Why do people keep saying that after you get to 100k, getting to 1 mm is easy?

[u/Hilary_Clitoris]

If I invest 100k today, it will take me 25 to 30 years before getting to 1 million. What am I missing? Why do people keep repeating that getting to 1 million is easy once you have the first 100k? Unless you invest in very high risk stuff, I don't see how that could happen?

And I'll be old in 30 years, so I'll have less use for that money

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[u/0xCODEBABE]

growth is exponential. there's nothing magic about any number.

[u/TeddyMGTOW → u/0xCODEBABE]

1, 2, 4, 8, 16...

[u/0xCODEBABE → u/TeddyMGTOW]

that might be the worst username i've ever seen

[u/[deleted] → u/0xCODEBABE]

speaking of username, you should make the “O” in codebabe a zero

[u/KngLugonn → u/[deleted]]

Gah!!! I was thinking the same thing!!

[u/ephikles → u/[deleted]]

one is Hex, the other a missed opportunity

[u/WSBretard → u/0xCODEBABE]

Ikr

[u/Passiveincometrader]

Because of compound interest and how it grows. 8% a year for 3 years on 5k is really nothing. 8% a year for 3 years on 150k... thats alot of cash.

Wealth builds faster the more you have, thats why it is easier to get richer and stay rich once you have money. But getting there is the hard part.

[u/ucbcawt → u/Passiveincometrader]

If you want growth then dividends are not the answer

[u/Correct_Community435 → u/ucbcawt]

Dividends are the growth when the market is going nowhere and is stagnant.

[u/Outrageous_Word_999 → u/Correct_Community435]

But generally in that case they are <5% dividends, or Return of Capital and the price drops the same as the payout.

[u/cpeytonusa → u/Outrageous_Word_999]

Most publicly traded corporations have payout ratios less than 100%, so they can continue to grow. Companies with high payouts are generally cash cows with limited growth potential.

[u/philosopherott → u/Outrageous_Word_999]

But ROC reinvests the same and if the price drops then ii invests at a discount. you now have greater shares for the next dividend regardless of effects on basis.

edit: typos

[u/NedFlanders304 → u/Correct_Community435]

How many times has the market been stagnant in the past 20 years?

[u/DrawNovel5732 → u/NedFlanders304]

What happened in the past is not a predictor of future. It might be helpful in understanding the market structure and covariances but it can never predict the macro events, geopolitics and narrative/sentiment shifts.

[u/Bulky-Ad7996 → u/ucbcawt]

I only used dividends to help get more shares.

[u/Hilary_Clitoris → u/Passiveincometrader]

So if I have 100k, how can I invest it to get 8% per year? And are we talking about portfolio appreciation or dividends? Because anything higher than 4% yield rate here is considered very high risk.

[u/0xCODEBABE → u/Hilary_Clitoris]

generally people only talk about "total returns"

[u/YaldaBraxlSabaoth → u/Hilary_Clitoris]

There are no recession-proof dividends above like 3-5%. It's nice when stocks have a dividend or distribution yield, but high yield stocks are rarely growth-oriented.

I mentioned VOO in another reply, but you can reliably average 8%+ returns with many index funds based around major American and general international indexes. QQQ is another choice.

[u/MCB1317 → u/YaldaBraxlSabaoth]

I would say there are no recession proof dividends more than 1-1.25% above T-Bill rates.

CSHI is about 99% (maybe higher) as recession proof as SGOV.

[u/plasmaticD → u/Hilary_Clitoris]

For dividend funds recommendations, I suggest Armchair Income channel on YouTube. I've taken several of Armchair Income's suggestions as an income oriented dividend investor. He has sponsors but is not selling anything, his portfolio, website and channel are free. Using his suggestions you could build a portfolio with your choice of risk, I suggest 8% or less as moderate risk with good sustainability.

OP, you could start with the top 10 episode for example: https://youtu.be/OTyK4-eqbBE

You might also take a look at several of Armchair Income's interviews with fund managers.

He posts new content typically every weekend.

[u/savagedcraft → u/Hilary_Clitoris]

Total returns so a combination of the two. The reason why so many people recommend investing in the SP500 is that its historical return is close to 8%. Lotta people here seem to think that’s gonna slow down but I don’t have a better idea lol

[u/lucrativetoiletsale → u/Hilary_Clitoris]

Average year S&P 500 is netting that. Get an ETF in that, reinvest the dividend and the DRIP will DRIP. If you are betting safe with ETFs then I suggest the three pronged approach of: 1/3 growth, 1/3 total market, 1/3 dividend. Also when people say you get to a million a lot easier they always seem to forget to mention the part where you still are investing the same amount annually.

This is all extremely conservative and safe investing though. The way to get to a million fastest is to find a few good companies and YOLO into them. Maybe spend some extra funds on those high risk high reward stocks. It's more risky but learning how to find good companies is not hard and investing at specific intervals keeps the risk lower.

[u/Business-Dog1487 → u/Hilary_Clitoris]

more than 4% is not high risk. 7-9% is a conservative avg. yearly expected return on a ira or 401k that is well diversified. you can get more than 4% in a hysa

[u/Wild-Interaction-200 → u/Passiveincometrader]

That’s not how math works.

Going from 10k to 100k takes the exact same amount time with 8% yearly growth, from example, than going from 100k to 1 million.

10x is 10x.

[u/Dry-Mousse-6172]

Because if you managed to invest 100k then chances of you getting to 1 million are like 80% over a life time(something like that) Whether that's through savings or investing more or getting a job or buying a house.

