My first $100,000 seems impossible.

[Cassius King]

I finished school in 1997. From that date forward it seems that I have seen little if no gains in my portfolio. Strictly growing through contributions. As soon as I think I'm getting close, this past month in the market happens (again!) and crushes my energy for awhile. It's really disheartening.
What are others doing? I know I can't be the only person of this generation facing the same experience.
From those that are more experienced, how long did it take to get to $100k? Am I correct in understanding that the first $100k is the hardest?
Thanks for letting me vent!

/rant!

Cheers, TheDude!

 

[NW-Bound]

I don't remember when I crossed that mark, which was some time ago (check my signature for my age). But when I was your age (you are 35, correct?), I did not "count" my money every day like I do now. They say water won't boil if you watch it. So, don't.

 

[Alan]

I finished school in 1997. From that date forward it seems that I have seen little if no gains in my portfolio. Strictly growing through contributions. As soon as I think I'm getting close, this past month in the market happens (again!) and crushes my energy for awhile. It's really disheartening.
What are others doing? I know I can't be the only person of this generation facing the same experience.
From those that are more experienced, how long did it take to get to $100k? Am I correct in understanding that the first $100k is the hardest?
Thanks for letting me vent!

/rant!

Cheers, TheDude!

I didn't start saving for ER until I was 37 and had a much higher salary than right after graduating 15 years earlier.

That was in '92 and it took 6 years to accumulate the first $100k, which consisted of $80k in contributions.

Don't get disheartened, you are doing great to have started so early

 

[av8er]

I finished school in 1997. From that date forward it seems that I have seen little if no gains in my portfolio. Strictly growing through contributions

I feel your pain. I've been maxing out my retirement accounts since 2003 (all in targeted retirement funds) and I've seen very little growth in those accounts besides my contributions. I keep plugging away, though, and continue to hope that someday I'll see the benefits of compounding interest.

I guess I should focus on the bright side, though...at least my retirement accounts no longer have less in them than I've contributed (as they did in the recent past).

 

[headingout]

I was 33 when net worth crossed $100K, probably several years later before actually had that in investments. Thanks to a high-paying profession which I loved at the time. The last few years have been tough slogging for us all. I've been close to ER for several years: that "last" $100K is feeling pretty hard too!

I guess the moral, young or old, is be sure you're enjoying the present: who knows how long it will take to reach the future, or if it will even arrive the way we envision.

 

[BTravlin]

You may not have reached $100K yet but you're way ahead of most people when it comes to retirement savings.

 

[DblDoc]

It starts out slow but then it grows. Compounding - the most powerful force in the universe (attributed to Albert Einstein).

From Bob's Financial Website (Advice for Young Saver)

 

[Dawg52]

I remember buying my first house at 30 and wiping out much of my savings in the process. Paid a lot down to assume a low rate note. So I had to be in my late 30's before I crossed the magic number. And it seemed like it took forever.

Hang in there, it will come. I wish I could say it will snow ball from there with good stock returns, but who knows in this crazy world.

 

[W2R]

You are young, so I can say this... Take that lemon and make lemonade. By that I mean, turn that burning desire (to accumulate $100K) into your burning motivation to see how much less you can spend so that you can save more.

By the time the market turns around again, you'll have more money than you had ever planned or expected and you will need less than you ever imagined.

 

[aaronc879]

It took me 8+ years(age 21-29) to reach $100K in savings. I'm soon to be 31 and still have never earned $50K in a year and won't any time soon. What you spend is at least as important as what you make. So keep your expenses low and you'll get there soon.

 

[CuppaJoe]

Seriously, I have no idea partly because I never believed the paper numbers. I started investing in 1972, all equities until, this date I know, July '91, when I took a good look at the paper numbers, and thought, "ye gods, I should diversify."

 

[REWahoo]

I didn't start building a nest egg until age 31 - took me 10 years to get to $100k.

 

[FUEGO]

Looks like it took me 21 months after graduating college to get to $100k net worth (at age 25). Then roughly every year after that another $100k in net worth accumulated itself.

