personal finance
2021 BRS Continuation Pay, TSP Info on New 5-Year L Funds, and Finance Friday Articles
Here is an article about FY21 Continuation Pay for those in the Blended Retirement System (and here’s a guest post about applying for it):
Blended Retirement System CY 2021 Continuation Pay Announced
Here is the TSP PDF about the new Lifecycle Funds in 5-year increments that start 1 JUL 2020:
Additional Lifecycle (L) Funds
Here are my favorites this week:
6 steps to selecting a target-date fund
When Should You Sell Your Stocks?
Here are the rest of this week’s articles:
3 Reasons Why You Can Take More Risk with a 529
Coming Up Short When Trying to Buy a House
How State and Local Taxes Affect Your Retirement Plan
How Will Private Equity Work in 401ks?
Is This The Most Volatile Year Ever?
Not All Income Is Created Equal
Questions I’m Asked About Term Life Insurance
Sitting on One Million Dollars in Cash
Some Things About the Markets That Will Never Change
Finance Friday
Here are my favorites this week:
Implementing and Refining the “Spend Safely in Retirement Strategy”
Thrift Savings Plan Adds New Funds
Here are the rest of this week’s articles:
5 Unusual Ways To Accelerate Your Financial Independence
A PHYSICIAN’S INSURANCE CHECKLIST: THE DEFINITIVE GUIDE
Backtests vs. Real Life in the Markets
Could Multiple Savings Accounts Help You?
FIRE FAQ: Frequently Asked Questions About Financial Independence & Retiring Early
Inflection Point? Time to Diversify?
My Bad – 3 Insights Into Behavioral Finance
My Best Financial Decisions of 2019
Roth vs Traditional When Going for PSLF
The 2020 Stock Market By the Numbers
The Craziest Charts of the Year (So Far)
The One Percent Rule For Real Estate Investing
Vanguard leaders discuss the risks of default or downgrades in the bond markets
More TSP Lifecycle Funds and Finance Friday Articles
Starting July 1, 2020, you will have ten Lifecycle (L) Funds to choose from instead of the five currently available. They’re adding the additional L Funds so that the target dates will be separated by only five years instead of ten, allowing you to more precisely target the time when you think you’ll need your money. Six more L Funds will be added, and the L 2020 Fund, having reached its target date, will be rolled into the L Income Fund. See the fact sheet Additional Lifecycle (L) Funds for more information.
Here are my favorites this week:
My Real Estate Performance in the Coronavirus Era
The Six Big Money Items You Should Do as a Resident
Here are the rest of the articles:
5 Personal Finance Truths for the Military
Averting My Gaze from the Stock Market
Divvying Up Dollars When You Have a Surplus
How to Optimize Your Money in Retirement
Love Your Job? Why You Should Still Pursue Financial Independence
Massive Up and Down Moves in Stocks in the Same Year Are More Common Than You Think
The Story of Stocks and the Three Bears
Tips for Dealing With Your First Market Downturn
Vanguard and Fidelity investors didn’t flinch as the market tanked
Vanguard Total Stock Market Mutual Fund vs ETF: What’s the Real Difference?
What Percentage of Your Current Income Will You Need in Retirement?
Where the Private Real Estate Market Stands Six Weeks Into COVID-19
Financial Podcasts I Recommend
For those looking to get some financial education through their earbuds or while driving, here are the podcasts I recommend and actively listen to as well as one I don’t listen to but you should consider.
Two investment advisors give an educational and entertaining summary of recent market/financial news 1-2 times per week.
Many know that Vanguard was founded by John Bogle, and those who follow his investing principles are self-named “Bogleheads.” This podcast will teach you those principles.
Creative Planning is an investment advisory firm. Its President, Peter Mallouk, and Director of Financial Education, Jonathan Clements, who was a Wall Street financial columnist for 20 years, provide a monthly podcast series discussing recent market events, investment philosophy, and give monthly tips.
