Your Savings Do NOT Explode After $100k (here's when it does)

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*414 {Hammad}[Ankit] Your Savings Do NOT Explode After $100k (here's when it does)

[FreeThoughtCrime]

The reason they say that your net worth explodes after 100k is because at 100k, your gains start exceeding your contributions for the first time. At some point, your continuing contributions become utterly irrelevant. I stopped contributing around the 450k mark. At that stage, a single up or down day moves the needle more than a whole year's worth of contributions.

[ronmexico]

Every dollar bill is a worker. You can give it to someone else or put it to work for yourself

[TurdFerguson-]

The miracle of compound interest. I'm 54 and have been saving every penny I can since I was 22. I'm now just north of $2M (and completely own two rental homes). My only debt is about $100K on my primary residence, which I'm reluctant to pay off early because the mortgage rate is 3.125%.

It can be done, just sacrifice early and save all that you can.

[Idintcare]

That spreadsheet has an error. It assumes you invest $20k each year in a lump sum at the end of the year. In reality you're likely to invest 20k in smaller amounts during the year. So each new 20k added will return an average of 3.5% in the first year. That shaves about 3 years off the time to get to $1m. Also if you're going to discount the 1m due to inflation then you should also factor in that your savings will likely rise as well. If you can invest 20k pa in year 1 then by year 7 you may be able to invest to 40k pa. And by year 14 it may be 80k pa.

[simplewelshman]

Currently at $241K, gotta keep pushing.

[aliabulhaj]

You're counting inflation twice! Typically it's 10% annual returns for the s&p500. People tend to deduct 3% to account for inflation.

[ChickenIandlEggs]

Even if mathematically they don't explore, people I know who have 100K+ net worth are on the grind and will get their first mill much faster than those who dont.

[droberts]

Never chase the number. Chase the point where you can feel financially unburdened.

[pdxmusl]

Na.. i mean i get your point. And yes inflation will make even a million sound small someday. But right now still 100k really does impact how quickly you can grow your portfolio. 100k is still a lot of money. If you had invested in VOOG as example. 100k would have grown to 137k this year (which is unusual) and thats not even counting the 10 or 20k or whatever you were adding in. You could have ended this year at 160+k. Yes obviously the more you have the more events like this will benefit you. Im not saying you shouldn't target 250k. Im just saying hitting 100k is still a substantial milestone.

If you invested only 100k in an s&p 500. And stopped. Did nothing. In 30 years you would have 1.6mil. 100k is still a wealth builder.

[MidwestMoney]

I'm taking Munger's side on this one. The first $100, 000 for me was a total B. It felt like it took an eternity. I reached that point in my early 30's. Then all of a sudden at 40 I hit the million dollar mark. I couldn't believe how fast it happened.

[griffinreitz]

My first 300k was pretty easy. Ran a company and remodeled old houses nights and weekends. 80 to 100 hours a week adds up pretty fast. Once I started getting houses paid for the trip to 700k wasn't to bad. 700 to a million took forever, it seemed. Every time I got close something went to hell. LOL Once I got there I quit. Been retired for years. Worth more than when I retired so I guess I'm doing OK. My biggest challenge was learning to spend money instead of constantly saving and investing it.

Bought an 80k pickup a few months ago, so I'm getting better at it. LOL

[SniperLogic]

DON’T ease off the gas at 100K. That’s too early by far.

[SnowyCountryChicken]

My net worth was $250k sometime in 2008. Then it crashed to $65k later that year. I stayed put mostly in my investments. Today I have around $3M.

So when I saw those hundreds of videos about net worth exploding after $100k — it depends. It depends on whether there’s a market correction along the way or a recession.

[tonyvalenti]

One thing that does make your million dollars feel like more in retirement is being 100% debt free. Life in the cash lane is much more rewarding and ownership is much more valuable than owing. 😉

[TecnoTops]

The honesty in this video is very refreshing. Tired of seeing investment videos assuming 10% returns for 30 years and not even mentioning inflation. Keep it up.

[JacqueScherrer]

Well, when you’re only earning $16, 000 in 1988 and you could only afford to contribute 3% to the 401k, that was only $480 all year, it takes a lot longer than 8 years to save that first $100, 000. It took me closer to 20 years. It took at least a decade of pay raises and continually increasing my contribution to be at a 10% contribution rate. Took a lot less time to save the second 100k due to higher salary and higher contribution rate.

[Freddylone]

11 months of investing. $67k saved, debts cleared, and a portfolio just shy of a quarter million. Taking my finances seriously this year was worth it in retrospect.

[TylerRayHamblin]

$135k in retirement at 32 between me and the wife. Made early mistakes and started late but glad I got passionate about finances before 35.

[kjk]

The median home price in 1994 was about $130k and today its around $420k. So charlie said to save 77% of the median home price. Converting that to today's median price, thats $324k. This is a 3.85% inflation rate. At that inflation rate, you need to have a $3.2M goal 31 years from now for it to feel like $1M today.

[AZ_Bill]

As long as people didn’t sell during Covid, they are more than fine now. It’s a long game. Just keep maxing out the 401(k) and keep it in equities.