What it Means to Have $100000 in Savings

2019 was a gangbusters year for me in reaching a $100k net worth. That took some doing to save up, and now I get to enjoy everything that comes with that. Since the beginning, I’ve known what it means to have $100000 in savings but never wrote it out in full. I’ve also noticed there aren’t many articles out there that discuss what having six figures means. I mean, it ain’t a million dollars so is it at all worth celebrating?

Dude. Of course it is. Six-figure wealth means you’ve got more money than roughly two thirds of the US population. If you’re looking at the net worth in your specific age group, the scales likely tip even further in your favor.

Via DQYDJ here.

Which puts you as one of the wealthiest people on the planet. Anyone would love to get a six-figure windfall solely for the breathing room it offers. You now have that breathing room through nothing else but your own hard work and intelligence. And if you’re still working towards those six digits, here’s what’s now yours for the keeping.

You Have an Incredible Amount of Security for Hard Times

2020 is good as an illustrative point, if nothing else. “Hard times” definitely covers a universal pandemic with wide-ranging health complications that also causes 20% of the workforce to lose their jobs. There are millions of folks out there now forced to weather a fierce storm with little – if any – warning. I could have easily been one of them as I started out in the exact same place they did. The only reason I am not experiencing the storm with them is through a mix of using my privilege for a good job title and a ridiculous amount of opportunity. But neither of these things are guaranteed long-term, and at some point I could find myself otherwise unemployed with no paycheck coming in.

Yet if that does to pass, I’d still be okay. Having $100000 in savings means I have roughly four years’ worth of spending money at my disposal if need be. If I choose to restructure my lifestyle to spend even less, that money stretches even further to cover half a decade. Having that security is an incredible comfort whenever I’m feeling anxious about the world at large. It also means most of my money worries have gone for good; there’s nothing left but calm when you run your investment numbers and know that money’s there for you. There is almost nothing that can knock you off your feet with that kind of backing behind you.

You’re Gaining Five Figures of Wealth Per Year, Minimum

So if times are bad, you know you’re covered. But when times are good, on the other hand, you’re literally rewarded for having that much money.

I actually have most of my net worth invested, which tops out at over six figures while generating growth and dividends in the index funds I’ve chosen. The average return of the overall stock market is ten percent, which I can reasonably expect to earn as well with said index funds. That means, on average, you’re growing your net worth by ten thousand dollars every 365 days. That’s how much money you’d get after a year working a $9.60/hour part-time job. Instead of trading twenty hours a week away, however, all you need to do for this ten grand is wait around for a year. Yes, really.

Keep in mind that the 10% figure is the average return; some years give you more, some years give you less. If it’s a year like 2019, you could see a $25,000 return with zero extra work. A year like 2018 could see $0. But overall? How could you miss it?

Best part of this is that the money you gain will start to generate money of its own. Thanks to compound interest, you’ll see that $10,000 you grew in Year 1 generate an extra thousand dollars in Year 2, along with another $10,000 on top of that. In less than five years you’d be 50% richer, all without lifting a finger.

It’s compound interest that enables the rich to keep getting richer, which you are now a part of thanks to $100k in savings (that is an affiliate link). Given enough time, that will grow to seven figures without any further tweaks on your end. It’s a one-and-done deal that secures your retirement future… or most futures, for that matter.

Your Financial Skillset Can Be Deployed for Other Goals

All that optimization you’ve learned how to do will leave you with bundles of cash you can put towards whatever else you want. It’s a big deal!! I wouldn’t go gallivanting off to spend your new $100k savings, as it will work hard for you while also shielding you from hard times. But hey, if you could save that much money you’ve got some serious skill with far-reaching influence.

Let’s say you’ve managed to save at least $10,000 a year for easy math. At that rate, and assuming it’s grown by 10% each year, you would have needed seven years to raise that much. That means you had the discipline to keep grinding and budgeting instead of just spending it. You were also a good planner for both investing it properly and keeping your expenses low enough to allow for the growth. Anyone with discipline, planning, and a goal they know how to hit is freaking unstoppable. Ain’t no way I’m betting against you, and there won’t be many that will.

Because dang, you’re a rockstar who knows how to prepare for opportunity. The world is now open for you to explore. You’ve grown your power, and you can do so much more than last year’s you. Before I know it you’ll have raised a shitload of money for charity, or became the next biggest business investor or checkers champion or something. Having endless options in your life is what it means to have $100000 in savings. You can pursue whatever it is you particularly want out of life and, better yet, be poised to achieve it. Whew!