Financial Residency or Physician Finance Minute
Ryan Inman is a fee-only financial advisor who happens to be married to a GS physician at NMCSD. Financial Residency is the podcast that I recommend but don’t personally listen to because I find it to be too basic. That said, if you are a beginner to intermediate when it comes to personal finance, I think this is a podcast that you should strongly consider to build your financial knowledge base. For those with a short attention span, he also offers the Physician Finance Minute, which is literally 1-2 minutes of financial learning each day.
This podcast is hosted by a former investment manager. He does an excellent job of reviewing personal finance and economics topics in shows that are usually about 30 minutes in length.
Jimmy Turner, a practicing Anesthesiologist, and co-host Ryan Inman, the host of the Financial Residency Podcast above, teach you all of the personal finance topics you wish you had learned in medical school.
Peter Kim is also a practicing Anesthesiologist and entrepreneur who focuses this podcast on ways that physicians can create diverse streams of passive income.
This podcast from Morningstar is hosted by Christine Benz and Jeff Ptak as they talk to influential leaders in investing, advice, and personal finance about a wide-range of topics, such as asset allocation and balancing risk and return.
Our finances, portfolios, and the markets are affected daily by the policies and politics coming out of Washington. In each episode of WashingtonWise Investor, host Mike Townsend, Charles Schwab’s Vice President for Legislative and Regulatory Affairs, focuses a non-partisan eye on the stories that matter most to investors, and his guests offer actionable suggestions for what to do—and what not to do—with your portfolio.
Fellow Emergency Physician James Dahle, MD has created a digital and print media empire. You can’t go wrong if you make this your solitary source of financial information. There is a blog, internet forum, podcast, and book, so no matter how you prefer to ingest information you can find what you are looking for on his site.
Finance Friday Articles
Here are my favorites this week:
When Your Income Becomes Your Enemy
Why is the Market Doing Well Lately?
Here are the rest of this week’s articles:
4 Financial Tips for DINKS (Dual Income No Kids)
5 Ways Investment Performance Measurements Can Be Fuzzy
6 simple ways to take action in your financial life without hurting your long-term goals
A One-of-a-Kind Market Environment
At Ease (Make Sure Your Life Insurance Beneficiaries are Up-To-Date)
Bubble Behavior During a Depression
From Medical Degree to Financially Free
Here Are the 2020-2021 Post-9/11 GI Bill Rates
How COVID-19 is Changing the Housing Market
How Much of the Bear Market Losses Have Been Recovered?
How Our Annual Spending Determines Our Retirement Needs
Physician in Transition: A Fast Track Guide to Financial Security
The Different Types of Real Estate Crowdfunding Deals
The Diversification Drag & The Management of Luck
The Top 10 Things Doctors Need to Know About Disability Insurance
Thoughts from a mom investing for college
To SBP, or Not to SBP? Evaluating Your Survivor Benefit Plan Option at Retirement
6 Short Books That Can Transform Your Financial Life
Finance is an area of extreme importance in the personal and professional lives of military members, or at least it should be. In order to give readers a quick head start, I’d like to provide them with a list of recommended resources that offer sound advice and can be read quickly. Let’s face it, we’re all busy.
Get a Financial Life: Personal Finance in Your Twenties and Thirties – If you want one book to guide you in nearly all aspects of your financial life, this is undoubtedly the most comprehensive and useful financial book I’ve ever read. It offers sound advice in a concise format and covers investing, banking, insurance, real estate, taxes, and nearly every other topic you can think of. This is the best money you could spend if you are in your twenties or thirties, and probably even if you are older than that and just getting started.
Jonathan Clements Money Guide 2016 – This is another comprehensive resource I recommend. After a 2015 and 2016 edition, he transitioned the content to a free money guide on a blog called Humble Dollar, but if you want a physical book the 2016 edition is still highly relevant and recommended.
How to Think About Money – Clements’ other book is short in length (158 pages) but extremely useful when it comes to shaping your approach to personal finance. He teaches you how to think about money and use it to maximally impact your life and happiness.
