How I Saved $100000 FAST (Top 5 Tips For Beginners)

today i'll share how i save my first 100 000 and give you all the lessons i learned along the way to help you save your first 100k plus a lot more besides paying off all of your high interest debt this is the first huge milestone on your financial journey and it's a really exciting thing to accomplish think about it this way if all 20 000 of us that are my subscribers hit 100k saved or invested will combine to form a total of 2 billion billion with a b that's so amazing oh and also at the end i'll share my top 5 tips for saving 100k to explain this journey i'll go step by step through the jobs that i had and the things that i learned in each one looking back on it in hindsight coming out of college i had less than a thousand dollars to my name my invested net worth was basically zero and i got a job at a car dealership selling cars the lesson i learned here in hindsight as a young person in my early 20s was that i really easily could have worked more and harder in college but i squandered a ton of time just playing video games or hanging out or otherwise just wasting time and yes that time is precious but i really wouldn't have lost any deep core meaningful experiences had i taken half of that free time and gotten paid for it for working instead so i left that college phase went into my working phase now to this car dealership invested net worth basically zero dollars but i did start a 401k there i didn't have a lot of money to invest so almost nothing got invested but the critical step happened there which was starting that account what i learned in hindsight there was that i could have applied myself even more to sales again i could have worked a lot harder i would say at most my invested net worth when i left that job was two or three thousand dollars next i got a job in retail working at a target store i was making maybe 15 an hour as a gstl as a manager and the great thing about that overall compensation package was they had a 401k which was available to me immediately it had something around like a four percent match and there was no vesting period so i transferred that 401k from the car dealer to target it's an important thing for you to understand about 401ks is if you had one at a job before and you left that job that money is still yours it's sitting there doing nothing until you move it somewhere but once you move it you can do more stuff with it i just wanted to point that out because i've had conversations in the past with people where they say something like oh yeah that was a great job i had a 401k and then that's the end of it like like the money's gone it's not gone it's still yours i jumped into the 401k right away as early as possible because i'd heard about it from dave ramsey and so i knew it was a worthwhile thing but i hadn't really had a lot of experience with it there at the car dealership but here at target i really did i worked there for between two and three years and i invested around five percent of my income at that time and that's typically what you do whenever you have a 401k you pick a percentage of each check that goes into it and it's money that gets taken out of your pay before taxes so this is before tax contributions and all that means is whatever percentage you pick they take that out of all of your pay and it goes immediately into that account then the beauty of the 401k is that you get a match and so up to a certain percent that's set by your employer typically it's between three and six percent if you invest that full amount they'll match you dollar for dollar so i was investing around five percent of my income and then target would put four percent of my income also in the account in that month and then because there was no vesting period it didn't mean i had to wait any number of years to access that money it meant immediately it was there in my account and if i left it would be mine i did have a job coming up here where i had a five-year vesting period and that really kind of stinks in hindsight the lesson that i learned from working at target was that hey target is really optimized and really organized and that's really important that's not my nature to be that way but the benefits of that are huge also i didn't know it at the time but i learned that the automatic withdrawal system of a 401k was far far more painless than choosing when to invest like every now and then if you feel like you can throwing some money in there is much harder than just letting it happen automatically my invested net worth leaving target was around ten thousand dollars then i had an opportunity to go back to that same car dealership where i worked before and go do a different job that i liked a lot more i got to kind of teach people how to use their new car and so that was really fun for me i like technology i like cars that was a good opportunity i made like 17 or 18 an hour so it was a bump up from target and again i transferred the money from that 401k back into this 401k once more and even though i didn't make a ton of money and i didn't invest a ton of money by the time i left that job for the next one i probably had an invested net worth of around 15 000 maybe scratching the surface of 20 000 but the lesson that i learned from that was hey keep moving that money keep doing stuff with it and keep investing because that will grow over time and even though yeah 20 000 isn't enough to like retire on that's a pretty big nest egg for somebody who's in their