2724: The First $100,000 Is The Hardest by J. Money of Budgets Are Sexy on Building Wealth & Investing

[00:00:00] Looking to part ways with complicated, expensive, and uncertain shipping?

[00:00:04] Then give your business the edge it needs with USPS Ground Advantage Shipping from the United

[00:00:10] States Postal Service. Keep everything simple with clear, upfront pricing and no unexpected

[00:00:17] surcharges. Keep things affordable with some of the lowest prices out there. And keep it all

[00:00:23] reliable with on-time ground shipments. It's time to turn shipping to your advantage. Learn how at

[00:00:30] usps.com slash advantage. USPS Ground Advantage. Simple, affordable, reliable.

[00:00:40] This episode is brought to you by La Quinta by Wyndham. Your work can take you all over the place

[00:00:45] like Texas. You've never been, but it's going to be great because you're staying at La Quinta

[00:00:49] by Wyndham. Their free bright side breakfast will give you energy for the day ahead. And after,

[00:00:54] you can unwind using their free high-speed wifi. Tonight La Quinta, tomorrow you shine. Book your

[00:00:59] stay today at LQ.com. This is Optimal Finance Daily, episode 2724. The first hundred thousand

[00:01:09] is the hardest by J Money of BudgetsAreSexy.com. And I'm your host and personal finance enthusiast,

[00:01:16] Diana Merriam. Now let's get right to it and continue optimizing your life.

[00:01:25] The first one hundred thousand is the hardest by J Money of BudgetsAreSexy.com.

[00:01:32] You know what's hard? Making your first million dollars. For us normal people, I say making your

[00:01:38] first hundred thousand dollars is the ultimate achievement. You can't make it to a million or

[00:01:44] a billion without first hitting a hundred thousand. But even more than that, it requires

[00:01:50] a complete overhaul of both your money and your mindset. You literally go from knowing jack to

[00:01:57] building out an entire plan and foundation. And that's if you even get to the point where you

[00:02:03] care enough to make it happen. It took me 28 years to finally start paying attention.

[00:02:08] And from the emails I routinely get, the epiphany unfortunately comes many decades later

[00:02:14] for others too. And even then, once you're committed to making the change, the real work

[00:02:20] begins. You have to first figure out where all your money is going and why. You have to cut back

[00:02:27] from your accustomed lifestyle and start saving everything from scratch. You have to climb yourself

[00:02:32] out of all that debt just to get to even. You have to get your career off the ground or fixed

[00:02:38] on top of hustling dozens of side jobs or whatever else will be powering your plan.

[00:02:44] You have to figure out how to invest and balance your life so you actually still enjoy it. And most

[00:02:50] importantly, you have to become really good at being patient because it all takes time. In fact,

[00:02:57] that's the magic ingredient of it all, time. And it can be a b****. But once you get your

[00:03:04] mind right and the engine running, it starts getting easier from there until you're crossing

[00:03:09] such once fantasized milestones before you know it. You hit your break-even point at zero,

[00:03:16] then cross to $1,000 in savings, then $10,000 and $20,000 up to $50,000, $75,000, $100,000,

[00:03:27] $500,000 and all the way up to the double comma club and beyond. Life is good and it becomes so

[00:03:34] easy over time that you rarely need to think about it anymore. You still do because well,

[00:03:40] we're all nerds, but it becomes more out of fun than it does necessity. And I wouldn't even care

[00:03:46] anymore that you stop listening to this blog because it means you're all set now. Unless

[00:03:51] you're Drake or T-Boon who can't stop, won't stop until they're eventually kazillionaires.

[00:03:57] My friend over at ESI Money, and ESI stands for Earn, Save and Invest, recently shared his own

[00:04:03] milestones and how long they took to cross. And the numbers are pretty mind blowing. A million

[00:04:10] dollars net worth, 19 years and three months. $2 million net worth, four years and nine months.

[00:04:18] $3 million net worth, two years and eight months. $4 million net worth, not there yet and likely

[00:04:27] won't get there since he just retired. We'll never know how long it'll take him to reach a billion

[00:04:33] now. Thanks a lot, bud. But as you can see, the first push is incredibly harder than the rest.

[00:04:40] 19 years down to just over two to accrue the same exact amount of money. It's pretty ridiculous.

[00:04:47] And I'm sure if you were to track your own progress, you'd see something similar.

[00:04:52] I joked with ESI that I was going to steal his idea and tweak it to the 100,000s since I'm not

[00:04:58] as baller as he is yet. So here it is as promised. P.S. I assumed that ESI started the clock around

[00:05:06] the same time he got his first real job because he mentioned salary. So that's what I did here too.

