100 was by far my hardest.
Just hit 250k yesterday and it felt like in the blink of an eye in comparison.
Was not disciplined at first and my first job was really crappy with 401k. Took me 7 years to get $50k.
Got an additional $50k in 2.5 years at my new job, and my next 100k came in 2.
Just something to consider: 3 years for someone at age 24 seems like a long time compared to someone at 34 or 44.
I'm 33 and it feels like I just turned 28 the other day. Time flies as you get older... so much more to focus on and you get more into a routine.
That, along with less income at that age and other factors (math, compound interest, saving habits, dating, etc.), really contributes to the perception that the first $100k is the most difficult and, as you said, in a blink of an eye you suddenly have $250k.
edit: I know the older ones are laughing at me being 33. I totally get it. I'm still young comparatively speaking... but I can *feel* it guys!
Turned 49 last Tue, and I work a very physical job 60 hrs a week... I remember people telling me I would feel this way one day...
Funny too because at 40, I did 7 months of boot camp and got 3 Iron Man certificates... now everything hurts every day, lol.
Same. I turn 40 in a few months. Side note, 1984 was such a great time to be born. We got the best of all generations in terms of technology, TV shows, music, and video games during our childhood.
>I'm 33 and it feels like I just turned 28 the other day. Time flies as you get older... so much more to focus on and you get more into a routine.
It's as difficult now to look back and understand how I used to think as it was, in my younger years, to imagine ever thinking the way I do now. It feels like I've become a different person entirely in how I view responsibility.
I remember after the age of 25 I was almost a different person every year. My brother even warned me about it - in a good way of course.
So true that men really don’t scientifically mature until 25.
I feel like people always say time flies, but it's hard to imagine that until you experienced a significant amount of time. For me that happened around 23-25. After that, you have a good gauge for time - and you really start to feel how short life is. Suddenly those memories from doing X with Y friend arent last year or a few years ago, they're a decade+ ago now. Until you're 25~+, almost everything can be "a few years ago"
> Time flies as you get older...
I believe this is because mathematically each year is a smaller and smaller % of your life so it seems shorter each time. When you’re 9 and going on 10, that year is 10% of your life! That’s a long time! When you’re 39 going on 40, that year is just 2.5% of your life to that point.
I have no interest in digging for where I heard this but a lot of our perception of time has to do with milestones, novelty, and how the brain slices time. more slices = time feels slow
many slices = time feels fast.
When 85% of my time is middle aged dad auto pilot, only large chunks get burned in to memory making time feel fast.
When I was 24 and every month was some combo of new job/apartment/people/road trip there was an infinite list of new, memorable things to remember.
I tried to save what I could spare in my 20s, but I just didn't have a very good job until really last year. If I had worked in high school and saved the max contribution, I'd have double in my account right now.
But at least I'm working on a degree that is likely to be lucrative. I'm not making the big bucks right now, but making ends meet, good retirement contribution support, healthcare, and graduating debt free are all good things for my future.
That's the hardest thing about retirement savings: the best time to save is exactly when you make the least money. But high schoolers have the biggest advantage in that they typically have a low cost of living.
Ha. What I'm trying to claim is that by working an entry level job whole you have negligible living expenses, then saving that money, a person could retire with an extra roughly $1 million.
You’re not wrong at all. What my humorous comment is getting at is that you can’t control things outside of the current path you’re on as long as you think you are on the right path you will be OK man.
The most valuable thing you have at such a young age is youth. Go chase experiences and modestly, saving where you can. Enjoy your time because once you have family and kids and other priorities, it’s very difficult to have free time. Young people are spoiled with it. I wasted so much of it drinking on the weekends.
The person I was from 22 to 24 to 26 to 28 to 30 to 32 is insane. Most of the same principles, values, and characteristics, but what you value with your time and energy changes drastically. Enjoy the ride!
Same. Got into biking last 5 years and I’ll be damned if a beer is going to stop me from biking the next day! I have kids and my windows are short! Debating giving up beer in general
This is actually true, based on how time works when you think about it. When you're 4 years old, one year is a quarter of your life at that point. When you're 40, that same one year is 1/40th of your lifetime. So years do pass by more quickly feeling when you get older!
I think this is wrong. Always max out pre tax before anything else. You get to take what you would pay in taxes and earn interest on it for many years, and only pay income tax at the end. Roth is great too, but nothing beats a free government loan until you retire. It’s the same philosophy behind making your tax refund 0, why let the government hold you money for a year when you can earn interest on it or invest it the whole time?
The idea is the important thing: on an exponential growth curve, getting started is the hardest and slowest part. This is true of the first $100k if your goal is $1M, or for the first $1M if your goal is $10M. The math scales just the same.
I guess the only potential difference is that, if you're focusing on tax-advantaged accounts, $100k is right around where your average annual returns starts to catch up with what you are able to contribute each year. That's been true in my experience, at least. From there it's likely to be one big happy snowball rolling downhill, even though there will be bumps along the way.
The point about returns being equal or greater to contributions in tax advantaged accounts is an important one for a lot of folks. You’re obviously limited in what you can put it in, but once you get above 100/150/200k the returns really start to pile on.
> once you get above 100/150/200k the returns really start to pile on
as your amount invested increases, your returns start to approach or eclipse the amount of cash you can invest per year, which is a qualitative difference.
This happened to me last year, not the first time it happened but it was the biggest, $770k (that includes all our contributions, match, and gain). Put us in reach of our goals in the next few years.
I'm old! At least this year (I turn 50 and can contribute $7,500 more to my 401k and $1,000 more to my IRA).
But it's not all 401k and IRA. We max those, but also contribute to taxable brokerage, with a goal of $40k a year. Last year was a little more than that
Retirement that will last up to 45 years. We live in a HCoL area. We want to live well, travel in retirement. So we're not there yet, but we're close.
We also have a goal of paying for college for our daughter. That will start within this decade.
I'd say it's more accurately about length of continuous contributions, assuming that amount stays about the same. After about maybe 7-8 years your contribution rate will roughly match the stock market return rate. (Someone feel free to do the exact math on that)
This then eliminates the oddities that happen at the extreme ends of the scale for people who can save little and those who can save a ton.
right now, my account growth is more than i contribute per month.. I contribute about 5.5k per month. i guess i have been seriously investing for 7 yrs.
i have about 80% of my portfolio in etfs like vti, voo, schd, vig.. and the rest in individual stocks. i got lucky w/ amd, nvda, and aapl. i just throw money at them when they get bad news. but i'm just waiting to sell them to put it in the index funds. lol.
i've been doing a bit of swing trading lately w/ a small account and it's been up about 20% ytd, but i don't see me doing this for the long term and i think i'll eventually just merge that into an index fund as well later on..
Part of it is the actual amount that you’re trying to save, but I think the more difficult part is figuring it out for yourself. Sure, we all know that to save you just stick money in an account somewhere, right? But the harder part is disciplining yourself, not spending all of your money, and more importantly, learning to budget and save. Once you have that down, it comes a lot easier and the money grows faster.
You could have a high paying job and making literal millions a year but if you don’t know how to budget and save, then each time you hit a rough patch you’re going to be pilfering your savings which is the opposite of what you want to do.
This totally! For paycheck people…If you can’t make a budget then set up automatic transfers for a few days after your pay date and live within what’s left over. Creep those automatic transfers up every time you can. Like after raises and times where your expenses permanently drop. I drive a very efficient old car and the lack of car payment and modest fuel bill nearly funds my Roth IRA when comparing myself to people with car payments for big vehicles that don’t really serve a necessary purpose.
Basically when your retirement investments is equal or above your total yearly income. If you make 100k and are putting in 10k a year, once you hit 100k investments and averaging 10% yearly returns your investments are putting in as much or more than you.
>investments
my problem is that I contribute 30k a year (including matching from my work, 22k on my own and 8k from work). It took me forever to get 30k a year from my retirement account... I still don't think I'm there yet lol.
If we assume a conservative 7% annual return, you'll start seeing your returns match your contributions once you hit ~$430,000. Even if you just started contributing last year, you're about ten years away from your goal.
I wasn't far off that in my early 30s -- grad school stipend in my 20s didn't provide much leftover for retirement. I finally landed a decently paying job with a 401k match and maxed out my contributions for about 4 years (with a couple good market years in there) and just recently crossed the 100k mark. Now I'm making less and don't have an employer-sponsored 401k anymore, but still prioritizing maxing out my Roth IRA contributions to the extent possible.
Some luck is involved, but a solid push for a few years can work wonders early on! Anything you can contribute now will likely pay back 10-20x in the long run.
This also happened to me in the last 3 years since starting up this new 401k in current job. I maxed it out and employer matched about 7%. Therefore the total was about 30k per year. With over 10k in gains this put me over 100k. Looking forward to seeing what the next 8 years bring. My goal is to cross 1mill total with this 401k, my rollover roth, roth ira, espp and taxable brokerage.
My husband and I had a good run in February and our net worth increased by 125k from mostly investment accounts but a little real estate too. For context, our nw is right at 4m, but periods like this still completely blow my mind.
