TSP: Take Advantage of the Low Fees

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I get a lot of questions on my Facebook page from readers about how to invest with little or no money. Usually, they have some great ideas ranging from no to low cost commission brokers or robo-investing apps. My advice to Military and Federal employees, however, remains consistent: Take advantage of the low-cost of TSP. 

Bottom line up front, the Thrift Savings Plan only charges .033% in fees.  

So, for every $1,000 you invest, you only pay .33¢.  

Yes there are free brokerages that offer no commission investing, but the responsibility of diversifying your portfolio is placed directly on your shoulders. The TSP can diversify for you through its market funds (G, F, S, C, and I) and it’s lifecycle funds.  Check out this link for a detailed analysis of the TSP’s C fund:

 http://www.smartmilitaryinvestor.com/smi-blog/detailed-breakdown-of-tsp-c-fund

Right now federal regulations on mutual funds say you cannot be charged more than .25% for maintenance fees.  

Great mutual fund and IRA providers like the mighty Vanguard company offer rates as low as 0.07%, which is still double the TSP rate. 

I consider the TSP my first investment tool. I have built and extensive portfolio of dividend-paying stocks in a seperate brokerage account, bought government bonds, and ventured into peer-to-peer lending, but have never sacrificed my TSP investment for any of them. It’s low fess are a prime reason why! 

Going Forward... 

I am offering financial coaching sessions for anyone who is looking for more personal advice.