Eric Siu explains why the first $100K is the hardest part of building wealth. Saving $10K yearly at 7% returns takes 7.84 years to hit $100K, but once you're there, the next $100K takes only 1.35 years as compound returns accelerate.
Don't buy coffee. Don't buy avocado toast. Why does net worth explode after $100K? So that was the video that just came out today. And the principle is like, takes a long time to build up to $100,000, right? Let's say you save $10,000 a year and you're getting a 7% return in the market. It takes you 7.84 years of saving $10,000 a year, getting 7% return in the market to get to $100,000. But after that $100K, now your $100K is making you that 7% as well every single year. So it's compounding. It's like a snowball rolling down the hill. It's getting easier and easier. And by the time you're at the $900K level, it only takes you 1.35 years to get your next $100K. So it's like 481% faster from $900K to $1 million than it is from $0 to $100K. So what does that tell you? All the friction is at the very beginning of wealth building, right? So that's why all these people online are saying, don't buy coffee, don't buy avocado toast. They're trying to get you to your first $100K.