But I somehow managed to have a nicely positive net worth upon graduating college, so I had a "head start" on that first $100k in net worth.

I'm including debt reduction in my net worth calculations. Paying down principal on student loans and mortgages adds right into the bottom line on my net worth calculations.

And only recently did our household earned income creep into the six figure range (and just barely at that).

Enjoy these days of cheap stock prices Mr Market has given you. You will keep plowing money into the cheap market, and some day it will start going up again. Just think what your portfolio will be worth if we get back to Dow 14,000 or so. That would be a 40% increase from today's levels.

 

[bbbamI]

I honestly don't remember when we hit the $100k mark. If I took a guess I suppose it would have been in our late 30's. But at that time the thought of early retirement was not in our thoughts. We just kept pluggin' away and enjoyed life.

 

[Cassius King]

Thanks for all the responses!
I know I'll keep chugging away, but I have had mental goals of where I would like to see myself and where I think I should be by a certain time.
Like was stated earlier, in this recent market, without the help of compounding, it's hard to build real growth.

 

[NW-Bound]

Thanks for all the responses!
I know I'll keep chugging away, but I have had mental goals of where I would like to see myself and where I think I should be by a certain time.
Like was stated earlier, in this recent market, without the help of compounding, it's hard to build real growth.

As I posted here before, I just practiced LBYM and didn't even think of retiring early or compute out what it would take to ER when I was still working. Only when my wife and I were tired of work, it occurred to me that we might not have to.

Looks like it took me 21 months after graduating college to get to $100k net worth (at age 25). Then roughly every year after that another $100k in net worth accumulated itself.

You must be a good trader. You wrote that after 21 months you got $100K, and then another $100K at the 21+12 month mark. But in terms of percentage gains, you have been trailing off in recent years, else you would get more than $100K for the next 12 months, and the next 12 months after that.

Maybe your gains are more lumpy than you thought. But no matter... You ARE a good trader. I would have many $M if I could compound my portfolio the same way in the last decade.

 

[walkinwood]

If you're saving for your retirement, you don't need the money now, so don't worry about it. When I was in your situation (early career), I kept my allocation at 80% equity 20% ST. bonds. The bond portion provided some stability.

Keep trying to maximize your savings & focus on earning more too (Build your skills, look for and be open to new opportunities etc.) One day, the market will soar and you'll be amazed at how fast your net worth will grow.

 

[WM]

It took us about 10 years to get to 100K. What does your portfolio look like? Ours grew a lot faster after we got rid of the loaded funds and went to indexes. But I don't discount the effects of timing.

One positive thing I see in the experience has been that being younger (mid-30's) we have plenty of time for things to work themselves out. We saw some big drops, but as someone who's still learning I'd rather be on the roller coaster with a smaller portfolio than 30 years' worth of savings! I figure all this is making us tough

I agree that it does seem to take forever to get to what feels like a "substantial" amount, which is why I never looked too often at how were were doing (although initially that cost us because we were slow to realize what a drag the loaded funds were).

 

[glippy]

Why would you want the market to go up when you're still trying to buy securities? You want cheap prices when you're a buyer, not higher prices. I've always said the market can stagnate or go down as long as it wants, so long as it sky-rockets the day after I retire ;-)

 

[mchas]

Looks like it took me 21 months after graduating college to get to $100k net worth (at age 25). Then roughly every year after that another $100k in net worth accumulated itself.
...
And only recently did our household earned income creep into the six figure range (and just barely at that).

That is a heck of a run - how'd you do it? Your NW goes up by as much as your salary every year, and you're just getting started?

As for the original question, it took me about 2.5 years after graduating to hit $100k, but that was ALL from saving - not really much investment return to speak of. What others have said is true - the amount you save is really what matters, not how much you make. Live like you are still on a college budget and it's much easier.

