How to Save Your First $100,000

How Do You Save Your First $100,000?

The secret behind reaching your first $100,000 and many more after that is called compound interest rate effect. When you save money in a regular account or savings account, they rest. If you instead invest the money on the stock market in the long term, they work, the difference is huge over time.

5 years later of consistently investing $1500 a month with a 9% annual return you will then have saved up your very first $100,000.

But, keep in mind that in the beginning, you will be required to make an effort, while the reward in terms of return seems seemingly small.

A number of years later, the working money will give you a seemingly high return on a low or non-existent bet on your part, then the snowball is rolling.

Albert Einstein is said to have declared compound interest the eighth wonder of the world and one of the strongest forces in the universe. So, it does work you just have to be patient with it.

How Long Does It Take to Save $100,000?

To make $100,000 in five years, as I have mentioned before, you need to save $1500 every month at a return of 9% per year. You will then have $100,000 in the account after 5 years. If you save more money, it will of course go faster and if you save less, you can count on it taking longer to reach your goal.

3 things you can do to save $100,000

1. Get multiple sources of income

As one of the world’s most famous investors said, “Do not rely on an income” – Warren Buffett. Warren Buffett says that the average millionaire in the United States has 5-6 different incomes.

So one way to increase your chances of having $100,000 is to create more income. Your various incomes can be an extra job, start your own or rent a room at home.

It may be that you are terribly good at flipping then maybe you can sell some bowls to make extra money, thus creating income from a hobby.

2. Save

To save. Let’s say that today you decide to become a millionaire. You start saving $50 a month, after one year you have collected $600.

Your motivation begins to wane and you feel “I will never get rich”. So you take your money and go on a skiing holiday with your friends, now you’re back on square one.

Saving sounds like the easiest task, but is in fact one of the most difficult.

To motivate yourself to save, you have to set up a plan, the plan can be as simple as “what do I save for and how much should I save for this”?

3. Invest

Many who want to reach $100,000 make the mistake of not investing. They believe that a $100,000 grows fastest by having it in a savings account.

The truth is that when your capital starts to grow, the return you get on your money will be greater than the ones you save!

Let’s say that you save $100 a month, which is $1200 per year. If you also have a sum of $25,000 and receive an 8% return on that money, you will receive a return of $2000.

So you earn more from your money you already have than what you save.

How do you save a $100,000? Saving a $100,000 is a fairly straight line, it is difficult to go straight on this line.

So the most important thing is to keep up the commitment in saving and to understand that it will not take a week or a year.

It will probably take longer. Another necessary part to reach your first $100,000 is to get started, so what’s stopping you?

How much can you save each month?

Check out how much you can save each month from your salary. Calculate what expenses you have, everything that is left over after your fixed costs, you actually have the opportunity to save.

How much you then choose to save from it is up to you, the more you save the faster you can save a $100,000.

Go through bill by bill and see if you can cut any costs or reduce them.

Can you save on any of it below?

  • Food costs
  • Mobile billing
  • Subscription
  • Mortgages
  • Electricity bill
  • Insurance

Invest your money in the stock market

If we are to be completely realistic, you will probably never be able to save $100,000 if you just leave your savings in an interest account.

The interest rate is far too low to give any return so it will take a very long time to reach the $100,000 with the money in a bank account.

However, you can earn $100,000 on stocks, or rather reach your first million by investing your savings in stocks or mutual funds.

The stock market has given an average return of 9% per year, while the bank interest rate is currently around 1%.

In addition, there is a much lower tax on funds and shares than there is on savings accounts. You thus get both a higher return and lower tax by investing in the stock market instead of interest.

Save more aggressively in the beginning and calmer later

If you have the opportunity, it can be a good idea to save a little harder in the beginning and then save less. Maybe you can save a little extra on things or have an extra job to get more money for your savings.

By saving a large amount of capital quickly, you will be able to take advantage of compound interest, also called the snowball effect in the past, which means that you get more money “for free” in the form of returns.

It therefore does not require as much money saved to reach the $100,000 if the majority of the amount saved takes place in the first years instead of the other way around.

Should I invest in stocks or mutual funds to reach my $100,000?

It is entirely up to you if you choose stocks or mutual funds, but if you feel uncertain, I recommend a monthly savings in mutual funds and an Investment Savings Account.

Then everything will be taken care of automatically and you can focus on the most important thing, to make money that can be saved and invested.

You will in all probability get a good return and save your $100,000 as long as you just let the monthly savings roll on each month and do not withdraw your money.

Investing in the stock market is very easy if we ourselves do not bother with it for ourselves.

Time and return are the two most important factors

The two most important factors are time and return, because they pull the absolute biggest load in the hunt for the $100,000 and beyond.

You just have to spend your money, why should it be on the couch when you go to work? In the beginning, as I said, the lion’s share of value creation and the ever-increasing portfolio comes from its own new savings.

If you save $100 a month, you will have collected $1240 after one year, given a 7 percent annual return. 1200 is your new savings and $40 is your return, which means that the new savings account for almost 97% of your total savings capital.

But let’s fast forward to year 27, that’s the year you reach $100,000.

Then you have saved a total of $32,400 in total, and all of a sudden the return accounts for 67% of your entire fortune. 10 years later you reach the next $100,000 and then the return is as much as 79% of your total wealth.

When you have raised a $100,000, an annual return of 7% corresponds to a full $7000. It’s as much money as you initially saving in 70 months or almost 6 years.

The money now works for you and pulls the heaviest load.

If we assume that you continue to save $100 per month, this means that you save $1200 per year, the return on your $100,000 then adds another 6 years of new savings.

The more you save, the faster it goes

A golden benchmark is to save 10% of disposable income, ie income after tax. But the best savings are what gets off and each trip starts with a first step.

The average person saves just under $300 per month on a monthly basis. This means that it takes 16 years to reach the first $100,000.

If you save $840 a month, then it takes a little more than 7 years to reach the goal. The more you save continuously, the faster it goes.

The snowball is rolling

Let us be inspired by the people who have an aggressive monthly savings.

  • The first $100,000 is reached shortly after 7 years.
  • About 5 years later, the second $100,000 is reached.
  • Four years later, the third $100,000 is reached.
  • The fourth $100,000 is reached after just 3 years.

… And then it rolls on faster and faster.

If they keep the savings until the age of 65, they have achieved a saving of $1,6 million, where almost 76,9 percent of this consists of returns.

Adjust the time according to what your life looks like

Although this blog post is an explanation of how to save a $100,000 in five years, it is important that you do not get stuck in it.

Everyone has different conditions, so pick the parts you think are good and adapt it to what your life looks like.

If you can only save $50 a month, do it! The most important thing is that you start today because the compound interest effect starts working for you as soon as you start, if you never start, you never take part in it.

In addition, your conditions may change, which means that you can save more money in a year, then it is good if you are already saving.

As long as you save and invest every month, you will eventually have $100,000, it’s simple math.

In fact, if you reach the $100,000, you have a good chance of saving up so much money over time that you can stop working if you want to.


It is quite possible to save $100,000 and the secret is about putting your money to work. The compound interest rate effect does most of the work, you just have to be a little stubborn and patient.

  • Invest your money in the stock market
  • Save continuously and the salary comes immediately – most people have too much month left at the end of the salary
  • The more you save, the faster it goes



This article has been reviewed by our editorial board and has been approved for publication in accordance with our editorial policies.

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