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Why your fist $100K invested are a gamechanger
AJ Neeme
February 23, 2025
Why your fist $100K invested are a gamechanger
One of the greatest and wisest investors of all time, Charlie Munger, famously said:
“The first $100K is the hardest but you gotta do it.”
I’m not talking about forced investing like your pension or stock your company awards you.
Someone is making the investing decision for you.
I’m talking about you choosing to take a specific amount of your own hard earned $$$$ and buying assets with it.
That’s where people get stuck at $0 and never get started.
If I already have a pension, company stock and cash savings, why do I still need to invest ?
Time Flexibility: Your pension can’t be touched until retirement. This removes flexibility for you. Governments and pension providers might change the retirement age.
Diversification: Your company stock might be performing great now. But, will it be in 20-30 years ? Same goes for your pension.
Inflation: The cash pile sitting in the bank is likely to depreciate in value because of inflation. What you think is enough to live off of for 20 years, might be 12-15 years by the time you hit retirement
Your own investing will fill the flexibility, diversification and inflation hedge gaps
Why $100K ? Why not $50K or $200K ?
Truth be told, $100K is catchier than $75K or $132K.
It’s a nice round number and your entry into the 6 figure club.
Once you hit it, you’ve probably:
Achieved some degree of emotional control
Made the necessary lifestyle adjustments
$ Momentum starts to build
The earlier you get started the better (But, anytime is better than not)
Let’s say you get to $100K invested and decide to never invest again.
Your investment grows at an average rate of 8% per year.
What will it be worth at retirement ?
If you’re 10 years away from retirement: $215K
If you’re 20 years away from retirement: $466K
If you’re 30 years away from retirement: $1,000,000!
Time is your biggest ally. But, getting started is the biggest favor you can give yourself
Great! How do I start ?
But, most importantly, make sure you have a solid financial foundation to get started:
Live below your means
Build and Emergency Fund
Understand your Financial Priorities
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The information contained in this newsletter is for general informational purposes only. It should not be construed as financial or investment advice. Please consult a qualified financial advisor before making any investment decisions.