personal finance

Finance Friday Articles

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Here are my favorites this week:

Almost Zero

How COVID-19 is forcing physicians to rethink the concept of job security

International stocks help diversify your portfolio

You Don’t Need Alpha

 

Here are the rest of the articles:

4 Things I’ve Learned Reading Medical Expert Witness Opinions

5 Ways to Protect Your Investment Portfolio in a Downturn

6 steps to selecting a target-date fund

7 Great First Steps in Real Estate Investing

15-Year or 30-Year Fixed Mortgage: Which Is Right for You?

AcreTrader Review: Invest in Non-Leveraged, Cash-Flowing Farmland

A Roth IRA For Every Baby in America

Asset Allocation (Part 1): The Security Bucket

A Year of Change for the TSP, Still More on the Way?

Being an Expert Witness: Why Starting Today Can Save Your Tomorrow

Best Time to Buy a Car & 8 Other Steps on How to Get the Best Deal on a Car

Chasing Markets Can Be a Poor Long-Term Investment Strategy

Cooking Up a Story About Robinhood Traders

Crash Test

Finding Your Ideal Retirement Location

Going Back to School? Here Are the 2020-21 GI Bill Rates

How I Found Financial Security in a Culture Obsessed with Consumerism

How Millennials Can Close the Generational Wealth Gap

How to Succeed at Private Real Estate Investing

Is It Wrong to Earn Less?

Just Another Day

MOAA Tax Update: The Status of 5 Key States

Patience is Virtue No One Has Time For Anymore

Pay off our mortgage or not? A glimpse into a couple’s final decision

Private School During the Pandemic: Visiting an Old Debate

Retirement plan down because of covid-19? Here’s why you still need stocks in your 401(k).

Say No to a Vacation Home

Should Retirees Adopt a Flexible Withdrawal Strategy?

Skewed Impression

Want a Strong Portfolio? Don’t Make These 7 Mistakes

What If We Get Inflation But Interest Rates Don’t Rise?

Why Is Gold Rising?

Would You Quit Your Job as a Lottery Winner?

Throwback Thursday Classic Post – Step 2 to Crush the TSP – Decide

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The Thrift Savings Plan (TSP) is the military’s retirement account. Learning how to maximize its utility should be high on your financial priority list. I’m going to create a guide that will show you how to crush it with the TSP. We already showed you step 1 in that guide. Here’s step 2…

The 2nd Step to Crush the TSP – Decide

If you want to crush it with the TSP, you’ve got some decisions you have to make. You have to decide:

  • How much you’re going to invest.
  • What investments you’re going to use.

Decide How Much You Are Going to Invest

If you want to crush it, you need to invest as much as you can afford. How much can you contribute? Here is the TSP page that lists the contribution limits.

That page may be confusing, so here is the bottom line:

  • You can contribute $19,500 in 2020.
  • If you are 50 or older, you can contribute an additional $6,500.
  • If you are deployed to a combat zone, you can contribute even more.
  • Any matching contributions you get from the DoD due to the Blended Retirement System or BRS (if you’re in it) does not count toward these limits.

How much should you contribute? As much as you can. Period. Even a few hundred dollars is better than nothing.

Decide Which Investments You Are Going to Use

The TSP is pretty simple in this regard. You only really have six options.

The first option is to just let someone else handle this for you by using a Lifecycle fund. According to the TSP:

The L Funds, or “Lifecycle” funds, use professionally determined investment mixes that are tailored to meet investment objectives based on various time horizons. The objective is to strike an optimal balance between the expected risk and return associated with each fund.

Using L Funds is a simple, easy, and effective strategy that is completely fine for most people. If that is how you want to do it, you can just put all your TSP money in the L Fund with the year that is closest to when you want to retire and skip the rest of this blog post. For example, if you want to retire in 2034, you’d invest in the L 2035.

If you are more of a do-it-yourselfer, then you have five other investment options besides using a Lifecycle fund. The five investment options can be compared in this table from the TSP website.

That is really it. You can either use a Lifecycle fund, or one of the five other funds listed in the table.

The Bottom Line – Decisions You Have to Make

Like we said at the beginning, you have to decide:

  • How much you’re going to invest. (Hint: as much as you can afford.)
  • What investments you’re going to use – Lifecycle vs do-it-yourself with the five other available funds.

If you decided against the Lifecycle funds, the next thing you have to do is determine your asset allocation, which is our next step to crushing it with the TSP.

Financial Friday Articles

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Here are my favorites:

15 Ways to Happy

Confessions of a Former ‘FIRE’ Skeptic – How I learned to stop worrying and believe that these people are actually onto something.

Fed Up

The 4% budget: Why spending flexibility is more important than withdrawal rate in retirement

 

Here are the rest of the articles:

5 ways in which being a doctor impacts how you should approach personal finance

Before You Decide to Leave Medicine, Ask Yourself These 5 Questions

Cap on TSP G Fund Yield Discussed by Federal Reserve

Cost vs. Reward of Becoming a Doctor or a Dentist

Create Massive Leverage Through Passive Real Estate Investing

Delaware Bank Accounts, 529s and HSAs for Asset Protection

Experience Owning a Summer Rental

Fidelity drops robo-advice fees for small accounts

Here’s an easy, low-cost way to build a retirement plan like the pros

If We Can Print Our Own Money Why Do We Have to Pay Taxes?

Income Tax and TSP Withdrawals

It’s Easier to Start a Bull Market Than Prevent a Bear Market

Money actually can buy happiness, study finds

My 4 Current and 4 Future Passive Income Streams

Net worth calculator: How to find your net worth on paper

Should You Manage Your Own Rental Properties?