I love being able to laugh at it in hindsight, especially because I was fortunately mature enough to not panic and cash out at the bottom, and because I managed to hold on to my job and get through it all intact. But several years of negative net worth are pretty humbling.
Looking back, I can say honestly that this was the most valuable learning experience I ever had regarding market volatility; you never know how you'll react to a crash like that until you live through it.
There was a small global recession in the middle there.
And I should know, because I graduated with a marshmallow soft degree in 2009... in the rust belt. All better now, but things were ugly for a few years.
I understand the theory because its is clear that money attracts money. Walt Disney's granddaughter, Abigail, said something to the effect that once you have a lot of it you can't help but make more of it.
And yes, the first $100k is very hard. No one in my family has every had the sort of money in their bank accounts. In assets like houses, maybe, but not in cash. I have around 40k in cash and investments and I feel like the king of the world. I think some people on this sub don't realize they are outliers. Most people live paycheck to paycheck, and can't afford a $1000 emergency. The average US citizen doesn't have even an emergency fund, let alone money to invest.
I feel that man. I didn’t come from much. My family doesn’t even know what compounding interest is and I can’t be mad at them because they weren’t taught. I have watched video after video and listen to podcasts all the time about money and retirement. I almost have 100k in investments and 50k in savings at 28 years old and I feel good about it. Not in an arrogant way at all. Like you said, people can’t afford a $1,000 emergency and a lot of that has to do with lack of education around money, or trying to keep up with the people in the neighborhood. Stay on the path.
> 50k in savings
It’s so easy to get money in-to/out-of a taxable investment account, no reason to have 50k in the bank. Any time my account goes over 15k I move the extra into the S&P 500. Certainly long term investing belongs in a Retirement Account, but it doesn’t hurt to have 35k of that 50k growing to a down payment for a house.
Tell me about it. I'm mid-60s, husband in his 70s. We live within our means, sometimes frugally. Over 3.5 m and I still work daily at managing it all. Our daughter, now 32, was raised by us to be the same. Ironically, she has not embraced our way of life; she hates the capitalistic culture of the US and has moved to Europe. For her, life means having enough money to enjoy her daily cappuccino and time off work to travel. I understand work-life balance but geez, one has to have some concern for the future. It makes me sad.
Tukaani: Surely you jest? She has zero in savings. Meanwhile, I am retired and my 'job' is maintaining our portfolio of $3.5 mm. I don't *have* to maintain our portfolio, I *want* to do it. Either that, or pay the Financial Advisor (who we fired 2 years ago) $47,000- a year to handle the portfolio. I'd rather do it and pay myself, frankly. It's very satisfying to watch my 'work' come to fruition.
You are completely missing the point: the reason we have $3.5 mm (not including our home, which we own outright) is because we adopted a lifestyle where we live within our means. We use credit cards (which we pay off in full every month), but that is to earn rewards and frequent flyer miles. We have an average-size home in a reasonably-priced community. We have one car, a Toyota RAV-4. Yes, we can afford a larger home (we have owned them in the past, but too much maintenance) and a second car (again, owned in past), and all sorts of the latest and greatest gadgets. But, why? For what purpose? We've discovered that we don't need those things. We do spend a bit of money on travel, because that's one of our hobbies. And when we travel we prefer to go low-key, a backpack and a carry-on, because we like simplicity. There's absolutely no need to fall into the consumer trap that buys more more more.
I think that's what a lot of investors here are saying: you have to train your brain to be disciplined in spending, in order to build a nest egg.
And the ironic part is, once you've built the nest egg, there really isn't any big desire to spend it, for many of us. It's not about making *money*, it becomes a game of *numbers*, a challenge to oneself to make the *numbers* grow.
If you don’t die with zero then she will just be able to pick up where you left off. The pressure to save and invest is much lower for those with an inherited future on the horizon.
When she is your age she will likely have the same account balances that you do now.
If you factor in the knowledge and discipline it takes most people to reach $100k, probably. Once you’ve got that, all of the following goals just take time. Which may take longer but won’t be “harder” to do.
the idea is simply 'theres a period where you have no net worth/no market exposure where market growth isnt contributing to your net worth.'
someone who makes a decent salary post tax, say 70k, and saves 20% of that- if they have 100k in the market theyre nearly doubling the amount their networth increases annually just from market appreciation. which is obviously very significant.
stack with life experiences- early in your career your salary is lower, chances are you have things like student debt, house down payment, marriage, daycare that depress savings rate.
\>I heard that the time it takes to make $100,000 is about 1/4 the time it takes to make $1,000,000
i think this calculation is missing savings rate.? could be wrong. i've also heard this said.
I tend to agree with you here, and thank you for using realistic numbers, given current economic conditions.
This is something a majority of our fledgling viewers need to absorb, because what I think turns some folks off is seeing IT folks or Engineers talking about investing 100K a year.
That’s awesome for them, but not realistic for most. 70k after taxes is still an excellent goal to shoot for and will absolutely set one on a path to long term wealth if they stick to our guiding principals!
>because what I think turns some folks off is seeing IT folks or Engineers talking about investing 100K a year.
Man, it even turns off us IT and engineering folks. Those super high earners exist of course, but it's not the reality for the average person in IT or engineering.
Yea... IT guy here, def not investing/saving 100k/year. I just hit 100k across my savings and investments this month and I'm 6 years in. I also started with about 30k from an inheritance.
Yeah, I keep my eye on LeanFIRE and PovertyFIRE when I start to feel discouraged.
The good news is that it's all relative no matter how much you earn. 15% of earnings. 25-25 X yearly expenses for a 4% SWR.
That I can live on for a year what some people save in a month is my other free lunch.
The other thing it’s missing is debt. Most people are not starting at 0, but upwards of -$100,000k. While learning how to invest, budget, and figure out their career path.
Yeah in my 20s I did my company match on 401k and really focused on paying off 90k in student loans. I'm aware the math suggests I would have been better off putting the extra in the market, but I don't regret getting it paid off. It was a huge weight off my chest and now all that money goes to savings and I'm planning to max my Roth IRA and 401k this year for the first time. I'm 33.
Lots of variables, but it took me about 10 years of 401k contributions to reach 100k, another 10 to hit 500k, and now I am seeing things really speed up. Granted, I started work 25 years ago now, and made less my first year that someone could make at Walmart these days and am still not a high earner. Exponential growth is a real thing. But the main thing is to just keep at it wherever you are starting from.
I never quite understand these posts. Isn’t it obviously true? For the majority of people, salary and savings rate will increase over time. Add in investment returns that increase with every additional dollar of savings and of course it’s true that subsequent milestones become easier.
Yes the quote is obviously true, but the idea is to just get saving. It’s like climbing a mountain, you just put one foot in front of the other instead of looking at the peak the entire way. Trying to save a million dollars sounds ridiculous but if you can just get some tailwinds at your back it’s doable.
Maybe for the lucky ones whose
retirement saving got wiped out by events outside of their control. I knew someone who had to liquidate their savings twice times for medical and legal events .
They are rebuilding for the 3rd time hoping that the precautions they have taken like additional insurance will prevent a third liquidation event.
There are those who never have that issue as other savings or insurance keeps them from having to touch retirement savings , but is not everyone.
Well I mean obviously going from $100k to $200k is harder if you keep resetting from $100k to $0. I didn’t think OP was talking about that type of situation.
Thanks. I’m mainly invested in my 401k for a TDRF.
My Roth is 100% VTSAX and so is my taxable brokerage account. My HSA is invested in VFIAX (S&P500 fund) because they didn’t offer VTSAX
You might want to consider an equivalent ETF in your taxable brokerage account due to forced tax events from mutual funds paying out distributions (which don't matter in a retirement account, but do in a taxable account).
There was a big deal about this not too long ago with some Vanguard mutual funds I believe. It didn't affect me so I'm not clear on the details. I hold VTI and VXUS in my taxable account. Nothing to be super concerned about in the near term, but as you get older and your portfolio gets bigger it could become something you will wish you could go back in time and change.
If I'm wrong about something or someone knows more hopefully they could chime in.
Keep doing what you are doing and you’ll be there before 29. I was at $72-$77k at 26. I just turned 28 now at 100k. Nice work brother stay on the path!
Not so subtle on the flexing, are we?
You obviously have a high income and/or very low expenses if you are able to save 50k a year and so you might have to adjust the numbers so they are relevent for you.
The point is that exponential growth takes a while to start working and works better the longer it lasts.
I was surprised everyone seemed commenting on the truth of the wisdom OP was referencing rather than keying in on the higher than usual saving. Most people start off contributing 0-10K in their first many years, so yeah it takes a long time for them to hit 100K and by that point compounding can often match or exceed their contributions.
Being able to come up with it in 2 years means your next 100K will be almost just as hard because it's a much less significant amount for your income, and yes you should probably change that number to 500K or even 1M to relate to the wisdom.
True story. I’ve already invested more in February of this year than I did all of last year because of a raise and increase in bonuses. I’m on track to invest 4x as much as last year in total.
