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While joining the millionaire club may be out of reach for many young Americans, the power of compounding can make it possible.
It’s simple: you invest a small amount of money each month in a low-cost index fund. When you earn dividends, you automatically reinvest those earnings to buy more shares, and your return grows over time.
But there’s a catch, says personal finance YouTuber Mark Tilbury: Magic only really happens after you invested the first $100,000.
“Don’t worry about making millions,” Tilbury said. “Instead, focus on the first $100,000 because after that your net worth will go crazy.”
But Tilbury was not the first to note the significance of this milestone.
Billionaire investor Charlie Munger is often credited with popularizing the importance of the first $100,000, once describing it as “ab—-, but you’ve got to do it” because “after that, you can get off a little gas.”
But reaching that $100,000 milestone is difficult for today’s young Americans — especially when you consider the rising cost of living and skyrocketing home prices. About 56% of Americans think the cost of living is too high, according to a Politico poll last month (1).
While it might take you longer to reach this milestone than previous generations, it’s still worth pursuing.
Here’s why your first $100,000 is so important and how to get there fast.
After you hit $100,000, “compound interest stops being lame,” according to Tilbury. “Getting that chunk of money as quickly as possible is the key. […] Once you get to that point, it’s almost inevitable that you’ll be rich if you just invest in a low-cost index fund.”
To get there, Tilbury suggests people follow what he calls the GROWTH method:
G: Get control of your finances.
A: Root your investments.
A: Optimize your tax management.
w: Eliminate your debts.
T: Tap into additional streams of income.
H: Increased self-discipline.
Read more: Warren Buffett used 8 solid, repeatable rules to turn $9,800 into a $150 billion fortune. Start using them today to get rich (and stay rich)
Gaining control over your finances is crucial to achieving long-term financial stability and achieving your goals. And according to Tilbury, there’s only one way to get control of your finances – budgeting. Once you’ve assessed your budget, there may even be ways to shed some unnecessary dollars and avoid unnecessary expenses.
For example, the average American spends nearly $1,080 a year on subscriptions alone—with about $200 wasted on unused ones, according to CNET’s annual subscription survey (2). Just by canceling a subscription you no longer use, you can save hundreds each year – money that could be put toward your $100,000 goal.
Budgeting apps like Rocket Money can be a great tool for tracking your spending and reaching your financial goals.
The app tracks all your spending, including subscriptions, on a monthly basis, allowing you to see where your money is going at all times. Plus, their concierge service lets you easily identify and cancel unwanted subscriptions.
Rocket Money’s Financial Goals feature lets you automate your savings, helping you build your nest egg in the background without any extra effort.
And for a small fee, their concierge service can even negotiate lower rates on monthly bills like cell phone and cable bills.
When it comes to building your investment portfolio, Tilbury advocates the “investment rooting” model, which prioritizes investing a set amount of money each month, whether it’s $50 or $500.
One way to root your investments is through an automated portfolio like the one offered by Acorns.
Spending money is inevitable, no matter how careful you are with your budget. But with tools like Acorns—an automated savings and investment app—you can root your investments as you spend.
Acorns helps you build your investment portfolio by rounding each purchase on your credit or debit card to the nearest dollar. From there, Acorns automatically invests the spare change in a diversified portfolio of ETFs. This way, even everyday expenses become part of your consistent investment strategy, helping you to root your investments and grow your wealth over time.
If you sign up today, you can get a $20 sign-up bonus to help you get started on your investment journey.
Another way to root your finances is by diversifying away from the stock market, and gold can be a solid option, especially when it comes to saving for retirement.
Gold – often touted as a safe haven during tough economic times – has been the best-performing asset since 2025. The price of the yellow metal hit a record high of more than $4,300 an ounce in October, reaching a 65% gain by the end of the year (3).
And amid heightened uncertainty about rates, gold could be a valuable asset. Goldman Sachs predicts that gold prices will reach $4,900 per ounce by the end of 2026 (4).
“Gold is now an institutional asset and is seen as a hedge for ‘everything,'” Tim Seymour said during an interview with CNBC (5).
