The Brutal Truth About Getting Rich After $100K

You made your first $100K. That's a huge milestone. But how do you go from $100,000 to $1 million? I've helped thousands of people go from 6 figures to 7. The truth is, what got you to $100K won't necessarily get you to $1 million. But it's actually not about putting in more and more work and trying harder or cutting back to make yourself miserable. Today, I'll show you how to go from $100K to $1 million with a strategy for the level that you are at now. First off, $100,000 invested is a big deal. Only 22% of Americans have reached this number. So give yourself a huge pat on the back. I know that it took a lot of dedication and consistency to get to this point, but you may also know in the back of your head that $100K is not enough for you. And a lot of people in your situation don't have a lot of people they can talk to about how to grow that money more. Nobody wants to hear from someone with $100K in the bank. Boo-hoo. Mr. Mrs. $100Ks, life is so difficult. It's taboo to talk about money, especially when we're talking about amounts like this. But the reality is that $100,000 is just a starting point for a lot of people to get to the levels they want. And what got you to this point may not get you where you want to go. You actually have to upgrade your systems. That's how you can set yourself up for $1 million and beyond. That will give you options down the road. You can cut back on working hours, spend time with family, fitness, travel later in life. You can retire a little earlier. You can just spend more on the things you love. So it's important to note that reaching $100K is a huge accomplishment and it may be a great time to upgrade their strategy and systems. This is not about trying harder. It's not about using a fancier budgeting app. In fact, I don't even use any budgeting apps. It is about building a smarter plan that matches the level you're playing at now. Going from $0 to $100K is about eliminating debt, starting to invest, building an emergency fund. And for that phase, my CEO system was perfect. That stands for cut costs, earn more, and optimize your spending. You cut some of your discretionary spending by 20 to 50%. You earn more by negotiating raises or earning money on the side, and you optimize your system by negotiating a lower APR if you have debt or getting the most out of your credit card perks. But once you're at $100K, it becomes more about scaling wealth. You're no longer optimizing. You are maximizing. And just as an example, I sometimes see people who have $100K, $500K, $800K, and they're still agonizing over some freaking resi Amex Platinum perk. I'm like, why are you doing this? One of the best parts about having more money is you get the gift of spending it to get the exact experience you want. So instead of focusing on your conscious spending plan, which you already have a handle on, we're going to actually focus on something more meaningful, and that is your money dials. You're definitely not going to be asking $3 questions. Um, should I get the raspberries because they're on sale for $1? You have $875,000 in a liquid portfolio. Why the fuck are we talking about this right now? You do not want to be the millionaire who's afraid to buy blueberries. Because you're playing a much different game than when you first started out. This is why I'm so passionate about this topic, because it is a tragedy to be playing the same game you played at age 21, 22, where you necessarily didn't have a lot of money. You were trying to find great deals, great bargains. But if you have made it to $100K or beyond, you want to upgrade the way you look at your money. At this level, the systems and strategies that you put into place matter way more than saving a couple of bucks on some specialty drink. A lot of people I've noticed hit $100K, they stop evolving. They're still eating at the same places they ate at when they had far less money. They're still traveling the same way they traveled at when they had far less money. And then they wonder, why do I feel stuck? Why do I feel like I'm living like a college student? Well, if you want to have more, if you want to spend more, if you want money to become more meaningful to you, then your approach has to change starting right here. You know, a lot of people are just winging it with money. They're guessing about investing. They're trying to save when they can. And then deep down, they just hope it'll all work out. But that's not the way we want to approach money. That is why I created my money coaching program, so you can stop guessing and finally take control of your money. In my money coaching program, you'll get monthly coaching from my team and me, step-by-step playbooks for earning more and paying off debt and investing, plus the accountability to really follow through. Imagine logging in and seeing the exact next move for your money. No more confusion, no more homework that you've assigned yourself to figure it out later. That's exactly what my money coaching program does for you. Go to iwt.com/moneycoaching or click the link in the description below to join us today. A lot of people plateau here. When you start investing, maybe you invested $50, a couple hundred bucks a month, and then you bump that number up as you started to earn more. But now you want to be sure you are optimizing and taking advantage of all of your tax-advantaged accounts available to you. My ladder of personal finance is a good place to start. The first rung starts with your 401(k) through work. Are you contributing