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The late Charlie Munger—billionaire investor, vice chairman of Berkshire Hathaway, and Warren Buffett’s right-hand man—once told shareholders that raising the first $100,000 in capital is a difficult but necessary part of long-term financial success.
“It’s now — yes, but you have to do it,” Munger said at the time. “I don’t care what you have to do – if it means walking everywhere and not eating anything that wasn’t purchased with a coupon, find a way to get your hands on $100,000.”
The first $100,000 is considered the tipping point for wealth building because it is a large amount of capital. Personal finance guru Ramit Sethi uploaded a video on his YouTube channel that explains why entering the six-figure club accelerates one’s path to financial freedom.
Sethi used the example of a saver who started with $0 and invested $833 per month for 40 years at a 7% rate of return. It would take about eight years for this hypothetical person to reach their first $100,000. From there it will take only 32 years to reach $1 million.
Eventually, your journey will reach a tipping point where you earn more on previous contributions and accumulated capital than on new contributions.
Here are some ways you can potentially reach this important milestone.
Since 1957, the S&P 500 has delivered a 10.26% compound annual return, according to data from Investopedia.
Assuming you invest $833 every month, it will take you a little over seven years to reach the $100,000 milestone.
Getting into the habit of setting aside money every month is easier than you think.
Allocating a portion of your monthly paycheck is a good place to start, but you can take it a step further and start investing extra change from everyday purchases with Acorns.
Here’s how it works: After you link your bank account or credit card to Acorns, the robo-investing app automatically rounds off your purchases to the nearest dollar and deposits the excess into a smart investment portfolio of diversified ETFs, such as the Vanguard S&P 500 ETF.
For example, when you buy a coffee for $4.25, Acorns automatically rounds off the total purchase price to $5 and keeps the 75-cent difference in your portfolio.
While 75 cents doesn’t sound like a lot, $2.50 worth of daily round-ups from daily purchases can add up to more than $900 a year — and that’s before money and compounding are earned in the market.
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Read more: Warren Buffett used 8 solid, repeatable money rules to turn $9,800 into a $150B fortune. Start using them today to get rich (and stay rich).
Alternatively, you can target higher contributions. A side hustle, freelance work, or extra hours at your current job can help you contribute $900, or even $1,000, every month instead of $833.
Instead of getting a second job, you can start investing to build a passive income. That way, you can join the highly coveted six-figure club without compromising on maintaining a healthy work-life balance.
Real estate can be an attractive investment opportunity.
Gallup, Inc. According to a 2024 survey by , 36% of respondents considered real estate as the best investment option. However, amid rising housing prices in the US over the past few years, investing in rental properties to build a passive income stream may be impossible for many. No need to worry about property maintenance and finding reliable tenants.
If you don’t have the extra funds to buy a second home or just don’t want to deal with the odds of becoming a homeowner, you can start a turnkey real estate side hustle with the help of real estate crowdfunding platforms.
Homeshares gives accredited investors access to this overlooked segment: billions in locked-in equity sitting in owner-occupied homes.
Instead of buying properties, investors participate through a portfolio of Home Equity Agreements (HEAs) – allowing homeowners to unlock cash with no monthly payments, while investors share in future appreciation.
The result is exposure to a large, under-tapped market in top US cities, without the headaches of being a landlord or the risk of overleveraging.
HEAs come with built-in protection: They typically cover 25 to 35% of the home’s value in a lien-secured position, helping to protect your investment when the market declines. And unlike traditional real estate, HEAs are also generally resilient to interest rate changes, providing attractive, risk-adjusted returns even during times of economic uncertainty.
With a diversified portfolio of high-quality homes and a target return of 14% to 17%, Homeshares offers a practical way to gain exposure to a growing corner of the real estate market.
You can tap into this market by investing in shares of holiday homes or rental properties through Arrival.
Backed by world-class investors including Jeff Bezos, Arrived allows you to invest in shares of vacation and rental properties, earning a passive income stream without the extra work that comes with owning your own rental property.
To begin, simply browse through a selection of vetted properties, each chosen for their potential appreciation and income generation. Once you’ve chosen an asset, you can start investing for as little as $100, earning potential quarterly dividends.
Once you’re an investor with Arrived, you’ll gain access to their recently launched secondary marketplace, where investors can buy and sell individual rental and vacation rental properties directly on the platform.
This allows you to purchase assets that are missed in the initial offering or sell shares before an asset reaches the end of its hold period.
With access to over 400 properties in 60 cities, this new way of doing real estate business opens up the flexibility and opportunities to access more properties every quarter.
Another strategy to fast-track your entry into the six-figure club is using your employer’s 401(k) matching program.
According to research from the Plan Sponsors of America (PSCA), 98% of companies offering a 401(k) in 2023 will match their employees’ contributions to varying degrees.
But there’s usually a cap on the amount the employer matches your contributions to your retirement account. Or maybe your employer doesn’t have a 401(k) matching program.
According to a report published by the American Association of Retired Persons (AARP), in 2022, approximately 47% of American workers between the ages of 18 and 64 were employed by businesses that did not offer any type of retirement plan.
Not having employer-sponsored retirement plans shouldn’t prevent you from opening tax-advantaged retirement accounts like self-directed IRAs. These accounts can give you control over your savings, allowing you to choose where you want to invest and how much you want to keep, subject to IRS rules.
Opening a gold IRA can help you safely grow your net worth by protecting your savings against inflation, as well as further diversifying your portfolio.
Priority Gold is an industry leader in precious metals providing physical delivery of gold and silver. Plus, they have an A+ rating from the Better Business Bureau and a 5-star rating from TrustLink.
If you want to convert an existing IRA to a gold IRA, Priority Gold offers a 100% free rollover, plus free shipping, and free storage for up to five years. Eligible buyers will also receive up to $10,000 in free silver.
To learn more about how Priority Gold can help reduce the impact of inflation on your nest egg, download their free 2025 Gold Investor Bundle.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
