Get Ready For the Schwabocalypse!

Schwab and AmEx got me the card in less than 48 hours of account opening! Just in time for their war on value investment firms like Vanguard and Blackrock. Here are their new fees starting tomorrow 01 March 2017 for their ETFs and Mutual Funds:

Name Old Fee New Fee TSP Equivalent
Schwab U.S. Small-Cap ETF™ SCHA 0.07% 0.06% S Fund
Schwab U.S. Mid-Cap ETF™ SCHM 0.07% 0.06% S Fund
Schwab International Equity ETF™ SCHF 0.08% 0.07% I Fund
Schwab Emerging Markets Equity ETF™ SCHE 0.14% 0.13% None
Schwab U.S. Aggregate Bond ETF™ SCHZ 0.05% 0.04% F Fund
Schwab S&P 500® Index Fund SWPPX 0.09% 0.03% C Fund
Schwab Total Stock Market Index Fund SWTSX 0.09% 0.03% C and S Fund
Schwab 1000 Index® Fund SNXFX 0.29% 0.05% C Fund
Schwab Small-Cap Index Fund® SWSSX 0.17% 0.05% S Fund
Schwab International Index Fund® SWISX 0.19% 0.07% I Fund
Schwab® Treasury Infl Protected Secs Idx SWRSX 0.19% 0.05% G Fund
Schwab U.S. TIPS ETF™ SCHP 0.07% 0.05% G Fund
Schwab Fundamental U.S. Broad Market Index ETF FNDB 0.32% 0.25% C and S Fund
Schwab Fundamental U.S. Large Company Index ETF FNDX 0.32% 0.25% C Fund
Schwab Fundamental U.S. Small Company Index ETF FNDA 0.32% 0.25% S Fund
Schwab Fundamental International Large Company Index ETF FNDF 0.32% 0.25% I Fund
Schwab Fundamental International Small Company Index ETF FNDC 0.46% 0.39% None
Schwab Fundamental Emerging Markets Large Company Index ETF FNDE 0.47% 0.40% None
Schwab® U.S. Aggregate Bond Index Fund SWAGX N/A 0.04% F Fund
Schwab® Short-Term Bond Index Fund SWSBX N/A 0.06% F Fund?

So there you go! Worth a look if you don’t have TSP access. Davey sent his list of possible suggestions here: SCHE and GREK are looking like YOLO bets!


Brad Wilson Churn Completed (for real this time)

A troy ounce of gold just hit $1,262.90 so I called at 1(888)992-4272 and they offered me $1,264.19 per coin for a minimum of 5 coins. They were pretty quick to make the offer and the price changes every minute. I was able to do the 4 coins I bought to meet minimum spend, as well as one I have been holding on to for awhile. Since it hit the minimum of a single category I could of sold anything else of my collection at any quantity. They said I could also sell the half minimums of two categories if it came down to that. Once they get the coins they will send me a check for $6,314.50 of which I will use to pay off my AmEx Business Platinum card thus completing my Brad Wilson Churn.

Next step cashing out junk silver and American Eagles when silver goes above $20


Update: Within 3 hours the price of gold dropped from $1264.19 to $1258.65 per coin. I am glad I locked in the sale when I did! Good timing on this one.

$300 Bonus For $500 Deposit (net): The Optimized Schwab Churn

I rewrote this article once I called Schwab Promotions at (877) 807-9240 to clear up some questions. Turns out MR point transfers does not count for the minimum deposit of $1,000 nor the tiered bonus between $10,000 to $100,000. You need to really deposit at least $1,000 in cash for the bonus, but are free to take out any invest with MR rewards money as long as you maintain the initial $1,000 real cash deposit.

We applied Sunday night during the Oscars, but this triggers a computer hold since there is no one at the office for approvals. I did log in here and see this:

Success! However we did not get a temp card, but the real one should come in a few days. We had the Card approved by Monday morning and had it funded. She could have used “SchwabWelcome11” for a $100 to $500 bonus for $10,000 to $100,000 deposit, but we stuck with using code “REFER” for $100 to keep at least $1,000 held for a whole year.

For my account, I ended up putting in $25k for $200 bonus which now I am stuck keeping in Schwab for an entire year, but they let me stack another offer, I also get another $100 to keep the same money in there. The $100 for $1,000, my friend, is the better offer since it only locks up $1,000 for a year to get $100.

