Probably a breach of etiquitte to post twice in a row in another's thread, but I only see 3 scenarios where taking a tsp loan could have positive value. All require uncanny vision and precise timing. Unlikely that any of them are going to work well as a long term strategy:
1) Whatever you use the money for has a much higher personal value. Buy the little red corvette, get the hot gal to go for a ride, live happily ever after. Opportunity only knocks once. But if the object of your desire requires that kind of maintenance the future probably holds some nasty suprises. And the types that regularly trade future security for instant gratification probably don't spend much time on this board or have sufficient resources in tsp to make the purchase anyway.
2) Be your own broker. Loan yourself the money for your very own margin account. Borrow at a low rate, invest in assets unavailable in tsp, make a big score. But if one is that good at timing the market, why aren't other more liquid funds available for one's disposal? If you have to ask yourself for a loan you probably can't afford it. Not a good use of retirement funds.
3) Most interesting option: subvert the 2 trade limit. Stuck in G for the month, take the loan, change contribution allocations to CSI, repay the loan. Unfortunately, a very small window to accomplish this. Loan proceeeds are sent only by treasury check and take 7-10 days to arrive for deposit in bank account. Also, loan repayments in excess of regular payroll deductions must be mailed in by check, add another week. Unless your net take home is enough to cover the balance due and payday is coming soon, this is not going to do much good except in the extreme circumstance when you are out of trades early and absolutely know that in 2-1/2 weeks you must be in equities for a few days at the end of the month.
Anybody else had measurable success with tsp loans?
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