Most of all, the upward trajectory of the stock market surprised many people, from ordinary investors to financial experts. Some ordinary investors have done extremely well. Some self-appointed stock market gurus have lost assets. But many feds understand this and have joined the ranks of Club Mill. Some are even working on their second million dollars, which they may not have to touch for years.
Most experts say that the buy-low-sell-high approach should be avoided, as few are gifted with the ability to know when the market has reached its bottom or top. Most TSP millionaires have one thing in common. They invest in TSP for 25 to 30 years. They invested in funds C, S and I, indexed with shares. They invested at least enough to get a government 5% match. And most continued to invest in funds C, S and I, even when they threw in 2008. As it turned out, they bought “low” and received more shares when they were actually on sale. The best advice that many have learned is from fellow federals who have done well and from financial planners who truly understand TSP, which is unique – as well as much better than others – among employer-sponsored plans from type 401k.
So we asked Abraham Grungold – a full-time, part-time financial coach – how he and others got into the millionaires’ club. As usual, it is full of ideas. Here is his advice:
Who can you trust with your TSP?
This is an “elite club”. With over 75,000 members, TSP millionaires earned their title by contributing to TSP for 25-30 years, being at least moderately aggressive in investing their funds. To see also : Arlo Mudgett | The View from Faraway Farm: Listening to the world | Columnists. New members are welcome, but once you reach the financial peak, you have to work just as hard to stay there.
Successful TSP millionaires keep up with the constant changes in the plan. They read and use the TSP literature from performance charts to detailed policies, improving their financial literacy as resources increase. They avoid financial noise and trouble. They ignore the market crashes and take TSP trains through every high and every dip.
Today, I find that TSP participants seek financial advice from anyone who wants to give it. For example, they are in financially focused groups on Facebook that ask non-professionals for help managing and investing their TSPs. Accepting financial help from other people poses a greater risk to you than accepting offers for a great Netflix series or a good restaurant. If the show or restaurant fails to meet your expectations, the financial loss is small for nothing. However, when the advice you get from your Facebook acquaintance fails, you can watch your money go straight down the drain.
Many years ago I had lunch with colleagues and we were going to discuss TSP and where everyone planned to invest their bills. At that time, our only options were the G, C, F and I funds, a small part of the current TSP funds. Many believed that the economy looked promising and talked about aggressive investment in Fund C. Others chose a more prudent path, not taking risks and investing 100% of their account in Fund G. In my opinion, both ways of investing – whether aggressive or cautious – can lead to success; you just have to make the choice that will allow you to sleep at night. These discussions, which I shared with colleagues, remind me of people who exchange recipes. You can prepare your dish with oregano and thyme, and maybe you make the same dish with dill and basil. Just as you can make a great dish in different ways, you can also become a TSP millionaire in different ways … other than Facebook!
If you are planning to ask someone for financial advice regarding your TSP, they must have one of these two criteria. Either they are a federal employee who is also a TSP millionaire, or they are a financial advisor who has specific knowledge about TSP but is not trying to sell you insurance or an annuity. Like Facebook, YouTube is full of people who call themselves “experts” on TSP investing. However, they base their presentation only on the financial conditions of Investing in Mannequins (a book I recommend for new investors) and do not include any specifics of TSP. To invest wisely in TSP, you need to understand the mechanics of how TSP works, the rules, forms and definitions of each investment fund. Once you learn the basics, your path to becoming and / or remaining a TSP millionaire is as easy as tying your shoes.
I am an active federal employee and a longtime TSP millionaire. With this experience, I started a financial coaching business to help others achieve their dreams of TSP millionaires. Many federal officials contact me, whether they are TSP millionaires or want to become one. Together we discuss TSP investments, retirement strategies and goals. I also help clients who want to open an IRA or find the right investment for financial purposes outside of TSP. Creating a strong financial profile, such as the status of a TSP millionaire, is a challenging task, but with my guidance we will achieve it together.
Financial success can be easily achieved; it only takes a little effort.
If you have any questions or comments, please contact me at Abraham Grungold – AG Financial Services or my Facebook page at Federal employees of FERS.
An almost useless factoid
From Alazar Moges
The cows do not sleep upright despite the urban legend. The well-known idea of feeding cows is just a myth. This may interest you : Cognitive Radio Market predicted to reach $7.44 Billion by 2022. Unlike horses, which actually sleep while standing, cows rest on their stomachs and are usually very anxious creatures that could not easily approach or, not to mention their size, roll over.
Source: A modern farmer
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