top of page

Why Your First $100k Is the Hardest and Why It Changes Everything

If you are serious about building wealth, getting your first $100,000 invested should be priority number one. That first $100k is the hardest to build, but once you cross it, everything starts to feel easier. The reason? Your money starts working harder than you do.


Why $100k matters

In the beginning, almost all your progress comes from what you contribute. Once you hit $100k, the returns from your investments start making a real impact. Eventually, your portfolio can grow more in a year than you’re putting in yourself. That’s when momentum kicks in.


How compounding really works

Compounding is simply your money earning returns, and then those returns earning more returns. The growth isn’t a straight line — it starts slow and then snowballs over time.

Let’s say you invest $100,000 and earn an average of 10% per year without adding another dime:

  • After 5 years, it could grow to about $161,000

  • After 10 years, about $259,000

  • After 15 years, about $418,000

  • After 20 years, about $673,000


By year 20, your portfolio could be earning over $60,000 per year — without you lifting a finger. That’s the magic of compounding.


The Rule of 72

Want a quick way to estimate how long it takes your money to double? Divide 72 by your annual return.

  • At 10% returns, your money doubles roughly every 7 years

  • At 8%, it doubles about every 9 years

  • At 6%, it doubles about every 12 years


The earlier you hit $100k, the more doubling periods you give yourself — and the faster you reach serious wealth.


How to reach $100k faster

You control three things: how much you save, how long you invest, and the type of investments you choose. The first two are entirely in your hands.

  1. Increase your savings rate: When your income goes up, save half of the increase and enjoy the other half. Funnel bonuses, equity payouts, and tax refunds straight into your investments.

  2. Automate your investing: Set up automatic contributions to your retirement accounts and brokerage so it happens without thinking. Do it on payday so your spending adjusts around your plan.

  3. Keep costs and taxes low: Stick with diversified, low-cost index funds or ETFs. Use tax-advantaged accounts first, and place tax-heavy investments in accounts that shelter you from unnecessary taxes.

  4. Avoid lifestyle creep: As income grows, keep your expenses in check. Your savings rate matters more than your salary for building wealth.


A realistic road map for high earners

Let’s say you make $300,000 a year and commit to saving 20% of your gross income. That’s $60,000 per year, or $5,000 per month, invested.

Assuming a 7% annual return once invested:

  • After 1 year: about $64,000 saved and invested (including growth)

  • After 2 years: about $133,000 — you’ve already crossed the $100k mark

  • After 3 years: about $209,000

  • After 5 years: about $393,000


Even at a more conservative 5% return, you’d still cross the $100k mark in under two years. High earners who keep expenses in check can hit this milestone shockingly fast; the real challenge is staying disciplined enough to make it happen.


What to invest in while you build

  • Broad US and international stock index funds

  • A sensible mix of stocks and bonds for your risk tolerance

  • Tax-efficient investments in your brokerage account

  • Avoiding the urge to time the market — missing just the best days can set you back years


Common mistakes that slow you down

  • Waiting for the “perfect” time to start

  • Holding too much idle cash beyond your emergency fund

  • Overloading on employer stock

  • Paying high fees for complex products that don’t deliver

  • Increasing spending with every raise


The mindset shift

The first $100k is a milestone not just for your money, but for your habits. You’ll have built the discipline, automation, and consistency that make the rest of your journey much easier.

Once you hit that number, the snowball is rolling and it’s just a matter of time before it becomes a boulder. If you're interested in building a financial plan driven by purpose rather than products Book a free intro call here.


Disclaimer: This blog is for educational purposes only and does not constitute financial advice. Please consult with your advisor, tax professional, or mortgage lender before making a major purchase decision.


bottom of page