mid-20s finally this next job move was moving into the construction company where i now work and this was the place with that nasty vesting period now when i got started there i basically made the same money that i made at that car dealership job but it was just a low salary position to start because i really didn't know anything yet now i've been a construction professional for almost 10 years and i've been investing that whole entire time because this particular company wouldn't let you access their 401k program until you'd been there for a year it meant that i had to wait and either do nothing or do something else with that 401k money you remember how i've been transferring it from job to job to job so i could keep investing with it well the problem is that if you're locked out of it then you can't invest any more money in that account so what i did was withdraw the money from the 401k and move it into a traditional ira that's another option for you to know about whenever you leave a job that has a 401k if you can't roll it over or you don't want to roll it over into that new jobs 401k then just take the money out of that employer sponsored type account and put it into an account that you have full control over i also did that because the five-year vesting period at this place really kind of sucked and what that meant was you would get a full match up to three percent of your salary something like that but if you left before it was fully vested it meant that you didn't get that money and so the way this worked was every year you got another 20 of that match so let's say the first year i had a thousand dollars coming to me i wouldn't get that full match in the account and then if i left i wouldn't be like allowed to keep it i would only get 20 of the value of that so i'd get 200 bucks the whole reason a company would do that is to try and incentivize you to stick around hey if i leave this job i'm potentially leaving thousands of dollars of company match on the table so i'd rather stay and get the match which i did actually think about from time to time there and then with every successive year you would get 20 more of that match you've been waiting on that's the longest vesting period of any company i've ever heard of i think other times maybe it's one year or three years something like that but this was a very long vesting period so because i'd rolled over that previous 401k balance from the car dealership into my own traditional ira i got to keep investing into that account by the time i got a chance to restart a 401k i probably had around 20 000 in that ira account and then i started over with a brand new fresh blank zero dollar 401k from the new company then i kept investing in both the 401k and the ira for years and all that means is you set up an automatic withdrawal from your check so with your 401k you set it up with somebody in your company with your ira you just set it up to come out of your bank account and you say put in 100 bucks a month or 300 bucks a month or whatever it is you want to invest and it just immediately shoots over there i would say overall during that time period at least at first i was only investing around 10 in my 401k and maybe 50 or 100 bucks a month max in the ira i just wasn't making enough to invest more at that time i think it was important that i kind of had made that decision early on that no matter what even if it's a small amount i'm going to be investing every month no matter what thankfully the stock market was really great in 2014 to 2019 or so and it was just an incredible time to have money to invest and to be able to have that money invested already because it just had really great gains throughout that time period and it took several years at this job investing more and more every year as i earned more and more to reach 100 000 saved and my kind of routine around that was if i got a raise or if i got a bonus then some of that money would always go into the 401k so i would bump it up with every raise or bump it up potentially every year and say hey i want to go from 10 percent to 12 or i'm gonna go from 12 to 14 and because a lot of those same times i was getting a raise it didn't really feel like i had any less money in fact most of the time i was able to invest more and still have a bigger paycheck at the same time i just never saw the full difference i never saw that full paycheck because i just allocated a portion of it to my 401k in hindsight i think that was a really really good move it's something that works with our human psychology to go it's not as painful to have your full check and then all of a sudden decide to take a big chunk out of it and try and live on less if you never see it in the first place and the money is just taken out of there and you slowly ratchet it up over time as you make more money then you're still making more and you're investing more and there's none of that emotional turmoil in the end i think i was in my early 30s before my invested net worth totaled over a hundred thousand dollars and that long difficult slog of three decades of my life to get over 100k is super annoying that's something that i just want to acknowledge that if you're feeling like that if you feel like you've been investing for a long time you've been saving money for a long time and you're still not there it's just so slow but one of the best and most famous investors of all time charlie munger put it this way that first 100k is ouch [Laughter] charlie i agree completely man it is and