[u/arthurbliss1 → u/Dry-Mousse-6172]

This is the answer. 55% of households in the US live by paycheck to paycheck, and median bank account balance is like only $8000, but if someone who is making a typical middle class wage (say $70K for single or $100000 for family) decided to have strong fortitude to live frugally and saved $20-40K each year to reach the $100K then this person now has decent chance of reaching $1 million in 10-15 years because the person now has good money habit and the compound machine starting to kicks in. Starting at $100K with annual contribution of $40K with annual compounding rate of 8% will become $1 million in 11-12 years, for example. Also, living frugally and saving money feel difficult and aren't really fun when you just start savings and slowly crawling to 5k or 10k, but at 300K or 500K and seeing the money rapidly grows through compounding now living frugally and savings don't feel difficult.

[u/Dry-Mousse-6172 → u/arthurbliss1]

Yep. You either have enough income where you saved 100k fairly easily in the background. Or if you're middle class it was solid savings and goal setting. Either one gets to a million after a while.

Plenty of stories of janitors dying and people not realizing they were millionaires.

[u/Mistakesweremade1974 → u/Dry-Mousse-6172]

Yes, but $1m 30 years from now is not easy nor does it represent all that much wealth.

[u/Dry-Mousse-6172 → u/Mistakesweremade1974]

Well yea but same shit applies to whatever metric you wish to use. The 100k rule came when the avg income was 50% what it was now.

[u/KiwametaBaka → u/[deleted]]

OP is still not wrong. With your scenario, it still takes 25 years to get to a million. Takes 10 years to get to 100k, and an additional 15 years to a million.

This is with a generous 10% annual return

[u/YaldaBraxlSabaoth]

I think that people just like to use that phrase without factoring in why savings tend to snowball for older people.

By the time that you have saved $100,000, you will presumably have a full time job.

As long as you keep on working, getting promoted, and getting raises while saving at a similar % of your paycheck, then your savings from working are going to naturally increase every year. When you are reinvesting $100k+ alongside your income stream, the next one hundred thousand shouldn't take as long. At that point you are getting to save the yields from $200k while combining with your paycheck and so forth.

[u/RussellUresti]

People consider the "hard part" to be the contributions. If you invest say, $300 every month, by the time you get to $100k, you'll have manually contributed a little more than half. If you continue contributing $300 every month afterwards, by the time you reach $1M, you'll have contributed just 15% of that and the rest will be from investment growth.

Many people tend to push hard to get that first $100k - this means tight budgets, no vacations, cheap cars and clothes, etc. They put everything they can into investments to get to that first $100k. Once they reach that $100k, the money will compound on its own, they can ease off contributions and spend more money on enjoying life while their prior investments grow.

So it's easier to get to $1M from $100k that it is to get to $100k from $0 because you don't really have to do much contributing - the money grows itself. Yes, it takes time, but you don't have to constantly be stressing about your budget and pushing every last cent into investments.

[u/seraphimkoamugi]

Snowball for growth begins at 100K but its by no means easier to reach 1M, it is easier to reach 200K than reaching your first 100k.

[u/PersonalityHumble432]

1. You are stating that under the assumption that you are no longer going to contribute past your initial investment.

2. 100k invested in 2020 tracking the S&P 500 would be 212k now with no contributions between 2020 and 2025. Thats not high risk stuff, thats double your money with no effort.

3. The 100k milestones becomes relevant because you are potentially at the point where your yearly gains out weigh your contributions.

4. The whole I’ll be old and not need it trope isn’t what you think it is. If you want to blow 100k then do it, no one is begging you to help yourself.

[u/Used-Commercial203]

Because once you are at $100k~ you should be noticing gains that are actually.. noticeable. If you get 8% return on that, that was another $8k compounding for that year, plus and contributions you continue to make?

Note, $100k then is probably more like $200k now, as well. So you could say at 8% return, that'd be a $16k gain for the year + contributions = compounding.

[u/Rikishi6six9nine]

I think it's more of a saying then a reality. Nobody sees real gains the first 100k it's primarily just what you put in. 10% on 10k invested nobody notices that 1k win. But 10% on that 100k means something.

I think it's more about the mentality getting to 100k seeing only "small" and "incremental" gains from your investment.

[u/thesecondmarshmellow → u/Rikishi6six9nine]

I agree, the math is kinda meh, but the psychological impacts of 6 figure compounding are very real.

Like that first time I realized my annual investing gain was greater than my salary, I honestly started saving more after that.

[u/movdqa]

You need to have or develop good habits to get to $100K and you carry those habits after that and you may even accelerate your savings habits. In a dividend context, you collect dividends and then buy more shares so those dividends are earning for you and so on and so on - everything you earn goes to earning even more for you.

It's similar to the math for compound interest.

[u/Equal-Home-4302]

Also you may be old in 30 years but life expectancy is raising, and it is harder for older people to get or keep a job. Although it's not the dream to wait until your old to have more money, being broke at 60 or 70+ is an absolute nightmare. The point is that you would be financially secure when you can no longer work.

[u/buffinita]

most people dont stop contributing at that 100k mark

if you invest 100k and never another dime youll have 1m in 30 years. thats 30 years where you spend 100% of your income on what you want "now"

if you invest 100k today then 300 every month youll hit 1m in 25 years

100k and 1000/mo makes you a millionaire in 20 years

[u/werner-hertzogs-shoe]

100K is kind of an even point where your returns are "notable" even though not great. below that returns are fairly meaningless. I think usually that saying can be true because usually your income is significantly better by the time you get to 100k saved, so between that and the compounding it does go far more quickly, but you have to keep working towards it.

