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Marines, Lacking Financial Planning, Get Hand From Ex-Army Officer

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What’s the No. 1 reason members of the military lose their security clearance to classified information? Financial woes, according to former Defense Secretary Leon Panetta. The military’s rationale is that a person who’s loaded with delinquent debt is at risk of engaging in illegal acts to generate funds.

Financial Independence Training ( helps military men and women on active duty learn how to manage their money and stay financially fit. The California-based nonprofit is “dedicated to preventing financial debt and resulting career sanctions in the military, and preparing troops for lifelong financial success.” FIT founder-president David Block, a certified financial planner and retired Army lieutenant colonel, who retired his financial advisory practice eight years ago, discusses the organization’s work in an interview with ThinkAdvisor.

At FIT’s Financial Planning Day on July 13, some 20 financial planners will coach one-on-one — pro bono — an expected 100 to 150 Marines about money-management basics, as well as the military version of a 401(k) plan. They will gather at Marine Corps base Camp Pendleton in San Diego County. Last October, FIT conducted what it calls the first-ever such event for the military at Marine Corps Air Station Miramar, in San Diego. Block hopes to get the okay for Financial Planning Days at Marine bases nationwide and eventually, for all branches of the military.

FIT is Block’s pro bono passion. Shortly before founding it, he was a volunteer counselor teaching wounded war veterans how to budget and save.

FIT’s backstory: Three years ago, three-star Marine Lt. General Terry F. Robling, ret. – nickname: “Guts” — approached the Financial Planning Association in San Diego, lamenting that the Marine Corps was being drained of many good men and women in active duty as a result of security clearance loss. And, he said, “the overwhelming reason is that they don’t know how to handle their money and get into debt,” Block recalls.

Robling asked the FPA to come up with a solution that would support the military’s on-base Personal Financial Management Programs. Block took the lead in his FPA chapter. The CFP’s research would find that as soon as 18- to 20-year-old Marine recruits completed their three months’ training, they blew their banked salaries on electronic gadgets and the like.

In 2014, Block set up FIT. It offers classroom training to locally based Marines as well as an online interactive computer and smartphone app, “Opportunities Lost: The Car-Buying Dilemma,” available for use by all service branches to help folks make the right decisions about vehicle purchase. More apps will follow soon.

FIT has its genesis in the financial counseling Block conducted from  2012 to 2013 with Homes for Our Troops, in which wounded warriors received houses built to accommodate disabilities that they suffered in military service.

Before a 17-year career as a financial advisor — with Ameriprise Financial and its predecessor IDS – Block, a native of Utica, New York, served in the Army for 20 years as an officer. He was stationed in Germany twice, Vietnam and at the Pentagon. Though he retired his financial practice, he remains a CFP.

Block, 68, recently spoke on the phone with ThinkAdvisor from FIT offices in La Mesa, California. His Mission: Possible – to help improve the financial status of people in the U.S. military. Here are excerpts from our conversation:

THINKADVISOR: Why primarily did you start Financial Independence Training?

DAVID BLOCK: We need to do better in educating our military about money and family money management. When most folks come out of the Marine Corps, they haven’t even learned the basics. Another [reason] is that when an individual leaves any branch of the service, if they don’t get a job right away and go on unemployment, part of that is footed by the military. Why are you working only with Marines on classroom training and Financial Planning Days and not the other service branches?

The military is very protective of its members. In the past, abuses have occurred with people coming on installations and marketing inappropriate things. Some of that has resulted in firms being banned. [Consequently] we had to go through a six-moth approval process from the assistant secretary of the Navy to get access to the Marine bases. We [hope to] get permission to expand what we’re doing to all Marine Corps bases and eventually to the other services.

You previously did volunteer work with Homes for Our Troops. It’s got to be a huge challenge for wounded veterans to manage what money they have when they return home.

It is. Part of our process was to help them track their expenses to see what their lifestyle really cost so they could make decisions about how to become a homeowner and meet all their other expenses associated with being a wounded warrior. We’d ask: ”How did you come up with your budget estimate?” They’d say, “We thought about what we spent.” Well, most of us are terrible at remembering everything we spend money on.

What better way did you suggest?

We asked them to list whatever they spent money on. Then we’d categorize that as to necessities, frivolous expenditures and so on. One of the other advisors was helping a veteran whose wife was spending about $300 a month treating herself to coffee at Starbucks [or the like]. So looking at every expense is where the real value comes in because then you have a basis to start building.

What did you conclude after working with the vets for a year?

That most of them didn’t understand basic money management. They didn’t know where their money was going or how to start planning a future.

