Step 4 to Crush the TSP – Invest
You’ve read steps 1, 2, and 3 to crush the Thrift Savings Plan (TSP), and now you’re ready for step 4 and to start investing. In step 3 you came up with your desired asset allocation, so make sure you have that. You’re going to need it for the rest of the post. Just to make life a little easier, we’re going to use an example asset allocation of 80% stocks and 20% bonds.
Bond…James Bond
For the bond portion of your asset allocation, you only have two investment choices:
- G Fund – US government bonds (specially issued to the TSP)
- F Fund – US government, corporate, and mortgage-backed bonds
Both of these are US bond options, which is just fine. There are no international bonds available in the TSP.
We could have an intellectual discussion about the subtle differences between these two bond funds, but we’re not going to. It isn’t necessary. They’re both fine bond funds, so just split the difference, diversify, and put half of your bond allocation in the G fund and half in the F fund.
To illustrate, in the example allocation of 80% stocks and 20% bonds, we’d put 10% in the G fund and 10% in the F fund.
That’s it. The bonds are done.
The Stock Allocation
This is a little more complicated. The largest decision you have to make is how you’re going to divide your stocks between the three options. Here are your choices:
- C Fund – stocks of large and medium-sized US companies
- S Fund – stocks of small to medium-sized US companies (not included in the C Fund)
- I Fund – international stocks of more than 20 developed countries
The first question is what percentage of your stock allocation should go to the I fund. There are a few schools of thought on this.
John Bogle, the founder of Vanguard, is famous for believing that you don’t need to invest any of your stocks in international stocks. His long held belief was that the US companies are doing business globally, so they are already worldwide diversified. For example, Coca-Cola is clearly selling Coke products all over the globe. He would say you should put 0% of your stocks in the I fund.
At the other end of the spectrum are people who believe that you should invest proportionally. If you look at the worldwide value of stocks, it is about a 50/50 split between the US and the rest of the world. These people would say you should put 50% of your allocation in international stocks.
Both of these opinions are reasonable, so anything between 0% and 50% allocated to the I fund is fine. What do I do?
I rely on the research done by Vanguard, an institution managing over $5 trillion. I figure they have more money and resources to research this stuff than I do. What does Vanguard do?
If you look at their Target Retirement Funds, which are meant to be a “one stop shop” kind of investment fund, you’ll notice that they split their stock allocation so that 60% is US and 40% is international. They used to do it 70% US and 30% international, but their research showed 60/40 to be a better split so they moved to it a few years ago.
You’ll notice that a 40% international allocation is between the 0% Bogle viewpoint and the 50% global weighting viewpoint, so it seems fine to me and that is what I do.
If you want another opinion, you can look at the TSP Lifecycle funds. You’ll notice that they do about a 70% US and 30% international split, like Vanguard used to do. Again, that seems reasonable.
Ultimately, you can pick anywhere from 0% to 50% and find someone really smart who agrees with you. I’d encourage you to have some exposure to international, so I’d say you should pick at least 20%, but it really is up to you.
Not sure what to do? Go with 30% (the TSP Lifecycle approach) or 40% (the Vanguard approach) for the I fund and call it a day.
How to Split the C and S Funds
This is easier, or at least I think it is. The C fund is basically an S&P 500 index fund of large companies, with the S fund having the rest of the small and medium sized companies. If you want to mirror the US stock market, you want to put about 75% of your US stock allocation in the C fund and the other 25% in the S fund. You’ll notice that this is what the TSP Lifecycle funds do, further backing up my assertion.
So, I recommend that you split your C and S fund allocation 75/25, respectively.