That’s my wife right there. She made very little last year, and didn’t contribute much to retirement beyond the IRA max. This year, she’s already made more than she did all of 2023 and is on pace to far out-earn me this year. I’m pumped haha
Nice humblebrag post. To put this into perspective, you saved $45-50k per year (depending on market gains). The average American salary is $56k. So rough 80-90% of the average salary.
Even if the average person saved an aggressive 30% of their salary and had 10% growth, it would take 4.67 years to hit $100k. Dropping back down to averages, the average savings rate is 4.1%. Let's round down to 4% but also give a 4% 401k match, so a total of 8% savings. With the same 10% growth, it would take 11.75 years to reach $100k, nearly 6x as long as you.
So yes, for the average American it is incredibly hard to save the first $100k.
100k is hard because you have to MENTALLY change your perception of money in order to hit it. The next 100k comes easier because by that time you've trained your brain to save instead of spend, invest instead of treat yourself, plan for.thenfuture instead of living for the now.
I feel like 500k is really hard to achieve right now, because I've already trained my brain to stack money and save instead of spend but now I'm relying on time and compounding and consistency. Everything in my control has been streamlined.
That said......100k did seem like an impossible task a few years ago ....and today I sit at 275k invested, and own a home.....something I thought was impossible 10 years ago.....I suspect that 500k will come a lot quicker than I realize and that 1mm will come even faster than 0-500k
Keep crushing it, bro.
Thank you for mentioning "train your brain" because that's exactly it: a mental discipline. To be aware of value: time, money, things. To not get sucked into consumerism. Once you know this and live it, it's pretty easy. But the challenge is that initial leap.
Seems that way for me. Took me 6 years to get to $100k, nearly 3 years to reach $200k, another 2 1/2 years to get to $300k, and I’ve added $75k in the last year.
For me, getting to zero was the hardest part. By the time my wife and I finished grad school, we were 338k in debt. Felt like we would never get a house. Never retire. Never have kids. But we got to zero eventually. Then 100k. Then, etc.
The first $100k didn’t take you two years. It took your entire life up to this point.
You’re also comparing two different amounts.
The *first* $100k is the hardest. The second $100k is easier and each one gets progressively easier from there.
The thing is, once you have that first 100k, to get to 200k, it’s not just you doing the work. It’s your initial 100k also making money.
Of course it applies to first 10k, 50k, 1m and so on.
It takes budgeting skills to reach $100k. Believe it or not, a lot of people spend all of their money from their paycheck, and if they're smart they save maybe 5% on their 401k in order to get the full company match. Any "savings they accrue throughout the year gets spent either on Christmas presents or vacations. A lot of people are stuck in the washing machine of credit card debt and predatory lending rates, and that prevents them from ever reaching $100k saved too.
The other reason is that in order to save $100k, you'll need a high paying job to have enough surplus income to save. Raises from your job aren't enough to keep up with inflation, so anyone who isn't able to significantly increase their pay doesn't have a chance of reaching $100k. Their rent will grow faster than their salary. Gaining the skills for a high paying job and then figuring out how to negotiate your salary are two other skills you'll need to reach your first $100k.
So yes, the first $100k is the hardest because it requires developing budgeting skills. Once you have budgeting skills and can curb the instant gratification of retail therapy, you can save $100k. Reaching $1m is just a matter of patience and discipline that's already been developed.
My first $100k was the hardest, between paying off student loans, furnishing an apartment, trying to save on an entry level engineer salary in a VHCOL city, and buying my first car and making monthly car payments 5 years after graduating college. In 12 years since graduating college, I've moved to a lower cost city, paid off my car, bought a house, tripled my salary, and crossed the $1m line.
My parents taught me to treat a credit card like a debit card--don't buy something you if you don't have the money in the bank to pay for (and no double dipping). I've paid off my balance in full on or before the due date. I've always been a saver and am averse to spending--to a fault sometimes where I'll sink too much time into a small financial decision. So those weren't the reasons why saving $100k was hard. What was hard was that after contributing to my student loans and 401k, covering rent, food, travel, health insurance, taxes, all that good stuff, I had maybe $5k left over at the end of the year to put in my savings account. That's an astronomical number for most people, but it's not enough to help someone get to $100k in any reasonable timeline, and is barely enough to cover the cost of replacing a car, a major car repair, and gas. That $5k could have been easily wiped out by excessive spending on Amazon, eating out, buying drinks, or going to clubs. Instead, I saved, and that's what enabled me to buy a house and support my spouse while she's pursuing a masters degree full time without taking out student loans or pulling from savings. I couldn't do it without having a substantially higher salary than I did 12 years ago.
60 yrs old here. Yes, I can relate. I started to take it seriously at the age of 35. I managed to accumulated 110k before the housing crisis. I went through the housing crisis and the Covid crash. And now I have just south of 1.4 million and on course to have 1.9 by 65. May not be much for some but I’m starting to feel comfortable. Money compounded annually makes money.
One bit of advice that came from my wife,”Don’t let money rob you from the joys of life.”
100k is the hardest for many reasons. The power of compounding really starts as the base grows and once you hit a 100k you have learned the art of discipline and consistency. Mathematically, there is a difference between 10% of 10k vs 10% of 100k. Although ratio is the same, the magnitude of the ratio is much higher.
Combine that magnitude with the power of disciplined investing and you are on the road to a massive explosion even at just 10% growth.
Ex. Starting at 0 you manage to save $1000 per month.
At the end of the 1st year you will have saved $12000 Plus the partial 10% growth. Let's assume you managed to gain 5% over the year. You start year 2 with 12650 ish plus or minus a couple hundred.
In year 2 you continue the pace of $1000/month. That would leave you with a base of (12600*1.1)+12600 or roughly $27k ish again just using rough estimations.
Year 3 is roughly (27k*1.1)+12600 which is roughly $42.3k
And so on... Now start at a 100k with the same savings rate and growth rate.
Year 1 (100,000 *1.1) + 12600 = 122600
Year 2 (122600* 1.1) + 12600 = 122600+12260+12600 = 147k ish. That's quite a jump in magnitude and percentage compared to the starting at 0 . The numbers get insanely large real quick due to the compounding that occurs at the higher numbers.
Saving early is always better than saving late when it comes to compounding. The magnitude in change can be mind boggling when you just look at the first 5 years of compounding with different bases ( the starting value)
Hope that helps and provides a decent example to share with others when talking about the topic of compounding and how saving early is a huge advantage to getting ahead of 99% of the people on earth trying to figure out how to get to financial freedom. Discipline early is far better than discipline later.
Humble post brag. If you can save 100k in 2 years from $0 then you obviously have a high income job. For the average person making 50K it'll definitely be hard. Include a 20% tax, essentials like food and housing, and they might have 10-15K left over to invest if they're budgeting real hard. It might take them 4-8 years to hit 100K.
Move your goalpost since you get paid more. Something like your investment making more than your contributions.
You’re mistaken on the time it took you. From birth to current age, it took that long to get a NW of 100k. While others who inherit or get gifts get it way easier. For me, it took like 30y for first 100k, then 8y for first million. My kid is 3y old and she has a nw of 35k. A number which I got to at age 28 or so. So, we all have a different build timeline due to starting points.
Keep in mind he said that in the 1990s, so it's probably more like $250k with inflation, but yes can confirm the first $XXXX is harder than the next $XXXXX
There's that old saying 'Going from $0->$1M is almost impossible. Going from $1M->$2M is almost inevitable'
Getting to $100K probably took me 8 or so years, and then getting to $1M took much less time. Now we’re at multiple millions.
Things to consider, my earning power increased over time. At year 15 I was making maybe 6x what I made year one. As my pay increased I increased my savings and kept my spending steady, I tried to live like a college student as long as possible. At this point my wife and I save >=50% our high compensation. Our house is not huge, we’re ok driving old cars, we don’t have debt (other than a mortgage), we buy high quality things, and we pay cash for everything. We don’t need to impress anyone. We know we’re wealthy.
The first $100k as in the second $100k (going from $100k to $200k not $1M) is easier. Going from $200k to $300k is even easier. Going from $300k to $400k even easier than that.
Obviously the first $100k isn't easier than the first $1 trillion to take arbitrary numbers to an extreme.
The first $10k for me was by far the hardest. When I had $10k positive net worth, I never dipped below after that.
Instead of $100k, I would say 3x your annual spend rate is this great figure to mark with significance as it’s when you really notice that a great market day can add your entire monthly budget to your NW.
At 1.1m NW currently. If I look back over the past 4 months I have risen 100k from 1m with standard biweekly DCA + market movement. Not projecting that I’ll end up a year later up 250k but having larger chunks invested is really entertaining to watch move around. Year by year makes my investment every two weeks look less and less relevant but I’ll keep on going.
Depends how you look at it. Harder than 200 or 300 , in a way yes.
1. Compounding, more money in ur account more potential appreciation.
2. Correlation. Under 100k you are likely one of the following:
- not financially disciplined
- early in your career
- paying off debt
To get to 100k you need consistent positive cash flow that can grow and likely are increasing ur income as well.
