Published in · 7 min read · Apr 3, 2024
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It took me 10 years to save my first 100k. And then it only took about a year to cross over 150k. It turns out, that’s pretty normal.
Compound interest is an amazing thing, but it sure starts out slow. You need time and lots of capital invested for it to work its magic.
Today I want to break down in detail the math that explains why saving your first 100k is so hard, but your net worth starts exploding after you hit that milestone.
Without any return on your investment, how long it takes you to hit any milestone depends entirely on how much you save.
For most of this post, we’ll be using $10,000 a year as our annual savings. There’s nothing special about $10,000. It’s a nice round number. It’s also an aggressive yet achievable savings goal for someone making the median salary.
Here’s what saving $100k looks like with no returns:
Obviously, you don’t even need a chart for this one. $100k divided by $10k a year is 10 years. Your balance goes up linearly by 10…
