Strategies for Building Wealth from Zero to $100,000

Building a strong financial foundation requires aggressive savings and smart investments to reach your first $100,000.

### Strategies for Building Wealth: From Zero to $100,000
* 🎉  Congratulations on reaching a net worth of zero! You're already ahead of the **12% of the population struggling with debt**, so it's time to focus on building your **first $100,000**.
* 💪  Begin by finishing your financial cleanup; eliminate any lingering **high debt** and establish an **emergency fund** to prevent falling back into debt.
* 💰  Aim to save aggressively, targeting a savings rate of **25% of your gross income**, while recognizing that starting with **10% is perfectly fine**.
* 📈  Take advantage of employer matches in retirement plans, as this provides **"free money" with a guaranteed return**, and then focus on investing in Roth accounts for **tax-free growth**.
* ⌛  Building wealth may feel slow initially, but with **consistent monthly savings of $10,000** and an **8% annual return**, it can take approximately **7 years and 5 months** to reach **$100,000**.
* 🔄  Stay committed to your financial journey despite distractions and potential downturns, as the **discipline you build now will pay off significantly in the long run**.
* 🏡  When considering major purchases like a home, ensure you can **stay for at least five to seven years** and keep housing costs **under 25% of your gross income** to maintain financial stability.
* 📚  Utilize resources for home buying and investing to enhance your financial literacy and ensure your money **works harder for you** beyond just home equity.

[Music] okay bro that was going from a negative net worth to a zero. Now let's talk about the fun side, the other side of that equation. Let's talk about the second strata. What about net worth from zero to $100,000? What are the wealth strategies we ought to be focusing on? First of all, congratulations! Once you get to zero, meaning you don't actually owe, you know, you have money. Hopefully, you're living on less than you make. You don't have a ton of credit card debt. You're already doing better than the 12% of the population that is pretty much stuck in some form of debt, whether it's student loan debt, whether it's credit card debt. You're already doing better than that group of people. But now we've got to get you to that bowling point, which is we've got to try to work on getting you to your first $100,000. So what are the things that we ought to focus on when it comes to getting to 100? Well, the first is you got

to finish your financial cleanup. If you do still have lingering high debt, get that knocked out ASAP, and then build your emergency fund. So again, you won't find yourself getting back into that. You want to build that foundation so that you can keep yourself out of debt, and so that way you can begin focusing on the number one primary thing that you should be focusing on. Yeah, we like to say start aggressively investing now. Look, don't misunderstand us. We want you not just going out there and speculating, where you're out there buying whatever the latest and greatest TR that you hear that you can't miss making money on. That's not what we're talking about in the beginning when we're trying to get you to your first $100,000. Your savings rate is so much more important than even the investment you're choosing. So I want you to be as aggressive as possible with what you can put towards the future, and our goal is we want you saving 25% of your gross income for the future. But if all you can

do is 10%. That's great. See how you can move to 11% next year. If you're at 15%, awesome. What can we do to get to 20%? Because as you begin saving, as you begin to increase your savings rate, you get to move along in the financial order of operations. When you think about putting your dollars to work, where do you put them? Well, we've already talked about we want you to be getting that employer match. It is free money. It's 100% rate of return. You can't miss out on that. Well, then you knock out that high debt. You've got your emergency fund covered. Now you get into the fun stuff. Now you get to look at the accounts where you can actually get your bills working for you. Yeah, I mean, I get excited when somebody tells me, Hey, I'm at the point where I've got a good emergency fund. Where do I need to start investing? I love introducing people to Roth accounts, whether it's your Roth employer plan, whether it's your Roth IRA. Get in there.

and take advantage of this tax-free growth opportunity. Because if you do this early and often enough, there's a good chance you could be a seven-figure tax-free millionaire, and that's super exciting. So, get that Roth IRA, get that health savings account, and don't skip out on step six, which allows you to load up that employer plan too. Now, here's what's interesting: these are all so exciting and so fun, and we have a lot of fervor when we just start first funding these accounts, but in reality, it might feel slow at first. You might feel like, Oh gosh, I've been doing this for a year, and I'm just not going anywhere. The numbers aren't getting big, the accounts aren't huge. Man, is this even worth it? Should I even do it? Take a deep breath. That's normal. It is supposed to feel slow at first because what's interesting is when you can apply time over this discipline, the story gets super, super exciting. Yeah, so let's talk about that first $100,000. This is something that I

