The AC Interview Series with Carlos from AAFMAA

Adam Interview

If you would like to participate in our interview series, check out the questions here, put together your answers in a word or google doc, and shoot them to me at adam@adamchudy.com and we’ll get you in the mix 

This interview is from Carlos Perez at AAFMAA.  

– Thanks, Adam

What’s your story?

CarlosPerezDisplaying CarlosPerez.jpgMy story is a fairly typical American one. I grew up in a blue-collar town just north of New York City. We were a middle class family and my parents worked hard to create greater opportunities for their children than they had when they were growing up.  I attended a small Catholic school through 8th grade and then went to our public high school. During those years I participated in Boy Scouts and ran track and cross country.  I was fortunate in that I had some great role models – clergy, coaches, and teachers.  After high school I attended West Point and joined the Army where I served for over 26 years. The Service provided tremendous opportunities for personal and professional development across the country and globe.  I served as an Engineer Officer in a variety of command and staff assignments, including combat deployments to Bosnia, Iraq, and Afghanistan.

My interest in finance was casual until I decided to compete for a position teaching economics at West Point.  Upon selection, I applied for and received admission to Stanford Business School (more on affording college here – Adam). There I learned more about economics and personal finance – both subjects of great interest and personal application to everyday life.  The former taught me that resources are scarce and we must always weigh tradeoffs in our decisions. The latter taught me the importance of a sound financial plan and not relying on luck to achieve financial fitness.

When people ask you what you do, what’s your answer?

I work for American Armed Forces Mutual Aid Association (AAFMAA), assisting the Chief Operating Officer in managing company operations.  AAFMAA is the longest-standing not-for-profit association that empowers military families with affordable financial solutions. Our services include insurance, financial advice, investment management, and trust services.  Even though I’m no longer in the Army, AAFMAA allows me to stay in touch with our military men and women and veterans. It is professionally rewarding and satisfying.

What is the best advice you have for those struggling with debt that want to take control of their finances?

Climbing out of debt and taking control of one’s finances can be daunting.  It’s best to avoid debt altogether by having and following a budget.  If you do find yourself in debt, then whittle it down a little bit at a time. Identify how much in your budget can go towards reducing your debt and then start paying it off.

Tackle high interest items first, since those cost you the most. And, avoid new debt if possible, especially avoid adding credit card debts. For service members and veterans, relief organizations can provide financial counseling and debt relief assistance at little to no cost.  For those on active duty, AAFMAA offers $4,000 Career Assistance Program loan at 1.5% that has helped many in the military eliminate higher interest debt.

Do you have any tips for saving money?

Saving requires discipline.  A necessary pre-condition is to budget. Take stock of your assets and liabilities. Identify your spending patterns and cut wasteful spending.  Build an emergency fund with about 4 to 6 months’ worth of expenses. With that complete, start investing via a well-diversified, low cost mutual fund and set up automatic investments.  Some firms will do this with as little as $50 a month investment at no extra cost.

Automatic investment over a long horizon is key to generating wealth. Many confuse income with wealth. You can have a very high income, and yet save very little as a result of undisciplined spending. Whereas, wisely controlling your income, you can generate wealth through savings and investment. It is this accumulation of wealth, and not just income that ultimately creates financial independence.

How do you stay financially organized?

Your budgeting process should include the development of and planning for financial goals – pay for a car, a house, college, etc.   To stay organized and on track, review your actual spending, savings, and investment regularly.  Compare these to your planned spending and goals. And, as you start accumulating wealth, periodically review all of your accounts. I try do this about once a quarter.  Additionally, try to minimize the number of accounts and financial vehicles you use.  Keep it simple.  Most of us can meet our financial objectives with just a few mutual funds and a short term savings account. The more accounts you have, the more difficult it becomes to manage them. Similarly, limit your lines of credit and credit cards to the bare minimum.  If you find managing your finances overwhelming, seek advice from a reputable source.  At AAFMAA we offer financial advice through AAFMAA Wealth Management & Trust, LLC. AAFMAA Wealth Management & Trust is also non-profit, with fiduciary responsibility to its clients. The only caveat is that you must be active military or a veteran to use its service.

What is the best advice you’ve ever received?

As young college graduate, I once attended a financial planning seminar. At one point, the speaker paused and said “always pay yourself first.” He then went on to explain his remark. There will always be competing demands for your income – bills, taxes, loans and more. When times are tight, savings is often easiest to give up because you think you don’t lose anything.

The reality is that you lose a lot – you lose the power that compounding makes over a long time. So, the speaker advised us to always take some portion of your income, no matter how small, and “pay yourself first” by putting it away – investing it.  And, if you can, make it automatic. By consistently paying yourself you maximize the power of compounding and inherently take advantage of the market’s ups and downs because a fixed amount “buys more” when markets are cheap and “buys (relatively) less” when they’re expensive.  Over a lifetime, consistently paying yourself first can make tens of thousands of dollars difference.

What does your morning routine look like?

Fitness is important to me in all its dimensions – mental, social, spiritual and physical.  It was a standard part of my life while in the Army and I’ve tried to maintain those good habits.  I am a morning person. I feel most productive and alert in the early part of the day. I usually wake up around 5:00 a.m. and head to the gym. I try for at least three sessions of cardio a week and two sessions of weights. I follow a “no socializing at the gym” rule.  That lets me get in and out in about an hour.  Instead of socializing, I use my gym time to think – think about my day, the coming week, work projects, etc. I find my time at the gym among the most mentally productive time of my day.

Following my workout I shower, have breakfast and read the paper before heading in to the office. I try to eat well, too. And I always eat breakfast.  I enjoy milk and cereal, oatmeal, yogurt, fruit, or occasionally eggs and toast. And, if I miss my morning exercise routine, I try to squeeze a workout in during lunch if possible.

Do you have any finance related book recommendations?

Finance books can be onerous and many are simply hype. A great read that anyone can appreciate, from the beginning investor to the seasoned professional, is The Millionaire Next Door: The Surprising Secrets of America’s Wealthy, by Thomas J. Stanley.  Although it is few years old, I still like this book because it lays out in simple precepts how it is possible for anyone to generate wealth. Stanley points out that most millionaires don’t live lavish lives. Instead, they live well within their means and grow wealth by investing the difference.  For the more experienced investor, I recommend Benjamin Graham’s The Intelligent Investor, a classic which lays out in detail the Value Investing philosophy.

Any favorite blogs?

AAFMAA maintains blog called the INTEL Center.  It provides a wide range of information that, while geared towards those in the military, is of use to most people.  Recent postings include subjects such as long term care, car loans, insurance and important documents everyone should safe keep. In addition, we maintain a related site, SpouseLink, focused on connecting and helping military spouses around the world. I also enjoy The Consumerist and, although it’s not a blog per se, the Money Girl podcast because it offers snippets of advice that you can take in during a workout or while running errands (and hopefully he’s checking out our site right here! – AC).


To see all our interviews head over to the Guest Interviews Page.

If you would like to participate in our interview series, check out the questions here, put together your answers in a word or google doc, and shoot them to me at adam@adamchudy.com and we’ll get you in the mix – Thanks, Adam


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