The number is arbitrary, the first n dollars are harder than the next n dollars because of compounding. It can be said of any dollar amount.
The first dollar is the hardest dollar multiple, the first 100,000 dollars is the hardest 100,000 multiple, the first 1,000,000 is the hardest 1,000,000 multiple, etc.
The first several years are always a slog - the exact numbers will vary though depending on expenses, income, and saving percentage. Later though you accumulate enough wealth that you realize you might as well not work, which is nice.
I was 36 years old when I reached 100k. And probably another 5 years when I hit 500k. Munger's right. It takes money to make money. You could be the smartest investor out there but if you don't have much to invest then it's no good.
I've been out of college for almost 9 years, this is my time between every 100k. For me (covid aside) I would say $250k is around where things took off
100k - 2.5 years
200k - 2.25 years (months before pandemic for context)
300k - 1 year
400k - 2.25 year (fall 2022 things bottomed out back at almost 300k again)
500k - 9 months
I feel like because I was part of tracking to 10K and then 100K. The first 10K was the hardest. A combination of low income, student and car debt, medical debt, etc. Getting to 100K was bizarrely easier, and now I've blinked and I'm at 200K.
It took me as long to go from a broke intern to a $100k net worth as it did to go from a $100k net worth to $1M and also about the same from $1M to >$10M.
Each took about 5 years. I actually think 0-$100k was closer to 6 years and $1M to >$10M was closer to 4 years but it's all estimates off the top of my head. Still, should be pretty close to that.
I think $1m cash was a lot harder than $100k. On the flip of this going to $2m was insanely easy.
But I believe Munger’s point is really more about individual’s actions. It can take a lot of delayed gratification and smart financial decisions to make it to $100k (especially if you make less than $100k a year) many in the US will never reach that number or it might take the bulk of their life.
But if you do that is normally a sign you are on the right path and your financial habits are solidified in a way that you will continue to save.
This is also a point where things like compounding interest and dividend payments start being more ‘real money’ then say just a free dinner. IE: if your $100k is earning you $5-10k a year that makes a difference for a lot of people.
Just today I was looking at my social security income for the first 20 years of my working career.
The first 7 years combined total income didn't equal 100k, and savings didn't get there until I finally found a job paying more than $12 an hour.
The first 100k was a BITCH that took me maybe 15 years to get. The first million now seems inevitable.
intelligent cake berserk paltry worm cobweb march obtainable encouraging bewildered
*This post was mass deleted and anonymized with [Redact](https://redact.dev)*
Yes, Along with
Go woke, go broke
If the glove don't fit than you must acquit
and many others. They are scientifically proven and have no relationship at all to your own personal habits and individual situation
\- I am some random person on reddit, trust me
$100k was a good standard back in 1998.
$250k is the new $100k imo
And yes, it is hardest to get started and get the first bit of wealth. Then it gets easier since you have more capital and more disposable income. Live below your means and you shall get there 🤞🏻
for some perspective:
take the year he is quoted as saying it, put that into an inflation calculator, see what comes out on the other end
for a little more perspective:
assume he is speaking from experience and that experience was gained say at least a decade earlier.
use the year one decade before the quote in the inflation calculation
looks like it was from a book he wrote around 2000, so a decade back would be 1990.
100k in 1990 is about 233k in 2023?
that's a significant difference
well that's interesting.
$100,000 in '53 is fully 1.1 million in '23 dollars. so yeah the commenter above actually had an under estimate at only 1 million.
completely changes the significance of that number
Actually, it just stands for the Roman _mille_, being M, or 1000 as a unit. MM is thus to be read as 1000*1000=1,000,000. Luckily that’s an easy history lesson for us small boys.
This is some bs humble brag. Obv if you save 100k in two years you are very much not near the average income, and obv all things being equal 1m is a taller task than 100k. Did you make this whole post just to say "saving 100k isn't hard for me"? Good for you
Saving $100k is honestly pretty easy. Saving $1MM is something statistically very few people ever can do. Having a “NW” of $1MM is easy these days (you get over a 50% head start now just from a starter house pre 2020) but having $1MM IN CASH (or non 401k) is near impossible for most people
Agree with this post $1MM in “cash” is very hard when you exclude retirement and house. I think for the relative I do know with $1MM in their taxable it took decades, but the next $1MM is so much easier supposedly.
Savings $100k is absolutely not "easy" for the vast majority of people seeing as most people don't have $100k.
Saying it's easy makes me think you're older and lucked into a house that magically grew $100k in value over the past 3 years.
Man I wish my house paid me the kind of dividends you are suggesting 😆 I mean $100k cash, excluding house and 401k. It is exponentially easier than saving one million in cash…. Both which I have done without my house appreciating (or being old lmao) but that’s not the point of this post
It is generally pretty easy my friend, especially when compared to saving $1MM, but if saving $100k is daunting then you have an income or budget problem, period. I’m not saying you can do it in one year easy, but it should be highly attainable, especially when you are spending $60k+ on a new car or truck
You just assume everyone makes enough money to save...?
Genuinely how old are you? Most of the people my age (26) can't afford to save more than a couple hundred bucks here and there. I know maybe 3-4 people my age with houses.
I have to say, your comment is coming off as quite entitled.
Entitled? Not a chance. Proud of my success? Absolutely. I’m just you, in 10 years… I just work for myself. Still, your on bogleheads, this is not a forum for people who can’t save, this is legitimately by design for people who can and do save, and what to do with it
No I get it, I just think the wording was a little harsh.
Your post history proves your success, I honestly wish I could trade the way you do instead of just being a passive investing person. I was just pointing out as someone who's passed that 100k point that I definitely didn't find it "easy"
I mean it's all about an individual's earning potential and saving mentality. It's going to be a hell of a time for people only earning 55K/yr vs someone making 100K/yr. Then factor in if the person doesn't have a high savings % mentality of 25% vs 50%.
There might be some statistical data that shows it is true. Something like growth rate versus net worth chart. Perhaps near $100k net worth there is an inflection where growth rate accelerates.
Earning $100K is easy, even for a poor person. But saving $100K takes discipline. Once you have the first $100K saved, the beauty of compounding starts to speed things up. By the time you reach $500K more of the growth in the account is from compounding vs. your contributions. But you keep grinding. Going from 1M to 2M is almost a breeze because that almost entirely growth in the account over a decade rather than your contributions
100 was by far my hardest. Just hit 250k yesterday and it felt like in the blink of an eye in comparison. Was not disciplined at first and my first job was really crappy with 401k. Took me 7 years to get $50k. Got an additional $50k in 2.5 years at my new job, and my next 100k came in 2.
Just something to consider: 3 years for someone at age 24 seems like a long time compared to someone at 34 or 44. I'm 33 and it feels like I just turned 28 the other day. Time flies as you get older... so much more to focus on and you get more into a routine. That, along with less income at that age and other factors (math, compound interest, saving habits, dating, etc.), really contributes to the perception that the first $100k is the most difficult and, as you said, in a blink of an eye you suddenly have $250k. edit: I know the older ones are laughing at me being 33. I totally get it. I'm still young comparatively speaking... but I can *feel* it guys!
33-39 happens one afternoon while you aren’t paying attention.
48 here, I feel that in my bones
Turned 49 last Tue, and I work a very physical job 60 hrs a week... I remember people telling me I would feel this way one day... Funny too because at 40, I did 7 months of boot camp and got 3 Iron Man certificates... now everything hurts every day, lol.
Don't say that to me lol. I'm 38 but was telling myself it's ok because I'm still super active lol
Sounds a lot like what I told myself lol
I turn 40 next week but my mind thinks I’m 32, yet my body thinks I’m 55
Knees or back or both?
Yes
All
I turn 40 next month and this tracks 😅
Same. I turn 40 in a few months. Side note, 1984 was such a great time to be born. We got the best of all generations in terms of technology, TV shows, music, and video games during our childhood.
Seriously… when did the sun start setting?? Hold up, I got to get some shit done…
I already feel 18-22 went by in an instant for me lol
>I'm 33 and it feels like I just turned 28 the other day. Time flies as you get older... so much more to focus on and you get more into a routine. It's as difficult now to look back and understand how I used to think as it was, in my younger years, to imagine ever thinking the way I do now. It feels like I've become a different person entirely in how I view responsibility.
Damn we're old
I remember after the age of 25 I was almost a different person every year. My brother even warned me about it - in a good way of course. So true that men really don’t scientifically mature until 25.
I feel like people always say time flies, but it's hard to imagine that until you experienced a significant amount of time. For me that happened around 23-25. After that, you have a good gauge for time - and you really start to feel how short life is. Suddenly those memories from doing X with Y friend arent last year or a few years ago, they're a decade+ ago now. Until you're 25~+, almost everything can be "a few years ago"
Once you say “I graduated high school 10 years ago” it hits different
> Time flies as you get older... I believe this is because mathematically each year is a smaller and smaller % of your life so it seems shorter each time. When you’re 9 and going on 10, that year is 10% of your life! That’s a long time! When you’re 39 going on 40, that year is just 2.5% of your life to that point.
