The Money Muse

This milestone is one of the hardest to reach – and takes the longest. But once you achieve it, the pace will really pick up on your financial journey. I’ve experienced this firsthand. After starting my first full-time job out of college (with a starting salary of $32K), it took me six years of aggressively saving and investing to achieve a net worth of $100K. But, it only took me three years to reach a net worth of $200K. So, how do you achieve this important milestone, and why do things speed up after the first $100K?

Let’s first take a look at the actions you can put into place to reach $100K:

• Automate your savings. Set up automatic transfers from your checking account to your savings or investment accounts. By automating your savings, you’re less likely to spend the money before saving it, helping you consistently contribute to your financial goals.
• Invest early and consistently. Start investing as early as possible, even if it’s just a small amount. Consistent contributions to your investment accounts allow you to take advantage of compound interest over time, helping your money grow faster.
• Focus on increasing your income. Look for opportunities to increase your income through career advancement, side hustles, or freelance work. As your income grows, you’ll have more money available to save and invest, accelerating your journey to financial milestones like reaching $100K.
• Track your progress. Regularly monitor your net worth and investment accounts to track your progress towards your goals. Seeing your investments grow over time can be motivating and help you stay on track with your financial plan.
• Stay disciplined. Stick to your budget and financial plan, even when it’s tempting to overspend or deviate from your goals. Consistent saving and investing habits are key to reaching milestones like your first $100K and beyond.

As for why things speed up after reaching the first $100K, it’s largely due to the power of compound interest and increased income. Compound interest allows your investments to grow exponentially over time, especially as your initial investments start to generate returns of their own. Additionally, as your net worth grows, you may have more opportunities for investment diversification and higher returns, further accelerating your financial progress. Keep focused on your goals, stay disciplined with your saving and investing habits, and celebrate each milestone along the way. You’re on the path to financial success!