to get the full match amount? I'm sure you are if you are watching this video. But just as a reminder, if your company is matching 5%, you want to be investing at least that much. The next rung is paying off any high-interest debt. Now, a lot of people get complacent with just making the minimum payments, even people who have a considerable amount of wealth. If this is you, what you don't need is a big hug and a cookie. You need somebody like me to tell you, stop it. Make a plan to pay off your high-interest debt immediately. It might mean bumping your payments up 20 to 50% more. It probably means you need to cut back on some of your discretionary spending. Make the plan, automate it. The third rung is opening up a Roth IRA. Now, with a Roth IRA, you contribute to it with after-tax dollars, but everything you earn is tax-free after that. It is an amazing account Be aware of the eligibility requirements for high-income earners. For the fourth rung, max out your 401(k). That means you go back to your 401(k), invest above and beyond your company match to max out the full allowable contribution. The fifth rung on the ladder is something not a lot of people talk about. It's a health savings account or HSA. This is an awesome triple tax-advantaged account. Now, to qualify for these, you usually need to have a high deductible health plan, but an HSA allows you to save money pretax for any qualified medical expense. The cool part is that you can actually invest that money. So if you don't actually use the money or need it right now for medical expenses, it grows. For the final rung, consider opening up a taxable brokerage account. This is something that a lot of people who start to earn money do not realize exists. They think that I'm limited to invest my 401(k) and my Roth and etc., etc. No. If you want to invest $1 million a month, you can. You open up a taxable brokerage account and you can automate everything. So you're investing your take-home pay just like you would your 401(k). I also have a December rule. This is going to make you hundreds of thousands of dollars. So listen up. Every December you do an annual automatic increase. If you are investing 10%, bump it up to 11%, maybe 12% if you want to invest more aggressively. If you do just that, that decision alone will be worth hundreds of thousands of dollars over your lifetime. Now, what we just covered is a quick evolution of everything you did to get to $100K. Maybe you were only taking advantage of one of these options. Maybe you got a little complacent with your debt, whatever. Dial it in, lock in. Let's keep moving along. I just gave you a full system for what accounts to use. Honestly, a lot of people do not even get this far. But if you've got $100K or more, you're not just looking for the basics. You want to know how to take everything— investments, income, rich life goals— and make it work together harmoniously. That's where having expert guidance can make a massive difference. And it is where our partners at Facet can help. Facet offers dynamic financial planning that evolves with you, including monthly check-ins to hold you accountable so you can stay on track with your financial and retirement goals. Facet planners are CFP professionals and fiduciaries. And the best part is, unlike traditional advisors who charge a percentage of your assets, which can often cost somebody like you hundreds of thousands of dollars over your lifetime, maybe more, Facet charges an affordable flat membership fee for financial planning. I've actually worked with them to help many couples on my podcast understand if they can retire early, pay for their kids' college, be more generous, or take better vacations every year. A lot of people can do financial planning on their own. But if you've ever wished you had a smart team, especially as your portfolio grows larger, especially as your finances become more complex, it might be worth a conversation. Head over to facet.com/Ramit or click the link in the description below to learn more. Once you've got the right system in place, it's time to move on to the next step. And even if you're maxing out every available account, there's one major mistake that can quietly erase your progress. That's what we're going to fix next. At this stage, automation is table stakes. Like when you started working, automation was a tool to build your habits. You wanted to make sure your payments were made on time. You wanted to avoid late fees. You wanted to start investing and saving without having to think about it. But when you've reached $100K, you are playing a different game. It's now about using automation to reclaim your time and preserve your decision-making energy. Let me show you how it works. Maybe, you know, you're going to your cousin's wedding overseas next summer. You can set up a sub-savings account and call it Summer Wedding, and you put away $300 or $500 a month so you can cover that travel and hotel. Or you can just set aside some fun money every month. And if something comes up, you just think, That sounds fun. You can spend guilt-free because you already set aside the money. You see, what you're doing here is instead of being reactive, like many people who are just starting out have to do, you have earned the ability to be proactive. You can look further ahead. You can start to plan for things that are going to come. You can even plan for stuff you don't even know is going to happen yet, but you know something is going to happen. That is when you really start to leverage the earnings and the portfolio