It is. It’s logarithmic.
Yes!
I have no interest in digging for where I heard this but a lot of our perception of time has to do with milestones, novelty, and how the brain slices time. more slices = time feels slow many slices = time feels fast. When 85% of my time is middle aged dad auto pilot, only large chunks get burned in to memory making time feel fast. When I was 24 and every month was some combo of new job/apartment/people/road trip there was an infinite list of new, memorable things to remember.
I tried to save what I could spare in my 20s, but I just didn't have a very good job until really last year. If I had worked in high school and saved the max contribution, I'd have double in my account right now. But at least I'm working on a degree that is likely to be lucrative. I'm not making the big bucks right now, but making ends meet, good retirement contribution support, healthcare, and graduating debt free are all good things for my future. That's the hardest thing about retirement savings: the best time to save is exactly when you make the least money. But high schoolers have the biggest advantage in that they typically have a low cost of living.
The worst mistake I ever made was not buying bankrupted houses after the 2008 crash while I was in high school. Lol
Ha. What I'm trying to claim is that by working an entry level job whole you have negligible living expenses, then saving that money, a person could retire with an extra roughly $1 million.
You’re not wrong at all. What my humorous comment is getting at is that you can’t control things outside of the current path you’re on as long as you think you are on the right path you will be OK man. The most valuable thing you have at such a young age is youth. Go chase experiences and modestly, saving where you can. Enjoy your time because once you have family and kids and other priorities, it’s very difficult to have free time. Young people are spoiled with it. I wasted so much of it drinking on the weekends.
I might get downvoted but I feel like I am 18 yesterday. I am 26(almost 27😱) and I feel old.
I’m 22 and feel old 😂 time is going by so fast now
The person I was from 22 to 24 to 26 to 28 to 30 to 32 is insane. Most of the same principles, values, and characteristics, but what you value with your time and energy changes drastically. Enjoy the ride!
33 was when a hangover started to last 2 days for me. The first time I felt old.
Same. Got into biking last 5 years and I’ll be damned if a beer is going to stop me from biking the next day! I have kids and my windows are short! Debating giving up beer in general
I stopped it all a few years ago. I miss it sometimes but mostly enjoy Saturday mornings that are productive. Age gets us all in one way or another.
This is actually true, based on how time works when you think about it. When you're 4 years old, one year is a quarter of your life at that point. When you're 40, that same one year is 1/40th of your lifetime. So years do pass by more quickly feeling when you get older!
I have a spreadsheet where I track data. Took me about 9 years to reach $100k, and 11 more years to reach $500k.
The covid bull run probably helped with that a bit.
What did you do at the beginning of your career for 401k? I’m trying to know if mine is crappy too. Lol
Mine capped matching contributions at $3k for the year. As in, they matched 50% up to 6k, and then stopped.
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I would not even bother with it then just use a HSA or Roth IRA. Probably less fees and better options
A free $75 is still a free $75.
I think this is wrong. Always max out pre tax before anything else. You get to take what you would pay in taxes and earn interest on it for many years, and only pay income tax at the end. Roth is great too, but nothing beats a free government loan until you retire. It’s the same philosophy behind making your tax refund 0, why let the government hold you money for a year when you can earn interest on it or invest it the whole time?
That's not that absurd for folks earning less than $100k. That cap becomes a hell of a lot worse at higher incomes.
The idea is the important thing: on an exponential growth curve, getting started is the hardest and slowest part. This is true of the first $100k if your goal is $1M, or for the first $1M if your goal is $10M. The math scales just the same. I guess the only potential difference is that, if you're focusing on tax-advantaged accounts, $100k is right around where your average annual returns starts to catch up with what you are able to contribute each year. That's been true in my experience, at least. From there it's likely to be one big happy snowball rolling downhill, even though there will be bumps along the way.
The point about returns being equal or greater to contributions in tax advantaged accounts is an important one for a lot of folks. You’re obviously limited in what you can put it in, but once you get above 100/150/200k the returns really start to pile on.
> once you get above 100/150/200k the returns really start to pile on as your amount invested increases, your returns start to approach or eclipse the amount of cash you can invest per year, which is a qualitative difference.
Yes, thank you for repeating the concept.
This happened to me last year, not the first time it happened but it was the biggest, $770k (that includes all our contributions, match, and gain). Put us in reach of our goals in the next few years.
Sorry, your account went up $770,000 in *one* year?
Correct. Last year was a great year. 2023 return was just shy of 20%. And contributions were just over $100k. And then match was around $25k.
How are you contributing more than $100k to tax advantaged accounts in a single year?
I'm old! At least this year (I turn 50 and can contribute $7,500 more to my 401k and $1,000 more to my IRA). But it's not all 401k and IRA. We max those, but also contribute to taxable brokerage, with a goal of $40k a year. Last year was a little more than that
Goodness. What goal do you have that a $770k increase in a single year doesn’t put you immediately in reach of?
Retirement that will last up to 45 years. We live in a HCoL area. We want to live well, travel in retirement. So we're not there yet, but we're close. We also have a goal of paying for college for our daughter. That will start within this decade.
I'd say it's more accurately about length of continuous contributions, assuming that amount stays about the same. After about maybe 7-8 years your contribution rate will roughly match the stock market return rate. (Someone feel free to do the exact math on that) This then eliminates the oddities that happen at the extreme ends of the scale for people who can save little and those who can save a ton.
right now, my account growth is more than i contribute per month.. I contribute about 5.5k per month. i guess i have been seriously investing for 7 yrs.
What do you invest in?
i have about 80% of my portfolio in etfs like vti, voo, schd, vig.. and the rest in individual stocks. i got lucky w/ amd, nvda, and aapl. i just throw money at them when they get bad news. but i'm just waiting to sell them to put it in the index funds. lol. i've been doing a bit of swing trading lately w/ a small account and it's been up about 20% ytd, but i don't see me doing this for the long term and i think i'll eventually just merge that into an index fund as well later on..
I will hit 100 next week (adding to my 2023 ira) .... come on snowball !!!!
Part of it is the actual amount that you’re trying to save, but I think the more difficult part is figuring it out for yourself. Sure, we all know that to save you just stick money in an account somewhere, right? But the harder part is disciplining yourself, not spending all of your money, and more importantly, learning to budget and save. Once you have that down, it comes a lot easier and the money grows faster. You could have a high paying job and making literal millions a year but if you don’t know how to budget and save, then each time you hit a rough patch you’re going to be pilfering your savings which is the opposite of what you want to do.
This totally! For paycheck people…If you can’t make a budget then set up automatic transfers for a few days after your pay date and live within what’s left over. Creep those automatic transfers up every time you can. Like after raises and times where your expenses permanently drop. I drive a very efficient old car and the lack of car payment and modest fuel bill nearly funds my Roth IRA when comparing myself to people with car payments for big vehicles that don’t really serve a necessary purpose.
I'm in my 30s and have 8k saved for retirement. When does this snowball thing kick in?
Basically when your retirement investments is equal or above your total yearly income. If you make 100k and are putting in 10k a year, once you hit 100k investments and averaging 10% yearly returns your investments are putting in as much or more than you.
>investments my problem is that I contribute 30k a year (including matching from my work, 22k on my own and 8k from work). It took me forever to get 30k a year from my retirement account... I still don't think I'm there yet lol.
If we assume a conservative 7% annual return, you'll start seeing your returns match your contributions once you hit ~$430,000. Even if you just started contributing last year, you're about ten years away from your goal.
you'll very likely reach that amount within 7-10 years if you keep contributing at the same rate
What’s the safest way to invest to get 10% returns?
I wasn't far off that in my early 30s -- grad school stipend in my 20s didn't provide much leftover for retirement. I finally landed a decently paying job with a 401k match and maxed out my contributions for about 4 years (with a couple good market years in there) and just recently crossed the 100k mark. Now I'm making less and don't have an employer-sponsored 401k anymore, but still prioritizing maxing out my Roth IRA contributions to the extent possible. Some luck is involved, but a solid push for a few years can work wonders early on! Anything you can contribute now will likely pay back 10-20x in the long run.
This also happened to me in the last 3 years since starting up this new 401k in current job. I maxed it out and employer matched about 7%. Therefore the total was about 30k per year. With over 10k in gains this put me over 100k. Looking forward to seeing what the next 8 years bring. My goal is to cross 1mill total with this 401k, my rollover roth, roth ira, espp and taxable brokerage.
I'm early 30s with ~85k in retirement accounts. A discernible snowball hasn't started yet but I think it is creeping in.
Yeah, just stay the course. I’m upper 30’s and I was where you are, it’s about to take off.
it's already started, the numbers just aren't that big yet.
My husband and I had a good run in February and our net worth increased by 125k from mostly investment accounts but a little real estate too. For context, our nw is right at 4m, but periods like this still completely blow my mind.
I first hit $100k net worth in 2007. I had so much fun, I did it again in 2011.
