Want to join the TSP millionaires club? Ask one!

The mostly upward trajectory of the stock market has surprised lots of people, from ordinary investors to financial experts. Some ordinary investors have done exceedingly well. Some self-appointed stock market gurus have lost assets. But a lot of feds get it and have made the ranks of Club Mill. Some are even working on their second million dollar nestegg, which many may not have to touch for years.

Most experts say to avoid the buy-low-sell-high approach because few are gifted with the ability to know when the market has bottomed out or peaked. Most TSP millionaires have one thing in common. They’ve been investing in the TSP for 25-to-30 years. They invested in the stock-indexed C, S and I funds. They invested at least enough to get the government 5% match. And most continued to invest in the C, S and I funds even when they nosedived in 2008. As it turned out, they bought “low” and got more shares when they were in fact on sale. The best advice many have learned is from fellow feds who have done well, and from financial planners who really understand the TSP, which is unique — as in much better than the rest — among employer-sponsored 401k type plans.

So we asked Abraham Grungold — a full-time fed, part time financial coach — how he and others got into the millionaires club. As per usual, he’s full of ideas. Here’s his advice:

Who can you trust with your TSP?

It’s an “elite club.” With over 75,000 members, the TSP millionaires received their title by contributing to the TSP for 25-30 years, being at least moderately aggressive with investing their funds. New members are welcome, but once you make it to the financial “top”, you need to work just as hard to stay there.

Successful TSP millionaires stay up to date with the plan’s constant changes. They read and utilize the TSP literature from performance charts to detailed policy, improving their financial literacy as the resources grow. They avoid the financial hypes and woes. They ignore the downfalls in the market and ride the TSP rollercoaster through every high and every dip.

Today, I find that TSP participants seek financial advice from anyone willing to give it. For example, they are on financial-focused Facebook groups asking non-professionals for help to manage and invest their TSP. Accepting financial assistance from others poses a greater risk for you than accepting suggestions for a great Netflix series or a good restaurant. If the show or the restaurant fails to meet your expectations, the financial loss is little to none. However, when the advice you get from your Facebook acquaintance fails, you may watch your money go straight down the drain.

Many years ago, I spent lunches with co-workers, and we would discuss the TSP and where everyone planned to invest their accounts. Back in those days, our only options were just the G, C, F, and I Funds, a small fraction of current TSP funds. Many believed the economy looked promising and spoke about investing aggressively in the C fund. Others chose a more cautious path by not taking any chances and investing 100% of their account in the G fund. In my opinion, both paths of investing — whether aggressive or cautious — can lead to success; you just need to make the choice that will let you sleep at night. These discussions I shared with co-workers reminds me of people who swap recipes. I may make my dish with oregano and thyme and maybe you make that same dish with dill and basil. Just like you can make a great dish in different ways, you can also become a TSP millionaire through various avenues… other than Facebook!

If you plan to ask someone for financial advice regarding your TSP, they must have one of these two criteria. Either they are a federal employee who also is a TSP millionaire, or they are a financial advisor who has specific knowledge regarding the TSP but does not try to sell you insurance or annuities. Like Facebook, YouTube is filled with people who call themselves “experts” on TSP investing. However, they only base their presentation on financial terms from “Investing for Dummies” (a book I recommend for new investors), and fail to include any specifics of the TSP. For you to invest wisely in the TSP, you must understand the mechanics of how the TSP works, the rules, the forms, and the definitions of each investment fund. Once you learn the basics, your path to become and/or remain a TSP millionaire is as easy as tying your shoes

I am an active federal employee and a longstanding TSP millionaire. With this background, I started a financial coaching business to help others reach their TSP millionaire dreams. Many federal employees contact me whether they are TSP millionaires or want to become one. Together, we discuss TSP investments, strategies, and retirement goals. I also help clients who wish to open an IRA or to find the right investments for financial goals outside of the TSP. Creating a strong financial profile, like the status of TSP millionaire, is a challenging task, but with my guidance, we will achieve it together.

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

Any questions or comments please contact me at Abraham Grungold – AG Financial Services or my Facebook page at FERS Federal Employees.

Nearly Useless Factoid

By Alazar Moges

Cows do not sleep standing up despite urban legend. The widely known idea of cow-tipping is simply a myth. Unlike horses, who do actually sleep while standing, cows rest on their bellies and are generally very apprehensive creatures that would not be easy to approach, or let alone at their size, tip over.

Source: Modern Farmer

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THRIFT SAVINGS PLAN TICKER

Oct 19, 2021 Close Change YTD*
L Income 23.2805 0.0341 3.52%
L 2025 12.0833 0.0345 6.40%
L 2030 42.8438 0.1673 7.92%
L 2035 12.8892 0.055 8.58%
L 2040 48.8603 0.227 9.26%
L 2045 13.4055 0.0665 9.83%
L 2050 29.4133 0.1556 10.41%
L 2055 14.5327 0.0961 12.65%
L 2060 14.5326 0.0961 12.65%
L 2065 14.5324 0.096 12.65%
G Fund 16.6854 0.0007 0.99%
F Fund 20.8070 -0.0522 -1.40%
C Fund 68.0320 0.5004 15.90%
S Fund 86.9354 0.4118 11.66%
I Fund 39.2478 0.2573 8.56%
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.