The Bogleheads’ Guide to the Three-Fund Portfolio – I’d encourage anyone who is using a financial planner to read this book. Investing does not need to be complicated, and you probably don’t need to be paying an advisor when you can easily do this yourself.
The Elements of Investing: Easy Lessons for Every Investor – For investment advice, I turn to two authors, Burton Malkiel and John Bogle. Malkiel is the Chemical Bank Chairman’s Professor of Economics at Princeton University and is most famous for his bestselling book, A Random Walk down Wall Street: The Time-tested Strategy for Successful Investing, which is 500 pages long. His lesser known book, The Elements of Investing: Easy Lessons for Every Investor is much more manageable at less than 200 pages, was published in 2013, and provides all of the advice without the in-depth theory. It’s like skipping to dessert without having to eat your vegetables. In addition, you can check out The Random Walk Guide To Investing, which is only 224 pages but a bit dated since the last edition is from 2007. The principles, though, remain unchanged so it is still a worthwhile read.
The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns – Bogle, founder of The Vanguard Group, is also famous for a book that I highly recommend, Common Sense on Mutual Funds. This book, however, is heavy on theory. If you don’t want a degree in finance, you can get the Reader’s Digest version by reading his other book, The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns. This book is also a much easier read at 216 pages long, and will teach you how to get rich slowly, the only surefire way to get rich.
Finance Friday Articles
Here are my favorites this week:
A World of Problems With the TSP I Fund
Investing According to Jack Bogle
The Day You Became A Better Writer
Here are the rest of this week’s articles:
9 Tips for Hiring a Contractor to Build Your Dream Home
Does Delaying Social Security Deliver an 8% Return?
Face it: This is a good time to make a will
Give Me Five – A Discussion of the IRS’s 5 Year Rule for Roth IRAs
Incorporating to Reduce Liability and Save Taxes
Low Bond Returns are Nothing New
Portfolio Construction Case Studies
Retiring With Extreme Low Interest Rates
The Best Source of Investment Income?
The Simplest Way to Make Up For Portfolio Losses
Things I’d Tell Myself at 18 That I Now Know at 26
Do You Need a Financial Advisor?
Not everyone feels comfortable managing their own finances, so I’d like to discuss whether to get help planning your personal finances and how to select an advisor if you need one.
Do You Need Financial Advice?
It isn’t hard to manage most of your financial life if you are willing to learn a little, spend a small amount of time on your finances, and get help only when you need it. The areas you’ll need to address include creating and executing an investment plan, managing your assets, maximizing tax-efficiency, tax preparation, insurance, estate planning, asset protection, and other areas depending on your situation.
This list can be daunting to many, and most physicians are busy and would prefer if someone did this for them or helped them out significantly. If you’re in this camp, you likely need financial advice. In addition, some people want access to investments that they can’t get on their own like hedge or venture capital funds. I’m not one of these people, but if you are you’ll need an advisor.
How Do You Select an Advisor?
There are a number of important factors to consider when selecting a financial advisor. These include:
- How are they paid?
You want a “fee-only” advisor who is going to be paid a flat fee, hourly fee, or percentage of assets under management. You want to avoid any advisor who is compensated with commissions on trades or investments they sell you. This will ensure that their incentives are aligned with yours.
- How much are they paid?
Whether you are paying a flat fee, hourly rate, or percentage of assets, you should be able to get an advisor for under $5000/year. The industry standard for a percentage of assets fee is 1% of assets under management, but you should be able to find this service for significantly less. Vanguard’s asset management service is 0.3%, for example, as are many of the “robo-advisers” I’ll discuss at the end of this article. Also, make sure he/she discloses any additional fees you will have to pay.
- What are their credentials?
