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The First $100k is the Hardest!

Jason from Dividend Mantra recently asked “Is The First $100k The Hardest?” I can officially answer that question with a resounding “YES!” as I just crossed that barrier last week. Woo hoo!

Man was I ecstatic! It’s hard to believe that I just started on this journey to financial independence last year, and really didn’t get serious until the end of 2014. In the past 365 days I have been able to increase my net worth approximately 67% to over $100,000! And that was without any windfalls, just hard work and dedication.

Last year I was already somewhat “decent” with money, but I could have been a lot better. I was contributing over 10% to my 401k. I had sold my car as soon as I moved to NYC. I was paying down my high interest rate student loans first. I was never someone to just shop for the hell of it. I had a decent job. So I’m not going to deny, that the cards were already stacked in my favor. It just took one conscious decision to knock it out of the park and really pursue financial independence to really get the ball rolling.

To get to where I am, the first thing I did was take a look at my retirement savings. I didn’t have an IRA and I wasn’t maxing out my 401k. So I logged onto my retirement account website and reset my 401k contribution rate to a percentage that I knew would get me to the IRS contribution limit.

The second thing I did was look at my expenses. I canceled the stupid $60 a month clothing subscription service I was a part of. I reduced the amount I was going out to bars and clubs in NYC, and “but everyone else is doing it” was NOT going to be an excuse anymore. I began to cut down on meals out, and began shopping more at the grocery store.

Fall of 2014 rolled around which is open enrollment season at work. I selected the HSA medical plan option and set my contributions to max out for 2015. I then opened up a Roth IRA with Vanguard and basically threw all this “new” money from cutting expenses straight into my Roth IRA. Anything left over goes into an after-tax brokerage account with Vanguard.

That’s the quick and dirty of how I got here, now onto the good stuff. What are my numbers?

123

Cash – Checking account, plus money market account, minus outstanding credit card balances.
Post-tax investments – Mix of individual stocks and cheap Vanguard index funds in brokerage accounts.
Tax advantaged accounts – Pre-tax and Roth 401k, Roth IRA, and HSA. The Roth 401k is from previous years, I know better than to contribute to something other than pre-tax now!
Cash-balance pension – I have a cash balance pension plan with my current employer that I’m fully vested in. I believe if the balance remains small I can roll into an IRA when I leave, but if it gets higher I unfortunately would have to leave it alone until standard retirement age.
Student loans – These puppies are at 3% and I’m not really in a hurry to pay them off.

Man it’s been a wild ride, and it hasn’t even been that long! I’m just excited for what’s next. When I calculated my financial independence day I thought I would get to $110k by the end of the year, but as long as the market cooperates I should be able to beat that.

I definitely want to thank this whole personal finance community that doesn’t shy away from taking time to share their stories and best practices to help others like myself achieve their goals!

Is your net worth progressing as you planned? Have you crossed any milestones lately?

70 thoughts on “The First $100k is the Hardest!

  1. Holly@ClubThrifty

    Awesome job! I try not to pay too much attention to our investments and just keep plugging away at them, but we have made huge progess over the past few years. That’s especially true since I’ve become self-employed. During my 2.5 years of self-employment, I have saved a lot more than I ever did when I was employed by someone else.
    Holly@ClubThrifty recently posted…Destroying My Bucket List (One Goal at a Time)My Profile

    Reply
    1. Fervent Finance Post author

      That’s awesome Holly. I’ve been brainstorming more and more lately about ways to make self-employment a reality. Maybe someday I’ll make the plunge. Wish me luck!

      Reply
    1. Fervent Finance Post author

      Thanks Luke. It’s good not to dwell on your net worth. I look at mine more than I should, but I like being able to log onto Personal Capital and take 30 seconds to make sure nothing is fishy such as huge credit card charge, or missing dolla bills.

      Reply
  2. Kate@GoodnightDebt

    Congrats! 100k is such a huge milestone! On to 200k!
    My net worth is climbing “on schedule” but the schedule I set for myself is a little hard to believe. I passed $40k this month, hoping to hit $56k by the end of the year. It’s crazy to think that this time last year I had $30,000 in student loans!
    Kate@GoodnightDebt recently posted…My Painful RealizationMy Profile

    Reply
    1. Fervent Finance Post author

      Thanks Kate – $200k stands NO chance! Awesome job yourself. I had a negative net worth for probably 2 years after I graduated college due to student loans. Now their balances are so small compared to what they were.

      Reply
    1. Fervent Finance Post author

      NYC definitely doesn’t make it easy. But over the past year and a half of being here, I’ve been able to hone my craft and know how to do city living on the cheap!

      Reply
    1. Fervent Finance Post author

      Good point Andrew. I have $100k working for me while I try to stash away the next $100k which definitely will speed up the process!

      Reply
    1. Fervent Finance Post author

      Thanks for the confidence Jeff. Back when the blog was just started I wrote about living in the city – http://ferventfinance.com/city-living/ but that was almost six months ago, and could probably use updating from my knew skills I’ve mastered. Maybe you’re right and I should make a how-to guide for millennials trying to save some cash money while living in the Big Apple. I’ll mention you in the credits 😉

      Reply
  3. Robert

    Way to go! Crossing 100k still feels like my most significant milestone to-date. Not enough to retire on, but plenty to feel like I have sufficient F’ you money to pursue whatever work (or lack thereof) I choose.