that you've built so you can look further down the road. At this stage, you can also review your bank accounts. If you have an account from a local credit union in a town that you no longer live in, maybe you're not using that account. Close it. Do a little spring cleaning. The point is, I want you to fight for simplicity in your finances. You probably only need one checking account. You probably don't need 5 different 401(k)s from old companies. Simplify it. Then you want to run monthly rich life reviews instead of worrying about day-to-day minutia of how much your rolled oats cost every morning. If relationships are so important to your rich life, you might actually ask, how did the last month go for us? Did we have enough date nights? Would we like to do more of them? What do we want to do next month? Is there a friend you've been meaning to visit? When can you make that trip? How much money are you going to set aside for it? Or maybe health. And wellness is part of your rich life. Can you spend more to reach your goals faster, better? Maybe you can hire a personal trainer, maybe a nutritionist, maybe you take a course online. Living your rich life is the end goal, not simply increasing the number. You do not want to sacrifice on the important things just because your target may have changed. And the next step is where the real money acceleration really starts. Now, when you started your career, your focus was probably on learning and growing, especially if you've made it to this point already. Maybe you negotiated a raise using some of my techniques. Maybe you learned what skills you needed to get promoted. All of that is fantastic. I have found that when people make it to a certain level, they often start to unconsciously coast. They basically say like, "Well, I'm making more money than I ever thought I would. I'm good. I'm just going to keep doing what I'm doing." What they don't realize is that they might actually be underpaid for what they do and/or If you want to get promoted, what got you here won't get you there. Let's talk about the salary part first. Glassdoor, PayScale, they might be good places to start. A lot of states now require employers to post their salary ranges on their job listings. So you want to evaluate, are you being underpaid for what you do? I actually have an entire video on this. You can check it out here. Also, if you have expertise in your field, you can leverage it through paid consulting gigs or launching products. Use a system like my Dream Job program or my Earnable Business program to earn $10K $50K, even $100K more. If you have made it to the point where you got $100K accumulated, you're probably very good at what you do. Now take it and use it to strategically increase your income even more. This is all extra money you can put towards investing or living your rich life. Remember, earning more doesn't just grow your net worth. It buys you the freedom to say yes to things that a lot of people can't even fathom. So once you start earning more, you need to know what to do with it, what to invest in, and what to enjoy now as part of your rich life. That's where the Conscious Spending Plan comes in. It shows you exactly how to spend more on what you love guilt-free. If you earn more money, you should be spending more money. Yeah, I said it. Freaking ultra frugality community telling you you should be making $190,000 still eating those little hostess donuts that you get from a gas station. What the fuck? The important part is to remember, as you increase your income, as you increase your net worth, save more, invest more, and yes, spend more. This is why I hate the term lifestyle creep. You think I creeped my way into buying this sweater? Ooh, oops, tripped and fell, end up buying a cashmere sweater. That didn't happen. I think of it as conscious spending. I know what I'm doing. I know how much I can afford. I trust myself. I'm confident because I built competence. And that's what I want for you as well. I want that kind of energy. I'm not going to creep my way into anything. I want you to plan for big purchases, cars, vacations, years out before they arise. Don't sweat small little expenses like buying organic broccoli. You should create a worry-free number and anything below that, whether it's $5, $50, $2,000, you don't have to worry about. Here's the key. Your worry-free number right now should be way higher than it was at 20. That's the point. That's what we're talking about. And the things you love, you actually should spend more on them. Think about it. If you no longer have debt, if you're earning more than you were 5 years ago, chances are you can change your conscious spending plan to account for more guilt-free spending. Like when I was in college, some of my friends graduated and I would go to visit them and I would stay on their couch and it was awesome. We had a great time. That's what being in your early 20s is about. Now, when I travel, I want to stay at beautiful hotels that I love. I want to travel for a month or more, places like New York, Tokyo. An easy way to think about this is through the lens of something called a money dial. Each one of us has something that we love to spend money on, whether it's food, travel, fitness, conveniences, experiences. And I call them dials because you can turn them up or down depending on what matters most to you. And the fact is, there is nothing wrong with spending money on the things you love. In fact, I encourage it. So let me ask you something right now. If you had $25,000 extra, what would you spend it