Why Net Worth EXPLODES After $100,000 (Simple Steps)

I saved my first $100,000 at the age of 25 and since then things have gotten a little bit crazy so in this video I want to explain why net worth kind of goes crazy after 100K and more importantly how to get there first off I want to explain why the first 100,000 is so critical and I like to use this example of kind of like a a smartphone upgrade for your finances so when it comes to investing Capital scaling is actually super important this pretty much just means that as your investment grows it makes more

money and that money makes more money it's kind of like why the rich get richer is because the more money you have the more money that money makes the more money you're going to end up having the Vicious Cycle but one you want to be on so with the whole smartphone analogy let's say that you have like a basic flip phone there's not like a ton of stuff that you can do with that there's maybe like snake and a few other games on there I used to love snake back on like those old what are

those called anyways I think you know probably works fine but there's not a lot that you can do with it but then you upgrade to a new brand new expensive iPhone now now you can literally do almost everything I like run my business on my phone I can talk to people you have games you got AI all kinds of stuff that you can do on there and that's kind of like what investing is the more money you have and the more money you invest it actually opens up new opportunities that you just didn't have before

when you didn't have this much money invested which is weird another way to look at it is like some viral you know social media post you initially post it it gets some likes some shares couple comments or whatever it's like it's doing fine but then you know it starts to click with people they share it to their friends it starts to go around to more friends and then suddenly this thing's taken off it's getting some momentum and then the algorithm decides to bless you and suddenly you're one of the most popular people in the world

for a couple weeks and you start making money on t-shirts pretty much the same thing so that's kind of like what happens once you hit 100K that's when it starts to go kind of viral and I'll break down the math of why that is in a second but for me I had a couple different Milestones of when things really took a shift the first 10,000 changed a ton of stuff for me and I might even make a whole video on how I got there and how literally my life changed from that but then as I

kept grinding and kept going and was finally able to get to that first 100,000 that's when like everything changed that's when I was able to leave my day job because I had enough money that I could buy investment that paid me every single month I was able to take more risks on things I was able to invest more into myself I started to make compound interest which we'll talk about in a second so many things changed in my life once I hit this point the cool thing is it's not a million it's not going to

take you like a lifetime to get there it's not going to take you even 20 years to get there you can get there relatively quickly if you kind of follow certain strategies all right before we get to the making money side let's talk about something super fun math maybe you don't think it's fun cuz you're not weird like me but you know you clicked on this video so if you invest $500 a month with a 7% annual return it'll take about 11 1/2 years to reach $100,000 it's most likely not going to be like a

completely straight line but if you're willing to make some sacrifices and some changes that's relatively attainable but where things start to get interesting is where you go from 100K to 200k if you're at 100K and you keep investing in the same amount 500 bucks a month and 7% return then it only takes 7 years to go from 100K to 200k and then only about 5 years to go from 200k to 300K even though what you're doing stays exactly the same it's less than half the time it took for the first 100 kit and then 300

to 400 is like 4 years and as you keep going down the line it gets shorter and shorter and shorter and the same amount of money is being created way way faster sometimes eventually down to a little over a year as I'm sure you've heard from a bunch of people like Charlie Monger the first 100K is an absolute hard thing to do but you got to do it because getting to a 100K does not happen on accident you need to keep a handle on your finances and you need to have a goal and more importantly

you have to have a plan on how to accomplish that goal I know for me when I first sat down and actually took time to write out on paper what I wanted for my future and my family's future that was the beginning of making sign ific changes in my finances and that's also why I love the sponsor of this video facet facet is building the future of financial planning offering personalized planning from a team of certified financial planner professionals and that just means that they actually know what they're talking about they have experts offering guidance

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you get from 0 to 10,000 is actually very different from the weight that you get from 10,000 to 100,000 so I have a different video where I talk about how to get from 0 to 10K but this is more how to get to that first 100,000 and there's a couple different strategies the first one is taking advantage of opportunities so once you have your first you know maybe 25 or $50,000 saved up it actually opens up a lot of possibilities and some of those possibilities could mean taking a lower paying job with the opportunity to

scale more let's say you spend 50k a year and you have $25,000 in the banks you have 6 months worth of living expenses that means that you could take a lower paying job for like 6 months maybe even more but that job might have the opportunity earn 50% more if you can get past the first couple months maybe it's something in sales or starting or working with a smaller business or or whatever you decide to do that's just one of the huge advantages of having an emergency fund that's really well funded that if there's a