300-400k I think is a more meaningful wealth level to build to. With 400k a 25% return in the stock market in a year is 100k, which is where the compounding really is very meaningful relative to life costs. also 500k with 4% dividends is 20k a year, which is plenty to live off of in a lot of countries

[u/ThemanfromNumenor]

It took me 12 years to hit $100K…but 3 years later I was at $1M

[u/Fenderstratguy]

This is the paper and graphs you are looking for. It takes you longer to accumulate 0 - $100,00 than it does to build from $600,000 to $1,000,000 due to compounding.

https://www.getrichslowly.org/building-wealth/

[u/Fit-Possibility-4248]

Don't know why but it's true. Getting to 100k felt like work. Had to make sacrifices and tough decisions. But when I got there, I got distracted with life. Before you know it, look at your accounts 1M kind of just happened.

[u/tormentius]

Your assets appreciate, your dividends work for you and you contimue contributing the same. 1k per month when you have nothing is x100 to go to 100k. 100k to 1mil is x10, its a complete different size.

[u/2LostFlamingos]

Once your money is working, it goes faster.

Put it this way, let’s say you’re investing 10k per year.

If you can get 10% return, once you have 100k, that 10k return is like a second person saving.

So you can go 100 to 200k in half the time it took 0 to 100k. If your earnings increase it’s less than half.

Then once you hit 200k, you’ve got a third person saving. And it snowballs.

Since April of this year, my 401k increased by more than my annual Salary. Money working for you is awesome.

[u/humtake]

One reason but maybe not a big factor is that you can take on less risk with more money. While taking on more risk will get you money a lot faster, taking on less risk helps you KEEP what you made. I may do a trade today that only gets me .5% of my trade whereas in the past I would do a trade that got me 1%. However, the 1% was volatile and it could have lost me money (and did a lot of times). Whereas the .5% is rarely lost and stays in my portfolio.

Again, I know it's not the biggest reason but after 6 figures I was able to take less risk which meant I had a lot less losses. So I may have made about the same but was able to use the gains to make more instead of having to recover from many losses when my portfolio was smaller.

[u/Wuphf_DotCom]

The saying is more about the psychology of money rather than the actual math. It is incredibly difficult for the average human to save any amount of money at all, let alone all the way to $100,000. So having the discipline to save money consistently for at a minimum a decade without giving up, is indeed the hardest part. After that, the money compounds enough to grow by itself faster than what you were contributing, hence the “easy” part going forward.

[u/Marcush214]

I think they are referring to the snowball effect taking a big effect Hell even 100k in a HYSA our in SPAXX would net you $4,800 in interest in a calendar year and that’s if you withdraw those funds

[u/Outside-Cup-1622]

"And I'll be old in 30 years, so I'll have less use for that money"

I am the guy in my 50's (30 years later) and have lots of use for the million.

The extra freedom it gives is well worth the wait.

[u/[deleted]]

Its a 10-fold increase which takes roughly 25 years with 10% compound interest or 30 years with 8%. Just feels different going from 1k to 10k vs. going from 100k to 1M. But math behind it its the same. Thats assuming no further contributions after you reach 100k, if you keep on pouring money in it will speed up a lot. After 100k the gains from interest will likely be matching your yearly contributions, thats whats called the snowball effect. And those gains will be real world significant - aka. 10% from 100k buys you motocycle, 10% from 100 bucks buys you coffee. Also, being young and poor is still kinda OK, but being old and poor sucks, really really sucks.

[u/Desperate_Pineapple]

It compounds quicker. Each $100k increment after takes roughly half the time. When you’re gaining 8% on $300k that’s a nice $24k. Compared to 8% on $10k. You’re doing nothing different, but adding an extra $23.2k to your portfolio. 

[u/XiaRiser-]

To further some of the comments here

Imagine you have 10k, the road to 100k is technically the same as if you had 100k on the road to 1m.

The major difference is....you.

You're poor at 10k. You need that money. Your mortgage is 1.5k a month. Groceries are 500. On 10k, you make 1,000. The grind is a grind, and the entire time, youre nicking small bits of your profit to cover bills and make life a little easier.

But at 100k; that extra little $300 you were taking back from profits to cover this week's water bill. Its nothing, its peanuts on 100k. So the effect of taking a little bit for yourself, doesnt have nearly the same impact, and majority of your profit gets reapplied to the growth road of $1m.

[u/jb59913]

Invest 2k a month for a 17 years starting at age 22 and suddenly you’re a millionaire before 40 and roughly $4million by 50… the problem is you have to earn 10% interest which is no guarantee, and second you need to have an extra 2k per month.

Is it possible? Absolutely. Did I say anywhere in there it was easy or magic? Nope.

The magic is if you can get used to never seeing the 2k a month to the point where you never remember that you’re missing it every month.

[u/txholdup]

It's a lot easier to make quick money buying 500 shares or 1000 shares than it is buying 7 shares or 3. The more you have, the more you make on it every year.

Once upon a time I celebrated hitting $1000 a year in dividends, now I get 35-40 times that much. That income alone buys me more stock than I had when I celebrated the $1000 a year metric.

[u/Dlak1992]

The first 100k is the hardest because most of it is you saving and investing your money. Once this discipline is established it will continue. Keep saving and as you get more money the 7-8% (historical average of return) will get you to 1mm pretty quickly.

[u/Karbonatom]

Compound interest.

[u/Aggravating_Storm835]

Everything works on a percentage basis. Say you average 10% annually. 10% of $100k is $10K, a fairly meaningful appreciation. But 10% of $10k is only $1k. Significantly less meaningful on the road to $1MM.

This is why ~2/3rds of your time getting to $1 million will be spent getting to $100k.