You’ve Got a Confidence Boost Only $100k Savings Will Buy

The reigning queens at Bitches Get Riches are quick to remind you we live in an oppressive capitalistic hellscape. Remembering that is massively important, as is how much it tends to be disgustingly unfair to folks below a certain socioeconomic threshold. There’s also plenty of weird dynamics happening behind the scenes to keep those folks financially illiterate and encouraged to be mindless consumers.

And yet, there’s you. A person that’s balked against the status quo and boosted your networth into six-figure territory. Face it, you’ve got the same skill sets as the greatest people in history do. A person who is also going to just keep getting more powerful with the passage of time, not less. Nobody knows what you’ll do next, but they do know it’s going to be hella impressive.

And that’s a massive confidence boost, knowing your worth and having that reflected a little by cold hard cash. You’re proud of your achievement and justified in feeling so! Because that’s amazing and you’re amazing! What an incredible victory that you’ve reached despite all the odds. It’s a victory that will protect you and keep paying you dividends the rest of your life. There isn’t much that’s better than that.

You’re That Much Closer to Becoming a Millionaire

I touched on this in a previous post, but what having $100000 in savings means is having a proven track record for generating wealth. Since you have the seed funding and the skillset to properly deploy it, it’s literally only a matter of time before you have a million dollars.

If I keep that money invested, I’ll be a millionaire when I’m fifty years old with a 10% return. If I keep that money invested while maintaining my current savings rate, it’ll happen before I’m forty. And if I add a side hustle on top of that? I’m a millionaire within the next decade.

Anyone else with $100000 in savings is in the same boat I am with that. Whether there’s storms up ahead or some awesome weather, you’ve got a cocktail on the beach waiting for you either way.

22 thoughts on “What it Means to Have $100000 in Savings

  • May 20, 2020 at 7:40 pm
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    I can say that the time to go zero to 100k seemed very similar to the time to go from 100k to one million. Because at 100k the compounding really takes off! You are a super star.

    • May 20, 2020 at 9:20 pm
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      Awesome encouragement from someone who’s done it already. Thanks as always Steve!!

  • May 26, 2020 at 1:45 pm
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    Thanks for sharing your story Darcy!

    My wife and I also hit $100k in savings last fall. It’s true: hard work and consistency pays off.

    At the time my wife took a screenshot of our bank account jokingly saying: “We gotta remember this, because it’s going to be a long time until we see this again…” since we used a big chunk of it for a downpayment on our first house.

    However, I just smiled and said – we’ll be seeing this again, if fact, we’ll be seeing 1 million someday!

    Growing your investments and savings to $100,000 is not something that happens overnight. The skills, knowledge, humility, and courage you develop and learn from others along the journey is what will continue to propel you towards further success in the future!

    Thanks again for sharing your story Darcy!

  • May 27, 2020 at 6:24 am
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    That’s a nice little spike if we can make it to 98 – 99 range : )

    Congrats and great work, something to be proud of for sure.

    Max

  • July 24, 2020 at 10:06 am
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    Congrats on this milestone! I am projecting to hit the $100k milestone either by the end of this year, or early next, depending on how Mr. Market fares (I think for sure first quarter 2021 unless the market REALLY tanks). It’s definitely a milestone I am looking forward to! I’m told the growth really goes bananas once you hit that $100k – that it’s really the hump to get over when the compounding starts really taking off on its own. Can’t wait to see for myself!

    • July 25, 2020 at 5:33 pm
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      Thanks so much! And also WOOHOO!!!! It really is exciting to see the progress after hitting that, I’m so happy you’re closing in on it yourself.

  • August 17, 2020 at 1:47 am
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    You touched on many of the things that I experienced on my way to 100k which I hit early this year. I’ve been looking for an article just like this the whole time because I wanted to know how I should “feel.” I didn’t grow up with money so I grinded from 0. From debt actually.

    I have this really awesome traveling job that eliminated most my living expenses (job pays for everything) and it allowed me to save 100k in 2 years and eliminate ALL my debt too (except for mortgage $550 a month on new place I bought last year). I would say about 95% of my saving comes from just saving my paychecks but I want to venture out into investing and opening up other streams of income. I’ve taught myself a lot about investing throughout the pandemic and I have certain index funds right now that earns me some money but I’m not yet comfortable enough to invest large chunks. I am more experienced with real estate and may also go that route. I feel very secure and the feeling is very liberating — true financial freedom. I actually started feeling that way around 20k lol (and after eliminating my debt: car, credit cards etc). The weight was lifted off my chest that I carried around for so many years of living check to check.

    I will forever keep the discipline and the mindset to never go broke again. That’s one of the main benefits to me personally throughout this journey, my mindset and who I am as a person has changed, forever for the better. I also have a circle who are on the same journey as me and it’s also great to have that. Thanks for the article! It is very motivating and I feel like it’s an extra jolt pushing me toward an M.