it's not that something magical happens after that point of 100k like your money suddenly grows faster that's definitely not happening that's not how the math works i think it's just such a big milestone because it feels different to have that much money like now you're a real investor you've done things right for so long that now you have proof of concept and because the numbers that you're looking at have gotten so big it also feels better emotionally because when you make like a 15 profit in a year with 100k that's 15 grand hey you just made 15 grand out of nowhere that's awesome but making that same exact gain of 15 when you have 5 000 invested just doesn't feel the same because your account balance only changes by 750 if you don't yet have 100k saved or invested i want you to get there and that's why i'm going to share these top five tips for saving 100k number one work hard without doing this without committing yourself to your craft to your career whatever that looks like for you you don't deserve 100k and it's illogical to think that you'll get it otherwise working hard is the first step tip number two is to get auto enrolled in an employer sponsored account asap especially if they have a match free money is just a huge boost especially when you don't make a high income tip three is to invest in tried and true things plus minimize your fees do not chase single stocks or risky junk big diverse index funds are our friends but something else to be aware of there are a lot of employer-sponsored retirement plans that give you very limited choices in what you're allowed to invest in they can do that they can say hey you can invest in these five things and that's it so make sure that you review the options that you have and choose something that's really diverse i.e investing in a lot of different companies and industries and stuff not like 10 or 20 and check the fees make sure that whatever you're choosing has low fees typically every different fund you might pick has a different expense ratio and an expense ratio is typically a small looking number it'll say something like 0.40 or 0.95 or something like that and what that's telling you is that it's uh four-tenths of a percent or it's 0.95 of a percent it's like almost one percent and even though those numbers sound really small anything approaching one percent is high tip number four increase how much you invest each year if you invested 200 per month last year invest 300 per month this year if you have access to a 401k through your job and you have to invest six percent of your salary to get the full match from your employer and that's all you did last year that's good but bump it up a percent or two this year i've even seen where the brokerage company lets you automatically set up a yearly increase in the amount you invest so you're totally hands off like you can say increase my amount that i invest every year by one percent or something like that it's like full self-driving but with investing and it actually works if your 401k has really high management fees which is anything again close to or exceeding one percent then your other option is to open an ira to invest more money there after you get that max employer match so if you find out you've got really high fees with the 401k get the full match then any other money you have available that you've got enough discipline to say i'm gonna invest this put it in an ira instead tip number five is do not follow the market or the trends doing this does nothing but make us worry and second guess what we're doing and pull our hair out at night and just be mad to read the news instead stick to your plan invest in a ton of different companies invest as much as you can and be patient there will always be stories of people flipping nfts picking some hot new stock that skyrockets in value and makes them a bunch of money or any other new like trendy thing that's some short-lived tactic to get rich quick what you won't hear are as many stories of people failing at those very same methods those stories don't seem to get told as often hmm wonder why we're ashamed of our foolishness and losses that's why we don't mention them in casual conversation as much as we mention our wins the way i see it is you've worked hard for this money you've been disciplined enough to not spend it and you've been wise enough to invest it now is not the time to blow it on some sketchy scheme or to try and find a way to make 400 profits this year play the long game and win to know more specifics about the kind of stuff that i like to invest in click on this video or find it in the description i made a list of my top five index funds that i'm investing in this year so that will get more into the details of what i'm investing in and why and also if you made it to the end of the video i appreciate that and i'd like to give a little secret comment today the secret comment word is kangaroo because i said the word 401k a lot and k is for kangaroo all right see you later you

Channel: Brendan Evan

Views: 1,343

Keywords: money saving tips, personal finance, how to save $100000, how to save money fast, how to save money, save money, saving money, how to save money faster, how to save 100k, how to save money fast on a low income, how to save money faster tips, money saving tips 2022, how to save money with low income, saving money tips, how to save 10k, financial education, how to save a lot of money

Id: QNq0SXy9Wtg

Length: 13min 32sec (812 seconds)

Published: Tue Aug 16 2022