on? That answer that just came to you instinctively, that is your number one money dial. And this is the next evolution of conscious spending. It's where your rich life planning becomes real and visible. Young Ramit Sethi would have thought that a $1,000 or $2,000 cardigan was a waste of money.. But once I increased my earnings, once I made sure that I was saving and investing even more, once I gave myself permission to spend on things and find out what I loved, there was no turning back. As long as you cut back on the things that don't matter to you. That's why I drove a modest Honda Accord for 19 years. If you can do that, then I encourage you to spend more on the money dials that matter to you. The 5th step of the $100,000 to $1 million system is to focus on what I call $30,000 questions. When you're first building up to $100K, it's very common to focus on a lot of $3 questions. Should I skip the morning coffee? Should I use some app that's going to find me the cheapest gas? Okay. Now, though, it is time to focus on the things that will really move the needle. One of the first things you can do is look into firing your AUM-based financial advisor. Like, if you're paying a 1% fee, that's going to cost you hundreds of thousands of dollars and keep you from hitting the $1 million mark. You know, I helped a friend do this. This friend of mine was earning pretty good money. He wrote me one day. He's like, "Hey, I think I might be getting ripped off. Can you help me?" I was like, "Call me." He told me how much he was making, how much he had invested. I was like, "You need to fire these people immediately." And he did. And I have the email. Oh, I fucking love the drama. He fired them and he will save millions over the course of his life. Let me show you the math. 1% in fees may not sound like much. Let's say you're able to invest $50,000. And then every month after that you invest another $1,000. In 35 years, if you paid an advisor 1%, you would have $1.7 million. But in the same time period, if you did not pay an advisor and you were only paying like 0.2%, which you can get with a low-cost index fund, if we assume a 7% return for both examples, you would have over $2 million. In other words, that 1% fee that doesn't sound like that much cost you more than $380,000. This is why I would personally never use a financial advisor who charges a percentage of assets under management, AUM. And if you do want to use a financial advisor, you can find one who will give you great advice and they charge a flat fee like our friends at Facet. The next area you want to carefully consider is housing. This is the biggest purchase you're ever going to make in your life. Don't rush into it. Make sure you run the numbers. You might actually find that renting is a better financial deal. I came across an article of someone who toured a house and signed a contract within 48 hours. He was in a rush to lock in low interest rates in 2022. Okay, fine. Well, he quickly realized that homeownership costs a lot more. He's paying $2,950 for the mortgage, insurance, utilities, and lawn care. By comparison, his rent was just $1,200. He also got hit with a $13,000 unexpected repair. He wants to go back to renting, but he can't sell the house now, even after lowering the price multiple times. Now, I am not against homeownership, but people don't consider these phantom costs when they're buying. Americans literally think of houses as a magical treasure chest. Put a little bit of money in, close it up, wait a few years, and then open it up and it's full of gold. What the fuck? When you buy a house, you better run the numbers. You better understand what opportunity cost is, what transaction costs are. You better understand, are you paying 1% or 3% annually for maintenance every single year. You better understand amortization. If you don't know what the words I'm saying right now are, you're probably not ready to buy a house. Finally, I want to talk about tax strategy, something a lot of people become obsessed with. Honestly, for the average person, the best tax strategy is to take advantage of your tax-advantaged accounts that I talked about earlier—401(k), Roth IRA, HSA, etc. What do you do after that? Honestly, for most people, move on with your life. If you want to move to a low-tax state because you really love Ohio or Florida, fantastic, go for it. But I would never move somewhere just to save money on taxes. What is the fucking point of making all this money so I can go and save an extra X thousand dollars living in a place I don't want to live? When do I finally get to enjoy it? What is this? This normalization of moving someplace just so that I don't have to pay taxes when I'm already rich? What is the fucking point of being rich? Personally, I love living in a walkable community. I love living near amazing universities. I love having public access to amazing beaches and parks. Now, I would not trade this to go live in a McMansion somewhere to save $15,000 or $150,000 or even $1 million a year. There is a point to working hard, and one of those points is I don't have to eat TGI Fridays. Now, if you are paying a lot of taxes, you know what I say to you? Congratulations. It means you made a lot of money. When I write a massive tax bill every year, I am thrilled. It means I earned a lot of money and now my taxes can hopefully go to social services to help the poor and middle class. So there it is, your steps to go from $100,000 to $1 million. If you want more on this, check out my video on how to skyrocket this process at any age.