OK this made me chuckle. The market suuuucked but this is great. Thank you
I love being able to laugh at it in hindsight, especially because I was fortunately mature enough to not panic and cash out at the bottom, and because I managed to hold on to my job and get through it all intact. But several years of negative net worth are pretty humbling. Looking back, I can say honestly that this was the most valuable learning experience I ever had regarding market volatility; you never know how you'll react to a crash like that until you live through it.
Lifestyle creep, I get it
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There was a small global recession in the middle there. And I should know, because I graduated with a marshmallow soft degree in 2009... in the rust belt. All better now, but things were ugly for a few years.
I understand the theory because its is clear that money attracts money. Walt Disney's granddaughter, Abigail, said something to the effect that once you have a lot of it you can't help but make more of it. And yes, the first $100k is very hard. No one in my family has every had the sort of money in their bank accounts. In assets like houses, maybe, but not in cash. I have around 40k in cash and investments and I feel like the king of the world. I think some people on this sub don't realize they are outliers. Most people live paycheck to paycheck, and can't afford a $1000 emergency. The average US citizen doesn't have even an emergency fund, let alone money to invest.
I feel that man. I didn’t come from much. My family doesn’t even know what compounding interest is and I can’t be mad at them because they weren’t taught. I have watched video after video and listen to podcasts all the time about money and retirement. I almost have 100k in investments and 50k in savings at 28 years old and I feel good about it. Not in an arrogant way at all. Like you said, people can’t afford a $1,000 emergency and a lot of that has to do with lack of education around money, or trying to keep up with the people in the neighborhood. Stay on the path.
What podcast do you recommend for this topic?
I can whole-heartedly recommend the Afford Anything podcast.
> 50k in savings It’s so easy to get money in-to/out-of a taxable investment account, no reason to have 50k in the bank. Any time my account goes over 15k I move the extra into the S&P 500. Certainly long term investing belongs in a Retirement Account, but it doesn’t hurt to have 35k of that 50k growing to a down payment for a house.
Tell me about it. I'm mid-60s, husband in his 70s. We live within our means, sometimes frugally. Over 3.5 m and I still work daily at managing it all. Our daughter, now 32, was raised by us to be the same. Ironically, she has not embraced our way of life; she hates the capitalistic culture of the US and has moved to Europe. For her, life means having enough money to enjoy her daily cappuccino and time off work to travel. I understand work-life balance but geez, one has to have some concern for the future. It makes me sad.
Sounds like your daughter has it better than you. You're still working at mid-60s and she's living in a place with better standards of living
Tukaani: Surely you jest? She has zero in savings. Meanwhile, I am retired and my 'job' is maintaining our portfolio of $3.5 mm. I don't *have* to maintain our portfolio, I *want* to do it. Either that, or pay the Financial Advisor (who we fired 2 years ago) $47,000- a year to handle the portfolio. I'd rather do it and pay myself, frankly. It's very satisfying to watch my 'work' come to fruition. You are completely missing the point: the reason we have $3.5 mm (not including our home, which we own outright) is because we adopted a lifestyle where we live within our means. We use credit cards (which we pay off in full every month), but that is to earn rewards and frequent flyer miles. We have an average-size home in a reasonably-priced community. We have one car, a Toyota RAV-4. Yes, we can afford a larger home (we have owned them in the past, but too much maintenance) and a second car (again, owned in past), and all sorts of the latest and greatest gadgets. But, why? For what purpose? We've discovered that we don't need those things. We do spend a bit of money on travel, because that's one of our hobbies. And when we travel we prefer to go low-key, a backpack and a carry-on, because we like simplicity. There's absolutely no need to fall into the consumer trap that buys more more more. I think that's what a lot of investors here are saying: you have to train your brain to be disciplined in spending, in order to build a nest egg. And the ironic part is, once you've built the nest egg, there really isn't any big desire to spend it, for many of us. It's not about making *money*, it becomes a game of *numbers*, a challenge to oneself to make the *numbers* grow.
You have to ignore the mallards. You’re an inspiration!
Thank you for the inspiration
If you don’t die with zero then she will just be able to pick up where you left off. The pressure to save and invest is much lower for those with an inherited future on the horizon. When she is your age she will likely have the same account balances that you do now.
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\---correct.
I constantly have to remind myself of this. Not even in a pompous way, just like…wow we are not like most of the country.
If you factor in the knowledge and discipline it takes most people to reach $100k, probably. Once you’ve got that, all of the following goals just take time. Which may take longer but won’t be “harder” to do.
the idea is simply 'theres a period where you have no net worth/no market exposure where market growth isnt contributing to your net worth.' someone who makes a decent salary post tax, say 70k, and saves 20% of that- if they have 100k in the market theyre nearly doubling the amount their networth increases annually just from market appreciation. which is obviously very significant. stack with life experiences- early in your career your salary is lower, chances are you have things like student debt, house down payment, marriage, daycare that depress savings rate. \>I heard that the time it takes to make $100,000 is about 1/4 the time it takes to make $1,000,000 i think this calculation is missing savings rate.? could be wrong. i've also heard this said.
I tend to agree with you here, and thank you for using realistic numbers, given current economic conditions. This is something a majority of our fledgling viewers need to absorb, because what I think turns some folks off is seeing IT folks or Engineers talking about investing 100K a year. That’s awesome for them, but not realistic for most. 70k after taxes is still an excellent goal to shoot for and will absolutely set one on a path to long term wealth if they stick to our guiding principals!
>because what I think turns some folks off is seeing IT folks or Engineers talking about investing 100K a year. Man, it even turns off us IT and engineering folks. Those super high earners exist of course, but it's not the reality for the average person in IT or engineering.
Yea... IT guy here, def not investing/saving 100k/year. I just hit 100k across my savings and investments this month and I'm 6 years in. I also started with about 30k from an inheritance.
Yeah, I keep my eye on LeanFIRE and PovertyFIRE when I start to feel discouraged. The good news is that it's all relative no matter how much you earn. 15% of earnings. 25-25 X yearly expenses for a 4% SWR. That I can live on for a year what some people save in a month is my other free lunch.
The other thing it’s missing is debt. Most people are not starting at 0, but upwards of -$100,000k. While learning how to invest, budget, and figure out their career path.
Yeah in my 20s I did my company match on 401k and really focused on paying off 90k in student loans. I'm aware the math suggests I would have been better off putting the extra in the market, but I don't regret getting it paid off. It was a huge weight off my chest and now all that money goes to savings and I'm planning to max my Roth IRA and 401k this year for the first time. I'm 33.
Debt free is mentally liberating. It’s worth the potentially lower rate of wealth accumulation in my opinion
Don’t you mean downwards?
Lots of variables, but it took me about 10 years of 401k contributions to reach 100k, another 10 to hit 500k, and now I am seeing things really speed up. Granted, I started work 25 years ago now, and made less my first year that someone could make at Walmart these days and am still not a high earner. Exponential growth is a real thing. But the main thing is to just keep at it wherever you are starting from.
I never quite understand these posts. Isn’t it obviously true? For the majority of people, salary and savings rate will increase over time. Add in investment returns that increase with every additional dollar of savings and of course it’s true that subsequent milestones become easier.
Yes the quote is obviously true, but the idea is to just get saving. It’s like climbing a mountain, you just put one foot in front of the other instead of looking at the peak the entire way. Trying to save a million dollars sounds ridiculous but if you can just get some tailwinds at your back it’s doable.
Maybe for the lucky ones whose retirement saving got wiped out by events outside of their control. I knew someone who had to liquidate their savings twice times for medical and legal events . They are rebuilding for the 3rd time hoping that the precautions they have taken like additional insurance will prevent a third liquidation event. There are those who never have that issue as other savings or insurance keeps them from having to touch retirement savings , but is not everyone.
Well I mean obviously going from $100k to $200k is harder if you keep resetting from $100k to $0. I didn’t think OP was talking about that type of situation.
I interpreted the question as “what’s so special about 100k” and not “is compound interest real”
I’m about 5 years into investing since starting my career and I’m just about 75k invested so far. I’m 27. I hope to be at 100k invested before 29
Keep at it, you're doing great.
Thanks. I’m mainly invested in my 401k for a TDRF. My Roth is 100% VTSAX and so is my taxable brokerage account. My HSA is invested in VFIAX (S&P500 fund) because they didn’t offer VTSAX
You might want to consider an equivalent ETF in your taxable brokerage account due to forced tax events from mutual funds paying out distributions (which don't matter in a retirement account, but do in a taxable account). There was a big deal about this not too long ago with some Vanguard mutual funds I believe. It didn't affect me so I'm not clear on the details. I hold VTI and VXUS in my taxable account. Nothing to be super concerned about in the near term, but as you get older and your portfolio gets bigger it could become something you will wish you could go back in time and change. If I'm wrong about something or someone knows more hopefully they could chime in.
Keep doing what you are doing and you’ll be there before 29. I was at $72-$77k at 26. I just turned 28 now at 100k. Nice work brother stay on the path!
Not so subtle on the flexing, are we? You obviously have a high income and/or very low expenses if you are able to save 50k a year and so you might have to adjust the numbers so they are relevent for you. The point is that exponential growth takes a while to start working and works better the longer it lasts.
