Why $100,000 Invested Is A Huge Financial Milestone - Bitter to Richer (2024)

There are many financial goals you’ll reach throughout your life, but few are as significant as reaching $100,000. It sounds like a lot – and it really is. Once you reach $100,000, you’ll find that your finances will ramp up and accelerate faster than ever. It’s not the metric by which you can measure financial freedom, but it’s one of the biggest milestones along the way. In fact, it is a huge financial milestone that you’ll immediately appreciate. For those you have passed it, you can attest to it.

Those of you who haven’t reach it yet, don’t view it as insurmountable. With hard work, dedication, and diligence with your finances, you’ll eventually get there too. Now, without further ado, let’s get into what makes $100,000 invested such an important milestone!

It Means Your Debt Is Manageable

First up, it means your debt has become manageable. This isn’t a direct impact, rather you’ll have reached the milestone by having done this along the way. In order to reach the goal, you’ll need to be able to manage your debt. This doesn’t mean that you won’t have any debt – you may have a mortgage, for example. However, you’ll likely have eliminated most of your major debt, particularly debt with high interest rates.

Beyond that, your monthly payments on any leftover debt will be small enough so that you can put away a considerable amount of cash each month. So, if you don’t have much invested yet, think of this as one of the steps you need to take to get there.

Good Habits Are Already Formed

On top of that, you’ll have other good financial habits formed. You will have probably started making a decent living, and found ways to level up your income. You’ll also have started doing things like maintain a strong budget and cut major expenses that don’t make sense. These habits aren’t a guarantee of financial success, but they’re good indicators that you’re well on your way. Also, the hardest part is just building these habits in the first place. Usually once you have reached $100,000, you’ll have these good habits and tricks locked down. That’s another reason why your financial health tends to skyrocket at this point.

Your Mindset Becomes One Of Expecting Rather Than Hoping

Another great thing about reaching this milestone – and a pretty direct effect too – is that your mindset around financial independence and your goals will change. Instead of hoping you’ll become financially secure, it becomes more of an expectation that you’ll do everything you need in order to become financially independent. That confidence is a huge boon, and starting to feel that bit of security can make a world of difference.

Most people realize how secure an emergency fund makes us feel, but feeling like you’re on the way to true financial freedom is another level of that entirely. Reaching this point is a reward in and of itself, one which you’ll undoubtedly appreciate.

You Have More Freedom To Say No

Another benefit of this milestone is that you’re actually able to say no more often. Don’t go too crazy with this, but you can reject a lot of things that you may not have been able to pass up before. In other words, you have more freedom surrounding the choices you can make and the risks you can take. Have a job that treats you poorly? This may give you what you need in order to make a career shift that leaves you in a much happier place.

When money is weighing down on you and making ends meet is tough – well, then it feels like money is all that matters in the world. Once you have a bit of money though, life can become a lot more enjoyable.

Compound Interest Starts To Get Crazy Here

A major takeaway is also the power of compound interest. Before now, you may’ve only noticed it a little bit. Sure, you investments have increased – perhaps even substantially. However, after this point your gains will be bigger than ever and you’ll be able to notice them with ease. For fans of passive investing, this is the point where it is genuinely fun to just sit back and watch your money work for you.

I know day trading and trying to time the market sound enticing, but once you reach this point you’ll understand more than ever how playing the long game with investments like ETFs and index funds is such an amazing strategy.

Reaching $200,000 Is Much Easier

I feel like this shouldn’t need to be said, but it does. Reaching $200,000 will be much easier than reaching your first $100,000. You have the financial habits and tools in place to help you out. On top of that, you have $100,000 working for you to make you even more money! The gap will become much easier to close, and as the years pass you’ll be astounded at how much wealth you were able to build.

I’m sure you’ve heard about how the second million is always easier than the first – the same logic applies here. You’ve done the hard part, now you just have to stay consistent and your growth will be great.

Your Financial Goals Are Much More Attainable

Financial goals vary wildly from person to person, but there are some things we have in common. For example, most of us want to have enough money to retire, whether we choose to actually stop working or not. Additionally, all of our financial goals will benefit from us being able to save and invest more. Even if your goal is to donate everything, as you invest more and build up your finances, the more you can do that. Whatever your final goal is, having $100,00 invested will be a huge milestone along the way, and a boon that will make it easier to reach. All-in-all, that offers a nice cushion that helps you relax.

Conclusion

Hopefully this article explained why having $100,000 invested is such a massive milestone, and gave a few tips to reach that goal too. For those of you who have already passed this milestone – let us know how you got there, how it helped you, and any hurdles you faced in the comments. Was a strict budget the most important thing? Or did automating your investments help you stay consistent enough to get there? Whatever your tips and tricks are, let us know!

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