Wanna be a TSP Trillionaire? Ask one! | Federal News Network (2024)

There are lots of ways to become a millionaire. Some of them are even legal. You can invent something, like fire, Scrabble or potatoes, although those have been taken. Or you can write a book, then buy TV airtime, then teach seminars telling other people howthey can make a million in the market. If enough people buy it, you will become a millionaire without taking all that time and effort investing.

Or you can get a good steady job. Pick an outfit that is going to be around a long time and has an excellent 401k plan. Very important. Uncle Sam is a good example. And make sure that your employer is willing to kick in money to match your contributions. The government matches 5% for 99.5% of its employees. Many private companies have no match. Which is huge. That 5% tax-deferred contribution is a headstart that keeps on going. Then invest for the long haul in stocks, through good and especially bad times, like the C, S and I funds of the federal TSP. There is no guarantee of earnings and great performance, but so far, so good.

If you choose the invest-for-the-long haul course you may, as 112,000 rank-and-file federal and postal workers have done, become a TSP millionaire. Maybe with $2-3 million which, along with your steady federal annuity and inflation-indexed Social Security will guarantee you a better retirement. As in much better.

But the keys are long-term investing and doing what the proven winners have already done. Like Abraham Grungold. He’s a long-time fed who has found a good financial coach: himself. He’s been practicing what he preached to some others. And its worked. He’s our guest today on Your Turn (10am EST) here on FederalNewsNetwork.com or in the DC area at 1500 AM.

He’s going to talk about his “simple” 5-step recipe for becoming a TSP millionaire. This is one you can’t afford to miss. Tell a friend. If you miss the show, or want to hear it again, it will be archived on our home page. Meantime, here’s a sneak preview which he calls:

The Simple Recipe to become a TSP Millionaire

“There are approximately 4.5 million federal employees and approximately 2% of them, 112,880, are Thrift Savings Plan millionaires. These are the employees who contributed to the TSP their entire federal career and invested aggressively. They weathered every financial storm and crisis. They lived through the COVID-19 pandemic and showed no fear.

It is an elite club. And this club welcomes new members.

What does it take to become a TSP millionaire? What is the recipe? It takes a few basic ingredients and several important steps.

See Also

April TSP Performance: One Stock Fund Up 2.8%; One Fund Down 2.18% | FedSmith.comTSP C Fund - Federal Retirement ServicesTraditional vs. Roth TSP: Key Differences - SmartAssetThrift Savings Plans vs. 401(k) Plans - SmartAsset

1. Contributions: Put in as much as you can afford.
2. Investing: Invest your account aggressively.
3. Time: Let your account grow for 30 years.
4. Ignore every financial crisis.
5. Ignore everyone who is not a TSP millionaire.

To become a TSP millionaire or a TSP multi-millionaire, it has nothing to do with skill or luck. Investing in any of the TSP funds is not gambling. But if you are jumping from fund to fund trying to time the markets’ fluctuation, that is simply a recipe for disaster. An old fed friend of mine who is also a successful TSP member would say to me “Just Let It Ride.”

I started in the TSP from the beginning, in 1987. There was no computer technology for checking your daily balance. Making a simple interfund transfer took several weeks to accomplish. It was all done manually by mailing the forms and receiving your statements through the mail. And for employees with less than three years of federal service there were restrictions on which funds you could invest in.

So what does it take to be a TSP multi-millionaire? Well, my story is not just about making contributions and investing aggressively.

My story was about making the sacrifice to contribute the maximum every day of my federal career. I invested the maximum for 35 years. During the first twelve years of my federal service, I did not earn more than $50,000 per year. I worked a second job so I could maximize my contributions. I did not deny myself the pleasures of life. I still traveled and played golf but I lived on a budget so I could pay my living expenses. Also, during my career, I had four TSP loans, two personal loans and two residential loans.

Read more: Federal Report

I reached my first million in May 2014. It took me 27 years. My second million was achieved in February 2020. So why did it only take six years to do that? Well, I was contributing the IRS maximum including the over-age-50 contribution and the stock market grew rapidly during 2016 through 2019. My third million came in December 2021. So how could it have been accomplished in just 22 months? Due to the COVID-19 pandemic, I saw my account drop in 2020 but it bounced back and skyrocketed in 2021. Also, I kept buying shares when the market experienced any setbacks. Looking at my account now seems so surreal. Looking back, I made some sacrifices, but they certainly paid off.

I have many clients who are TSP millionaires and many who want to be TSP millionaires. I always ask them how much risk and sacrifice are you willing to make to achieve your goals? The key to be a TSP millionaire is making those important contributions and investing aggressively.

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

Any questions or comments, please contact me at Abraham Grungold – AG Financial Servicesor my Facebook page atFERS Federal Employees

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