“The first $100,000 is a bitch, but you gotta do it.”
A Charlie Munger bomb has been dropped. 💣
What does this classic line from Warren Buffet’s business partner mean?
Let me explain.
When you begin investing, the majority of your portfolio value will come from the money you’ve personally put in.
Which means you will have to save and invest roughly $75,000+ to get to that point!
Not an easy feat.
Most people struggle to save that amount.
And most people prioritise buying the expensive car and house before they even think about investing some of their money.
This makes it even harder to get $100,000 invested because of high mortgage and car loan repayments that you have to make each month.
So what’s the significance of $100,000 invested?
Once you have this amount invested the mighty power of COMPOUND INTEREST starts to take over.
Let me share a simple example.
Let’s say you build good savings habits in your 20’s and by the time you’re 30 you have $100,000 invested.
This would be a great achievement in its own right.
But this is where things start to get exciting!
You’ve done the hard work building your nest egg in your 20’s.
And now you get to enjoy watching your nest egg grow without you having to lift a finger!
Say what?!
Let’s say you’ve done your homework and you decide to put your $100,000 into a conservative investment that returns on average 7% per year (after inflation – the hidden tax).
You’re not out there trying to chase big returns because you’ve learned stupidity will not build long-term wealth.
Now let’s say you NEVER contribute another single dollar to your $100,000 portfolio.
What would happen to your $100,000 by the time you reach 65?
👇👇👇