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Derp Report ETF: GAA Excluding TSP


If you ever have time on your life to listen to podcasts, I definitely recommend the Meb Faber show. He is very entertaining, and takes a very quantitative look at the markets. We have somewhat of a similar background with undergraduate degrees in biology. Mr. Faber used his Biology degree to work for an investing firm analyzing biotech companies, and I ended up working for the Federal Reserve Bank with a degree in Biochemistry. Something happened along the way where he ended up being a multi-millionaire managing hundreds of millions of dollars in funds, and I ended up writing a blog earning 0.001 cents per ad impression.


I would like to think we brought our aspie, geek, quantitative minds into a world so saturated with bros and old stuffy men. Instead of making trades based on feelings and experience, we could use mounds of data to see new trends and patterns. In ‘The Big Short’ Dr. Michael Burry MD played by Christian Bale is the epitome of this savant/rain-man approach to applying quantitative reasoning in analysis of markets. You got to be the weirdo with the crazy ideas otherwise we are all just doing the same thing, and falling into the same traps.

The reason how many of us are exposed to market risk is we are too much into one thing. We tend to dump everything into something that has already gained value or has done well in the past. When that does not work out, when there is no more upside to it, we find ourselves holding the bag when all the initial investors have left. Just like flipping 5 houses in 2008, or buying thousands of dollars in Bennie Babies, or holding onto Twitter years after the IPO like my dumbass is ding. We all got burned by being too late into the game or buying on the upswing of hype and holding long after the sparkle is gone.


Diversity of investments is how we can capture growth while spreading out risk. Heard thinking and trend following is stupid, and if you dumped a bucket of ice water on your head for Facebook likes at some point in your life, you may be just wired to always be catching trends on the upswing, and buying into bubbles and holding on for another rally. You don’t hear about portfolio diversity because it is boring. I got into TSP because it is just that, incredibly boring and consistent and cheap over an insane time horizon. Now the next step is even more lame, because Global Asset Allocation is not sexy. No one brags about owning BB rated foreign sovereign debt as much as their brand new Tesla.


As I wrote before, TSP falls short in many aspects of the entire universe of investment opportunities out there. Mainly we are crippled to be truly diversified due to our domestic market bias. We think we are spread out and not exposed to risk because we own 3000 plus stocks in the American stock market, but forget to consider international stocks or bonds. We are just kind of half assing it here, we did the diverse index but not diverse markets. We forgot to go one more level up, the meta indexing of indexes.


Meb Faber’s podcast made me realize that all of us in TSP are investing in only domestic markets and developed international companies. He has a free book out there called Global Asset Allocation that he pushes the concept that to truly diversify our portfolio we may want to consider investing in companies we can’t pronounce or currencies we have never used.


If there is any sort of market correction here in the United States stock market, it is very unlikely that we see it affecting our position in a bond called “YPF Sociedad Anonima 144A” which is a loan to a company called Yacimientos Petrolíferos Fiscales or “Fiscal Oilfields ” an integrated Argentine energy company. This loan to the company is at 8.75% interest for $3.34 Million dollars and we can have a stake in in via the HYEM ETF. On the flip side, it’s hard to convince an American company to take out a 8.75% interest loan on $3.34 million dollars since most AAA rated bonds in America are earning around 3% right now.


There is an ETF that tries to invest in the entire world called GAA based on the Global Asset Allocation concept. From


The Cambria Global Asset Allocation ETF (NYSE: GAA) utilizes a quantitative approach to manage a diversified portfolio of global asset classes. The Cambria Global Asset Allocation ETF uses a buy and hold strategy that aims to reflect the market portfolio of investable assets.


What’s nice is the fund does not in itself have a management fee. It is listed o.oo% for an expense ratio, but in actuality it is around 0.25% because the underlying ETFs have fees in themselves. The description continues on:


The Cambria Global Asset Allocation ETF targets investing in approximately 29 ETFs that reflect the global universe of assets consisting of domestic and foreign stocks, bonds, real estate, commodities and currencies.


The biggest problem with this GAA ETF is I have $18,000 a year going into TSP which overlaps with a big chunk of it. Luckily all 28 funds are listed in the prospectus, and because I don’t have the requisite one million dollars to start my own ETF, I invite any of my readers to copy this template for a new ETF which is GAA minus any TSP components. I have marked each component accordingly:


Symbol Fund Name Category Fund % TSP Overlap
EYLD Cambria Emerging Shareholder Yield ETF Diversified Emerging Mkts 10.49% None
BND Vanguard Total Bond Market ETF Intermediate-Term Bond 7.77% F Fund
PDBC PowerShares Optm Yd DvrsCdtySrt NoK1 ETF Commodities Broad Basket 6.26% None
BNDX Vanguard Total International Bond ETF World Bond 5.04% None
MTUM iShares Edge MSCI USA Momentum Factor Large Growth 4.68% C Fund
VWOB Vanguard Emerging Mkts Govt Bd ETF Emerging Markets Bond 4.66% None
VTI Vanguard Total Stock Market ETF Large Blend 4.55% C and S Fund
VO Vanguard Mid-Cap ETF Mid-Cap Blend 4.48% S Fund
GVAL Cambria Global Value ETF Foreign Small/Mid Value 4.08% None
HYEM VanEck Vectors EM High Yield Bond ETF Emerging Markets Bond 3.99% None
VEA Vanguard FTSE Developed Markets ETF Foreign Large Blend 3.85% I Fund
SOVB Cambria Sovereign High Yield Bond ETF Emerging Markets Bond 3.52% None
SYLD Cambria Shareholder Yield ETF Mid-Cap Value 3.20% S Fund
VNQ Vanguard REIT ETF Real Estate 3.12% None
IPE SPDR® Blmbg Barclays TIPS ETF Inflation-Protected Bond 2.99% None (slight G Fund)
IEF iShares 7-10 Year Treasury Bond Long Government 2.95% G Fund
WIP SPDR® Citi Intl Govt Infl-Prot Bd ETF World Bond 2.94% None
LQD iShares iBoxx $ Invst Grade Crp Bond Corporate Bond 2.92% F Fund
VNQI Vanguard Global ex-US Real Est ETF Global Real Estate 2.78% None
VSS Vanguard FTSE All-Wld ex-US SmCp ETF Foreign Small/Mid Blend 2.04% None
VCSH Vanguard Short-Term Corporate Bond ETF Short-Term Bond 1.96% F Fund
TLT iShares 20& Year Treasury Bond Long Government 1.96% G Fund
BSV Vanguard Short-Term Bond ETF Short-Term Bond 1.96% F Fund
IHY VanEck Vectors Intl Hi Yld Bd ETF World Bond 1.88% None
IBND SPDR® Blmbg Barclays Intl Corp Bd ETF World Bond 1.88% None
FYLD Cambria Foreign Shareholder Yield ETF Foreign Small/Mid Value 1.88% None
JNK SPDR® Blmbg Barclays High Yield Bd ETF High Yield Bond 1.87% None


You can see exactly which funds to buy if you wanted to replicate GAA. Just keep in mind it will cost you at least $6.95 on Schwab to trade each ETF. Send me a message once you make this ETF or mutual fund and I will be your first investor. Just put me on your board!




Military Investment Series Conclusion: Where TSP Falls Short

LEH is trading for $395 a share! Only on

On Tuesday, September 16, 2008 Lehman Brothers Inc. was removed from the S&P 500 index, because they made a few bad moves, and caused some people to loose a few bucks. Index funds including C Fund managed by Blackrock were forced to sell their holdings of LEH between $3.95 to $0.30 a share from when the announcement was made on the 15th till it was de-listed from the NYSE on the 17th. They then had to buy up Harris Corp. (NYSE: HRS) to match the new S&P 500 index. For those paying attention shares of Harris Corp on Sep 19, 2008 had a massive spike of ten times the normal trading volume at 18,499,000 closing up 1.80% in value. If you were a front runner you could of snatched up this stock before it was included in the S&P 500 Index Funds. Keep in mind picking what stock is to be included in the index is as easy as knowing what Oprah would pick for her book club. The S&P pick process is still very non-mathematical and done by human committee.

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Military Investment Series Part 5: The G and F Fund

Bonds are loans to companies, municipalities and even the federal government. When a town wants to build a bridge or a company wants to build a warehouse, they issue bonds to raise money. In the old days bonds were physical pieces of paper with coupons you tore off and turned into the issuer for payment at pre-determined intervals.

you can buy these from

These bonds are rated by companies like Moody’s for credit worthiness with a rating from AAA to D. Like your own credit score an 850 rating is good for you since your interest for a mortgage will be low, and a bad credit score of 400 is going to cost you in high interest rates because you obviously suck at paying people back and are an obvious risk. A bank will only take on the risk if it is lucrative for them to give you a chance with a loan. These bad credit companies are very high yield bonds know as “junk bonds”. They have a high risk of default, but if they do pay off the loan then it would be worth it!

Both the F Fund and the G Fund deal with loaning out money and hope on those parties paying you back at full term with interest. These securities are called bonds, where the writers of the bonds will make interest and principal payments to you over time. The F Fund matches the performance of the Bloomberg Barclays U.S. Aggregate Bond Index, a broad index representing the U.S. bond market. This is indexing with money lending instead of stocks.