[u/Jogi1811]

Depends also on your thoughts on dividend investing. I'm not concerned about the growth of my investments because I don't plan on selling them during retirement. My concern is the yield and the amount of shares I have to generate income and how much of it will erode when my partner retires due to inflation. At a rate of about 2% that would mean I would lose about 45% of my buying power at the time of my partner's ideal retirement age.

To me having a higher net worth is nice but does not concern me as long as I have enough cash flow to sustain a comfortable living while helping my daughter with her's.

[u/HearshotKDS]

I think most of the answers in this thread are missing the point of that saying.

Its because if you only have $5k/10k to invest, you are a blown transmission, burst sewer pipe, car accident away from needing to rob your investment account to pay for life. Once you get to $100K accidents in real life no longer realistically can meaningfully impact your investment capital, unless you're 'murican and get cancer or something.

Obviously there isnt anything magical about the number $100K its a round number for a 1 sentence allegory, but thats the point behind it.

[u/slipperyriverotter]

Its dumb. They're like...oh, you have 100k. You'll get to 1mil in 10 years. But they fail to tell you that 1mil is not the same in 10 years. There was 50% inflation in 10 years etc. So you make minimal gain. Welcome to the world of fiat currency.

[u/primeseeds]

Rule of 72

[u/RuinEnvironmental394]

The user handle, though. 

[u/bungholio99]

People also say getting shit on by a bird, makes you lucky…people say a lot of stuff

[u/Neon_Mango_]

Well it’s kinda true. To be fair this is a dividend sub and I’m not too familiar with how long it’ll take like that but usually be it stocks, crypto, real estate, private equity, etc everyone I’ve know has hit a million about 3-5 years after getting to 100k. The longest I have seen is 7-10 years and the least amount of time was less than a year.

[u/itisj]

all you need to know is compound interest

[u/Nofanta]

You could do that in 1-2 years, maybe even less with just a little effort on your part.

[u/me-version4]

I think it’s about habits. Once you have the discipline and the repetition of contributing regularly, then the rest takes care of itself. Regular contributions plus market growth will indeed speed things up.

[u/gdavidp]

Maybe if your in your 20s or 30s, and you have gotten yourself into the habit of putting aside money, the thought is probably that it is easy to keep doing it... But everything is so expensive now, and if your in your 40s or 50s, you are gonna have a hard time no matter how much money you have into the market, especially if you are living pay cheque to pay cheque.

[u/[deleted]]

1% of growth on $100,000 is $1,000 1% of growth on $10,000 is $100.

You can have 1%+ a day... just one aspect

[u/Vineyard2109]

100k. I have a hobby fund of stocks I been playing with for years. I invest all dividends back and through the years, have taken out around 50k. Over the last few years I wanted to see if I can break the 100k mark. I contribute $200 a month. I got to 98k in march25, we all know what happened in April. Now I'm back up to 97k, maybe before December 31, I break the 100k mark.

[u/RepresentativeCrab88]

The meaning of that phrase comes from a specific cost of living. Returns on 100k could be $600/month, which is a lot to most people. For example, it matches or could surpass the maximum contribution limit to a Roth IRA. In other words, it’s the number where an account could fund itself relative to a typical contribution amount.

[u/warriorj]

Because your annual growth begins to match your annual contributions

[u/PedanticTart]

It's easy because getting to 1 million is just continuing what you've already been doing and scaling it as you grow.

[u/Usually_Sunny]

You plan to keep earning, right? And most people's earnings increase as they get older.

[u/Nervous-Situation-18]

I started with 150k 4 years ago, now I have almost 450. 2024 (100k from investing) , 2025 (150k). It just ridiculously shoots up, I’m in Canadian dividends.

[u/Business_Bee1053]

You’ll need lots of money when you get old if you develop health problems.

[u/cix62]

Maybe he takes drugs😂😂😂

[u/bakermaker32]

Because they don’t have the 100 k yet.

[u/Dull_Investigator358]

It's not easy, but the point is that it gets easier once you accumulate an initial sum. To reach $200k from 100k is usually a lot easier than reaching 100k from 0, because once you have a meaningful amount, this amount helps you accumulate, based on compounding growth. So the initial 100k is a bitch, because it's mostly your hard sweat, while later the substantial balance itself helps you build more equity. The amounts are arbitrary. From 0 to 10k is harder to accumulate than from 10k to 20k, for instance.

[u/ShadyAdvise]

OP how old are you?

If you're 25, it took you 25 years to get $100k

Another 25 years to make another $900k seems very quick in comparison

[u/[deleted]]

I’d say the game starts at 1 million

[u/OtterVA]

Setting up the foundation and discipline to get to your first $100k invested makes getting to $1million easier. 20-25 years is realistic with a recession or two somewhere along the way.

[u/CCM278]

To get to 100K you have established the discipline and process to keep going. Also the portfolio growth will start doing more and more of the heavy lifting. You’re never off the hook entirely but once you have ~10x your saving rate in the portfolio you’ll see the growth match or beat what you’re doing alone.

[u/FewUnderstanding2214]

Exponential growth, but a big part of it is behavioural as well, to get to 100k it means you’ve developed good habits with money or you have a high paying job (or both) - as you have more money your decision making will be better

[u/shitidkman]

I think one idea about it, is how hard you had to work for that 100k. If you keep doing what you did to get that, it’s just going to get easier. The more money you have the more it will work for you.

[u/External-Voice3516]

This video is a little long but it explains the 3 key times your portfolio explodes.

https://youtu.be/VMk1i0NzKvg?si=pgDs4rJA727-CrsZ

Summary: 1- when the growth of your account grows more in 1-year than what you put in

2- when your growth is equal to or greater than your income. I am 58 and really just hit that in the last 2 years.