Putting the Stock Portion All Together
For the stocks, here’s the math:
- (Your desired international stock %) X (your total stock allocation %) = % that goes in the I fund
- (Your total stock allocation %) – (% you are putting in the I fund) = % you must divide into the C and S funds
- (Your % you must divide into the C and S funds) X 0.75 = % that goes in the C fund
- (Your % you must divide into the C and S funds) X 0.25 = % that goes in the S fund
Let’s use the 80% stock and 20% bond example we started with to illustrate. Let’s assume we’re going with a 40% desired allocation to international (like I personally use):
- (Desired international stock = 40%) X (total stock allocation = 80%) = 32% goes in the I fund
- (Total stock allocation = 80%) – (32% that is going in the I fund) = 48% we must divide into the C and S funds
- (48% we must divide into the C and S funds) X 0.75 = 36% that goes in the C fund
- (48% we must divide into the C and S funds) X 0.25 = 12% that goes in the S fund
That gives us a stock allocation of 32% I fund, 36% C fund, and 12% S fund.
The Bottom Line
We split our bond allocation 50/50 between the G and F funds. We put the desired percentage for international stocks in the I fund. We split the remaining stock allocation 75/25 between the C and S funds, respectively.
For the 80% stock and 20% bond portfolio we are using as an example, this plays out:
- 10% in the G fund
- 10% in the F fund
- 32% in the I fund (based on a hypothetical 60/40 US/international stock split, which can vary as discussed above)
- 36% in the C fund
- 12% in the S fund
This can be tough to grasp in a blog post, so if there are questions or points that need clarification just put them in the comments section and we’ll straighten them out.
The next step you need to crush the TSP is to decide if you’re going to go Roth or traditional.
2020 Navy and Marine Corps Public Health Conference: Call for Poster Abstracts
The Navy and Marine Corps Public Health Center is pleased to announce that the Navy and Marine Corps Public Health Conference is preparing for 2020, pending approval.
The conference will be held in Tidewater (Virginia) March 17-19, 2020, with the specific venue to be determined.
The deadline for poster abstract submissions is 31 October 2019 by 2359 EST. No late submissions will be accepted. Selected posters will be announced December 2019.
Please submit an abstract with a title, author names and affiliations, and a body of no more than 250 words in a Word Document to Stephen.p.rossi.civ < at > mail.mil with the email subject: Poster Abstract – Last Name, First Name.
Poster subjects should be related to public health in the military. Topics may include:
- Supplements
- PrEP
- Changes in HPW
- Diabetes Education
- MHPPH Update
- Smoking Cessation
- HPW best practices
- Readiness
- Program Evaluation
- Women’s Health
- Process Improvement
- Analytic techniques
- Injury Prevention
- Fleet HPW Programs
- Suicide Prevention
- Navy Needs Assessment
- Semper Fit Update
- Cancer Epidemiology
- Hospital Acquired Infections
- Behavioral Health Surveillance
- Communicable Disease Surveillance
- Public Health Dashboards and Assessment Tools
- Injury surveillance
Our conference team is working hard to develop a solid readiness-focusedagenda that addresses force health protection strategies and solutions for current and future public health threats to Navy and Marine Corps mission readiness.
We look forward to your submissions.
Finance Friday Articles
Here are this week’s articles:
Attending Your Own Funeral: Thoughts on Finances and Legacies
A User’s Manual for Human Financial Behavior
Best Time to Buy a Car and How to Get the Best Deal
Financial Independence With Kids: How Procreation Impacts FIRE
Financial Mistakes for the Financially Literate
Giving Voice – Make Sure You Discuss Major Financial Moves with Your Spouse/Partner
I’m 100% Stocks and Happy with my Diversification
Investing Doesn’t Have To Be Complicated
Is It Ever Too Late To Start Investing In Real Estate?
“I Want To Lower My Taxes” Is a Stupid Goal
Michael Burry Trashes Index Funds – Are We Screwed?
The Best and Worst Case Scenarios for Bonds from Here
The Big Short’s Michael Burry Explains Why Index Funds Are Like Subprime CDOs
‘The Big Short’ Whiffs On Indexing
What The Bible Can Teach You About Money
What to Make of a Stock Market That Has Gone Nowhere for a Year-and-a-Half
Throwback Thursday Classic Post – Should You Send a Letter to the Promotion Board?
