This is a topic people new to the military should really have injected into their brain over and over, especially with the new Blended Retirement System: THE THRIFT SAVINGS PLAN IS AMAZING.

I’m serious. It is such a simple program to follow, the rates of return are good, and the administrative fees are the lowest on the market. It’s funny how it’s literally taken me 11 years to figure all of this out. These are brutal lessons to learn, and I don’t want you making the same mistakes as me. Let’s get into it!

Get Your Money Out Of The G Fund!

Believe it or not, it took me six years to realize all my contributions were in the G Fund! It wasn’t until my father told me his TSP made over 30-percent returns in 2013 for me to think, “Wow, I wonder how much money I have now?”
Well, thanks to never allocating my money to anything but the G Fund, my TSP only made 1.93 percent, less than a tenth of his earnings in the C and S Funds. How embarrassing.

I assumed that my contributions were automatically invested in the best fund for increasing value when I logged into MyPay and made my allotments every month. Nobody told me (or maybe I wasn’t listening) that I needed to log into my TSP account and change how my money was invested.

When a new civilian or military member enrolls in the TSP, the G Fund (investing in government bonds – considered the safest investment) is the default investment for them. It is up to the member to then change it.

The G Fund is by far the safest fund to place your money in, but because of its low risk, it is low reward, with returns averaging 2.3 percent over the last ten years. The C and S Funds, on the other hand, are more volatile but have averaged 13.17 and 13.67 percent returns over the last ten years.

If I invested $1,000 in the G Fund and C Fund, over that same ten year period, the G Fund would have made a humble profit of $257, but the C Fund would have made over $2,600! Just the thought of it makes me want to cry.
If you haven’t already made your way to TSP.gov to check where your money is going, DO IT NOW!

Don’t Stop Contributing

I wish that was the only mistake I made with my TSP, but it wasn’t. Once I figured out which fund my money should go in, the market had a poor year (the I Fund is even more volatile than the others), so I decided to stop contributing because I was losing money.

Once again, I did not understand how shares and prices worked.

For example, if I chose to invest $100 at a price of $25 a share, I would be able to purchase 4 shares. But let’s say that share loses $5 in value the next month, and I’ve lost $20. The emotional part of my brain wants to withdraw the rest of my money because I don’t want to lose more, which is a valid point. But, if I decide to invest another $100 at a price of $20 a share, I am now able to buy 5 more shares. If the price eventually returns to $25, I’ve made $25 because of buying shares when the value for me was better. 

Hopefully that wasn’t too confusing, but if it was, let me sum it up: keep contributing, even if you’re losing money in the short term. The market is quite resilient, and it will eventually bounce back.

Contribute As Much As You Can

The TSP has numerous benefits over the likes of a Roth IRA, and if you’re in a position to exceed the standard $6,000 limit on a Roth, then you definitely need to use your TSP. I once again stopped my TSP contributions when I opened a Roth IRA account online. I thought I was restricted to the $6,000 limit, which was a half-baked idea, because the TSP allows for additional contributions.
The Roth TSP allows you to invest up to $19,000 a year, which is a pretty big chunk of change. I have a Roth TSP and a Roth IRA, which I have different goals for. I’ll get into that on another post though.

Also, if you are enrolled in the new Blended Retirement System, you should at least be contributing 5 percent of your base pay to TSP, so the government will match that money. Free money is the name of the game, and you should want to make free cash for your retirement wherever you can.

Conclusion

So that’s it – the three biggest lessons I had to learn the hard way when it came to the Thrift Savings Plan. I’ve talked to quite a few people who made the same mistake as me when it came to the G Fund. I hope these tips will get you on the right track, so you can maximize your earnings with the TSP.

Read my blog post about the TSP at

Be sure to share this video with someone who may need inspiration when it comes to personal finance. I don’t have all the answers, but together we can all help each other!

#personalinvesting #retirement #TSP…(read more)

LEARN MORE ABOUT: Thrift Savings Plans

REVEALED: Best Investment During Inflation

HOW TO INVEST IN GOLD: Gold IRA Investing

HOW TO INVEST IN SILVER: Silver IRA Investing

Managing personal finances is not an easy task, especially when it comes to investments. One of the most popular investment vehicles for federal employees in the United States is the Thrift Savings Plan (TSP). The TSP is a defined contribution plan for federal civilian and uniformed service members, similar to a 401k plan, and offers tax-advantaged savings and investment options. While the benefits of TSP are numerous, I’ve made a few mistakes while navigating this investment plan. Here, I share three huge mistakes I made using the Thrift Savings Plan and what I learned from them.

Mistake #1: Not Understanding the Importance of Diversification

When I first started investing in TSP, I was eligible to choose among five different funds: the G, F, C, S, and I funds. I was unaware of the importance of diversification in making an effectively profitable investment. Instead, I kept all of my money in one fund, thinking that doing so would bring higher returns. In reality, the opposite turned out to be true. As the saying goes, putting all your eggs in one basket is a recipe for disaster.

What I learned: Learning the importance of diversification means that I gained a new understanding of how to manage my investment risk. To invest intelligently, you need to spread your money across different asset classes, such as stocks, bonds, and real estate. Doing this minimizes the risk of loss while allowing you to potentially profit from multiple sources.

Mistake #2: Not Contributing Enough to TSP Regularly

Another mistake I made was not contributing enough to my TSP regularly. I thought that a one-time lump-sum investment would give me the desired result. However, that was not the case. Investing in small amounts regularly is a much better way to invest in the TSP. My lack of regular contributions could have affected my overall returns.

What I learned: Building wealth takes significant time and discipline. Setting up an automatic contribution plan to TSP from your paycheck is one effective way to contribute small amounts regularly. With regular contributions, your money has longer to grow, and your investment will reap higher returns.

Mistake #3: Not Paying Attention to the Fees Charged

TSP has some of the lowest fees on the market, making it a popular choice for many investors. However, not paying attention to what fees were charged was a mistake I made. These fees can significantly impact your investment balance, not to mention reduce long-term earnings. If you don’t pay attention to these fees, you will miss out on maximizing your investment.

What I learned: Before investing in any plan, it’s important to understand and compare the fees involved. Making sure to monitor these fees will give you a better understanding of how much you are paying and how much you are earning, thus allowing you to invest more effectively.

In conclusion, TSP can be a valuable investment tool, and with careful consideration and understanding, you can make it work for you. Learning from my mistakes can help you avoid the same pitfalls I encountered. To make the most of TSP’s benefits, aiming for diversification, contributing regularly, and paying attention to fees are three essential elements you can’t afford to overlook.