Is the first 100k really the hardest?

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tesuzuki2002
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Re: Is the first 100k really the hardest?

Post by tesuzuki2002 »

whodidntante wrote: Fri Apr 20, 2018 7:35 pm This thread just keeps on giving. For me, the first 10k of bonds was the hardest.
I'm curious why the first $10k of bonds?
tesuzuki2002
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Re: Is the first 100k really the hardest?

Post by tesuzuki2002 »

Exterous wrote: Fri Apr 20, 2018 9:52 pm
The multi-decade timelines involved clash with my impatient side:

Looks at account balances
"Hmmm....not high enough to retire"
Hit browser refresh button
"Damnit still not high enough to retire"
*pokes screen*
"Grow faster!"

HAHA you do this too??
tesuzuki2002
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Re: Is the first 100k really the hardest?

Post by tesuzuki2002 »

Crisium wrote: Thu Jun 28, 2018 9:46 am I'm hoping to hit 100k networth later this year as I'm around 90k, but I keep a prodigious emergency fund in cash so my invested assets is only in the 60k range. I take so much comfort in knowing that if I lost my job and could not receive unemplyoment, I could last over a year on my cash. I know it's a long term detriment, but I refuse to go below 12 months emergency fund.
There is nothing wrong with stability... I keep a pretty ridiculous cash buffer for that reason.. I do have comfort in knowing it is earning 3% in a checking account. It's not all terrible.. but then I think I'm missing out in general on 7% from the market ugh!

Atleast I could pay off the mortgage and cover living expenses for 12 months if I needed it.

At this point anything I make I just plow into the market. So it is working for me.
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whodidntante
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Re: Is the first 100k really the hardest?

Post by whodidntante »

tesuzuki2002 wrote: Thu Jun 28, 2018 12:09 pm
whodidntante wrote: Fri Apr 20, 2018 7:35 pm This thread just keeps on giving. For me, the first 10k of bonds was the hardest.
I'm curious why the first $10k of bonds?
I don't seem to have the extent of loss aversion that is common in my species. Instead, I think in terms of expected value. So the idea that I should hold bonds for decades is painful to accept, because bonds yield so little. I can accept some fixed income right now only in a portfolio wide risk control context.
tesuzuki2002
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Re: Is the first 100k really the hardest?

Post by tesuzuki2002 »

whodidntante wrote: Thu Jun 28, 2018 12:28 pm
tesuzuki2002 wrote: Thu Jun 28, 2018 12:09 pm
whodidntante wrote: Fri Apr 20, 2018 7:35 pm This thread just keeps on giving. For me, the first 10k of bonds was the hardest.
I'm curious why the first $10k of bonds?
I don't seem to have the extent of loss aversion that is common in my species. Instead, I think in terms of expected value. So the idea that I should hold bonds for decades is painful to accept, because bonds yield so little. I can accept some fixed income right now only in a portfolio wide risk control context.
I'm in the same boat. I recently have moved up to 7% in bonds and I'm not sure if I like it. I moving towards 10 % over the next 2-3 years...
I still feel like I'd be missing oout but I'm sprinkling in a few bonds.
randomguy
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Re: Is the first 100k really the hardest?

Post by randomguy »

a) 100k is all about savings for most people. Save 20k/year and you get there in 4-5 years. That is real easy and you see rapid results

b) 1 million is all about compounding. Save 20k/year with no growth and you are looking at 50 years. Make 8% and you are looking at more ~15 more years. Stop contributing and you are looking at 28 years. Savings still matters al ot

c)10 million and you are looking at 500 years from savings. 26 years if you keep saving. 29 if you stop saving. The value of savings has dropped a lot


The thing with compound growth is most of it is at the toward the end. That can be pretty frustrating. Compare that to savings where you get a more steady progression and positive feedback. You can double your NW in a couple years early on pretty easily.
scrabbler1
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Re: Is the first 100k really the hardest?

Post by scrabbler1 »

Using July of 1985 as the starting point because I had just finished college and began working full-time, it took me nearly 10 years to get to $100k. In those 10 years, which had low but quickly-rising earnings, I also bought cars twice and bought my apartment.

After that (1995), the next $100k increments arrived quickly, about 1 every 2 years, reaching the $500k mark by 2003. Those 8 years included the boom markets of the late 1990s, my peak earnings years, and the start of the exploding value of the company stock (ESOP) program which began in 1997. Then, it took me 9-12 months to advance another $100k to pierce the $900k mark in early 2007. Having a bigger base and strong markets after 2002 more than offset reduced earnings after switching to part-time working hours.

But it took 3 more years to get to the $1M mark. The crash in 2008 along with an early retirement starting in late 2008 stunted the growth. Still, it took only 3 years to add that $100k which overshadows 10 years to get the first $100k.
JM555
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Re: Is the first 100k really the hardest?