How many loans does this fund cover? Well, in December 31, 2015, the index included 9,720 notes and bonds. Its yield to maturity was 3.09%. The average duration of these bonds was 5.31 years. TSP is limited by law to only include super safe bonds only in the USA market of a rating of BBB- or better as safe investments, hence the low 3% yield. These guys are going to pay back, so you can’t really charge too much.

The G Fund is a U.S. Treasury security specially issued to the TSP. Payment of principal and interest for G is guaranteed by the U.S. Government. Thus, there is no credit risk as compared to the F fund which has a super small risk of default. However bonds of the F Fund are exposed to market risk where the risk that the value of the underlying securities will decline, and prepayment risk the risk that a security in the fund will be repaid before it matures. Since its infinity low risk we can only get a consistent 2% return with the United States government. This sucks because inflation is around the same rate, so it is like not making money at all.

US investment grade bonds and Government Bonds are boring because they will most likely pay the 3% average interest or 2% with the feds. There is no risk of loss, but there is also no return, This is why the Life cycle funds shift CSI to F and G as you age closer to death. No need to have 30% return every year when your 99 years old since you essentially only have a few years to spend your money before your spoiled rotten kids get it all in the will.

Again Dave Ramsey and I don’t like the Lifecycle funds because they are way too conservative. I have been told if you do life cycle to aim for your proposed death date as your retirement date, since we might live to 130 in the future, who knows? This will delay the shift to all F and G to maximize earnings and switch to a conservative income only portfolio later in life.

Now there are many ETFs that dabble in the riskier side of the bond market there is “JNK” which is SPDR Barclays Capital High Yield Bond ETF. You can also go outside the American market and invest in “SOVB” Cambria Sovereign Bond ETF which is the foreign equivalent of the G fund just for countries that really need the money, with pretty questionable credit, some as low as a B rating. However this risk has resulted in some sweet returns paid in dividends. My $990 investment via Robin Hood has earned me $14.63 and $9.46 in dividends in 6 months, 4.8% annualized yield!

This concludes the review of all the Funds of TSP. Check out my write up on C,S,I in previous entries. Next up, what is TSP missing and what can you do about it.


Any AmEx Business Card or Personal Platinum for McCormick Place AmEx Lounge

If you haven’t noticed, every dentist in Chicago is at McCormick Place right now for the CDS Midwinter meeting. One of the perks of the AmEx Business Cards is the small business networking offered by AmEx. Their program is known as OPEN involves lounges and networking forums to link small business together. One nice thing is they have an unpublished lounge located at McCormick Place South building. More info is on the McCormick site here, but nothing from the OPEN site or AmEx itself. Only mention is three lounges in NYC/LAS/CHI mentioned in an advertising blog. Specifically at Javits Center in NYC, McCormick Place in Chicago, Las Vegas Convention Center in Las Vegas.

The lounge is nice there are free snack foods and a quiet space to relax! Load up on coffee and snacks before class, no lines at all. This lounge is located in the South building which is connected to the Lakeside building on the 2.5 floor of the grand concourse.

You need any OPEN card, check for the blue OPEN logo in the back of the card. The front desk said they would take the Personal AmEx Platinum for access. You can also bring two guests per card holder.

Look for this logo on your card

They take the personal plat as well

coffee by an AmEx OPEN member company


Billy Goat Chips were good

The lounge features snacks and coffee from companies that are featured in their forum. They have videos running about their origin story, Pretty motivating if I had a business for sure. Worth a visit if you want to get away from the crowds and lines.


Military Investment Series Part 4: The I Fund

Lets talk about home country bias here. Although you may seem diversified in terms of owning 99.9% of every publicly traded American company you are actually in the one basket of your home country. Don’t feel like an idiot because the Japanese, Koreans, and Chinese are all invested in their respective domestic counterparts for their retirement. Davey Nelson did an interesting write up on how if I was born in Japan in the 1980s I would of actually lost over 50% in value doing the indexing in Japan due to home country bias.

We talked about C and S Fund which spreads out your money over the S&P 500 and the Dow Jones Total Stock Market US Completion Index respectively. The I Fund attempts to fix this home country bias by following the MSCI EAFE (Morgan Stanley Capital International Europe Australasia, Far East) Index.

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Schwab $300 for $25k, Am I a Sucker?

BLUF: Dave has the right idea for $100 for $1k for a better return at 10% return. There is alot of anxiety to lock up $25k for a year, but 1.2% is still pretty good on $25,000 if you plan on putting it into Schwab’s new super discount funds.

