A Practical Guide to Reaching Your First $100K
π― How Do You Actually Reach Your First $100,000?
The answer is simple: increase your income and decrease your expenses. But the methods are endless. Today, I'll share specific strategies that actually work.
π Cutting Expenses: Living Cost Strategies
1. Live with Roommates
I lived with roommates until I was 37 years oldβjust last year. It helped me save an incredible amount of money. Not glamorous, but definitely effective.
Expected Savings: $300-800/month
2. Cook at Home
Commit to bulk cooking at home for a year and cut out all takeout:
- No Starbucks runs
- No Chipotle lunches
- No quick snack bars from Target
Expected Savings: $200-500/month
3. Use Public Transportation
If possible in your area, swap your car for public transit:
- Cut gas costs
- Cut insurance costs
- Cut maintenance costs
Expected Savings: $300-600/month
π° Increasing Income: Revenue Growth Strategies
1. Ask for a Raise
Walk into your boss's office and ask for a raise. Show them the ways you've added value to the company and why that value deserves better pay.
Key Points:
- Prepare concrete performance data
- Research market salaries
- Ask with confidence
2. Start a Side Hustle
Dedicate your evenings or weekends to a side hustle bringing in an extra $500+ per month. I tutored every day after school while working full-time as a public school teacher. That made me more than $10,000 a month.
Side Hustle Ideas:
- Tutoring/Mentoring
- Freelance work
- Online selling
- Content creation
3. Sell Unused Items
Sell things you no longer useβold electronics, furniture, or clothes.
Expected Revenue: One-time $500-2,000
π Smart Saving and Investing
1. Maximize 401(k) Match
If your employer offers 401(k) matching, contribute at least up to the company match. This is literally free money.
Example: If your company matches 100% up to 3% of salary, contribute at least 3%!
2. Open a Roth IRA
If you're not investing yet, open a Roth IRA and put your money there. It compounds over time, and you won't pay taxes on withdrawals later.
2024 Annual Limit: $7,000 (Age 50+: $8,000)
3. Use High-Yield Savings Accounts
Keep your emergency fund in a high-yield savings account earning 4-5% APY. Leaving money in low-interest accounts means losing opportunity cost.
β οΈ Munger's Final Advice
Charlie Munger said:
"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."
Honestly, that's not what anyone wants to hear. We'd all like to have our cake and eat it too. But the truth is: if you don't put in the work, you'll only reach $100,000 much later in life, and you may not have enough time left to enjoy the benefits that come after it.
π‘ Key Action Checklist
| Area | Strategy | Expected Impact |
|---|---|---|
| π Housing | Live with roommates | Save $300-800/month |
| π½οΈ Food | Cook at home, cut takeout | Save $200-500/month |
| π Transport | Use public transit | Save $300-600/month |
| πΌ Salary | Negotiate a raise | 3-10% annual increase |
| π± Side Hustle | Evening/weekend work | $500+/month extra income |
| π Investing | 401(k) match, Roth IRA | Maximize compound growth |
π Final Thoughts
If your family can give you a starter fund like Dave's, that's amazing. But if they can't, that doesn't mean you're stuck. It just means you have to work a little harder.
I truly believe that anyone who stays disciplined can get there. I won't lie and say it's easy, but you can definitely do it.
The most important thing is to actually get started. Start today!