Having said that, I feel your pain about investments. The market has gone nowhere in the last ten years. What I always tell myself though is that net worth is relative, so if the market is flat for you, it's flat for almost everyone, so you are not losing ground anymore than the next guy (me included). It'll all eventually work out... but if not, we're all screwed anyway

 

[ronocnikral]

i graduated college in 2005. I flirted with 100k NW just before the end of 2007, when my company's stock was grabbing $100+. It quickly went down. Somewhere in 2009 we blew past the 100K mark. Of course, I married in 2008, so if you want to count property, my wife brought a nice chunck equity to the table, $100k+ (and she lived on less than $20k/yr when I met her). I attribute it mainly to my company's 401k match, which is 8%.

Meanwhile, we are slashing expenses, living on the cheap and enjoying the journey. Hopefully we get over $200k (ex property) sometime early 2011. But, it won't change a single thing i do if it is sometime later on down the road.

keep plugging away...

 

[scrabbler1]

Not including the value of my co-op apartment (see below), the total value of my savings [taxable accounts plus 401(k)] did not break $100k until early 1995 when I was 32 years old.

My salary at the time was only in the mid-50s. I did not max out my 401(k) contributions which were eligible for company match until 1989, after I bought the apartment (I needed 20% as a down payment).

Early 1995 was just after I had estimated I had recovered the closing costs on the refi of the mortgage I got in 1989. My monthly payment had dropped by $200 a month in 1992 so my savings rate increased a lot. I also spent about $8k on a used car that year.

The value of the apartment I bought took a nosedive along with the rest of the real estate market in the early 1990s, so it took many years (late 1990s, at least) until its value got back to what I paid for it. But I also paid off the mortgage a few years later, further increasing my savings rate as we headed into the stock market boom of the late 1990s. My monthly maintenance costs are about 50% of what I would pay for rent in the area, and more than half of it is tax-deductible.

Yes, that first $100k was the toughest. It took nearly 10 years of working and saving (and buying some big-ticket items) to get there. In contrast, I reached $200k in savings (excluding the apartment in late 1997, only 2 1/2 years after reaching $100k. Compound interest, the booming stock market, and an increased savings rate were the main reasons. After that, it took no more than 2 years to accumulate each additional $100k (through $900k) although the exploding value of my company stock holdings introduced in 1997 helped.

Then I retired in 2008 when I neared $1M.

 

[ESRwannabe]

I finished school in 1997. From that date forward it seems that I have seen little if no gains in my portfolio. Strictly growing through contributions. As soon as I think I'm getting close, this past month in the market happens (again!) and crushes my energy for awhile. It's really disheartening.
What are others doing? I know I can't be the only person of this generation facing the same experience.
From those that are more experienced, how long did it take to get to $100k? Am I correct in understanding that the first $100k is the hardest?
Thanks for letting me vent!

/rant!

Cheers, TheDude!

I know exactly how you are feeling. The drop in 2008 caused me a huge amount of stress, but I was able to adjust and come up with an alternate strategy that works for me. I would suggest you might want to orient your portfolio towards income instead of total return. That is what I have done and is one of the main reasons why I haven't given up.

I changed my mentality from being an investor in financial instruments, to being an investor in companies and countries. My intention is to not sell shares. So, the fluctuation in share price is not such a discouragement. My focus is on my share of the profits as a co-owner of the business, i.e. the dividends.

I really don't know how long it took me to reach $100k. I started aggressively investing around 2005, but I didn't know anything about stocks and just put it all into a long term muni bond fund. It wasn't until around 2007 that I moved from basically 100% bonds to almost 100% stocks. So, I guess I got a proper initiation test. I'm still close to 100% stocks right now.

Before this latest crash I was up to around $200k. However, I don't really care about the current share price value, that much. I am actually pretty happy with the crash because I have improved my dividend income.

If you want to know my "method" in a nut shell for picking individual stocks. Go look at "good" dividend based funds like VIG the Div Appreciation Index and use that as your initial stock screen. From there go and look at the top 20 holdings. Look them up on Morningstar and look at their stats. Then think about the company. What do they do? Who do they sell to? How well will they do in a crap economy? From this you can make a wish list of stocks you want to buy. Now, just go and buy them, but never put more than 5% of your principal in any one stock. So, if you only owned individual stocks you would have at least 20 in total. The 5% limit is based on my portfolio's principal, i.e. how much I have invested, not whatever my current portfolio value is.

