When I started working for the government in 2000, I was 21 years old and had no idea, at all, how to invest money in the Thrift Savings Plan (TSP), the government equivalent of a 401(k).
I knew two things:
- I should invest money in TSP
- I had no idea what I’m doing
I didn’t grow up in a family that talked much about money. And 401(k)s weren’t something my parents invested in, either.
They largely counted on a couple pensions my father had, as well as Social Security.
So what did I do?
The Magic of the Match
I remember when I first started, my older colleagues recommended that I at least contribute enough to receive the full government match because, as they put it, it was “free money.”
Free money?
That sounded good to me.
I’ll be honest: it wasn’t easy.
I had student loans.
I was renting an apartment (with a roommate).
I had a car payment.
I had credit card debt.
And I’ll admit something else:
I really didn’t know how to save money.
But I took the advice of my colleagues and always contributed, at a minimum, enough to receive the full government match.
Step it Up
What I discovered is that once money comes out of your paycheck before you ever see it, you learn to live without it.
As the years went by, I decided not just to do the match, but to increase whenever I could.
So every time I got promoted, I put in a little bit more.
And a little bit more.
By the time I was in my late 20s, I ended up working with someone who used to work on Wall Street.
He told me that over long periods of time, the stock market had historically produced some of the strongest returns.
His advice was simple: if you’re investing for decades, you can ride out the ups and downs.
Without much other guidance (we didn’t have a financial advisor then), I shifted all of my TSP balance and future contributions into the C Fund, which closely tracks the S&P 500.
And then I largely left it alone.
That approach worked well for me for many years.
But it wasn’t until we started working with a financial advisor about 10 years ago that I realized something important:
My success had far less to do with picking the perfect investment and far more to do with consistently investing over time.
Enter the Financial Advisor
While hubby and I felt pretty good about our financial discipline, we knew there was still a lot we didn’t know.
We were both socking away money for retirement.
We were diligently saving for our son’s education (but without a defined goal).
We had paid off our student loans years ago.
But we knew there was a whole world we didn’t know.
So we found a financial advisor to help us answer a simple question:
Were we actually on track?
Getting the Train on Track
One of the first things our financial advisor recommended was that I move from investing 100% in the C Fund to the L2040 Lifecycle Fund since I was originally planning to retire around 2035.
The TSP lifecycle funds slowly adjust the balance of funds over time to adjust risk as you get older.
One of the beautiful things about the TSP is its low fees, and putting my TSP on autopilot gave me a sense of peace.
He also helped us understand that we were on track to save the equivalent of four years of Virginia in-state tuition for our son, which made a lot of sense to us.
All in all, while it was somewhat exciting to have a plan, it gave us a sense of peace.
It also helped reinforce the need to stay steady with investing, and build up your financial future, brick by brick.
What I Wish I Knew at 21
Looking back, I spent a lot of time worrying that I didn’t know enough about investing.
I didn’t know how to analyze stocks.
I didn’t know how to build a sophisticated portfolio.
And I certainly didn’t know what the market was going to do next.
What I eventually learned is that successful investing isn’t necessarily about being the smartest person in the room.
It’s about consistency.
It’s about getting started.
It’s about continuing to invest when the market is up, down, or sideways.
And it’s about giving compound growth time to do its thing.
When I retired from the federal government after 25 years, my TSP balance had grown to well over seven figures.
Not because I was a financial genius.
Not because I picked the perfect investments.
But because I started early, consistently increased my contributions, and stayed invested.
If you’re young and just getting started, you don’t need to know everything.
You don’t need the perfect plan.
You don’t need to predict the stock market.
You just need to begin.
🐝 That’s the buzz for today – go forth and make good financial decisions!