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Basic Housing Allowance is Your Investment Pipeline in Disguise

I know, I know, I’m always talking about investing and capitalizing on opportunities that are in front of you. I can’t help it! If I had to do things all over again, I would have invested in much more real estate over the years. This world will never get more land. We’ll get more people, but we’ll never get more land. Quite an interesting thought, isn’t it?

As our two sons are beginning their careers in the US Navy, they’ve fallen succumb to our repeated lectures on investing and spending the money they make wisely to prepare themselves for a comfortable future. The most recent discussion has been about BAH and what a privilege it is to be granted that money each month.

Utilizing the BAH calculator found on, I broke things down to my sons so they could see things from my perspective. I used only an E-3 rank with dependents and found the following amounts for each of these cities:

  • Virginia Beach, VA $1,518/month
  • Monterey, CA $1,890/month
  • San Diego, CA $2,232/month
  • Honolulu, HI $2,613/month
  • Jacksonville, FL $1,428/month

If we took an average of those 5 cities, that amount would be roughly $1,936 per month. Now, I understand that as you grow in rate your BAH increases, as well as the locality of your duty station. I also know the military offers moving allowances and I didn’t include any of that. I wanted to keep things at the fundamental level so that they could retain this information and hopefully develop a strategic plan.

Let’s say you are an E-3 and earn the $1,936 as a married sailor with dependents. Utilizing your rights to a VA Loan, you decide to purchase a home, putting no money down. Your family stays in that home for 4 years with a mortgage the same amount as your BAH allowance. After your tour, you will have invested $92,928 into your property. Which means when you go to sell in a firm market, you should have a substantial profit to take with you to your next duty station. While it may not be the full $92,928, there’s even a good chance it could be much more depending on your market.

Looking across the tenure of a possibly career, and doing the math using the same figures, despite the obvious increases over time due to rank changes, here’s an estimate:

$1,936 x 12 months = $23,232/year

$23,232 x 4 year tour = $92,928/tour

$92,928 x 5 tours in an average career = $464,640 in total BAH allowance

Looking at it from this perspective, many of us can confidently visualize just how beneficial this is. I challenge anyone to find another line of work that offers this kind of opportunity to invest in assets that benefit the employee and their family.


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