think is interesting if you're just deliberate with your monthly savings, meaning you're going to save $10,000 annually, which I know, but go with us for this illustration. You'll see what we're saying, what we're sharing here, and making a reasonable 8% per year. A lot of people are surprised to see, yes, it's going to take 7 years and 5 months just to get to $100,000, just to get to $100,000, and that's even with a very aggressive savings rate. But here's the thing I need people to understand. I understand a lot of life is going to happen in that seven years. It's because more than likely, that's enough time that you're going to have an economic downturn. There's a lot of things. There's going to be elections during those periods. There's going to be lots of things where every night you're going to come home and something's going to whisper in your ear, Hey, I know you're buying every month. I know you're

investing, and I know you have this automatic millionaire thing going on if you just stay the course, but why don't you quit? And I, I, it happens all the time. I've had neighbors where they know what I do for a living, they see the excitement that we create, and they'll come to me, and they'll say, Hey, can you help me set up an account with a Fidelity or Vanguard and get this started? Then they'll come to me three months later and say, Brian, that was the dumbest thing ever because that thing can lose money. I'm telling you, do not get S-tracked in this first $100,000. It is, that is the journey. This is so simple, but it is not easy because life is going to be out there with all these distractions. Always be buying is your friend, but then what's the rest of the story? So, we said it might take you, if you were to start at 30, it might take you s years and five months to build up to $100,000. But if you can stay the

course, and you can continue to save $10,000 a year, and you can make, on average, 8%. By the time you get to retirement, by the time you get to age 65, in the last six months of your investing, your portfolio will have grown by $100,000. What took you 7 years and 5 months to do in the beginning, by the end of your journey, only takes 6 months. If you can put in the time, if you can stay the course, so don't. It's going to feel slow, it's going to feel hard. Keep plugging forward, and your future self will thank you. It is all about, in the beginning, those small decisions, so you can build that great big beautiful tomorrow. So get through the slow part where, yes, every month is going to feel like a task, a journey to get there. But if you will do this and get to that critical mass, that launch point, and that's what, or bowling point, as I like to say, and not saying very well, you will get to a point where your

money can work harder than you can with your back, your brain, and even your hands. Now, here's what you need to do. Also, at this stage, make sure you stay out of credit card debt. You got out of that high-interest debt. Don't allow yourself, when life gets tough, to fall back into that trap. And then, as you get into this positive net worth territory, you probably are doing things like making large decisions like buying a home. So, even when you make a large decision like that, make sure you're doing it in a responsible manner. We actually have a rule when it comes to home buying. Before you purchase your first home, make sure that your timeline is you can be there for at least five to seven years. When it comes to putting it on down payment, you don't have to do 20% down. It's okay for your first house. It's okay for your first house if you only do a 3 to 5% down payment. And then, you want to make sure that you keep all of your house costs under 25% of your gross income. If

you can do that if you can get into a home. That way, there's a really good chance you're not going to derail your financial life and be Houser retirement poor by doing it the wrong way. Yeah, so make sure you go out there money.com resources. Check out some of these home buying guides, these other portals that we've set up to be tools for you because this is going to help you too. So you can actually have a chance to build wealth outside of just your home equity. Nothing wrong with building home equity, by the way. It's just that when it comes to your money working harder for you, we need that money to be accessible and something you can use. And that's why investing really is important in this journey.

$0-$100k Net Worth: Top Wealth-Building Strategies

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Reaching a net worth of zero is a positive step, as it means you're not in debt and are living within your means.

To move towards your first $100,000, focus on finishing financial cleanup, building an emergency fund, and aggressively saving for the future.

Prioritize saving 25% of your gross income, as your savings rate is more important than the specific investments you choose at this stage.

Increasing Your Savings Rate and Investing Wisely

Increasing your savings rate from 10% to 11% or 15% can help you move up the financial order of operations.

Taking advantage of employer matches and paying off high debt is crucial before investing.

Roth accounts and health savings accounts offer tax-free growth opportunities, potentially leading to significant wealth over time.

Saving $10,000 annually with an 8% return will take 7 years and 5 months to reach $100,000.

Life's challenges, such as economic downturns and distractions, can make it difficult to stay on track with savings.

It's important to remain committed and not get discouraged during the journey to the first $100,000.

Consistently saving $10,000 a year and earning an average of 8% can lead to significant portfolio growth, with the last six months of investing contributing $100,000.

Staying disciplined during the slow initial phase is crucial for reaching a critical mass where money can work harder.

When making large decisions like buying a home, aim for a timeline of at least five to seven years, consider a 3 to 5% down payment, and keep housing costs under 25% of your gross income.

Getting into a home can help prevent financial struggles in retirement.

com and home buying guides can provide valuable tools for building wealth.

It's important to have accessible money for investing, in addition to building home equity.