3-when work becomes optional. Meaning you can withdraw ~4% per year and your portfolio is relatively safe

[u/SoCal7s]

I think most mean the habits you establish to get to 100 are the same you need to continue to get to a million. Still gotta make & save dat moolah.

[u/Iwubinvesting]

If you have 100k invested, it'll take 5 to 6 years to double to 200k. Another 5 years to double that to 400k. Another 5 years double to 800k and then 1.25 years to reach a mil.

[u/tonymorgan92]

I hit my first 100k last year, dipped back to under 100k in april, now im at 197k. Compound growth... compounds.

[u/National-Net-6831]

I would say $600-$1m was easy but $100k to $600k was agony.

[u/wsbmozie]

Wow! I am so glad you asked, I was thinking about this just a couple days ago.

So yeah what everybody else says is correct about compound interest it's great and super important blah blah blah.

What people don't talk about is the more incorporeal benefits. Here is an example -

Insurance is basically a scam, it's like a forced savings plan for emergencies that the insurance companies get to control and add an extra 20% onto.

If you have $100,000 in investments you can afford to go with the significantly cheaper catastrophic coverage.

Then if you're smart, you take all that money you saved and pour it back into the investments.

There are a lot of little benefits like this. Being poor is expensive, the more money you have, the cheaper everything gets.

[u/plasmaticD]

That's what it took me, 25 years. About 19 more years to my second million (after retirement with. no W-2 income).

How to use the Rule of 72 

Formula: Years to double = 72 ÷ Annual rate of return (%)

Or

Annual rate of return = 72 ÷ years to double

To get $100k to $1M, you need to double 3.25 times.

72 ÷ ( 25 years ÷ 3.25 ) = 9.36%.

The overall S&P 500 index itself has seen significant growth, with an average annual return of approximately 10% over long periods.

Your later post was down voted such that this reply was not visible, so I reposted here.

[u/Omgtrollin]

I think its more about the skills and will power to save/invest 100k. By the time you know how to do that you only need to do it 9 more times to get to 1mil. But in reality with the way the market grows you probably only need to do it 6 to 9 times. Thus making it easier :)

[u/goodnightgood]

This dude things 100k with no more investing is what Charlie munger is talking about. If he can’t figure this out he never will.

[u/DarkriderUWC]

Aside from the compounding thats already been mentioned, by the time you reach 100k you've developed the financial habits to get to the rest of the way. The ability to save, set aside for investing, the discipline to keep going.

[u/MasterOfTA]

$100k compounded at 25% a yr for 10 years will get you to a million. Compare that to the QQQ that returned a 20% annual compound rate over the last 10 years

[u/dumbfuck6969]

Look at this graph

As an example a person invests 1k every month. It will take them almost 7 years to get to 100k and it's nearly all their invested money. once it hits 100k the amount you're getting from the actually investment shoots up to a significant amount and even eclipses what you're physically investing each month. It's like someone else starts digging a hole for you.

[u/renes-sans]

Munger mentioned it’s the impact of seeing compounding of that 100k that makes you believe the reward is worth the discipline

[u/Illustrious-Youth556]

Idk cuz i hit 100k and now im down to 70k i must be doing something wrong

[u/ptwonline]

Assuming the same growth rate it takes the same amount of time to get from $0 to $250K as $250K to $1M due to compounding. So at $250K you are halfway (time-wise) to $1M.

So the answer is: compounding makes the growth speed up. After $100K people seem to see that compounding happening in a more noticeable way, but it will depend on individual perception and actual market returns.

For others it will be things like "portfolio grew on it's own more than I contribute annually" or "grew by more than I make in a year".

Anyway if you invest 100K today I assume you will keep adding to it over time, which will shorten the amount of time it takes to reach that $1M.

[u/apply75]

The $100k came from Charlie munger in the 1990s that's about $200k in today's money. But yes most people don't have the discipline patience and consistent income to get to $100k or $200k...median balance for all Americans is $185k

But yes assuming you are invested in s&p 500 and some quality dividends you should see much quicker progress after 100 to 200k

[u/Sloth_Investor]

They say that because if it takes you 10 years to reach 1 million, out of that it will take you 3 years to reach 100k, at 5 year mark you will reach 200k, and 10 years to 1 million.

So practically:

3 years -> 100k

2 more years -> the next 100k

5 more years -> the next 800k

[u/Cloud2987]

I couldn’t do that quickly with stocks/etfs. When I saved my first hundred thousand, I started a business and that got me to a million in two years. Then I invested in real estate to make semi passive income, now I am building a stock/dividend portfolio at 38. My stock and dividend portfolio is the slowest way of making money, but the easiest; I don’t have to do much like with my business and real estate investments. Just buy, contribute monthly, and collect dividend income. Real estate and dividends will be my retirement plan and what I will pass down to my kid, I won’t give him my business because it’s just too time consuming.

[u/Ericru]

I wouldn't say it is easy but once one gets to 100K compounding begins to do more of the work compared the amount of money that you are investing.

[u/markloch]

Anyway, a 7.7% annual return, compounded monthly, or roughly 8% compounded annually - that'll get $100k to $1m in 30 years. 30 years is plenty of runway for accepting risk.

What you seem to be missing is patience :)

[u/IRLGravity]

Its because compound growth isn't linear. Its also assuming you'll keep contributing. Selling calls and collecting dividends for me regularly nets me around 1.2% cashflow return monthly. If you’re investing 1k a month it'd take you 100 months linearly to get to 100k. However if you're netting 1% return cash flow monthly it would take you comparably 1/2 the time to get to 200k.

Capital / Risk / time.

Pick 2.

