Cactus' Account Talk

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. . . and back down we go. So how are we supposed to make any money at this game? :suspicious:
 
That's true. It's just that I want it to make up its mind -- plus I want to get back up to zero for the year. :sick:
 
Cactus said:
That's true. It's just that I want it to make up its mind -- plus I want to get back up to zero for the year. :sick:
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I'm still below my 2017 finish, but I'm inching closer. Anything close to 1% for the day will push me positive again for the year.
 
Cactus said:
Looks like the S Fund mostly made back what it lost yesterday. :) The C Fund not so much. :o
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Interesting on what happened in my account over the last 3 days. I'm 100% "S" fund and on Tuesday it made .44% ($920.72), Wednesday was -.44% ($917.17) and Thursday was.44% ($917.96) That is pretty flat. :laugh: Maybe yesterday would have been a good day to get out. Tariff talk not looking good for the market this morning.
 
Hmmm? I thought it was the trade war uncertainty that was giving the small cap its edge. The small companies don't have the international presence that the large ones do and all that. We will have to keep an eye on that to see if the S Fund still bounces back. I still have two IFT's and am ready to jump. Not today though. I'll stay in over the weekend and see what develops. Maybe my mistake.
 
Small companies may sill be producing products that would sell overseas... I have two IFTs and ready to jump... IN! Maybe a partial position today, maybe wait till Monday.
 
Oh Prickly one, I've heard this one before but it actually isn't true. If you take loan proceeds out and put them back when you repay the loan there is no tax effect for either part of the transaction. When you ultimately withdraw the funds from your TSP account you are taxed one time and one time only! The big negative is that the funds you take out don't earn as much as they otherwise could while you have them out of your account. It is a little odd that you have to pay interest on your own money (which is part of your repayment of the loan that is also redeposited into your TSP account).


Scout333
 
No offense, but that article is a pile of doo doo. I have a residential loan and just paid off a general purpose loan last month. I have to wait until next month before I can request another general purpose loan in which I will immediately request.

For the loan interest, you pay it back to yourself.

I took out a residential loan since I recently bought a larger home and wanted to use some TSP funds to eliminate having to also pay $150.00 per month PMI (after tax money) for three years.

A general purpose loan also makes a lot of sense IMHO. For example, take out a $20k loan and use the money to pay off a high-interest rate credit card or contribute to an IRA or other investment account and be able to trade your funds with less restriction while also paying yourself interest.
 
Interesting, you are paying interest to yourself. I like that idea, but isn't the interest part double taxed? Not that it amounts to much.
 
Cactus said:
Interesting, you are paying interest to yourself. I like that idea, but isn't the interest part double taxed? Not that it amounts to much.
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No, the interest on the loan is not double taxed. If you take out a loan and the rate is say 3%, then the principle and interest is paid back into your TSP account.

If you make a withdrawal from your TSP, those funds are taxed as a distribution (with a potential 10% early withdrawal penalty). There is no tax on a TSP loan if repaid in full. If you default and do not repay your TSP loan in full, then the remaining funds will be considered a distribution and will be taxed.

Say for example, you usually keep $10K parked in the G-Fund and the return rate is 3% per year. If you wanted to double your return rate without increased risk exposure, then take out a $10K loan. You are already paying yourself back the 3% you would have earned and if you opened an investment account and parked the funds in a G-Fund equivalent making 3% per year, you are now earning 6% per year with the same level of risk exposure. The only downside is you now have a loan to repay using post tax dollars. Alternatively, if you used the $10K and put it into an IRA, then you now have a $10K deduction to claim on your taxes for this year.

In a nutshell, if you use the proceeds from a TSP loan to just spend the funds frivolously, then a loan is a bad idea. If you use the proceeds to further your investment strategy, it makes a lot of sense when you think about it.
 
Well, it looks like this morning we are giving back yesterday's gain and them some. Hard come --- Easy go. :sick:
 
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