Post by JM555 »

angelescrest wrote: Sun Mar 01, 2015 11:00 pm
JoeJohnson wrote: Salaries go up
Sounds like you're taking that for granted. Salaries in the U.S. have not been keeping up at all.

LOL. I’m wondering what powers you have that made you assume that he takes it for granted 🤣🤣🤣🤣

If he does take it for granted, then you have special powers. Sorry just had to comment on that LOL useful posts 🤦‍♂️
origami
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Re: Is the first 100k really the hardest?

Post by origami »

Haha, apparently I'm more of a runner than an investor cause 100k only means a 100 kilometers race to me. And - no, the first 100k run doesn't have to be the hardest :happy
angelescrest
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Re: Is the first 100k really the hardest?

Post by angelescrest »

JM555 wrote: Wed Feb 12, 2020 1:17 pm
angelescrest wrote: Sun Mar 01, 2015 11:00 pm
JoeJohnson wrote: Salaries go up
Sounds like you're taking that for granted. Salaries in the U.S. have not been keeping up at all.

LOL. I’m wondering what powers you have that made you assume that he takes it for granted 🤣🤣🤣🤣

If he does take it for granted, then you have special powers. Sorry just had to comment on that LOL useful posts 🤦‍♂️
Very useful comment on your own part. Thanks for contributing.
Glockenspiel
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Re: Is the first 100k really the hardest?

Post by Glockenspiel »

Tyrobi wrote: Wed Feb 25, 2015 6:39 am
r00ster wrote:I've often heard people say that the first 100k is the hardest...it only gets easier from here...now the magic of compounding begins, etc. I was wondering if anyone had any statistical support for this or if it's more of a cerebral victory.
$100k: It took us 5 long years after graduation from May 2005 to Mar 2010.
$200k: Then it took us another 2 full years in Feb 2012.
$300k: It only took about a year and half in Jun 2013.
$400k: After another year we got it in Apr 2014.
$500k: Less than a year later we crossed this point in Nov 2014.

The first $100k was really the hardest and longest for us. Each additional $100k is relatively easier.
Very similar for me and my wife, except I'm a couple of years younger/later. Increasing wages, savings rate, compounding, make each $100k easier than the last $100k.
Mr F
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Re: Is the first 100k really the hardest?

Post by Mr F »

Discovered this thread during the week and started reading everyones post since. Some really interesting stories, thought pieces and outlooks which makes this forum what it is.

I take a lot of interest in the average salaries or blue collars as our friends across the pond say (I’m from grey London). Reason being it lays bare what strength of mind it takes, along with discipline to make steady gains, when the wind is both with and against you. Not saying I don’t recognise and respect the individuals who have progressed well in whatever industry and been disciplined to live below your means. Perhaps sacrificing and not giving into temptations when the extra zeros are there takes just as much strength of mind?

Few take outs from this thread:

A) Some individuals have been including equity from their property, no right or wrong, but how many people include this in their net worth considering its not a liquid investment?

B) How quickly did the individuals who went from $(£)100k northwards; move to there desired AA? I am currently procrastinating at the moment with perhaps a short terms view we could have another crash. I know market timing is pointless, along with dollar cost averaging being (percentage wise) not as beneficial as lump sum.

C) Anyone from this thread who has achieved FI (or are close to) spent most of their careers self employed. The reason I ask (as a self employed person) is I require a larger emergency fund, have no-one matching my pension contributions, other insurance policies to pay for. Its a huge challenge, along with being the households only income to continue to save hard, give my family what they need (we are modest and humble) as well as have aspirations of a larger home.
Olemiss540
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Re: Is the first 100k really the hardest?

Post by Olemiss540 »

Mr F wrote: Sun Oct 11, 2020 1:17 pm Discovered this thread during the week and started reading everyones post since. Some really interesting stories, thought pieces and outlooks which makes this forum what it is.

I take a lot of interest in the average salaries or blue collars as our friends across the pond say (I’m from grey London). Reason being it lays bare what strength of mind it takes, along with discipline to make steady gains, when the wind is both with and against you. Not saying I don’t recognise and respect the individuals who have progressed well in whatever industry and been disciplined to live below your means. Perhaps sacrificing and not giving into temptations when the extra zeros are there takes just as much strength of mind?

Few take outs from this thread:

A) Some individuals have been including equity from their property, no right or wrong, but how many people include this in their net worth considering its not a liquid investment?

B) How quickly did the individuals who went from $(£)100k northwards; move to there desired AA? I am currently procrastinating at the moment with perhaps a short terms view we could have another crash. I know market timing is pointless, along with dollar cost averaging being (percentage wise) not as beneficial as lump sum.

C) Anyone from this thread who has achieved FI (or are close to) spent most of their careers self employed. The reason I ask (as a self employed person) is I require a larger emergency fund, have no-one matching my pension contributions, other insurance policies to pay for. Its a huge challenge, along with being the households only income to continue to save hard, give my family what they need (we are modest and humble) as well as have aspirations of a larger home.
Net worth = Assets minus liabilities. It does not equal investments minus liabilities. A house is most certainly an asset.