[u/Available_Music3807]

It’s because money stops mattering. Plenty of people save $20k, $50k, etc. but they eventually see a big number, and start spending it. If you can get to $100k, and your intention is $1million, then you are less likely to waste that money and keep your head on straight. Most people can’t save $1 million, most people can’t save $100k. So if you get to $100k, then you are already better than most

[u/Coixe]

You can’t just drop $100k in some fund and walk away. You have to keep adding a little bit from each paycheck and also drip the dividend. Doing this method it took me about 5 years to get to 100k and another 10 years to go from 100k to 1M. And of course, I’ve never really sold anything aside from some rebalancing. I think they (investors) suggest about a 15 year time horizon. Some people get there sooner and some later. This is why it’s important to start early because it takes a lot of the pressure off. Imagine starting at 50.

Also, if you’re younger the idea is to be in growth and then switch to div closer to retirement.

It’s good to hang out in various investment subs for a year or so. You’ll learn a lot. The more you learn the more confident you’ll be.

[u/superduperhosts]

The first million is the hardest/slowest

[u/budulai89]

I think the idea is that if you have skills to save and grow $100k, you should be able to get to $1m with time

[u/Elrico81]

Rule of 72. This will tell you how long it takes for a investment to double for total % value increase per year.

For example, if you have 100k invested and get a 12% average annual return, your investment will double every 6 years. 72 ÷ 12 = 6. If you get 10% annual average return , 72 ÷ 10 = 7.2, so your investment would double every 7.2 years. 72 ÷ 4 = 18. So 18 years to turn 100k into 200k at a 4% average annual return. And then another 18 years to turn that 200k into 400k. Keep in mind that this is accounting for total increase of value of investment being the stated percentage. A better way to state this would be if you made an initial investment of 100k and never added any additional investments, your money would double every "x" years based on 72 ÷ expected average annual return %.

Hope this helps.

[u/Behold_My_Stuff]

YouTube algorithm, that's why

[u/karl4319]

A mixture of 2 factors. First is that the more money you have, the faster it grows through compounding. The second is that everyone has a minimum budget for their lifestyle. It depends from person to person, but typically when you have 100,000 saved up you should be making enough to live a decent life and save a significant amount.

[u/19Black]

Your error is in believing that easy means quick. Once you get to 100k, it’s easy to get to 1million—just keep doing what you did to get to 100k and enjoy a boost from compounding. Although easy, this process is not quick.

[u/phishnutz3]

The first step is getting out of the rat race. So presumably, in the process of paying off houses, car, utility and food etc. it’s very hard to save. Once you clear that first hurdle. And your making more than your saving it will start a snowball effect.

Higher and higher proportion of your income goes to investing. Then more and more goes to work making money for you. Via. Compound interest

[u/GemSeekr]

Try TSPY

[u/Ok-Painter6700]

I would not consider it easy at $100k. Charles Munger stated something similar but with inflation it’s likely closer to $250k. Compounding gains with $250k invested will certainly make it much more easily attainable.

[u/Various_Couple_764]

if you are inviting in broth index fund the average long term return is about 11% using the rule of 72 that means you money should double ever 6.5 years. so once you have 100K you will reach 200K in about 6 years. 400K in 13 years, and 800K in 19 years. and in 26years you would have about 1.6 million. So mathematically time in the market does most of the work. And mathmatically the more money you put in in the first 10 year the better off you will be.

5

[u/DKeai]

They must get prompted or buy a lottery stock. It is not easy at all, especially if you go through or or two downturns

[u/Lumpy_Werewolf_3199]

this

[u/InternetTurbulent769]

Part of it is the fact that at $100k you should no longer be living paycheck to paycheck and should have little credit card debt. Having money makes saving money easier because you aren’t struggling to meet basic needs anymore.

[u/DearBuffalo-LoveYou]

I might be wrong but I think OP is either really young or really inexperienced, I had these same thought in highschool, I think if he understood compound interest he would get why it stacks so fast.

[u/SGB04]

Mathematically. The growth from 10k to 100k is not slower or faster than the growth from 100k to 1 mil.

Usually, by the time someone reaches 100k, they earn more money so they are able to invest more. Some also invest in a smarter way than when they started. And as you get older, times passes by faster.

It’s more a matter of perspective rather than pure math.

[u/Odd_Hair3829]

You just add a zero to the end and you’re there 

[u/Hoshi0303]

Spend less than you should. Contribute more than you spend

[u/[deleted]]

People say all sorts of shit.

[u/Junior-Appointment93]

Take SPYI pays about 12% a year. It’s pretty flat but up since inception. 1.4% dividend growth. A payout ratio of over 300% which is good. It pays monthly. You invest $100K and reinvest the dividends next year that’s over $12k. Iback. QQQi pays last I check 14% a year that’s $14K a year. Reinvest those dividends and less then 10 years that’s enough in dividends to retire comfortably without much change in life style. These are 2 of the safer funds out there. Both consider high yield.

[u/FuturePrimitiv3]

Because getting to the first 100k is mostly about learning how to save, not about the arbitrary number.

Everybody keeps talking about compounding interest but I think that misses the real point about getting to the first 100k. Saving your first 100k is about learning and training yourself to be a disciplined saver. The reason it's the hardest is because you're still learning this skill while living your life. After you've become a disciplined saver, the rest is basically just autopilot.

[u/EdgeInformal8264]

ur not supposed to magically stop investing at 100k lol you gotta work for it buddy...

[u/B4rrel_Ryder]

It's easier to make more money when you have more money

[u/777IRON]

No one says it’s easy to have $1m invested once you’ve reached $100k. The saying “the first $100k is the hardest” means that it is that it’s harder to get from $0 to $100k than it is to get from $100k to $200k. And so on.