Assuming you are under consideration by a promotion board, the answer is yes if:
- You have letters of recommendation you want to send in, traditionally because you are above zone and were passed over at least once. In general, you should try to get letters of recommendation from the most senior members who know you well enough to discuss your contributions to the Navy and why you should get promoted. For example, it is probably better to get a letter from an O6 who knows you well than to get a letter from an O8 who does not. Your specialty leader is always a solid choice as a letter writer if you are unsure who to get one from.
- You are reporting to a new command before the FITREP cycle and your Commanding Officer is willing to write a positive letter about your contributions to your new command.
- You have issues in your record or career that require explanation or amplifying information. For example, you want to tell the promotion board how promotion to the next rank will allow you to do something you can’t do at your present rank, like screen for XO. If there are any gaps in your military service or any new information not on your FITREPs, these may need explanation as well.
- You have to make corrections/additions to your record (like missing or illegible FITREPs, awards, academic or professional achievements, etc.) but you either don’t have time to update them the standard way or your have tried without success.
THINGS TO REMEMBER
There are a few things to keep in mind:
- After the board is finished, anything you sent is discarded. You cannot permanently update your record by sending documentation to the board.
- By law, a letter to the board must be considered. In other words, if you don’t want the board to discuss a topic, don’t mention it in a letter. If there is adverse information in your record, sending a letter discussing it may help if you have amplifying information to add. Then again, if it is something they might not have noticed, sending a letter discussing it ensures that they will notice it!
- Your Commanding Officer usually should not write a letter if he/she has done a FITREP on you, as his/her opinion should be reflected in the FITREP.
- They are usually not recommended if you are in-zone unless there is a reason to send a letter listed above. Do not send one just for the fun of it.
- Keep the length of letters to a minimum – one page or less – as boards have to read everything that is sent to them.
- Do not send copies of publications.
- Only the service member can send the letter on his/her behalf. In other words, if you have a letter from an admiral, you need to send it to the board. Don’t have the admiral’s aide send it because it will just get shredded and will not be briefed to the board.
- Your letter must arrive no later than 10 calendar days before the board convenes.
I’M STILL NOT SURE IF I NEED TO WRITE A LETTER
Write the letter, but keep it brief. This way if you are not selected for promotion, you’ll at least know the board had all the info you wanted them to have.
HOW DO I WRITE/SEND THE LETTER?
See the following website for all the info you need, including a sample letter to a board:
http://www.public.navy.mil/BUPERS-NPC/BOARDS/ACTIVEDUTYOFFICER/Pages/default.aspx
If You Want to Improve Your Wellness and Reduce Burnout, Read This Article
Wellness.
Burnout.
The articles discussing these subjects are endless. If you want to address your own wellness/burnout or that of others, read this article and take it to heart:
Reaching Peak Wellness – Most of It Is Nonsense. Here’s What Actually Works.
Three Global Health Engagement Positions Available – O4-O6
Three GHE billets that are coming available in summer of 2020. Position descriptions and requirements are below:
- Director, Office of Global Health Engagement, BUMED: open to an O-6 from any Corps; duty station is Falls Church, VA.
- Deputy Director, Office of Global Health Engagement, BUMED: open to an O-4/O-5 from any Corps; duty station is Falls Church, VA.
- Chief, Lessons Learned, NATO: open to Medical Corps O-4/O-5/O-6; duty station is Budapest, Hungary.
Officers must be in their PCS window and have Detailer concurrence to apply.
Medical Corps applications are due to CDR Melissa Austin (contact info is in the global) NLT Oct 15, 2019.
FY20 Promotion Phasing Plan Released
As you can see below, there are adjustments to promote a bunch of people on 1 OCT due to the new merit reorder process at promotion boards:
New Process to Digitally Submit Your Promotion Board Photo
I’m working on updating the Promo Prep document for 2020, but it’ll take a while. In the meantime, here is an update on this new process from your Detailing shop:
Officers now have the option of uploading their photo to their Official Military Personnel File (OMPF) electronically via MyNavy Portal (MNP), saving the time and costs associated with printing and mailing:
- Go to https://my.navy.mil and log in with your CAC Card.
