Skip to main content
Message Font: Serif | Sans-Serif
 
No. of Recommendations: 0
I feel like I learned a lot yesterday (9/25/12), but I am afraid I may have wasted $39. I'm a Fed and I have a decent amount built up in our 401k, aka the Thrift Savings Plan. I thought it might be fun and a new challenge to start an independent portfolio. Then I got to thinking, maybe instead of buying stocks and paying broker fees, I ought to just sink more into my 401k. What do you think?

Sincere regards,

Jim Whitt
Print the post Back To Top
No. of Recommendations: 0
What kind of fool? ... Isn't that a song title? ;-)
In any case, putting as much as you can into a 401k especially a low cost one such as the TSP is perhaps the best investment you can make for retirement. An exception might be if your circumstances are such that you want some investments in a taxable account if you might have a need to withdraw money from the account.

Bob
Print the post Back To Top
No. of Recommendations: 0
Ah, a music scholar. Thanks for replying, Bob. "What Kind of Fool Am I?" First recorded in 1962. Here's an article about it:

http://en.wikipedia.org/wiki/What_Kind_Of_Fool_Am_I%3F

I felt like I was taking a college class for no credit. This whole world of investing is so different from working as a pharmacist. I saw an article about "How to Invest $20, $100, and $1,000 (and More)" Here is the link:

http://www.fool.com/investing/brokerage/how-to-invest-20-100...

I thought maybe I could do something like a Roth and chunk in as much as I can every payday for emergency spending money. That sounds like what you were saying in your final paragraph. My best bet may be the "Drips" method they mentioned. I'm concerned about keeping good records for dollar cost averaging, because I'm a notoriously bad record keeper at home. Thanks for your advice!

Jim
Print the post Back To Top
No. of Recommendations: 1
SoonerJim,

You wrote, I feel like I learned a lot yesterday (9/25/12), but I am afraid I may have wasted $39. I'm a Fed and I have a decent amount built up in our 401k, aka the Thrift Savings Plan. I thought it might be fun and a new challenge to start an independent portfolio. Then I got to thinking, maybe instead of buying stocks and paying broker fees, I ought to just sink more into my 401k. What do you think?

I'm curious. What was the $39 for?

And when you say you're a "Fed", do you mean you're an FBI agent? Or do you work for the Federal Reserve? Or are you just employed by some other federal bureaucracy? And in any case, how does that fact affect this discussion - other than the fact that the TSP offers federal employees retirement investment options that usually beat the options available to private sector employees through their employer's 401(k) plans?

BTW, I suspect the main reason for you to invest outside your TSP would be:

1. You expect to hit the ($17K/$22.5K) contribution limit this year; and/or,
2. You would like to try an investment strategy that cannot be replicated with the limited set of funds available in the TSP.

The questions here involve two things:

Taxes: If you do not expect to hit the contribution limit, can you beat the tax-advantaged returns of your TSP?

Rate of Return: Do you have a plan to obtain at least as good a rate of return as your TSP options, adjusted for inflation?

I could ask more questions; but I really wonder where the $39 went. I think that might guide further questions ... and answers.

- Joel
Print the post Back To Top