Thursday, April 4, 2013

The first $100,000 is the hardest

I'd like to talk about how hard it is to accumulate 100,000 from a standstill, a great Charlie Munger quote:

"Munger has said that accumulating the first $100,000 from a standing start, with no seed money, is the most difficult part of building wealth. Making the first million was the next big hurdle. To do that a person must consistently underspend his income. Getting wealthy, he explains, is like rolling a snowball. It helps to start on the top of a long hill - start early and try to roll that snowball a very long time. It helps to live a long live." - P242, Damn Right!

 The single most hardest part of getting wealthy is amassing the first $100,000. After that the money starts working for you. The money is making money. That's what Munger is trying to say here. I couldn't agree more.

I myself find it very frustrating now, shoveling multiple grands of fresh funds per month into my broker accounts, collecting (compared to my income) tiny dividend checks, instead of buying that sweet car, or maybe upgrading my bathroom to this style, or getting a sweet 18k gold fountain pen, or maybe that Kiton suit.

One must save a large portion of his income, especially when he is accumulating the first $100,000. Figure out how to get the early capital. After that, I'd expect to get things to become fun, your money starts making money and you'll have "a lift-off". After the first 100,000, don't do stupid things like take on too much leverage or speculate with a high percentage of your net worth with derivatives.

Thanks for reading, take care.


  1. I recently cross the $100k mark for my portfolio although that's value not just contributions. I'll be able to cross $100k in contributions later this year and that will be amazing. The market definitely pushes the total value around a lot more, but it's great to see how hard work and keeping focused can deliver results.

    1. Passive IncomePursuit,

      Congrats on crossing the 100k mark! It shows that discipline and determination really lets you achieve great things. I'll probably cross it in about 3-5 years depending on how much I save. Keep it going.

      Take care.

  2. Yeah first 100,000 is the hardest... so is getting out of debt, the first 10K, 50K, 75K but I'm on my way ;)