I believe that the stock market, in the large cap sector, is reasonably efficient. So, whatever the stock price happens to be, it is basically at a reasonable price. I do not try to determine if I am getting a good price. I just look at the dividend, and the past dividend growth. Then I just buy whatever looks best at the time. I do not read any financial documents. I don't know how to value stocks. So, I only put a max of 5% in any one stock. I follow the stocks daily on Morningstar. If something bad happens and is in the news, I can probably sell before I take a total loss on it, and my loss is capped right from the start anyway.

For my method on investing in mutual funds, read through my past posts and I outline it pretty well. Basically I never buy into a stock fund that doesn't have at least a 2% div yield based on the share price and last year's payouts.

 

[kaudrey]

Cassius, I am a bit older than you (41) and also have mental goals. My goals from 3 years ago are not going to get hit because of the market, but I keep saving and investing, hoping that one day the market will again have a growth spurt and the upward trend will start again. I figure for the last 2 years I've been buying low, and hopefully someday will be rewarded for it.

I think it took about 8 years from when I left college to have my first $100K. If it makes you feel any better, the 10 years after that, which brings us to now, saw that $100K go up to about $500K, even with the market being what it is.

 

[FUEGO]

As I posted here before, I just practiced LBYM and didn't even think of retiring early or compute out what it would take to ER when I was still working. Only when my wife and I were tired of work, it occurred to me that we might not have to.


You must be a good trader. You wrote that after 21 months you got $100K, and then another $100K at the 21+12 month mark. But in terms of percentage gains, you have been trailing off in recent years, else you would get more than $100K for the next 12 months, and the next 12 months after that.

Maybe your gains are more lumpy than you thought. But no matter... You ARE a good trader. I would have many $M if I could compound my portfolio the same way in the last decade.

That is a heck of a run - how'd you do it? Your NW goes up by as much as your salary every year, and you're just getting started?

I'd say I'm pretty average as an investor. Here's the annual returns:
2005: 11%
2006: 16%
2007: 9%
2008: -37%
2009: 37%
1Q 2010: 6%
2Q 2010: as of today, a few percent negative roughly.

Back in 2005, I wasn't up to my target allocations. Now I am fairly close to where I want to be. I have a heavy allocation to volatile asset classes - REITs, international REITs, small cap, value, small value, international small cap, emerging markets. 100% equities. The FUEGO portfolio, because it can catch fire easily, or lead to FIRE quickly. I had a couple of smart* moves in 2008-2009, by rebalancing into emerging markets, REITs, international small, etc - stuff that had been simply smashed by Mr Market, and I rebalanced into that stuff by selling large cap stuff and grubbing for spare change from the couch cushions. Otherwise, plain Jane vanilla investing in passive indexes in a tax efficient manner.

But some things that helped me build wealth quickly? Tax efficiency - I have paid hardly any federal taxes during my 6 year working career (not sure how much, probably $5000ish total).

Keep expenses low. Focus on value-for-dollar more than being ultra LBYM for the sake of saving pennies.

And my net worth figures where I upped the NW by 100k a year are net worth, not portfolio balance increases. When I look back, there was only one year where I increased the portfolio by $100k+ in a year, and it was $94,500 from new contributions, and 21,500 from investment returns. I was landlording but then sold my non-bubble area condo and reinvested the proceeds into the market (in 2005).

Since Jan 1 2005 when I have good records, it looks like I have made a total of roughly $67,000 from investment returns (part of which was probably lost in the last 2 months). Increases in net worth and portfolio value have been primarily due to debt reduction and savings/contributions to investment accounts.

I guess another tip I would have would be to focus on growing net worth in the right areas and not strictly growing your portfolio value. Don't shy away from good cheap debt while you are young (like mortgages today). But do shy away from expensive debt, and minimize your expenditures on depreciating assets (including a house).


* smart = lucky