So the deal with Schwab is still on, but after talking to the Customer Service Rep, turns out I need to maintain the balance for a whole year or they will claw back the bonus! The link for the offer is here. The fine print is here:

Offer valid for individuals who do not have a Charles Schwab & Co., Inc. (“Schwab”) account (other than a Stock Plan Services account) and who open and make a qualifying net deposit into an eligible retail brokerage account within 45 days of enrollment in the offer. Net deposits are assets deposited into the enrolled account minus assets withdrawn from the account and transferred out of Schwab. Only outside assets new to Schwab qualify; assets transferred from affiliates other than Schwab Retirement Plan Services are excluded. Net deposits will be calculated as of the 45th day after enrollment, and the cash bonus will be credited to the enrolled account within approximately one week. For taxable accounts, you must maintain the net deposit amount (less any market losses) at Schwab for at least one year or Schwab may charge back the cash bonus.

Schwab reserves the right to change the offer terms or terminate the offer at any time without notice. The offer is limited to one per account, with no more than one account enrolled per client. The offer does not apply to accounts managed by independent investment advisors, the Schwab Global Account™, ERISA-covered retirement plans, certain tax-qualified retirement plans and accounts, or education savings accounts. The cash bonus, when combined with the value received from all other offers in the last 12 months, may not exceed $5,000 per household, as defined in the Charles Schwab Pricing Guide for Individual Investors. The offer is not transferable, saleable, or valid in conjunction with certain other offers and is available to U.S. residents only. Employees, contractors, or persons similarly associated with Schwab or a Schwab affiliate; their spouses; and employees of any securities regulatory organization or exchange are not eligible. Schwab may decline requests to enroll in the offer at its discretion. Other restrictions may apply.

I used these codes: “SchwabWelcome11” for $100 to $500 bonus for $10,000 to $100,000 deposit or roll over made within 45 days and held for ONE YEAR, and then code “REFER” for another $100 for at least $1,000 held for a whole year. Sorry for any confusion!

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USAA: Normal Bank or Military Buddy?

BLUF: USAA is a bank bent on profit like Shittybank, they might not be the cheapest just because you think they are military bros.

Bankers are going to bank, why should we let our guard down when it’s a bank run by a bunch of former O-6s? If anything we should be more suspicious of a bank run by a bunch of former O-6s! I was appalled to find out that one of the LTs was mislead by USAA into thinking she could not do both a Roth-TSP and a Roth IRA. She claims that her good buddies at USAA said she was better off picking USAA for her Roth IRA needs and they have some hot funds at a cool 1.5% management fees where she could dump her $11,000 into. They claimed that she should get her $5,500 for 2016 in as well as another $5,500 for 2017. They advised her to forget about TSP since she must chose to do Roth-IRA or Roth-TSP, also they said Don’t delay, act now, supplies were running out!

Lets just be very clear there is no problem in investing her $18,000 into Roth TSP for the year of 2017 as well as maxing out her 2016 and 2017 Roth IRA at $5,500 each. She could put away $29,000 post tax money that can earn without any future taxes on earnings. This boon of tax free money would cut off once she makes over $183,000 in MAGI. At this point in her career she would only be able to do $18,000 into TSP as she would be over the income limit, but could in the future do an indirect roll over to get her $5,500 in a back door roll over as a non tax deductible contribution into her Regular IRA.

Why would USAA mislead her like that? Well I am certain that there was a bonus to be had by the employee to have her open her IRA with USAA rather than Vanguard or Schwab which would be her cheapest options. She would then invest her IRA money into USAA’s various over priced funds. Here are the equivalents to the TSP funds in USAA world. All 5 funds of in TSP would cost her 0.029% in fees, if we look at comparable USAA funds we have USAA S&P 500 Index Fund Member Shares (USSPX) for the C Fund replicate at 0.29% management fee. Still low, but ten times as much as TSP. If we look at the life cycle funds we have USAA Target Retirement 2050 Fund (URFFX) at 0.88% which is 30 times more expensive than TSP at 0.029%. The G replicant called USAA Government Securities Fund (USGNX) cost 0.51% is 17 times more expensive! The S Fund is USAA Extended Market Index Fund (USMIX) at 0.49% fees which is 17 times more expensive than the 29 cents per $1,000 with TSP.

You get the idea! For shame USAA for trying to rip us millennials off like that! Fill your TSPs $18,000 limit before looking at USAA for sure. Even then you should look at Vanguard or Schwab for your low fee indexing! Just because these guys are former military, doesn’t mean they are your best friend. Also don’t fall for the trap when you get out of the military and they ask you to roll your TSP over into their bank! Don’t be a sucker,  max out your TSP before anything else.