Self-Made TSP Millionaires
Between January 2016 and August 2017, the number of self-made government worker millionaires jumped drastically. It went from 3,272 to 16,475. The rising stock market is helping more and more people join this millionaire retirement club each and every month. In addition to the millionaires, in August, there were over 46,000 people with account balances between $750,000 and $999,000. This had increased from about 19,000 in January 2016.
So how did these people do it?
Early TSP millionaires were political appointees including members of the House or Senate. Many others were lawyers who were named federal judges. They all brought their outside accounts with them and into the Thrift Savings Plan. This is likely the least expensive investment option that exists.
For federal investors, it is very important to take advantage of that 5% match that the government offers employees. For a TSP investor making $100,000 a year, the government match translates into a tax deferred pay raise. As the salary increases, so does the value of the match.
When you talk to a self-made TSP millionaire, they all have a few things in common. First, they have all been investing for a long time. In fact, the average investment time for these self-made millionaires is 28 years. They also have all, or at least most, of their money in the C and S funds. Even when the market tanks, like it did in 1997 and again in 2008, they continue to buy the stock funds. In fact, they got more shares because they considered them on sale. Then, they proceed to benefit from compounding.
Patience and smart investing can potentially help make you one of these self-made millionaires.