- Go to “My Record” at the top, then find “Officer Photograph.”
- The form NAVPERS 1070/884 will open and photos can be uploaded directly to the form and submitted to the OMPF.
- You must use your DOD ID (not your SSN).
A Change in Leadership for the Defense Health Agency
Here’s a link to the article:
Updated Instructions on How to Get the Executive/Expeditionary Medicine and Managed Care AQDs
You have your Detailing colleagues to thank for the update below…
How to Get the Executive/Expeditionary Medicine and Managed Care AQDs
Please go to the website below and use the “sign up” link. The new JMESP website address is:
https://jmesp.med.navy.mil/home
Please see “User Guidance” options at the website for instructions for both returning and new users available on the homepage. Under “All Users” is a PowerPoint presentation on how to add data. If you had an account in the old system (check maiden name if applicable), all you have to do to enter the site is reset your password. If did not have an account follow steps to establish an account.
Information on the other two Executive Medicine AQDs (67B Expeditionary and 67G Managed Care) is provided on the page, as well as a “Frequently Asked Questions.”
Now that you are on the website in your account follow these steps:
- Enter data.
- Courses (Check course for all services, e.g. “Combat Casualty Care” is an Army course and “MedXellence is a Joint-USUHS course)
- Education (Masters or higher required)
- Positions (by Corps)
- Certifications
- There is no need to send supporting documents unless requested.
- On the Competencies Attained if all boxes are checked, send us an e-mail: usn.bethesda.navmedprodevctrmd.list.nmpdc-jmesp@mail.mil. For MC, MSC and DC, provide your Detailer’s name; for NC your Planner’s name; if Reserve your Reserve Affairs Officer name. We will send verification for awarding. Member is copied on awarding e-mail.
- If boxes are not checked click on the lowercase letter ‘i” to see which competencies remain; you may satisfy remaining competencies (with the exception of Regulations) through Joint Medical Executive Skills online courses accessed through the following steps:
- Click Distance Learning
- Select courses associated with competency(ies) as listed on the chart (*If more than one module is indicated for the course, complete all modules).
- Courses generally take about an hour since they are not meant to make you an expert, but to provide you an overview of what to expect from your staff as CO/XO.
- Upon completion of online courses return to the website and add courses.
- Now if all boxes are checked, send us an e-mail: usn.bethesda.navmedprodevctrmd.list.nmpdc-jmesp@mail.mil. For MC, MSC and DC, provide your Detailer’s name; for NC your Planner’s name; if Reserve your Reserve Affairs Officer name. We will send verification for awarding. Member is copied on awarding e-mail.
General Program Information
The joint medical executive skills program formalizes the process designed to meet the congressional mandate which states in National Defense Authorization Act NDAA 1991, Sec. 8096. That “No appropriated funds used to fill the commander’s position at any MTF with a healthcare professional unless the candidate can demonstrate professional administrative skills.” This includes Commanding Officers, Executive Officers, and TRICARE Lead Agents prior to assignment.
JMESP is not a course, but a process through which officers are exposed to the congressionally mandated (through NDAA) 36 executive competencies through the following:
- Education: Master’s Degree or higher
- Approved Courses: Courses offered through Military Academic Institutions and Organizations, and service military medical departments’ sponsored courses. See Distance Learning for LEADS (formerly JMESI) courses located in Joint Knowledge Online.
- Experience: In both primary and certain collateral duties, executive and other board membership at military treatment facilities, operationally.
- Certification: Through medical and other health professional board certifying organizations and agencies.
If you have question not answered here, or at the website, contact usn.bethesda.navmedprodevctrmd.list.nmpdc-jmesp@mail.mil which includes both JMESP staff members for assistance.
Joel Schofer's Career Planning Blog 