I have been invested in target retirement funds since day 1 so never had to worried about shifting AA or market timing. Has worked wonderfully for my portfolio and would recommend the same due to your fears of the (neverending) impending.
I hold index funds because I do not overestimate my ability to pick stocks OR stock pickers.
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wander
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Re: Is the first 100k really the hardest?

Post by wander »

Open a brokerage account was the hardest. I gave myself from excuse to excuse that I did not have money left for investing. Later on I found a firm that only required $50 a month to open an account, from there on, it was just a way of life.
EnjoyIt
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Re: Is the first 100k really the hardest?

Post by EnjoyIt »

I made my first investment in college. I had a friend who's dad was an active trader. His strategy was simple. Buy something, wait till it goes up a few thousand and sell half. Repeat a couple of times. If it goes down without a good fundamentals reason, he buys more. I assume he made a couple of trades a month. He made enough money trading that he decided to quit his job. If only he started a blog back then. Lol. Anyways he got me into investing. My first trade was with national discount brokers. I bought a penny stock that made me a few hundred bucks. I bought a few other companies, some did well while others did poorly. Eventually I became a dividend growth investor and now a Bogleheads. If only I was a boglehead back then. I would have so much more money.
A time to EVALUATE your jitters: | https://www.bogleheads.org/forum/viewtopic.php?f=10&t=79939&start=400#p5275418
angelescrest
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Re: Is the first 100k really the hardest?

Post by angelescrest »

wander wrote: Tue Oct 13, 2020 4:49 am Open a brokerage account was the hardest. I gave myself from excuse to excuse that I did not have money left for investing. Later on I found a firm that only required $50 a month to open an account, from there on, it was just a way of life.
I think this is a really good point. Researching what type of account (I settled on a Roth), and which brokerage to pick (had to offer a free account with a minimum of no more than $1000), felt at the time to be monumental decisions. In part because it all felt so incredibly foreign. Signing a bunch of papers I didn’t really understand. Then executing a trade, with no guidance, felt like trying to make an order at a restaurant in another language. Maybe that’s why I’m still with the same brokerage, because once I finally got familiar and comfortable with everything, it felt great, and I stuck with them.

So agreed, that first step was a monumental one, and had I not done so, I’d be nowhere near on track for retirement.
bugleheadd
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Re: Is the first 100k really the hardest?

Post by bugleheadd »

Depends on how much your income is. $100k is not so difficult if you make like 100k a year and have low expenses.
Grt2bOutdoors
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Re: Is the first 100k really the hardest?

Post by Grt2bOutdoors »

bugleheadd wrote: Sat Oct 17, 2020 5:30 am Depends on how much your income is. $100k is not so difficult if you make like 100k a year and have low expenses.
Isn’t that always the case? The bigger the income shovel the easier it is. For the average worker, the first 50-100k, is a big hurdle to overcome.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
mr_brightside
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Re: Is the first 100k really the hardest?

Post by mr_brightside »

randomguy wrote: Fri Jun 29, 2018 12:06 am

The thing with compound growth is most of it is at the toward the end. That can be pretty frustrating. Compare that to savings where you get a more steady progression and positive feedback. You can double your NW in a couple years early on pretty easily.
so true

probably why many fall out early on -- kinda like working out for fitness -- all the pain in the beginning with not much to show for it

but stick with it and you eventually start 'adding zeros'. but I do tend to agree -- the first $100k is tough -- but quite a milestone once you reach it

the dot com period put a decent dent in my progression but did not deter me long term thankfully
remember Enron?? I do
softmax
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Re: Is the first 100k really the hardest?

Post by softmax »

Tyrobi wrote: Wed Feb 25, 2015 6:39 am
r00ster wrote:I've often heard people say that the first 100k is the hardest...it only gets easier from here...now the magic of compounding begins, etc. I was wondering if anyone had any statistical support for this or if it's more of a cerebral victory.
$100k: It took us 5 long years after graduation from May 2005 to Mar 2010.
$200k: Then it took us another 2 full years in Feb 2012.
$300k: It only took about a year and half in Jun 2013.
$400k: After another year we got it in Apr 2014.
$500k: Less than a year later we crossed this point in Nov 2014.

The first $100k was really the hardest and longest for us. Each additional $100k is relatively easier.
I just crossed $400k but haven’t felt any easier. Was it mainly due to stock growth in your case?
BrooklynInvest
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Re: Is the first 100k really the hardest?

Post by BrooklynInvest »

In percentage terms -

The first $100k is a bazillion percent increase in savings over initial zero amount

The second $100k is a 100% increase

The third $100k is a 50% increase

The larger the base, the smaller percentage increase you need to generate an extra $100?

One of my favorite quotes. Someone once asked Warren Buffett about his and Charlie Munger's "advanced ages." He replied "Sure we're probably the oldest CEOs but in percentage terms we're aging at a much lower rate."
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