    Reply
    1. Fervent Finance Post author

      Thanks Robert. I don’t feel like I have sufficient F-U money yet, but I wonder how I’ll know when it happens? Will I wake up one morning and just know? 🙂

      Reply
  4. SavvyJames

    Congratulations, quite the achievement! A friend of mine, a multi-millionaire at this point, told me a few years back that the first $100,000 was the hardest for him. For me, I believe it was between $400,000 – $500,000. Once we crossed that $0.5M barrier, the pace has picked up nicely.
    SavvyJames recently posted…Improve Your Spending PracticesMy Profile

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  5. Norm

    Congratuatlions on hitting six figures! The first $100k definitely is the hardest. Which is sad because you’ll look back on it one day as such a pitiable number.

    Depending on your pension plan, it might be worth to take the pension later instead of converting to 401(k). Depends on what your payout would be and when you could start taking it. Defined benefit plans are a rare bird these days!
    Norm recently posted…Weathering All Kinds of STORMS, Get It??My Profile

    Reply
    1. Fervent Finance Post author

      Thanks Norm. I can’t wait to look back and think $100k was pocket change. I’ve skimmed the pension plan document but haven’t read it in detail. I’ll definitely make sure to check before doing anything with it once I leave. Thanks for the tips.

      Reply
    1. Fervent Finance Post author

      That’s awesome Ali. Just think – when the markets aren’t going up, you’re buying into your investments at a cheaper price!

      Reply
    1. Fervent Finance Post author

      Haha Jason. I have quite a bit of time before the double comma club. But thanks for the vote of confidence.

      Reply
    1. Fervent Finance Post author

      Thanks Leigh! I can only hope that one day I appreciate my net worth at the pace which you do!

      Reply
  6. Our Next Life

    Big congrats! So true that the first $100K is the hardest, and I hope you feel great for reaching this big milestone. Now that you’ve got some great habits in place, and with your income likely continuing to rise, the next $100K will definitely happen faster and more easily. Keep up the great work! Wohoo!!!

    Reply
    1. Fervent Finance Post author

      Thanks ONL! Keeping up with a higher stress career that will pay dividends faster or taking an easier/less stressful job which will take longer to achieve FI is always a battle in my head.

      Reply
  7. Abigail @ipickuppennies

    Congrats! We’re still staring down the $100,000 mark thanks to various setbacks. But if nothing else, we’ll eventually own our house, which will put us over the top.

    And I’m hoping that next year will be when I can start really socking away the SEP funds. That’d go a long way toward boosting our net worth.
    Abigail @ipickuppennies recently posted…In which I electioneerMy Profile

    Reply
    1. Fervent Finance Post author

      Thanks Abigail! Saving for retirement is definitely a sure-fire way to get there. Good luck!

      Reply
  8. Mrs. PoP

    Well done with the milestone, Fervent! For us, the first $100K didn’t feel all that hard since it basically came about from us marrying. Combined we had a little over $100K at that point, split pretty evenly between us. $100-$300K was pretty slow going, though as we took on debt to buy properties during the recession and then had to wait a few years before they started to bounce back up in value.
    Mrs. PoP recently posted…PoP Balance Sheet – July 2015My Profile

    Reply
    1. Fervent Finance Post author

      It’s much harder to grow wealth alone compared to all you married bloggers with dual incomes 🙂

      Reply
    1. Fervent Finance Post author

      Thanks! Luckily my first job out of college paid for half of my master’s degree.

      Time is our investments’ greatest friend!

      Reply
  9. Mr. Modern Millennial

    First off, congrats on your huge accomplishment. Hope the next 100k is on its way quicker than the first!

    I recently crossed the 10k threshold. Slowly but surely, I’ll get on up there. Just gotta keep working at it.

    Take care,
    Dylan

    Reply
    1. Fervent Finance Post author

      Pleasure to make your acquaintance Dylan. I hope the next $100k goes faster as well! Keep working at it and I’m sure you’ll be blogging about $100k sooner than you think.

      Reply
    1. Fervent Finance Post author

      Totally agree – it finally feels like I have a snowball to start rolling, albeit a very small snowball.

      Reply
    1. Fervent Finance Post author

      Thanks Jason. It definitely is sweeter once you take the time to put the plans in motion, follow through, and see your goals get reached (even sooner than expected). Good luck on your path!

      Reply
    1. Fervent Finance Post author

      Haha I’m sure a million is just a little bit harder than $100k. Thanks for stopping by DivHut.

      Reply
    1. Fervent Finance Post author

      Thanks! I’m plain Vanilla and adhere to the Jim Collins way of investing. All into boring Vanguard index funds for me!

      Reply
  10. Happy Fruglar

    Congratulations on the $100k.

    As many have noted, doing it with little to no debt is a great accomplishment and that should really help see your finances grow over time.

    At some point, if you are generating great returns, it might be feasible to utilize some leverage in your asset accumulation, depends on your risk profile and what your investment opportunities are.

    Good Luck!

    Mr. Frugaler.

    Reply

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