There are a lot of different credentials that financial advisors can have, and many of them are nearly meaningless, like a physician having a BLS card. The ones that represent significant training and education include Chartered Financial Analyst (CFA), Certified Financial Planner (CFP), or Chartered Financial Consultant (ChFC). If they are an insurance agent, Chartered Life Underwriter (CLU) is a quality credential. If they have a MBA, CPA, or JD, that can be a plus as well. The rest of the credentials you’ll see mean little.
- What services do they offer?
As discussed in the 2nd paragraph, there are a lot of services you may want or need. Make sure that your advisor either provides the ones you want or has someone who can. Also make sure it is clear which of these services your fee includes and which it does not.
- How much experience do they have?
We’ve all been medical students and residents, so we’ve all been inexperienced professionals. Looking over our shoulders most of the time, however, was a supervisor with experience. Make sure your advisor has experience, specifically with physicians. We have unique problems like sizeable student loans and professional liability issues that they should be familiar with.
- What is their investment philosophy and is it compatible with yours?
Make sure that they can explain their financial philosophy to you in a manner that makes you comfortable and that you can comprehend. You don’t want to hire an advisor who talks over your head. Just like a doctor who avoids using complex medical jargon when talking to his/her patients, an effective financial advisor should be able to make complex subjects understandable for clients. Also, make sure their investment philosophy is compatible with yours. If you are a believer in passive index investing, you don’t want to hire an advisor who believes primarily in active management.
Are There Other Options?
“Robo-advisors” are on-line tools that have lower fees than a financial advisor but less of that personal touch. Betterment.com or Wealthfront.com are two of the larger companies, but there are others as well. While I have never used these services, I think they are worth considering when you are examining all of your options for obtaining financial advice, especially because the price is right.
What Do I Do?
As someone who writes financial articles, I have a personal interest in this, stay reasonably up-to-date on the latest developments, and do most of my own financial management. When I need help or feel like I’m in over my head, I have access to CFPs from Vanguard, a CPA, and an estate-planning attorney that I can call in a pinch.
If you want an advisor, though, I’d go to Vanguard or the White Coat Investor’s list of advisors.
TSP I Fund News and Finance Friday Articles
This one is certainly interesting for anyone who invests in the TSP I Fund, its international stock index fund:
Trump orders federal retirement money invested in Chinese equities to be pulled
And then they put out this update:
Board defers action on I Fund transition — (May 13, 2020) Due to a meaningfully different economic environment related in large part to the impact of the global COVID-19 pandemic, as well as the nomination of three new Federal Retirement Thrift Investment Board Members, pending further study, the Board is delaying the implementation of the I Fund benchmark change to the MSCI ACWI ex-U.S. Investible Market index from the MSCI EAFE index.
This is why I try to keep all of my international stock holdings at Vanguard in their total international stock fund, which includes emerging markets like China.
Here are my favorites from this week:
Does Covid-19 Prove the Stock Market is Inefficient?
How Debt-Free Living Helped Us Beat the Coronabear
Here are the rest of the articles:
AMA’s Disability Insurance: You Get What You Pay For
Can Millennials Count on Social Security In Financial Planning?
Charitable Remainder Trusts – A Potential Solution To The SECURE Act
Does Better Virus Response Lead to Better Stock Market Outcomes?
Forced Frugality: Applying Lockdown Life Lessons to Reach FI Faster
How to Thrive with Airbnb Rentals Amid the COVID-19 Pandemic
Nothing Fails Quite Like Success in the Stock Market
Now Is The Best Time In History To Do A Roth IRA Conversion
Partial FIRE: The Solution to Your Problems?
Refinancing with a Physician Home Loan
The 5 Types of Investors In This Market
Thinking Through Financial Decisions
This new site is all about money for military spouses
What Happens to Stocks After a Big Up Month?
What the White Coat Investor Actually Uses
What Ultralow Yields Mean for Your Financial and Retirement Plan
DOD Launches Financial Education Website for Military Spouses
Here’s a link to this announcement:
DOD Launches Financial Education Website for Military Spouses
Joel Schofer's Career Planning Blog 