A gold IRA is a type of individual retirement account that allows you to invest in physical gold and other precious metals.
One way to invest in gold that also offers significant tax advantages is to open a gold IRA with the help of Thor Metals.
The Gold IRA allows investors to hold physical gold or gold-related assets in a retirement account, thus combining the tax advantages of an IRA with the protective benefits of investing in gold, making it an attractive option for those looking to protect their retirement funds against economic uncertainties.
To learn more, this free information guide includes details on how to get up to $20,000 in free metals on eligible purchases.
Once your money is working for you, it’s time to optimize your tax management by doing things like claiming all available tax credits and deductions, maxing out tax-advantaged retirement accounts and tax-deferred savings accounts, or even starting a business and making the most of write-offs.
A qualified financial advisor can help you with all of this and more. With Advisor.com, you can find the best advisor for your needs – both in terms of what your finances can offer and what they’ll charge to work for you.
Advisor.com is a free service that helps you find a financial advisor who can create a plan together to achieve your financial goals. By matching you with a list of the best options for you from their database of thousands, you get a pre-screened financial advisor you can trust.
You can then arrange a free, no-obligation consultation to see if they are right for you.
To build a solid financial foundation and get closer to achieving a high net worth, eliminating debt should be a top priority. For example, the current average annual percentage rate (APR) for a new credit card is 24.92%, according to LendingTree (6).
Carrying high-interest debt can severely hinder your ability to grow your wealth and secure your financial future.
The personal finance YouTuber suggests diversifying and growing your income with a side hustle. If you’re looking for a low-effort side hustle with high payoff potential, real estate could be your answer.
Tilbury recently posted on X about how it used the proceeds from one of its most recent business deals. He said, “From that one business, I made enough to buy a rental unit, which has since generated a lot of passive income for me.”
If you want to generate investment income from the real estate market, there are plenty of opportunities to invest without having to find and buy a property yourself.
For example, crowdfunding platforms like Arrived allow you to enter the real estate market for as little as $100.
Arrived gives you access to SEC-qualified investment shares in rental homes and vacation rentals, curated and screened for their appreciation and income potential.
Backed by world-class investors like Jeff Bezos, Arrived makes it easy to fit these properties into your investment portfolio, regardless of income level. Their flexible investment amounts and streamlined process allow accredited and non-accredited investors to take advantage of this inflation-hedging asset class without any additional work on your part.
Another option is mogul, which allows you to invest in the top 1% of single-family rental properties across the country.
Founded by former Goldman Sachs analysts, the mogul’s team vets each property, ensuring it delivers a minimum 12% return even in downside scenarios. Overall, the platform shows an average annual IRR of 18.8%. Their cash-on-cash returns average between 10% and 12% annually.
You can earn monthly rental income as well as real-time capital appreciation and tax benefits – all without the need for a large down payment or 3am calls to tenants.
Each investment is secured by real assets, which do not depend on the viability of the platform. Each property is held in a self-contained Propco LLC, so investors own the property, not the platform.
It’s easy to get started – just create an account and browse available properties. Once you verify your information with their team, you can invest like a mogul in just a few clicks.
With increased self-discipline, reaching this financial milestone can put your net worth on an upward trajectory. Tilbury points out that you need to “find the inner discipline” to put all these steps into practice.
“Discipline is the currency of success,” Tilbury said. “The more you lie, the richer your future will become.”
The first step is saving – and saving money takes discipline.
One way to start saving is the Wealthfront Cash account, which can help you build an investment base through a combination of high interest rates and easy access.
A Wealthfront cash account can offer a base variable APY of 3.25%, but new customers can get a boost of 0.65% in the first three months for a total APY of 3.90% offered by program banks on your uninvested cash. That’s eight times the national deposit savings rate, according to the FDIC’s December report.
With no minimum balances or account fees, as well as 24/7 withdrawals and free domestic bank transfers, your funds remain accessible at all times. Additionally, Wealthfront Cash account balances up to $8 million are FDIC insured through program banks.
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