the course of his 20-year career.  Seeing as how the guy smoked 3 Cuban cigars a day and was paying child support on 2 divorces, I’m guessing not much. 

Now that I think about it, I should have probably filled him in a little.  If that guy asked me for advice today, I’d tell him that income from working overseas is NOT tax free, that Armor Group is now called G4S, that I highly doubt they pay anyone but their corporate leadership anywhere close to $250,000 a year in today’s market, and that even if all of the above was true, the only way to save up more than a million dollars working in security contracting is by living like a crackhead.

My apologies to the street people.  I’m got nothing against the homeless, except when they change clothes in the library bathrooms.  This article isn’t meant to knock them, but rather to point out a thing or two about their admirable frugality.  Have you ever seen a crackhead worried about paying their bills?  Never, man.  But if you finally do land that all-important first contract job, you should have a plan for what to do with your money.  I’m not a millionaire myself, so take this advice with a grain of salt, but one of the best ways to keep the money that you earn is to NOT SPEND IT.   

                Think about some of your biggest monthly bills now:  Lodging.  Utilities.  Groceries. Transportation to work.  Now go ahead and cross them out from your monthly budget.  How much money have you just saved?  All of these things are provided to you by Uncle Sam when you’re working overseas.  Three meals a day are included(more if you stuff a take-out tray and practice running from the DFAC Nazis), and while your housing might be anything from a tent to a full-on singlewide trailer, you don’t pay any rent.  Also, you’ll pretty much be living right where you work, so forget about a car note, insurance, or gas.  Once you get used to going homeless, you’ll be amazed at how much money you can save.

The time to start making a plan to cut your expenses is now, during your application phase.  If you’re planning on working on contracts for more than a single year, why not sell your house and erase your mortgage payment completely?  Chances are you’re going to want to stay out of the US for as much time as possible to qualify for the Foreign Earned Income Exemption, so why not have your spouse and kids move in with the in-laws while you’re gone?  They’ll have some help while you’re away, and with the money you save from a year of mortgage payments, you could easily afford to take them all on a nice vacation.

                Most importantly, if you’re trying to save money, do whatever you can to avoid taking on any more payments!  I hate to point the finger at security contractors, but we’re some of the worst offenders when it comes to wasting money.  If it’s in the PX or it’ll ship to an APO address, we’ll buy it.  I’ve seen one guy get over $1000 worth of cigars in a single month.  Another dude bought a honest-to-God ceremonial broadsword and no, he couldn’t mail it home).  And my biggest pet peeve is that almost every FOB now has an affiliate that will sell you a new car or motorcycle at discount.  You can start making payments on it while you’re deployed, and pick it up when you go home.  Never mind the fact that you won’t be able to drive it more than 2 weeks out of every year!

                My point from all this is, do whatever you can to save money.  If you do feel the need to buy a lot of junk, do it the crackhead way:  buy it used from some other dummy when his wife leaves him and he’s in need of quick cash.  Security contracting is a fun job, but no one would call it steady work.   You never know when your company might lose the contract or God forbid you get hurt, and then the gravy train’s over.  Instead of making internet shopping your hobby, try reading a book.  Maybe one on investing, so you’ll actually have a chance at making smart decisions with your money…




Apr 9, 2011 5:01pm
Great read. That's crazy to hear contractors spending their cash on $1000 boxes of cigars! However, I know these guys are far from the only industry where people making decent money start to waste it.

As for an investing book, I highly recommend "The Bogleheads Guide to Investing."
Apr 9, 2011 5:39pm
Thanks Tessor! I'll definitely check it out.
Apr 9, 2011 6:24pm
I was lured in by the catchy title and am glad I stopped by...it was a very interesting and entertaining read :)
Apr 9, 2011 6:35pm
I'm working at a boring factory. Being able to leave the country for awhile and see new places seems like another cool perk to security contracting. After awhile you get tired of seeing the same old machines day after day. Nice article, bro!
Apr 9, 2011 6:50pm
Very interesting.
Apr 10, 2011 12:49am
Overseas income up to $80,000 (they may have increased the limit since I checked) is, in fact, tax free as far as US taxes are concerned. You may be responsible for national taxes to the country you are in depending on the country.
Apr 10, 2011 9:15am
Thanks for the comments guys! Most of my articles are geared towards overseas security contractors, but on second thought I guess most people could benefit from some of the advice here (move in with parents, sell one of your cars, etc).

Noryanna, foreign earned income exemption levels are adjusted by the IRS every year. For 2011 I think the first $92,500 or so of your income was exempt from taxes.
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