Secrets of TSP millionaires

More than 55,000 active and retired federal and postal workers have a million dollars, or more, in their Thrift Savings Plan accounts. More than 77,000 have between $750,000 and $999,000. Since most people seeking big bucks leave government for the corporate or tech world — what’s their secret? The number who did it by successfully timing the market by buying low and selling high could probably fit into a dozen telephone booths. If there are that many left.

Most did it the same way private sector types build up their 401k accounts. By taking advantage of any company match. By investing as much as possible. And buy riding out the ups and downs of the stock market. Not getting excited when it is up or down or trying to figure out when that is and how long the peak, or valley, will be around. Most have been investing 25 years or more, and most rode out the market during the Great Recession of 2008-2009 when many of their colleagues got out of the tanking stock index funds when, as it turns out, they were on sale. And due for a record long bull market.

One of them is Abraham Grungold, a fed and financial coach who looks for buying opportunities — especially during downturns. Grungold, who has been very successful with his TSP, notes that many people fear that the upcoming election, and a possible government shutdown on Dec. 11, will have a major impact on the stock market. So we asked him to elaborate. He says to keep your eye on Dec. 11, which is the date Congress and the White House must must reach and agreement to continue federal operations. Or trigger a pre-Christmas shutdown in the midst of pandemic. Here’s what he says: 

December 11, Continuing Resolution or TSP Black Friday Sale.

Federal employees like everyone else have endured great stress during the COVID-19 pandemic. The latest and new stress is anticipating how the presidential election will affect the economy and your Thrift Saving Plan (TSP). How will your TSP be affected by the outcome of the presidential election? I have been hearing this question a lot from my clients, friends and co-workers.

A former co-worker of mine believes that if President Trump loses the election, he will cause the federal government to shut down on December 11. That’s what she thinks, but doesn’t know for sure. Friday December 11, is the deadline to fund the federal government and if it is not funded there will be a federal furlough. If this happens what does that mean for TSP investors? The stock market will surely take a nosedive. And quite possibly many TSP investors will panic and pull out of their index funds and transfer their money to the G Fund. This would be a big mistake for those TSP investors because they will have a recognized loss in their account. Over the years, there have been many tragic moments that have caused the stock market to plunge, such as the financial crisis of 2008-2009. But there has always been a recovery that has fueled the stock market to go even higher.

Personally, I do not believe there will be a federal furlough on December 11. But if this does happen, it is a buying opportunity for TSP investors. It will be a TSP Black Friday sale and I will be buying into the C Fund. I will tell all my clients that it is an excellent opportunity to do the same. It is called buying on the dip. I won’t have to stand in any Black Friday line. It will only take a few clicks on the TSP website. Then I will sit back, be patient, and drink some calming tea. The stock market will recover sooner than you think.

Financial success can easily be achieved; it only takes a little effort.

Any questions or comments please contact me at Grungold LinkedIn or my Facebook page at FERS Federal Employees.

Nearly Useless Factoid

By Alazar Moges

The Liberty Bell in Philadelphia is one of the nation’s most notable symbols of freedom and independence. But it was actually initially made in London at the Whitechapel Foundry. That bell cracked on the first test ring. Metalworkers John Pass and John Stow melted down that bell and cast a new one in Philadelphia.

Source: NPS

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THRIFT SAVINGS PLAN TICKER

Oct 21, 2020 Close Change YTD*
L Income 21.6443 -0.0126 1.59%
L 2025 10.5016 -0.0134 -
L 2030 35.9968 -0.0574 1.76%
L 2035 10.6631 -0.0189 -
L 2040 39.7978 -0.0771 1.73%
L 2045 10.7736 -0.0226 -
L 2050 23.3235 -0.0525 1.64%
L 2055 10.9973 -0.0294 -
L 2060 10.9973 -0.0295 -
L 2065 10.9974 -0.0295 -
G Fund 16.4818 0.0003 0.76%
F Fund 20.9820 -0.0133 6.75%
C Fund 50.9718 -0.11 5.50%
S Fund 61.3093 -0.5236 3.45%
I Fund 31.0193 -0.027 -6.83%
Closing price updated at approx 6pm ET each business day. More at tsp.gov
* YTD data is updated on the last day of the month.