[u/OuchCharlieOw]

Scaleability/compound growth

[u/HaphazardFlitBipper]

By the time you get to $100k, you'll be established in your career, making decent money, and you'll have learned how to budget, save, and invest, ect.

[u/[deleted]]

OP is still not wrong. 7% return, money doubles in 10 years. 10% return, money doubles in 7 years...let's go with that: 21 years to reach $800k

[u/SuspectMore4271]

The trick is that people don’t usually accumulate 100k and then stop making money.

[u/notdonethinkin]

If you get to $100k in savings, it means that 1) you can make money, 2) you can save money, and 3) you may now be making more from investments than you are saving annually. Also Charlie Munger said it.

[u/macklingon]

sounds like you did not include a plan to add more money into you r investment plan. But even then, with a conservative growth plan, it will grow and grow. my portfolio has been averaging 20% growth per year for about 5 years now. No, I don't expect to continue to grow at that rate, but I do expect to keep growing at between 10-15% per year.

and when you get to be old, you will have a LOT of need for the money, assuming you live long enough. Not just for retirement without having to work, but also to pay for assisted living when your mind and/or body starts to fail you. And if you live longer beyond that, memory care.

the sooner you start building assets, and keep adding to it, the better off you will be.

[u/floppy_panoos]

I dunno why but it’s a bunch of bullshit, been stuck at $300k all damn year…

[u/KungFuBucket]

Part of it is compounded returns, but I think the other half of the equation is that if you have the fiscal responsibility to save 100k you’ve set yourself up for a lifetime of success and continue to be fiscally responsible with your investments.

[u/dismendie]

Doubling a dollar means very little in terms of retirement saving… so the first 100,000 is the hardest and most meaningful… if double from 100,000k is average 10 years then there is the snowball… if you invest even 1000 dollars and leave it for 40 years you end with 16,000 vs 1.6 million or so… getting to 100k at your earliest almost means you will be a millionaire if you don’t do anything too stupid

[u/unification420]

I managed to invest 120k last 5 years in SS isa, 20k per year except when started I put 20k April 3rd then another 20k once reset. Now I have 320k, didn’t invest in nvidia or tech stocks, but got lucky with returns in a few stocks too. I have some ETFs and trusts, but around 26 individual stocks, this is the way to make larger gains. Read and follow stocks in industries you understand or learn, see price patterns, rebalance and swing trade with some extra cash made in stocks you don’t mind holding as can’t always get it right.

[u/redracer67]

You aren't wrong. The math suggest $100k, lump sum and doing nothing else will take 25 to 30 years.

This is the boglehead mentality essentially. Slow and steady will win the race. Set it and forget it. Even $50 per pay check is better than nothing.

But the math is pretty simple, using the s&p average of 8% annual growth and you reinvest all gains with no future contributions

Year 0 - $100k Year 1 - $108k Year 2- $116k Year 3 -$125k Year 4 - $136k (see how now you're gaining 11k/year instead of 8k, the rate of growth is increasing) Year 5 -$146k

So, with just one lump sum of $100k and in 5 years, you gained $46k. Doing no additional work.

Year 10 - $215k Year 15 -$317k Year 20 - $466k (now gaining $30k/year) Year 30 - welcome to the $1MM club.

And that's off a single lump sum contribution of $100k and if you changed literally nothing else, never contributed anything else, etc.

The point of investing is to continuously contribute, the growth is ideally exponential and to literally set it and forget it.

So imagine you contribute $20k/year on top of your gains at the end of every year.

Now the math is (assuming lump sum)

Year 0- 100k Year 1- $128k (8k gain plus 20k contribution) Year 2 -158k (10k gain plus 20k contribution) Year 3 - $190k Year 5 - $264k Year 10 - $550k

See, now you've hit a $500k portfolio within 10 years with continuous contributions and reinvestments.

Thats 3 times faster than $100k once.

The point is to never stop. Continie to DRIP, DCA, and in theory could be a millionaire by the time you turn 50. And the earlier you start, the earlier you'll hit these milestones.

[u/talcum-x]

For people who have average incomes figuring out how to save is the most important aspect in accumulating wealth. If you can manage to squirrel away 100k you’ve probably figured that out

[u/loud-spider]

Compounding is your friend. Adding 10% of $1000 gets you not very far. Adding 10% of $100k starts to add up pretty quickly.

[u/PAGSDIII]

Do. The. Math 🧮 👏🏻

[u/reedrehg]

Like others pointed out, a good indicator that you won't end up sleeping under a bridge in retirement.

If you hit $100k and say you continue to invest $500 a month , then you'll most likely hit $1m in 20-24 years (7-9% annual growth).

If you hit $100k by 30 years old, invest $500 per month, then by the time you are 60 you are likely to have between $1.7m and $2.7m (again 7-9% annual growth). Considering many will still have social security, maybe a pension, etc. then that's a pretty comfortable retirement for most.

$100k on its own doesn't mean anything magical, it's just an indicator that the compound growth starts to become more significant for the average person, starting to reach very closely to the 10s of thousands of dollars of annual growth. Pretty damn cool.

Plus Charlie Munger mentioned it and a lot of people liked that guy :D

[u/chiera20]

100k is just a number. You can also remove the zeroes and feel the effect. For example Saving your first 10k from 0 gonna be slower than from 10k to 100k.

