From $100k to $200k – How Long It Took To Double My Net Worth

It’s really hard to imagine your money working for you if it’s taking a really long time to save. It took myself until the age of 30 to achieve a net worth of $100k and that felt like forever. Hitting a $200k net worth took a lot less time. For the average income US household they should be able to reach the same $100k milestone if they focused their attention, but nothing comes for free.

For many – putting money into a 401k from the age 22 and buying a home in your mid-20’s would likely get you a hundred thousand net worth by 30 pretty easily. This is assuming that they’ve avoided debts and bad habits. It might seem pretty easy to some, but when talking to people about their finances the reality is that most 20-somethings aren’t too focused on saving – anything!

Laying The Groundwork

In most of my 20’s I squandered my savings, but I had a tiny focus on getting out of student loan debt. It took getting an increase in pay and a bit of growing up to get my mind right on saving.

Then I started to save – a lot – just beginning to put away money for no good reason and spending much less. No more casino or poker time, less eating out, and just less frivolous spending. It also helped that I was focusing on a career and started to earn more money.

How Long From A $100k Net Worth To $200k?

By the time I hit 32 I had a $200k net worth. It had taken myself from the age of 16 to 30 years to accumulate $100k, but then only a little over 2 more years to double it.

How did it take 14 years to get to the first $100k, but then only two years to get to a $200k net worth? That sounds crazy right?

Maybe it’s not fair to count the jobs from 16 to 23 since 23 was when I finished school and started working, but that still took a good 7 or 8 years to get to $100k. It’s not magic, it’s just math and time. So how did this happen?

First, The Career Is Established

If you stick to a career path, it’s likely that you’ll continue to see an increase in earnings as you become more valuable to your company and grow in experience. As a consultant, I always have to learn brand new technologies and businesses just to stay alive. The question I always like to ask myself is, “What value do I bring to a company?”. Usually asking that question helps to keep me feeling relevant.

Second, More Money Was Being Made

Since you’ve been at a job or career path for a few years now, you should be making a few extra dollars than when you started. Now that you’re earning more, it’s easier to put money away as long as you’re not increasing my spending habits. If you can keep your spending habits at 25 making $40k to the same habits making $80k at 30 then you’re likely saving a hefty amount. Obviously, life has other plans and you adjust, but you get the basic point.

Money Makes you Money

We’ve all heard the saying, “It takes money to make money”. Well, turns out it’s pretty true. Once you have $100k stashed away, you can put that in an index fund that spans the entire stock market or whatever alternative investment approaches that peak your interest. If you look at the last 30 years of the stock market with an almost 12 percent return per year average, that means that you would have made $12k in one year without doing anything. While this number might be ambitious and may be less likely in the future, it’s still true. The point is having only a thousand dollars to make $120 is not as useful as that $12k doing the same exact amount of work.

Let’s take my numbers as an example. If by 30 years old I had $100k and hit $200k by 32 only two years later, that means I somehow saved $50k a year. The truth is that the money was working for me. That 12% example over two years compounded is about $25k. So really I had to save around $37k each year. Because of my decrease in spending and increase in earnings, this was possible. As the money keeps growing, the next $100k milestones will get easier and easier.

Final Thoughts

I’m not saying that saving is easy, but it’s been an interesting ride these last few years as I’ve seen my net worth grow at a rapid rate. Also comparing your numbers to others is fine for reference, but don’t let it be discouraging if you’re not there yet. There will always be people behind you and people ahead of your situation in life. Choose to focus on yourself and your goals while learning from others.

RELATED: How I Reached $100k Net Worth by 30 Years Old

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