Archive - August 29, 2017

The 7 Habits of Highly Effective Investors
Dangers of Taking Out a TSP Loan

The 7 Habits of Highly Effective Investors

As Suzanne Woolley writes in her Bloomberg post, she’s identified seven habits of effective investors. I would agree with her on these habits.

  1. Save early, and automatically
  2. Expect financial emergencies
  3. Set an asset allocation, and diversify
  4. Keep fees low
  5. Use an advisor who is a fiduciary
  6. Spend less than you earn
  7. Maximize employee benefits

I would add Avoid leverage and Avoid speculation. You should invest within your risk tolerance and risk capacity. And, think long term for retirement investing and invest more conservatively as you come closer to needing your money for college, cars, or other financial goals.


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Dangers of Taking Out a TSP Loan

Recently, Michael Kitces published an article titled, “Why Paying Yourself 5% Interest On A 401(k) Loan Is A Bad Investment.”  My first thought was, “If it’s a bad idea for a 401(k) loan, it must be even worse for Thrift Savings Plan loans.”  After all, the interest on a TSP loan is nowhere near 5%…it’s tied to the G-Fund interest rate.  At the time of this writing, that would be 2.25%.  In other words, that’s less than than half of the 401(k) loan mentioned in Kitces’ article.

But that’s not why I wrote this article.  After all, I …

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