you've probably heard the saying the first $100,000 is the hardest but did you know that once you amass a $100,000 Investment Portfolio you're actually onethird of the way to surpassing the $1 million mark That's Right reaching the $100,000 Milestone is a bigger deal than you'd think let's take a look at the math and see exactly why that is stay tuned because this is great news for your future my name is Chris and I help teach people about money personal finance and investing if you you're interested in improving your financial future make sure to subscribe to the channel and hit the like button if this video is helpful compound interest was dubbed The Eighth Wonder of the World by Albert Einstein those who understand its power can become extremely wealthy starting from nothing most of us have heard about compound interest in one form or another but few of us understand just how powerful it truly is so take a look at this example to get a clear picture if you invest $100 per week earning an average return of 8% it would take about 12 years to reach your first $100,000 during this period you're squirreling away what money you can while not earning much in the way of Interest sure you might be earning a little bit but it sure isn't enough to allow you to quit your job rather it's more like a few dollars here and there and there's nothing especially remarkable happening during this period but those with patience will be rewarded handsomely continuing your consistent investment of $100 per week you're looking at at another 6 years before you break the $200,000 barrier that's right you'll be sitting at just over $200,000 if you've been keeping track that adds up to a solid 18 years of commitment that sure is a long time but remember it's like steadily climbing a financial Mountain one $100 bill at a time if you're committed your weekly investment of $100 get ready for the Long Haul it'll take another 18 years of steady contributions to hit the impressive one million Mark let's break it down further it took a solid 12 years to accumulate $100,000 in 18 total years to double that to $200,000 finally after a total of 36 years of dedication you're celebrating reaching the coveted million Milestone let's zoom in on how much of the grunt work is coming from your efforts versus what's kicking in from your invested cash in those first 12 years aimed at hitting that $100,000 goal most of the dough you're socking away is straight from your paycheck over $60,000 of it in fact the other $40,000 or so that's the result of your Investments churning out returns or each do going to work for you not bad but in this initial stretch it's like you're doing the heavy lifting while your Investments are still warming up $40,000 for little to no work on your part is great but you're probably not going to get hooked on the thrill of investing just yet things start to get a little more exciting over the next 6 years as you Journey towards is reaching $200,000 that's when the real power of compounding starts to show its magic by the time you hit that $200,000 Milestone you'll have earned more than $100,000 in interest while your own contributions will have exceeded $90,000 it's pretty amazing to see how your money is working for you growing all on its own over time and here's the kicker even though you've only reached $2,000 you're already halfway to the million doll Mark it's like watching your financial garden bloom into something something extraordinary right before your very eyes as you enter the second 18-year stretch compound interest truly starts to take the lead over your personal contribution it's like your money is working overtime gaining momentum all on its own by this point while you've diligently set aside roughly $180,000 from your own pocket your investments will have skyrocketed in value to over1 million it really goes to show you the remarkable returns of compounding your money isn't just growing it's multiplying exponentially far surpassing what you could have achieved through sheer contributions alone it's like witnessing the financial equivalent of a snowball rolling downhill Gathering speed and size with each passing year what's truly remarkable is that once you hit the 1 million Mark you're pulling in an astounding $80,000 in interest in just one year think about how long it took you to reach $100,000 and now you're almost hitting that in just 12 months it only gets smoother from there by by year 36 you've crossed the $1 million Milestone and by year 45 you've already soared past $2 million bringing in over $160,000 in interest annually in the best part you're not sacrificing your lifestyle or risking everything to achieve this you're simply putting aside $100 per week that's like skipping one meal out or being a bit more conservative with your spending on a car payment it's a small adjustment for such significant financial growth the S&P 500 usually brings in returns of over 10% but for this example we're using 8% that's roughly what the S&P 500 returns on average after adjusting for inflation it's important to be realistic when doing long-term calculations considering how inflation can nibble away at your gains over time note that this example does not increase contributions with inflation meaning it's $100 per week during year 1 and $100 per week during year 30 we've all heard about the wonders of compound interest but here it's Crystal Clear that the numbers are on your side and they're working faster than you might expect hitting $100,000 means you're onethird of the way to topping $1 million but it could happen even sooner than you think for a few reasons it's not just about the math that propels $100,000 to $1 million in no time there are quite a few other factors working for you that will help accelerate those gains once you start seeing those Investments take off it's like a jolt of motivation that runs through you you can't help but feel pumped watching your money grow there's just something exhilarating about watching your money grow on its own without requiring you to lift a finger and pretty soon you're itching to up your game throwing in more whenever you can get a little bump in your paycheck suddenly blowing it on a bigger car payment doesn't seem as tempting when you realize you could make that money work for you while you sleep it's all about shifting your mindset seeing every extra dollar as a chance to build your financial future instead of just blowing it on stuff as you navigate the world of money matters you start to see just how important a dollar can be you begin to understand that saving and investing even just a little bit can make a big difference down the road it's like planting a seed and watching it grow into something much bigger over time this realization helps you see the value in every dollar saved not just for what it is now but for what it could become in the future compare this to someone who has never invested a dollar they don't realize how a dollar wasted today is really like wasting 10 or $100 of your money down the road as your income starts to grow you'll naturally find yourself kicking up your weekly Investments too go to the days of sticking to a set $100 per week with more cash coming in you'll have the freedom to stash away even more maybe you'll start tossing in $150 or double it to $200 it's like upgrading to the next level in a game with real world gains more income means more room to invest and that opens up a whole world of possibilities for your financial future reaching that $100,000 Milestone might feel like the toughest part but it's important to see just how much ground you've covered turns out hitting that Mark means you're already a third of the way to $1 million plus with all of those factors we talked about earlier on your side you'll get there way sooner than you might think so keep the faith and stick to your plan compound interest towards those who stay patient and Trust the process
