Who Wants to be a Millionaire?

By on October 12, 2016 in Retirement with 0 Comments

Image of cartoon person climbing a stack of money

There is a surprising new member in the US retirement community. It is the “Federal Millionaire!”

As federal Baby-Boomers enter this exclusive society they are turning heads. So, how have these 7 figure sensations been able to accomplish this commendable undertaking on a government salary?

“The trouble for most people is they don’t decide to get wealthy; they just dream about it.” – Michael Masters.

Generally, the only remarkable feature a federal millionaire possesses, that non-millionaires do not, is their stanch resolve to retire wealthy. They determine to be steady in their savings approach. They make conscience efforts, throughout their working lives, to grow their wealth.

Below are 5 items that appear to be the biggest difference between those that retire with a 7-digit retirement savings and those that don’t.

Impressing No One

“Too many people spend money they earned, to buy things they don’t want, to impress people that they don’t like.”Will Rogers.

A generalization (and harsh reality) – In America we are an immediate gratification/low effort society.


When we eat, we don’t wish to be hassled with cooking or even waiting for someone else to cook. We love our fast food. It is easier to stop by Mickey D’s before work than it is to get up and make breakfast. Countless folks prefer to drive thru Starbucks rather than set up an automated coffee machine the night before. After a long day at work, many will opt to eat at a sit down restaurant instead of cooking a full meal at home.

According to flannelguyroi.com, (column: “Eating at home vs. Easting out”, dated 06/19/2014) the average American (in 2013) ate out 18 times per month, the national average of these meals being $13, while cooking at home averaged $4 per meal. Being mindful of the financial difference between eating out and dining at home, Federal millionaires eat out less and cook more.


Many Americans will either purchase or rent the most expensive home they can “afford/qualify for.” It is a kind of “status symbol.”

Federal Millionaires generally purchase their homes. The homes they buy, however, do not push the envelope of their financial abilities. They buy modest homes, sometimes fixer uppers (and do the work themselves). The savings from this approach allows them to have more discretionary cash for additional retirement savings.


This is another typical American “status symbol.” Yet, federal millionaires will shop around, hunt for bargains and purchase vehicles that fit their needs and their budget, not impress their friends or family.

Things and Stuff

Having the newest and most tech impressive items is another expense that millionaires will often avoid. I know federal millionaires that actually still own plain old “flip phones.” They are also not preoccupied with having that new 90-inch, touch screen, smart TV either. Their old 40-inch plan television works just fine.


“Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn’t, pays it.”Albert Einstein

By being thrifty, saving their desired amount becomes a more comfortable undertaking. Money that others would spend on “things,” instead gets placed into accounts that have the ability to potentially provide long-term compounding growth.

Compounding growth – Interest or earnings, not only added to the amount saved/invested but also to earlier gains. In (slightly simpler) English – money that grows on top of itself creating a positive exponential gain.

Note: Federal Millionaires avoid credit card debt with a passionate fanaticism. Basically, if interest is being paid to a credit card company, that is money that can’t be growing a retirement account!

Math Class

Rule of 72 – This is a mathematical rule that addresses compounding as it relates to “doubling” a number. If 72 is divided by a rate of annual return, it is possible to learn how many years it takes for that rate of return to double the initial number.


A 7.2% annual rate of return will double every 10 years. 72 ÷ 7.2 = 10.   Therefore, the earlier savings begin the greater the potential for additional “doublings.”

This is a hypothetical example and is not representative of any specific situation. Your results will vary. The hypothetical rates of return used do not reflect deduction of fees and charges inherent to investing.

Fanny and Monica are 2 feds with identical lives and incomes. They both invest the same, work the same number of years, earn the same and save the same amount every year. The only difference is that Fanny starts her retirement savings/planning 10 years before Monica. If they averaged the 7.2% (mentioned above), and Monica retires with $350,000 in her retirement account(s), then Fanny will retire with $700,000. With the 10-year head start, Fanny’s retirement account doubled 1 more time than Monica’s.

NOTE: Borrowing against retirement savings (Such as the TSP) will likely stunt the potential exponential gains within that account. It may be a low interest loan from yourself to yourself, but, the long term gains could be drastically damaged. Thus, the low interest may cost MUCH more than is initially apparent.

Strategic Vision

Strategic planning is worthless – unless there is first a strategic vision. – John Naisbitt

A vision of retirement is the first step in planning for retirement. It is virtually impossible to determine how much is needed if it is unknown what the desired retirement will look like.


If travel is an important piece to a desired retirement – What locations will be visited? How often will trips be taken? What type(s) of transportation will be used? What attraction will be visited? How much will food and accommodations cost? How long will each trip last, Etc. Once these questions are answered, it would be possible to place an estimate on how much money will be needed each year for these trips.

In order to plan for the costs of retirement travel, first a vision has to be developed. This is true of all expense categories within a retirement. Once the visions are clear, it is possible to begin a plan that will support them.

Federal millionaires develop their visions. Then they create a malleable and comprehensive retirement plan.

Planning the budget

“A budget is telling your money where to go, instead of wondering where it went.”John C. Maxwell

For federal millionaires, the budget is their lifelong companion and guide. They have their vision in place. They use that vision to help them mathematically “back into” the income they will need. Once they understand how much they will required to support their monthly retirement needs, they can again “back into” the amount of savings/growth that their retirement vision will necessitate. Then they budget today’s expenses which includes the necessary amount saved for retirement.

Stick to the plan

“Good… planning is 9 parts execution for every 1-part strategy.” – Tim Berry.

Federal millionaires stay on course with their retirement plans and consistently execute the steps needed to pursue their long-term goals. They don’t allow things, people or market conditions to distract them from their ultimate objectives.

More federal millionaires to come – Undoubtedly moving forward, the federal millionaire ranks will continue to impress. Now that they are on the radar, it will be exciting to see just how many additional feds will demonstrate their desire to retire millionaires.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.  Investing involves risks, including the loss of principal.  No strategy assures success or protects against loss. For a list of states in which I am registered to do business, please visit www.silverlightfinancial.com.

Securities offered through LPL Financial, member FINRA/SIPC.

Silverlight Financial donates free/no obligation Federal Retirement Readiness Reviews. These reviews culminate with a no cost phone consultation with founder, Randy Silvey. To personally request your FRRR email: randy.silvey@lpl.com

© 2016 Randy Silvey. All rights reserved. This article may not be reproduced without express written consent from Randy Silvey.


About the Author

Randy Silvey is the published author of You FIRST, Federal Employees Retirement Guide, one of the bestselling books of its kind on Amazon and Kindle. For over 14 years, he’s been educating and guiding Feds in pursuing wealthier retirement lifestyles. For a list of states in which Randy is registered to do business, please visit www.silverlightfinancial.com. Randy can be reached at 816-524-1515 or www.silverlightfinancial.com. Securities offered through LPL Financial. Member FINRA/SIPC.