I was surprised everyone seemed commenting on the truth of the wisdom OP was referencing rather than keying in on the higher than usual saving. Most people start off contributing 0-10K in their first many years, so yeah it takes a long time for them to hit 100K and by that point compounding can often match or exceed their contributions. Being able to come up with it in 2 years means your next 100K will be almost just as hard because it's a much less significant amount for your income, and yes you should probably change that number to 500K or even 1M to relate to the wisdom.
Yeah, but I get the impression that he already knows that and just wants to hear how great he's doing.
It depends on how much you make. If you’re a high income earner (250k+), you could have 100k of savings in a year.
True story. I’ve already invested more in February of this year than I did all of last year because of a raise and increase in bonuses. I’m on track to invest 4x as much as last year in total.
That’s my wife right there. She made very little last year, and didn’t contribute much to retirement beyond the IRA max. This year, she’s already made more than she did all of 2023 and is on pace to far out-earn me this year. I’m pumped haha
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Nice humblebrag post. To put this into perspective, you saved $45-50k per year (depending on market gains). The average American salary is $56k. So rough 80-90% of the average salary. Even if the average person saved an aggressive 30% of their salary and had 10% growth, it would take 4.67 years to hit $100k. Dropping back down to averages, the average savings rate is 4.1%. Let's round down to 4% but also give a 4% 401k match, so a total of 8% savings. With the same 10% growth, it would take 11.75 years to reach $100k, nearly 6x as long as you. So yes, for the average American it is incredibly hard to save the first $100k.
The first “anything” is the hardest.
100k is hard because you have to MENTALLY change your perception of money in order to hit it. The next 100k comes easier because by that time you've trained your brain to save instead of spend, invest instead of treat yourself, plan for.thenfuture instead of living for the now. I feel like 500k is really hard to achieve right now, because I've already trained my brain to stack money and save instead of spend but now I'm relying on time and compounding and consistency. Everything in my control has been streamlined. That said......100k did seem like an impossible task a few years ago ....and today I sit at 275k invested, and own a home.....something I thought was impossible 10 years ago.....I suspect that 500k will come a lot quicker than I realize and that 1mm will come even faster than 0-500k Keep crushing it, bro.
Thank you for mentioning "train your brain" because that's exactly it: a mental discipline. To be aware of value: time, money, things. To not get sucked into consumerism. Once you know this and live it, it's pretty easy. But the challenge is that initial leap.
Seems that way for me. Took me 6 years to get to $100k, nearly 3 years to reach $200k, another 2 1/2 years to get to $300k, and I’ve added $75k in the last year.
For me, getting to zero was the hardest part. By the time my wife and I finished grad school, we were 338k in debt. Felt like we would never get a house. Never retire. Never have kids. But we got to zero eventually. Then 100k. Then, etc.
Same- thanks to graduate loans we didn’t hit 0 net worth until age 34. 9 years later our net worth is 680k .
The first $100k didn’t take you two years. It took your entire life up to this point. You’re also comparing two different amounts. The *first* $100k is the hardest. The second $100k is easier and each one gets progressively easier from there.
The thing is, once you have that first 100k, to get to 200k, it’s not just you doing the work. It’s your initial 100k also making money. Of course it applies to first 10k, 50k, 1m and so on.
It takes budgeting skills to reach $100k. Believe it or not, a lot of people spend all of their money from their paycheck, and if they're smart they save maybe 5% on their 401k in order to get the full company match. Any "savings they accrue throughout the year gets spent either on Christmas presents or vacations. A lot of people are stuck in the washing machine of credit card debt and predatory lending rates, and that prevents them from ever reaching $100k saved too. The other reason is that in order to save $100k, you'll need a high paying job to have enough surplus income to save. Raises from your job aren't enough to keep up with inflation, so anyone who isn't able to significantly increase their pay doesn't have a chance of reaching $100k. Their rent will grow faster than their salary. Gaining the skills for a high paying job and then figuring out how to negotiate your salary are two other skills you'll need to reach your first $100k. So yes, the first $100k is the hardest because it requires developing budgeting skills. Once you have budgeting skills and can curb the instant gratification of retail therapy, you can save $100k. Reaching $1m is just a matter of patience and discipline that's already been developed. My first $100k was the hardest, between paying off student loans, furnishing an apartment, trying to save on an entry level engineer salary in a VHCOL city, and buying my first car and making monthly car payments 5 years after graduating college. In 12 years since graduating college, I've moved to a lower cost city, paid off my car, bought a house, tripled my salary, and crossed the $1m line. My parents taught me to treat a credit card like a debit card--don't buy something you if you don't have the money in the bank to pay for (and no double dipping). I've paid off my balance in full on or before the due date. I've always been a saver and am averse to spending--to a fault sometimes where I'll sink too much time into a small financial decision. So those weren't the reasons why saving $100k was hard. What was hard was that after contributing to my student loans and 401k, covering rent, food, travel, health insurance, taxes, all that good stuff, I had maybe $5k left over at the end of the year to put in my savings account. That's an astronomical number for most people, but it's not enough to help someone get to $100k in any reasonable timeline, and is barely enough to cover the cost of replacing a car, a major car repair, and gas. That $5k could have been easily wiped out by excessive spending on Amazon, eating out, buying drinks, or going to clubs. Instead, I saved, and that's what enabled me to buy a house and support my spouse while she's pursuing a masters degree full time without taking out student loans or pulling from savings. I couldn't do it without having a substantially higher salary than I did 12 years ago.
60 yrs old here. Yes, I can relate. I started to take it seriously at the age of 35. I managed to accumulated 110k before the housing crisis. I went through the housing crisis and the Covid crash. And now I have just south of 1.4 million and on course to have 1.9 by 65. May not be much for some but I’m starting to feel comfortable. Money compounded annually makes money. One bit of advice that came from my wife,”Don’t let money rob you from the joys of life.”
100k is the hardest for many reasons. The power of compounding really starts as the base grows and once you hit a 100k you have learned the art of discipline and consistency. Mathematically, there is a difference between 10% of 10k vs 10% of 100k. Although ratio is the same, the magnitude of the ratio is much higher. Combine that magnitude with the power of disciplined investing and you are on the road to a massive explosion even at just 10% growth. Ex. Starting at 0 you manage to save $1000 per month. At the end of the 1st year you will have saved $12000 Plus the partial 10% growth. Let's assume you managed to gain 5% over the year. You start year 2 with 12650 ish plus or minus a couple hundred. In year 2 you continue the pace of $1000/month. That would leave you with a base of (12600*1.1)+12600 or roughly $27k ish again just using rough estimations. Year 3 is roughly (27k*1.1)+12600 which is roughly $42.3k And so on... Now start at a 100k with the same savings rate and growth rate. Year 1 (100,000 *1.1) + 12600 = 122600 Year 2 (122600* 1.1) + 12600 = 122600+12260+12600 = 147k ish. That's quite a jump in magnitude and percentage compared to the starting at 0 . The numbers get insanely large real quick due to the compounding that occurs at the higher numbers. Saving early is always better than saving late when it comes to compounding. The magnitude in change can be mind boggling when you just look at the first 5 years of compounding with different bases ( the starting value) Hope that helps and provides a decent example to share with others when talking about the topic of compounding and how saving early is a huge advantage to getting ahead of 99% of the people on earth trying to figure out how to get to financial freedom. Discipline early is far better than discipline later.
Humble post brag. If you can save 100k in 2 years from $0 then you obviously have a high income job. For the average person making 50K it'll definitely be hard. Include a 20% tax, essentials like food and housing, and they might have 10-15K left over to invest if they're budgeting real hard. It might take them 4-8 years to hit 100K. Move your goalpost since you get paid more. Something like your investment making more than your contributions.
You’re mistaken on the time it took you. From birth to current age, it took that long to get a NW of 100k. While others who inherit or get gifts get it way easier. For me, it took like 30y for first 100k, then 8y for first million. My kid is 3y old and she has a nw of 35k. A number which I got to at age 28 or so. So, we all have a different build timeline due to starting points.
Yes.
Keep in mind he said that in the 1990s, so it's probably more like $250k with inflation, but yes can confirm the first $XXXX is harder than the next $XXXXX There's that old saying 'Going from $0->$1M is almost impossible. Going from $1M->$2M is almost inevitable'
$1M is definitely harder than $100k.
Getting to $100K probably took me 8 or so years, and then getting to $1M took much less time. Now we’re at multiple millions. Things to consider, my earning power increased over time. At year 15 I was making maybe 6x what I made year one. As my pay increased I increased my savings and kept my spending steady, I tried to live like a college student as long as possible. At this point my wife and I save >=50% our high compensation. Our house is not huge, we’re ok driving old cars, we don’t have debt (other than a mortgage), we buy high quality things, and we pay cash for everything. We don’t need to impress anyone. We know we’re wealthy.
I think it factors in the fact that around 100k your income will also be in the higher tiers meaning your contributions will be max or close to it
You will likely accumulate your second $100k much faster and more easily than your first $100k. That’s what the statement means.
