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Forget about investing unless you have your first $100,000

When it comes to investing, very few know it better than Charlie Munger and Warren Buffett.

You may have heard from them multiple times that the best way to invest well is to invest early. And perhaps the whole point of investing early is to ensure that you have a portfolio which could grow to a sizable nest egg when you retire.

It's so important that Charlie Munger even mentioned that you should try to hit it even if it means walking everywhere and not eating anything that wasn't purchased with a coupon.

The reason is simple. Investing is like rolling a snowball. If you have a sizable snowball and a really long hill, your little snowball will grow to a gigantic snowball once it reaches the bottom of the hill. This is the same for investing. The sooner you have this $100,000, the bigger your eventual snowball is going to be like.

Let's do a simple projection.

Say if you have $100,000 by the age of 30 and you aim to retire at 55 years old, you will have a nest egg of $542,743 (assuming a Compound Annual Growth Rate of 7%) by the time you retire.

However, if you only start to had this $100,000 at the age of 35, the same nest egg will just be $386,698.

It's even worse if you push this to the age of 40. The same nest egg will just be $275,903. This is almost half of what you could have if you have this $100,000 just ten years earlier.

Hence, it is of paramount importance for you to have your first $100,000 as soon as possible if you want to invest your way into having a comfortable nest egg by the time you retire.

If you don't have your first $100,000 yet, the main thing to focus on is to ensure that you save enough money first before you even start to look into investing.


Because a snowball needs to be of certain size before it can start gathering snow.

Any sum below $100,000 is going to be challenging in achieving sizable returns just from compound interest. If you have $20,000, even a 20% rate of return is just going to provide you with $4,000 in absolute numbers. This is with a 20% rate of return, mind you. The truth is such a return rate is rare and few among non professional investors.

Hence, if you do not have $100,000 yet, you need to focus on saving more first. I once wrote an article on savings. You may like to check it out here. In essence, you need to increase your saving rate if you still do not have $100,000 in your portfolio yet. This is the single most important step you need to do. It's pointless to think of how to improve your investing technique until you start to save that first $100,000. Your savings is going to bring you much faster to the milestone of $100,000 than trying to invest your way into it.

Once you hit this milestone, it is then easier for you to get sizable returns to reach where you want to be when you retire.

This is also the reason why you need to cut down your spending when you are young (below 30). Forget about buying a car. Forget about those luxurious holiday trips. Forget about those frequent dining outs at restaurants and cafes. Forget about those concerts. If you want to be financially independent sooner, you need to prioritise your first $100,000 above any of these. This is also the reason why it's a little appalling for me to know that there are youths who spend money on unnecessary stuff and save nothing from their paychecks when I watched this CNA video.

If there is a single takeaway for this weekend, I hope it's about really having you to think about how to start having your first $100,000. If you are interested to have a conversation about it, I am happy to be reached at

I also do share additional content in my Telegram channel. 200+ like-minded investors have already joined this channel. What are you waiting for?

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