job across the country you can afford to move if there's an investment opportunity that comes up you can afford to invest in it like I said if there's a job that you know would pay you less now but you have the opportunity to earn way more you literally would not have that opportunity if you didn't have a good emergency fund if you didn't already have money and that can really help you get to that first 100,000 faster then of course there's things like investing in the stock market or in real estate for me when I

got my first 25,000 is when I invested into my first rental property I was able to do a house hack where I could live in one unit rent the other ones out and since I was living there I was able to use an FHA firsttime home buyer alone which is 32% down so that can make something that seems really expensive actually uh attainable for a normal person when you can you know do 3 and 1 12% down and that's again another opportunity that you only have because you have money and as you continue to scale

how much money you have those opportunities scale with you and that's you know the rich get richer type of thing then of course there's investing into the stock market like we talked about with the 7% turn even though I think it's closer to like 11.6 or something like that I don't know that would be another route to go where you just stay at your day job you don't do any of the other stuff but you continually invest into the stock market and let that money make more money however I do think that it can grow

a lot faster if you do take some of that money at least and invest into income scaling income scaling is where you just really take you know a couple months or a couple years or a couple thousand dollars going to a seminar or whatever it is and you gain a valuable skill that will allow you to move to a higher job get a promotion at your job learn a high value skill that you can work you know on the nights and weekends to earn more money anything like that is generally going to be a much

better return than anything you could get in the stock market that's definitely another approach that gets opened up as you have more money then of course you do also have to play a good defense because as you start getting this money if you're anything like me you have this strong strong urge to spend it I actually know a kid who bought a rental around the same time as me but then he went out and bought a brand new car as well and because he had that brand new car he wasn't able to get another rental

for years and I was able to get another one and then another one and I was able to leave my job and do all this stuff and he is still working at a job and still on that first rental because of that car purchase it it drastically changed his finances and even if I had bought a car at the beginning if I had got a nicer apartment if I had done any of the things that I really wanted to do at the time but I made that decision not to because I also really didn't want

to work forever that's a common trap and why you need to play defense because it's super super easy that once you get 10 2050 $100,000 in the bank you just start blowing it and then that either starts to go down or you never make it to the next level where you can start to gain some freedom and stuff so making sure that you don't fall for lifestyle inflation as you're growing there you don't fall for any of these common traps of consumerism and trying to keep up with your friends and stuff like that can be

a huge way to actually get to that first $100,000 and uh you know honestly far beyond that of course you also want to maximize your efficiency and this is where having a you know written down goal of exactly what you're trying to do if you guys want to see how I plan out my goals there's a free template down below it's super helpful for me for financial goals business goals personal goals I really like that so check it out it's totally free but this will determine how you can be more efficient with that money are

you planning on retiring early cuz if not then it might be a good idea to use a Roth IRA or 401k or something like that to put that money into so it can start earning taxfree if it's like a Roth or are you planning on investing in real estate if that's the case then maybe keeping the money in the stock market is a bad idea cuz that could go down short term and in that case you might want to open up like a high savings account I get like 5% with Weeble on my emergency fund

and then when I'm ready to invest into a property then I can just pull it out from there and I don't have to worry about this whether the stock market's up or down or anything like that but it's all going to drastically change what is the best decision for you by what your goals are so if you don't have financial goals it's really going to be hard to be efficient with this money and actually reach that first 100K and Beyond if you don't really know exactly what your plans are and exactly what your steps are

along the way but even as you have that goal it's going to take discipline it's going to take mindset it's going to take encouragement I also have like a free community for financial minimalists that I'll link down below as well just to like get around people with the same mindset because for me when I'm not around like-minded people I can have a goal I can know where I'm trying to go but it requires a lot more willpower when you're just kind of by yourself and that's why maybe even watching videos like this might be helpful

it's because it can encourage you to take the right steps when you get tired when you get discouraged when you know you see a new car that you want it can encourage you to say no what do I actually want with my life do I want freedom do I want uh you know time Freedom do I want Financial Freedom what what are your actual goals do I want a yacht do I want a little farm what is it and that can help you stay on track when things get hard another thing that really helps is

to make things automatic I've talked about this a lot in my videos but if you aren't like stealing from yourself every paycheck and putting it in emergency fund putting it into Investments then this is going to be a lot harder if you have to actually make that decision yourself so just taking some time you know creating a budget and seeing how much you can invest every month and then putting that on automatic can really make a world of difference and make this happen for you pretend like it's a car payment pretend like it's a payment

you have to make and pay yourself first that way that way you are you know knowing that you're going to reach Financial Freedom you know it anyways I hope this video was helpful if it was check out this video right here on saving your first 10K if you're not there yet this video is super super super helpful so yeah watch that and and I'll see you next week