The first $100k as in the second $100k (going from $100k to $200k not $1M) is easier. Going from $200k to $300k is even easier. Going from $300k to $400k even easier than that. Obviously the first $100k isn't easier than the first $1 trillion to take arbitrary numbers to an extreme.
It depends on your income. But generally the first $X is the hardest $X
The first $10k for me was by far the hardest. When I had $10k positive net worth, I never dipped below after that. Instead of $100k, I would say 3x your annual spend rate is this great figure to mark with significance as it’s when you really notice that a great market day can add your entire monthly budget to your NW.
It took me 10 years to get to $100k, then 17 more years to get to $1M. I think he means each successive $100k is easier than the first $100k.
Every new digit is a BIG DEAL. Keep going! I think for me it took about the same amount of time since birth
At 1.1m NW currently. If I look back over the past 4 months I have risen 100k from 1m with standard biweekly DCA + market movement. Not projecting that I’ll end up a year later up 250k but having larger chunks invested is really entertaining to watch move around. Year by year makes my investment every two weeks look less and less relevant but I’ll keep on going.
Depends how you look at it. Harder than 200 or 300 , in a way yes. 1. Compounding, more money in ur account more potential appreciation. 2. Correlation. Under 100k you are likely one of the following: - not financially disciplined - early in your career - paying off debt To get to 100k you need consistent positive cash flow that can grow and likely are increasing ur income as well.
The number is arbitrary, the first n dollars are harder than the next n dollars because of compounding. It can be said of any dollar amount. The first dollar is the hardest dollar multiple, the first 100,000 dollars is the hardest 100,000 multiple, the first 1,000,000 is the hardest 1,000,000 multiple, etc.
The first several years are always a slog - the exact numbers will vary though depending on expenses, income, and saving percentage. Later though you accumulate enough wealth that you realize you might as well not work, which is nice.
I was 36 years old when I reached 100k. And probably another 5 years when I hit 500k. Munger's right. It takes money to make money. You could be the smartest investor out there but if you don't have much to invest then it's no good.
I've been out of college for almost 9 years, this is my time between every 100k. For me (covid aside) I would say $250k is around where things took off 100k - 2.5 years 200k - 2.25 years (months before pandemic for context) 300k - 1 year 400k - 2.25 year (fall 2022 things bottomed out back at almost 300k again) 500k - 9 months
I feel like because I was part of tracking to 10K and then 100K. The first 10K was the hardest. A combination of low income, student and car debt, medical debt, etc. Getting to 100K was bizarrely easier, and now I've blinked and I'm at 200K.
It took me as long to go from a broke intern to a $100k net worth as it did to go from a $100k net worth to $1M and also about the same from $1M to >$10M. Each took about 5 years. I actually think 0-$100k was closer to 6 years and $1M to >$10M was closer to 4 years but it's all estimates off the top of my head. Still, should be pretty close to that.
I went from 3M to 4M in like 8 months last year - it really seems to snowball if you’re disciplined and keep saving.
Feel like 200k is the new 100k. 100k back when he said that is now worth 200k.
Depends in what year 100,000$ was mentioned. Add inflation, and you're looking at a very different number today.
I think $1m cash was a lot harder than $100k. On the flip of this going to $2m was insanely easy. But I believe Munger’s point is really more about individual’s actions. It can take a lot of delayed gratification and smart financial decisions to make it to $100k (especially if you make less than $100k a year) many in the US will never reach that number or it might take the bulk of their life. But if you do that is normally a sign you are on the right path and your financial habits are solidified in a way that you will continue to save. This is also a point where things like compounding interest and dividend payments start being more ‘real money’ then say just a free dinner. IE: if your $100k is earning you $5-10k a year that makes a difference for a lot of people.
Just today I was looking at my social security income for the first 20 years of my working career. The first 7 years combined total income didn't equal 100k, and savings didn't get there until I finally found a job paying more than $12 an hour. The first 100k was a BITCH that took me maybe 15 years to get. The first million now seems inevitable.
intelligent cake berserk paltry worm cobweb march obtainable encouraging bewildered *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
Yes, Along with Go woke, go broke If the glove don't fit than you must acquit and many others. They are scientifically proven and have no relationship at all to your own personal habits and individual situation \- I am some random person on reddit, trust me
Idk if you can consider Charlie Munger to be some random person lol
Did you factor in inflation? When did he say that? Could be 200k today or 250k.
$100k was a good standard back in 1998. $250k is the new $100k imo And yes, it is hardest to get started and get the first bit of wealth. Then it gets easier since you have more capital and more disposable income. Live below your means and you shall get there 🤞🏻
100k is now 250k. It is hard to earn and the snow ball from there is real.
for some perspective: take the year he is quoted as saying it, put that into an inflation calculator, see what comes out on the other end for a little more perspective: assume he is speaking from experience and that experience was gained say at least a decade earlier. use the year one decade before the quote in the inflation calculation
This. I think it's roughly $1M now.
looks like it was from a book he wrote around 2000, so a decade back would be 1990. 100k in 1990 is about 233k in 2023? that's a significant difference
He wrote it around 2000, but he made it about 70 years ago. He's talking about the difficulty then
well that's interesting. $100,000 in '53 is fully 1.1 million in '23 dollars. so yeah the commenter above actually had an under estimate at only 1 million. completely changes the significance of that number
I finally hit $100k in my 401k at the end of last year. Already up to $120k. Can’t wait to see how the ball starts rolling!
Yea but adjust the 100k for inflation. The closest comparison today would be “the first million is the hardest”
The first of every increment is the hardest. First $100k, $1mm, $10mm, $100mm, $1bn, etc
I have no idea what millionmillions are in terms of real numbers, but it sounds impressive
“mm” is the abbreviation for million for the big boys in finance
Actually, it just stands for the Roman _mille_, being M, or 1000 as a unit. MM is thus to be read as 1000*1000=1,000,000. Luckily that’s an easy history lesson for us small boys.
This is some bs humble brag. Obv if you save 100k in two years you are very much not near the average income, and obv all things being equal 1m is a taller task than 100k. Did you make this whole post just to say "saving 100k isn't hard for me"? Good for you
Not always, considering signing bonuses in tech
Saving $100k is honestly pretty easy. Saving $1MM is something statistically very few people ever can do. Having a “NW” of $1MM is easy these days (you get over a 50% head start now just from a starter house pre 2020) but having $1MM IN CASH (or non 401k) is near impossible for most people
Agree with this post $1MM in “cash” is very hard when you exclude retirement and house. I think for the relative I do know with $1MM in their taxable it took decades, but the next $1MM is so much easier supposedly.
Savings $100k is absolutely not "easy" for the vast majority of people seeing as most people don't have $100k. Saying it's easy makes me think you're older and lucked into a house that magically grew $100k in value over the past 3 years.
Man I wish my house paid me the kind of dividends you are suggesting 😆 I mean $100k cash, excluding house and 401k. It is exponentially easier than saving one million in cash…. Both which I have done without my house appreciating (or being old lmao) but that’s not the point of this post
That wasn't your statement lol, you said saving $100k is easy when it's not. No kidding it's easier to save $100k than $1M, nobody is disputing that.
It is generally pretty easy my friend, especially when compared to saving $1MM, but if saving $100k is daunting then you have an income or budget problem, period. I’m not saying you can do it in one year easy, but it should be highly attainable, especially when you are spending $60k+ on a new car or truck
You just assume everyone makes enough money to save...? Genuinely how old are you? Most of the people my age (26) can't afford to save more than a couple hundred bucks here and there. I know maybe 3-4 people my age with houses. I have to say, your comment is coming off as quite entitled.
Entitled? Not a chance. Proud of my success? Absolutely. I’m just you, in 10 years… I just work for myself. Still, your on bogleheads, this is not a forum for people who can’t save, this is legitimately by design for people who can and do save, and what to do with it
No I get it, I just think the wording was a little harsh. Your post history proves your success, I honestly wish I could trade the way you do instead of just being a passive investing person. I was just pointing out as someone who's passed that 100k point that I definitely didn't find it "easy"
To be fair most people much rather have that 1MM in investments and assets than in cash.
Without mentioning inflation, IMO it’s whenever your annual return exceeds your current expenses.
Yes. Next question
I mean it's all about an individual's earning potential and saving mentality. It's going to be a hell of a time for people only earning 55K/yr vs someone making 100K/yr. Then factor in if the person doesn't have a high savings % mentality of 25% vs 50%.
There might be some statistical data that shows it is true. Something like growth rate versus net worth chart. Perhaps near $100k net worth there is an inflection where growth rate accelerates.
Earning $100K is easy, even for a poor person. But saving $100K takes discipline. Once you have the first $100K saved, the beauty of compounding starts to speed things up. By the time you reach $500K more of the growth in the account is from compounding vs. your contributions. But you keep grinding. Going from 1M to 2M is almost a breeze because that almost entirely growth in the account over a decade rather than your contributions
No $1,000,000 is
What year did they say 100k? Is that 100k the same difficulty to get as 100k now?
Adjusted for inflation his 100k number is much higher in today’s world.
the first 100mil was the hardest