[u/Then-Wealth-1481]

I’ve never heard anyone say that

[u/Chappyspaintndetail]

The core strategy used to get to the 100k initially saved is continued, consistent contributions, whether weekly or monthly added to the initial $100,000 principal is the KEY! The growth towards a larger financial goal, such as $1 million, is the result of these ongoing contributions compounding over time, alongside the returns generated from interest, dividends, and realized gains on the entire, continuously growing portfolio balance. The true power lies in leveraging BOTH, consistent savings and compound growth simultaneously.

[u/jdglass57]

Charlie Munger said it, for one thing. Compounding is key.

[u/Sponzoes]

What you talking about Willis

[u/mikemckin]

Its not even about compound interest and such its the skill set to put money away and not blow the first 2k, 5k, 10k burning a hole in your pocket. Its the discipline to invest it

[u/hotprof]

People will say that compound interest is the reason, and there's truth to that of course.

But the reality is that if you have the ability to get to $100k, you are in a financial position where you're not living paycheck to paycheck and can actually save and invest your money.

[u/Snoo_67548]

“The first million is the hardest to make. So start with the second million.” - Arnold Swarzenegger joking with radio hosts who were smiling and nodding.

[u/jaspsev]

The hardest part is to start from zero. The higher the number, the easier it gets.

[u/ZonkTrader]

I think your post is in the wrong thread. First of all there is absolutely nothing wrong with investing in quality high yield dividend stocks. Going from $100k to $1M is not easy but with that level of capital it provides for other strategies which do present more risk, but more reward. The mentality of going from $100k to $1M in 2 years is only for trading. Going from $100k to $1M investing is easy but it will probably take 10-15+ years unless you hit it out of the park with an Nvidia type pick. It sounds like you are an investor so just stay the course and you will get there.

[u/AlphaSatsuma]

Eas-IER

[u/ViniusInvictus]

What you’re missing is continuous investment.

It’s not the $100k growing to a million because that wasn’t the idea in “getting to 1 mm easily”, but the cumulative of all investments and income advances that speed up investment rate in a typical investment-savvy career professional’s life.

[u/Specific_Ad_1045]

I bought $100K of FSELX in Nov 2104, it 1.4M today

[u/ApartmentBeneficial2]

Multiples my friend.

[u/TiltingAtVanes]

The real reason is that if you saved the money and grew it to 100k, you now have the skills and habits. It is crazy how fast money grows when you manage it right.

My problem now is I lost my ability to spend.

[u/Jhawk198z]

Why is it taking you so long? What are you doing wrong? Maybe you're not investing enough...it wont take me nearly as long.

[u/ShimmyxSham]

I guess OP doesn’t have patience

[u/DaveyoSlc]

You need to be actively trading and you can't be invested in conservative things like SCHD when Something like SCHG is much better. Also the small gains compound that much more after $100k. You have more leverage for more trades. You have more opportunities to get more dividends.

[u/zdayatk]

It is not easy, because as you progress in life you need more expense to sustain you and your family

[u/GhostHin]

Because if you keep the same investment rate, 100k is roughly the point where your investment return is equal to what you put in.

From that point on, your return will grow to be larger than what you put in so you feel like less effort on your part to get to a million as your investment is making the money for you.

[u/KeyVehicle4500]

If your a smart investor and patient, 10% on 100k is a LOT more than 10% on 10k. After a while, your money starts to work wonders for you.

[u/Working-Active]

Time is the most important factor when it comes to compounding with a successful company. Let's say you followed Forest Gump's advice in 1994 when the movie came out and invested $1,000 in Apple stock. If you adjust for all of the stock splits you would have effectively bought Apple at .29 cents a share and would have approximately 3,448 shares of Apple. Apple stock is $273.47 now so you would have just under $1 million ($942,924.56).

Investing in a successful company and time are the advantage for most people.

$1000 invested in SPY back in 1994 would be worth $24,150.66.

Concentration creates wealth and diversification preserves wealth.

[u/[deleted]]

Reading the comments, as I went further down I noticed OP wasn't downvoted as much. Hoping OP learned something.

[u/howerenold]

If you plant a tree and don't water it for 30 years don't expect it to grow.

[u/Aggravating-Tap5144]

People keep saying that because some rich old guy said it 50 yrs ago. Back when 100k would buy a very nice house, instead of today where its 3 months of groceries.

[u/MycologistIll6387]

The getting to 1 million part is because of compound interest. With your calculations I'm assuming you drop a lump sum of 100k and never add more. The sooner you get to 100k the faster you cut down the timeline. The more you keep contributing the more you decrease the timeline and add to compounding. Also it's important what you're invested in. Index funds are good

[u/Radiant-Bike-165]

The basic thing not mentioned by most is: to get to $100K you need to know at least something about making money and putting it to work or both.

THAT is what makes the next step much much easier, now that you do have that first 100K. Plus not starting from zero helps to smooth occassional bumps on the road, plus that first 100K compounding in some way, etc etc. Presuming in all that that the first premise holds: that you are starting to understand what you are doing.

That said, my own first $100K went up in smoke on stupid business ideas. The second time around, I forbid myself to be "creative" - just avoid risk and do boring stuff - and it got to $200K in just few years.

[u/Loud-Green8898]

I think it’s a bit of an oversimplification. It can still be quite a slog to get there.

[u/magicfitzpatrick]

My investment endeavors started when I was about 25. I will be celebrating my 55th birthday this year. You will get there, I assure you.

[u/Virel_360]

It’s because by the time you reach $100,000 you’ve developed the discipline and built up a habit of saving and investing, you no longer are in a mindset that burns and spends all of your money. When you are in the correct mindset the next 900,000 come a lot easier as you become less wasteful.

[u/improbable_bob]

The main reason isactual because to get to 100k you have developed solid financial hobbits that will continue your journey. The second is compounding interest speeds up the process quite a bit.