Having a six-figure brokerage account balance is a major milestone. Once you have at least $100,000 saved, you are well on your way to becoming financially independent.
But when will this happen to you? Here's what you need to know.
Here's when you'll hit $100,000 in your investment account
The timeline for hitting your first $100,000 depends both on how much you invest each month and what return on investments you earn. The table below shows examples of when you'll be on track to hit this target.
| If you invest this amount each month… | And earn a 6% return, you will have $100,000 in this many years | And earn an 8% return, you will have $100,000 in this many years | And earn a 10% return, you will have $100,000 in this many years |
|---|
| $200 | 20.92 | 18.33 | 16.50 |
| $500 | 11.58 | 10.58 | 9.83 |
| $750 | 8.58 | 8.00 | 7.50 |
| $1,000 | 6.75 | 6.42 | 6.08 |
Data source: Author's calculations
As you can see, the more you invest each month, the faster you will hit your target. But your returns make a big difference as well. You can cut off a few years of time if you earn a 10% average annual return compared to earning just 6% per year.
So it's worth taking the time to make sure you're exposed to the right level of risk, as investing too conservatively could impact your investment performance and make reaching your goals harder.
A good rule of thumb is to invest money in the stock market that you won't need for around two to five years, as that will give you time to wait out any potential downturns. Another common rule says you should subtract your age from 110 and put that percentage of your portfolio in the market. Following these guidelines can help you earn the returns you need.
The sooner you hit $100,000, the better off you'll be
Making a point to try to hit your $100,000 milestone ASAP is important because once you have that much money invested, compound interest can do wonders to help you grow your wealth.
A $100,000 investment can turn into $259,374 in just 10 years' time, and in 30 years' time, your $100,000 investment could be worth $1.7 million. So, if you can save your $100,000 early on, you could easily become a multi-millionaire by retirement, even if you don't contribute much else over the course of your career.
Now, it can be hard to find the money to reach this major goal quickly. Investing $1,000 a month out of your bank account is out of reach for most people. But you can free up some cash to invest each month if you make a commitment to doing so. This may mean bringing lunch to work instead of dining out, or looking for free entertainment options instead of spending a lot of money for expensive nights out.
But the payoff will be worth it if you can hit your $100,000 goal quickly and then spend years watching that money work for you and grow into millions.
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FAQs
Consider the math. Knowing that saving $1,000 per month can get you to $100,000 in six years can be very motivating and motivation can help you stick to your budget and skip buying that new BMW.
At what age should you have your first 100K? ›
Kevin O'Leary: By Age 33, You Should Have $100K in Savings — How To Get Started. If you're just starting out in your career, $100,000 might seem like a lot of money. After all, the median salary of a 20- to 24-year-old, according to Bureau of Labor Statistics data, is just $37,024.
How much do I need to invest to make 100000 a year? ›
To cut to the chase, if you want your interest to earn $50,000, $70,000 or $100,000 per year, you'll need to have approximately $1.25 million to $2.5 million in savings or retirement accounts. If you're aiming for somewhere in the middle, like $70,000, you'd want to have $1.75 million saved.
How much interest will 100K earn in a year? ›
Annual compound interest earnings:
At 4.25%, your $100,000 would earn $4,250 per year. At 4.50%, your $100,000 would earn $4,500 per year. At 4.75%, your $100,000 would earn $4,750 per year. At 5.00%, your $100,000 would earn $5,000 per year.
How fast can you turn 100K into 1 million? ›
If you keep saving, you can get there even faster. If you invest just $500 per month into the fund on top of the initial $100,000, you'll get there in less than 20 years on average. Adding $1,000 per month will get you to $1 million within 17 years. There are a lot of great S&P 500 index funds.
Is 100K in investments good? ›
If you keep your $100,000 in a high-yield savings account earning 4% per year, after 30 years you'll end up with about $331,000. But if you instead earned even 9% from the stock market over the long run, that $100,000 could grow closer to $1.4 million. That's roughly four times as much money for your nest egg.
How many Americans have 100k in savings? ›
How many Americans have $100,000 in savings? About 26% of U.S. households had more than $100,000 in savings in retirement accounts as of 2022, according to USAFacts, a nonprofit organization that analyzes data from the Federal Reserve and other government agencies.
How many Americans have 200k in savings? ›
9% of Americans have between $100,000 and $200,000 saved, and 4% have between $200,000 and $350,000 saved. Finally, 4% have between $350,000 and $500,000 saved, and about 4% have more than $500,000.
Why is investing the first 100k the hardest? ›
The compound return is exponential, so less effort will be required over less time. It would take you slightly more than eight years to accumulate the first $100,000, but slightly less than six additional years to reach the second $100,000. That's almost 30% less time!
Can I live off the interest of $100,000? ›
“With a nest egg of $100,000, that would only cover two years of expenses without considering any additional income sources like Social Security,” Ross explained. “So, while it's not impossible, it would likely require a very frugal lifestyle and additional income streams to be comfortable.”
Many retirees fall far short of that amount, but their savings may be supplemented with other forms of income. According to data from the BLS, average 2022 incomes after taxes were as follows for older households: 65-74 years: $63,187 per year or $5,266 per month. 75 and older: $47,928 per year or $3,994 per month.
How to generate $100,000 in passive income? ›
Ways to Make $100,000 Per Year in Passive Income
- Invest in Real Estate. Rental properties generate income through tenants who pay rent each month to live in a property you own. ...
- CD Laddering. ...
- Dividend Stocks. ...
- Fixed-Income Securities. ...
- Start a Side Hustle.
Government bonds (aka "Treasurys") are generally considered the safest investments because they're backed by the full faith and credit of the U.S. government. Other types of bonds include corporate bonds and municipal bonds (earnings on the latter are exempt from federal taxes).
Is 100K too much in savings? ›
While reaching the $100,000 mark is an admirable achievement, it shouldn't be seen as an end game. Even a six-figure bank account likely won't go far enough in retirement, which could last as long as 30 years.
How rare is it to make over 100K? ›
Over one-third of American families earn $100,000 or more
The U.S. Census Bureau found that 37.1% of U.S. households earned at least $100,000 in 2022. Here's a more detailed breakdown of six-figure income brackets and the percentage of households in each one: $100,000 to $149,999: 16.9% $150,000 to $199,999: 8.7%
How long will it take me to get 100k? ›
How long will it take to save?
| Savings Goal | If You Saved $200/month | If You Saved $400/month |
|---|
| $70,000 | 350 months | 175 months |
| $80,000 | 400 months | 200 months |
| $90,000 | 450 months | 225 months |
| $100,000 | 500 months | 250 months |
7 more rowsHow To Use the Rule of 72 To Estimate Returns. Let's say you have an investment balance of $100,000, and you want to know how long it will take to get it to $200,000 without adding any more funds. With an estimated annual return of 7%, you'd divide 72 by 7 to see that your investment will double every 10.29 years.
How to invest $100,000 for quick return? ›
If you want to put $100,000 into a short-term investment, here are six options worth considering:
- High-Yield Savings Account. ...
- Money Market Funds. ...
- Cash Management Accounts. ...
- Short-Term Corporate Bonds. ...
- No-Penalty Certificates of Deposits (CD) ...
- Short-term U.S. Government Bonds.
Let's consider some examples: Investor A can only invest $1,000 every month and has nothing in savings. If he earns a 10% annual rate of return (compounded quarterly) in a portfolio created by a robo advisor, Investor A will need 22 years and seven months to become a millionaire.
