Lecture Notes: TSP Investment Options - Focus on the G Fund

Introduction

• Presenter: F Zonian
• Location: Sea Island, Georgia
• Activities: Golf, clay pigeons, enjoying local cuisine
• Purpose: Discuss investment options within the TSP (Thrift Savings Plan) focusing on the G Fund

Overview of TSP Investment Options

• Five Funds Available:
  1. G Fund
  2. F Fund
  3. C Fund
  4. S Fund
  5. I Fund
• Risk Order: From most conservative (G) to most risky (I)

Focus on the G Fund

• Start Date: April 1, 1987
• Average Annual Return: 4.6% over 37 years
• Purpose: Wealth preservation, not creation

G Fund Characteristics

• Beats Inflation: Long-term average return exceeds inflation (averaging 2-3%)
• Investment Type: Specially created treasury bonds unique to TSP
• Availability: Not available in the private sector
• Liquidity: Bonds mature daily; 100% liquid
• Guarantee: Only TSP fund guaranteed not to lose money

G Fund Suitability

• Preservation Phase: Suitable for older investors (e.g., 55+ years) for wealth preservation
• Young Investors: Less suitable for those in the accumulation phase seeking aggressive growth

Comparison with C Fund

• G Fund vs. C Fund (1999-2024):
  • G Fund: ~$500,000
  • C Fund: ~$1.1 million
• Opportunity Cost: G Fund may result in missing out on higher returns

Private Sector Alternatives

• High Yield Savings Account: Similar function as G Fund, albeit not guaranteed by the government
• High Yield Money Market: Another alternative

Conclusion

• G Fund Summary:
  • Oldest TSP fund
  • 4.6% average return
  • Wealth preservation focus
  • Not available in private markets
• Next Topic: Upcoming video on the F Fund

Audience Engagement

• Call to Action: Like, subscribe, and comment
• Comments Requested: Feedback on G Fund experience and favorite restaurants in St. Simons

Closing Remarks

• Sign-off: "Take care of each other and feed that TSP"