10 Step Investing Plan for Military Officers & Enlisted | Bogleheads for Military #212

Spencer and Jamie break down the 10 core principles of Bogleheads investing and show how military service members can apply this simple, low-cost approach to build wealth through the TSP and other accounts. If you're overwhelmed by investing advice or tempted by day trading and crypto, this episode cuts through the noise with a proven strategy that's worked for decades.

Hosts: Spencer Reese (former Air Force pilot, 12 years active duty) and Jamie (active duty officer)

The 10 Bogleheads Principles

1. Develop a workable plan - Create an investment policy statement (even informal) to guide decisions during market volatility
2. Invest early and often - Automate contributions to remove decision fatigue; increase TSP allocation today
3. Never bear too much or too little risk - Age-appropriate asset allocation; avoid the old G Fund default trap
4. Diversify - Don't put all eggs in one basket; TSP funds cover entire US market plus international exposure
5. Never try to time the market - Time IN the market beats timing the market; market dropped 19% in April 2025, now up 38% from that low
6. Use index funds when possible - TSP offers five low-cost index funds; 90% of active managers can't beat index funds over 20 years
7. Keep costs low - TSP expense ratios under 0.1%; avoid predatory companies charging 1-2%+ fees
8. Minimize taxes - Leverage Roth TSP and Roth IRA; military tax advantages (BAH, BAS, combat zone exclusion)
9. Invest with simplicity - LADS approach (Low-cost, Automated, Diversified, Simple); Warren Buffett's S&P 500 bet crushed hedge funds
10. Stay the course - Measure performance in decades, not days/weeks; don't panic sell during downturns

Key Takeaways

Why Bogleheads Philosophy Works for Military:

• Takes power back from financial advisors and complex products
• Simple enough anyone can succeed with minimal effort
• Perfect match for TSP's low-cost index fund structure
• Removes emotion from investing decisions

TSP Advantages:

• Five index funds (C, S, I, G, F) cover nearly entire investable market
• Lifecycle funds automatically balance risk by retirement year
• Expense ratios under 0.1% (incredibly low)
• Now defaults to lifecycle funds instead of G Fund (huge improvement with Blended Retirement System)

Common Military Investing Mistakes:

• Old G Fund default trap - cost retirees millions in missed gains
• Trying to time the market or day trade
• Paying high fees to predatory companies
• Not automating contributions
• Measuring performance over days/weeks instead of decades

The Math That Matters:

• First $100K took Spencer 4+ years; second $100K took 2 years (compound growth accelerates)
• Market will drop 30% in next 10 years (guaranteed) - but timing it is impossible
• S&P 500 gained 125% over 10 years vs. best hedge fund's 87% in Warren Buffett's famous bet
• April 2025 market drop: 19% down, then 38% up from that low within months

Diversification Made Easy:

• C Fund: 500 largest US companies (S&P 500)
• S Fund: ~2,000 smaller US companies
• I Fund: 5,000+ international companies (20+ developed + emerging markets, excludes China/Hong Kong)
• Combined: Total US and international market exposure
• Add VXUS in Roth IRA for China/Hong Kong exposure if desired

Automation is Your Friend:

• Log into MyPay once, increase TSP allocation, never think about it again
• Every promotion or time-in-grade raise = bump allocation by 1%
• One decision removes 100 future decisions
• Eliminate decision fatigue and emotional reactions

Fee Impact Example:

• Predatory companies charge 1-2%+ fees
• TSP: Under 0.1%
• Fidelity FZROX: 0% expense ratio
• Vanguard funds: 0.03%
• Rule of thumb: Stay under 0.25%, ideally under 0.10%

Resources Mentioned

Books:

• "The Little Book of Common Sense Investing" by Jack Bogle
• "The Military Money Manual" by Spencer Reese (available at MWR Library, Libby app, Amazon)

Investment Accounts:

• TSP (Thrift Savings Plan) - Military 401k
• Roth TSP and Roth IRA (tax-advantaged accounts)
• Recommended brokerages: Fidelity, Vanguard, Schwab

Key Terms:

• LADS: Low-cost, Automated, Diversified, Simple
• Index fund vs. active management
• Expense ratio and basis points
• Asset location strategy
• Investment Policy Statement

Previous Episodes Referenced:

• TSP deep dives (search podcast)
• Roth TSP vs. Roth IRA explanations
• "Do Better" episode on predatory companies

Real-World Examples

• Lieutenant with $50K in checking account - proves military pay allows saving, just need to invest it
• Service member paid off all auto and student loans in 3 months of deployment
• Retirees with $250-500K in G Fund who missed out on millions
• Enron, WorldCom, Lehman Brothers - why diversification matters
• MicroStrategy (MSTR) - current example of concentrated risk

Who This Episode Is For

• Military service members at any rank
• TSP participants unsure how to invest
• Anyone tempted by day trading, crypto, or "get rich quick" schemes
• New investors overwhelmed by options
• Service members paying high fees to financial advisors
• Anyone who wants a simple, proven wealth-building strategy

Quick Action Steps

1. Log into MyPay and increase TSP allocation (even 1% helps)
2. Verify you're in appropriate Lifecycle Fund (birth year + 60-65 years)
3. NOT in G Fund unless near retirement
4. Set automatic annual increases (1% per year)
5. Open Roth IRA at Fidelity, Vanguard, or Schwab
6. Read "The Military Money Manual" (free at base library)
7. Stop checking account daily - check quarterly at most

Contact

• Website: MilitaryMoneyManual.com
• Instagram: @MilitaryMoneyManual
• Book: "The Military Money Manual" (Amazon, $3 Kindle, free at MWR libraries)

The Bogleheads philosophy has helped millions become millionaires through simple, low-cost index fund investing. As a military service member, you have access to one of the best low-cost investment vehicles in the world - the TSP. Stop overthinking it, automate your investments, and stay the course.