  • September 7, 2020 at 12:23 am
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    Great post and I felt many of these same things when I first hit that big milestone of the first $100K. I love the part where you talk about you are gaining five figures a year, minimum. I never really thought about it like that but you are so right. It just keeps growing and starts a snowball effect.

  • October 10, 2020 at 9:24 pm
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    Congratulations it takes a lot of patience and time.
    Looking forward to reach that milestone first quarter of 2021
    Can’t wait.

    • October 19, 2020 at 7:14 pm
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      Thanks so much! And I am SO excited for you to reach that – just a few more months!!!

    • November 6, 2020 at 1:45 am
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      Almost there altogether about 42 months of savings like you I expect to reach that milestone first quarter 2021.

  • November 11, 2020 at 11:39 am
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    Good stuff! I agree about the peace of mind having 6 figures saved brings with it. I earn a very average wage and our family relies on a single income. Once we crossed the $100K mark we NEVER looked back. Now, 12 years later, we have roughly $1.7MM in investments (evenly split between retirement accounts and a brokerage account), $100K in liquid emergency savings, a fully paid off house, and not a penny of debt to our names at just age 39. We live modestly and below the norm. Getting the first $100K was incredibly slow and difficult. Getting the first million was also long road. Ever since then though, it has felt like it has snowballed and will continue to do so. The strong financial habits are now baked into every part of our life and I see nowhere to go but up from here. I hope that by the time we reach investments of $3 we can look into early retirement and what that might look like, while continuing to still grow our money for decades to come.

    • November 11, 2020 at 12:08 pm
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      Nice work! Goes to show how much farther you can go after hitting that first six-figure benchmark 💪

  • January 26, 2021 at 1:54 pm
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    Is $300,000. A lot of money?

    • January 27, 2021 at 9:36 pm
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      Whew, YES $300k is definitely a lot of money. Assuming it’s invested in an index fund it will net you $30,000 a year extra (on average). If you subscribe to the 4% rule of retirement that will give you $1,000 a month in income for the rest of your life. My monthly expenses are around $2,500; if you’re the same and you have $300k then you only need to cover $1,500 of your expenses for life (or $18k a year, which means you’d still have to work but you can take a big pay cut in exchange for an awesome work-life balance).

      Best of all, a lot of people in the financial independence community view reaching $300k as the halfway point to becoming a millionaire, thanks to compound interest. That’s a really exciting number and I hope you’re feeling good about managing it!

      • November 13, 2022 at 1:43 pm
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        Good article but call me ignorant I guess. The way this reads I with $400k sitting in the bank should already be a millionaire? But I’m not! Savings & checking pays nothing in interest, definitely nothing that would expand to $10k a yr. Lately I’ve been giving thought to transferring all my assets to a locally NCUI Credit Union to possibly gain something in monthly interest. My present bank FSNB only seems to be invoking more and more fees. THOUGHTS?

        • November 13, 2022 at 9:21 pm
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          What jumped out at me was you saying your money is “in the bank”. If you’re leaving that $400k in a bank account but expect it to grow then yeah, wrong approach. Most banks pay very little for money sitting in checking and savings accounts. That’s fine if you want to keep your money accessible at the drop of a hat, but NOT if you want it to grow. The $10k a year is from taking that money OUT of a bank account and investing it INTO an index fund. Index funds that track the total stock market or the S&P 500 have grown 10% a year on average in the long term. Better yet, because it’s automated it’s MUCH cheaper fee-wise than other managed funds with poorer returns. Depending on your brokerage (Vanguard, Fidelity, etc) I’d look at their “total stock market” funds or “S&P 500” funds instead of a credit union. Best of luck, Terry.

  • January 26, 2021 at 3:37 pm
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    Great post. My first $100K felt like it took forever. Then I reached it and next thing I know I am knocking at $1M. Thank you for sharing.

    • January 27, 2021 at 9:26 pm
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      Right?? $1 million seems like a pipe dream until you hit that $100,000 net worth and realize “whoa, this finance strategy actually pays off!” I’m closing in on $200k now which took less than half the time of the first $100k. Just bonkers.

  • February 16, 2021 at 2:49 pm
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    Great post! I’m at 177,000 right now…should hit 225,000 plus by the end of 2021!🤞🏽😎

  • August 6, 2021 at 2:43 am
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    Nice post. I was excited when I reached $100,000. It was really tough even with three kids. By the end of 2022, I should hit the 200k milestone. I will be saving a lot more since we paid all of our debts.

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