Step-Up in Basis – What You Need to Know

The Doctor Loan: My Experiences Buying and Building with Physician Mortgage Loans

What To Do With an Inheritance

Why You Shouldn’t Trust the Financial Industry

Finance Friday Articles

Posted on Updated on

Here are my favorites this week:

Target-Date Funds Are Performing Well. But Choosing One Can Be Harder Than You Think.

Three Pathways to Wealth

What’s the Best Diversifier for Stocks? counterbalanced by Do Treasuries Have a Place in a Modern Portfolio?

Why Your Money-Market Fund Isn’t as Safe as You Think

 

Here are the rest of the articles:

5 Tax Benefits of Investing in a Syndication

5 Thoughts on a World with No Yield

5 Ways to Retire With $5 Million by Age 55

7 Ways For Physicians to Make an Extra $1,000 a Month

Active vs Passive Real Estate Investing

Asset Allocation Beyond the Zero Bound – Japan has had zero rates for 20 years. Here is what seems to have mattered for investment outcomes.

Best Passive Income Ideas for 2020

Covid-19 and Physician Burnout: How I Turned My Plank Into A Runway

Everyone Who Thinks the Stock Market Is a Game Loses

Explaining the 2020 Stock Market

How Low is Your Passive Income Tax Rate? The Taxes on Passive Income Streams

How to Fix Your Financial Problems

Investment Return vs Savings Rate: Designing Your Portfolio Pt 2

It Depends

Keep Your Distance

Jack Bogle Was Wrong About ETFs

My Thoughts on the “Passive Investing Bubble”

Tax-Efficient Investing and Asset Location

The Importance of Investing Money in Residency

TL;DR: The Best Finance Books in One Sentence

Two Reasons to Worry

Using an All-in-One Fund During a Downturn

Why Rebalancing (Almost Always) Pays Off

Throwback Thursday Classic Post – Step 1 to Crush the TSP – Prepare

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The Thrift Savings Plan (TSP) is the military’s retirement account. Learning how to maximize its utility should be high on your financial priority list. I’m going to create a guide that will show you how to crush the TSP. Here’s Step 1 in that guide…

Step 1 to Crush the TSP – Prepare

Before you can crush the TSP, you have to do a little preparation. You don’t need to be Warren Buffet, but you need to understand the basics of investing and the TSP. Luckily, there are many ways to learn the basics. Here are a few:

  1. Read a book – Go to your library, search for a used book with AddAll (one of my favorite tools), or buy one new on Amazon. The easiest and quickest read to increase your basic investing knowledge is The Elements of Investing: Easy Lessons for Every Investor. Read this book. THAT’S AN ORDER! (unless you outrank me)
  2. Read an online introduction to investing – The one that I’d recommend is the Bogleheads Wiki. Here’s a link to their getting started page and their investing start-up kit. What’s the best part? All of this is free.
  3. Watch videos – The Bogleheads have a video series, which is also free.
  4. Read blog posts – My favorite TSP-specific blog posts are found at The White Coat Investor. You can read What You Need To Know About The TSP, The G Fund – A Free Lunch, or The Military’s New Blended Retirement System. I wrote the last one.
  5. Read the TSP website – The TSP website has a wealth of information.

Now you’ve got some homework. Once you’ve done as much of this as you can, move on to the 2nd step.

New TSP Lifecycle Fund Asset Allocations

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Here’s the PDF that shows you the new asset allocations for the 5 year TSP Lifecycle Funds:

L Funds PDF

Here’s the graphic that summarizes it:

Screen Shot 2020-07-06 at 12.32.43 PM

Finance Friday Articles

Posted on Updated on

Here are my favorites this week:

Free Beer Plus Profits! A Craft Brewery Investment Goes Full Circle

How Often Do Long-Term Bonds Beat Stocks?

Roth 401(k) vs. 401(k): Which is the Better Option?

The Best Side Gig Is Spending Less

 

Here are the rest of the articles:

3 keys to building an emergency fund

5 Ways Financial Freedom Beats Burnout

10 Reasons to Consider a Nonclinical Job to Defeat Burnout

Achieving Financial Freedom as a Physician is Simple, but Not Easy

Breaking the Traditional Financial Rules

Consumer Addiction and 5 Ways to Beat It

Consumption Smoothing is Stupid

Debt is Like a Negative Bond

How a Career Transition Can Help You Reach Financial Independence

Indexed Annuities – No Down Less Up

Investing legend Burton Malkiel on day-trading millennials, the end of the 60/40 portfolio and more

IRS Adds New Criteria for COVID-Related Loans, Withdrawals From Retirement Plans

IRS expands criteria to withdraw money from retirement plans for those affected by coronavirus

Is an Annuity Right for You?

Rebalancing Too Slow?

Report of Retirees Fleeing Market Due to Coronavirus Was Greatly Exaggerated

Right From Wrong

Should I Buy Stocks Now?

Should spouses get to contribute to troops’ retirement savings accounts? Debate set to begin.

States Without Income Tax: Is There a Benefit to Moving?

The Best and Worst Quarters in Stock Market History

The Economy is Not the Stock Market

The Key to Successful Investing? Your Mindset

The New 60/40 Portfolio

Vanguard Leaning More On ETFs

When It Comes to Social Security Retirement Benefits, Timing Matters

Why an S Corp Doesn’t Mix Well With a W-2 Job

Why is Gold Valuable?