[00:05:13] Only I went back to my first hourly job after college, old Navy, summer of 2001,

[00:05:19] since it took me a number of years to actually get my first salaried one. $100,000 net worth,

[00:05:26] seven years and 11 months. $200,000 net worth, one year, five months. $300,000 net worth,

[00:05:34] one year, two months. $400,000 net worth, one year, eight months. $500,000 net worth,

[00:05:42] two years, seven months. $600,000 net worth, probably over the next two years.

[00:05:49] As you can see, it took me way longer to hit my first 100,000 than all the others.

[00:05:54] And while I started regressing with the last few 100,000, the point kids entered my life and slowed

[00:06:00] down the hustle, it hasn't required any real additional effort or strategizing on my behalf.

[00:06:07] I just feed the machine and it does the rest. The majority of everything you need to do happens

[00:06:13] between reaching your first epiphany and hitting that first 100,000. You'll still learn and tweak

[00:06:20] as you go and maybe even switch strategies in the process. But once you've got your mind right,

[00:06:26] it's all a matter of pouring in the fuel and letting time, and sometimes luck, take over from

[00:06:32] there. Is reaching your first million or even billion hard? Of course. But if you ask me,

[00:06:39] getting to your first 100,000 is by far the most important. If you're there, congratulations!

[00:06:46] You figured out how to beat 75% of your countrymen. Total guess there, but probably accurate.

[00:06:53] If you haven't, don't stress. You're well on your way. As I don't know many people who would

[00:06:58] spend their free time devouring finance blogs and then doing nothing about it. It all takes time.

[00:07:04] But once you hit that first 100,000, it's much smoother sailing. You just listened to the post

[00:07:14] titled The First 100,000 is the Hardest by J Money of BudgetsAreSexy.com. And I'll be right

[00:07:21] back with my commentary. Looking to part ways with complicated, expensive and uncertain shipping?

[00:07:28] Then give your business the edge it needs with USPS Ground Advantage Shipping from the United

[00:07:34] States Postal Service. Keep everything simple with clear upfront pricing and no unexpected

[00:07:40] surcharges. Keep things affordable with some of the lowest prices out there and keep it all

[00:07:46] reliable with on-time ground shipments. It's time to turn shipping to your advantage. Learn how at

[00:07:53] USPS.com slash advantage. USPS Ground Advantage. Simple, affordable, reliable. If you've been using

[00:08:03] Mint to manage your finances, I've got some bad news. Mint is shutting down. But now for the good

[00:08:09] news. There's a better alternative. Our sponsor Monarch Money. Mint users are turning to Monarch

[00:08:15] Money and loving it. Maybe you're saving for a down payment, a wedding, a dream vacation, your

[00:08:21] kid's college. I found that Monarch makes it so easy to help you reach your financial goals,

[00:08:26] whatever they are. I definitely wouldn't be able to allocate my finances or plan as clearly without

[00:08:31] help from Monarch. In fact, Monarch is the top rated all-in-one personal finance app. It gives

[00:08:37] you a comprehensive view of all of your accounts, investments, transactions and more. Create custom

[00:08:43] budgets, set goals and collaborate with your partner. And now get an extended 30-day free

[00:08:48] trial when you go to monarchmoney.com slash OFD. After trying out Monarch for myself, I understand

[00:08:54] why it's the top rated personal finance app. And right now get an extended 30-day free trial

[00:09:00] when you go to monarchmoney.com slash OFD. That's M-O-N-A-R-C-H M-O-N-E-Y dot com slash OFD for your

[00:09:09] extended 30-day free trial. I think J Money makes some great points here. The first $100,000

[00:09:17] is the hardest because it takes time to get your good money habits in place. While I do think

[00:09:22] focusing on your net worth is a better way to track your progress than focusing on something

[00:09:27] like your credit score, for example, I found for myself that focusing on the gap between my income

[00:09:33] and expenses has helped me get the best results. Saving and investing as much as I can while

[00:09:40] monitoring my spending and expenses naturally resulted in increasing my net worth. I focused

[00:09:46] on the systems and behaviors and let the results take care of themselves. And after six years,

[00:09:53] this led me to a net worth of almost $500,000. I'm not quite sure when I passed that $100,000

[00:10:00] threshold. It was probably worth celebrating, but I was too busy celebrating every month that

[00:10:07] I stayed within my budget and hit my targeted savings rate. Compound interest is a magical

[00:10:12] thing. And the more you invest, the more compound interest is working to grow your net worth.

[00:10:19] That should do it for today. Have a happy rest of your day,

[00:10:22] and I'll see you on the Tuesday show tomorrow, where your optimal life awaits.