Now you’re working chiefly with military members who are on active duty. What’s your approach?

We’re educating young people to get a grip on things so that when they leave the service as veterans, they’ll be able to manage their finances. We’re bringing to bear a different way of helping a young person think about budgeting and spending plans. Typically, the academic approach is: “You need to learn to save.” But when you’re 18,19 or 20 years old, or a wounded veteran, that approach isn’t motivating.

Does FIT help with investing as well?

If the Marines have freed-up money, we show them how to invest in the Thrift Savings Plan, the military version of a 401(k) plan. We don’t give them tactical advice like, “Here’s what you should use.” But we do give them strategic planning advice: “For someone your age, here are the percentages that you ought to have in different categories.”

Once you’ve counseled them about money, are they on their own?

No. Each military installation has a personal financial management specialist [PFM], who are accredited financial counselors. They’re civilian government employees that can help them take the next steps.

Why can’t folks just learn everything they need to know about money from the PFMs, then?

They can’t handle the big demand. At Miramar, there are 10,000 Marines and one PFM. At Camp Pendleton, there are 40,000 Marines and two PFMs.

Why did you choose to develop your first financial app about vehicle purchase — “Opportunities Lost: A Car-Buying Dilemma”?

Some of the inappropriate marketing to the military is still going on. A few weeks ago, at Camp Pendleton, one new Marine had someone off-base pick him up and show him a car. He was sold a vehicle with a $750-a-month payment over six years. For somebody who is three or four years in the service and single, their net pay may be only $1,600 a month. He wasn’t able to break the contract and probably will have to pay about $1,200 a month just to keep up the car payments and buy fuel [etc.]. Are those exploiters targeting enlisted people only?

No. It’s across-the-board. We know of one senior NCO [noncommissioned officer] who was paying $900 a month for an [Audi].

Just what are the benefits of your car-buying app?

We’re saying that here’s a specific event you’re going to go through many times in your life. We get people to realize that even though the purchase of a car or truck may seem independent of anything else, it isn’t: You’ve made that decision, but now there are other things that are impacted. It can make the difference between being able to buy an engagement ring without going into debt and taking only a three-day weekend because you can’t afford a honeymoon.

What’s an example of an app that FIT has under development?

One is called “Success/Failure,” to be available late this year or early 2017. It’s based on each successive decision that the person makes. For example: Buy a truck vs. a car? New or used? A family vehicle because you’re planning to have children? Ultimately, it will show: “You’re in the red! You’re in debt!” Or “You’re in the green! You’re OK!”

What if they’re in the red?

They can go back and review their decisions to see which one will have the biggest impact on getting them out of debt. If you have a lot of debt when you leave the military, you’re going to have to take any job you can get.

After you train Marines at the bases, do they then look for outside planners?

Typically, no. We direct them to the PFM on-base, who can usually meet their needs. But we give them information about finding a planner, such as through the Financial Planning Association web site, where they can look for one in their area.

Does a wounded veteran receive a government VA benefit pension?

Typically, the only way is if they leave the military before 20 years’ service and are discharged as a medical retiree. Then they can draw a VA disability pension. Most of the military who come home having lost a limb, for example, will almost always be discharged on their medical conditions.

Was that the case with the vets you helped with Homes for Our Troops?

Yes, generally. Those with serious injuries will receive a pension for the rest of their lives. But the challenge was to help them realize that, even though what they’ll [be paid] each month may initially seem like a lot of money, when they add home ownership, future vehicle replacements and all the other things that are needed, they’ve got to be very judicious with the money they have right now.

Were you lucky enough to escape injury when you served in the Army?

Yes. Fortunately, in my role as construction engineer taking care of supply routes, I wasn’t on the front lines with the infantry.

I trust your deep concern about people with disabilities stemmed from your first wife’s death of multipole sclerosis.

It obviously had a lasting impact on me. She was diagnosed with a very severe case of MS when we’d been married just short of five years. For the next five, I was able to keep her at home with care during the day, and me at night. So I learned a lot about what it means to be loving.

You were 20 years in the Army. Then you became a financial planner. What interested you in that field?

In 1983, I was working on a master’s in operations research. The stock market was doing wonderfully well, but another student and I thought we could do better. So we invested — and we lost all our money. I interviewed a lot of folks and found out that financial planning is comprehensive and that becoming a CFP was the way to go. At first, I invested only for myself and family — my present wife and I have been married for 32 years — then I started investing for friends. Eventually, it became clear: “I think I can do this as a profession.” So I made a successful glide path for the rest of my life.

— Check out 10 Things Veterans Should Know About Retirement Benefits on ThinkAdvisor.