Why Your First $100,000 is so Hard (And the Next is Easy) - Charlie Munger

Given the perceived difficulty of saving your first $100,000, in this video, we’ll be discussing how important it is to identify steps that can ease this period and set us on a rewarding journey toward building wealth over time.

Charlie Munger, the Vice-Chairman of Berkshire Hathaway, has acknowledged how difficult it is to reach your first $100,000. When aiming to achieve this significant milestone in saving or investing, it’s undeniable that the journey can be hard. But the key question here is: why is progressing from 100,000 to 200,000 so much easier than getting from 0 to 100,000?

The initial challenge lies in the fact that when you begin your financial journey, you possess minimal money in the market, which limits your ability to generate earnings through compounding. In essence, the process of saving or investing your first 100,000 becomes a formidable task as you lack the substantial base needed to accumulate returns over time. On the other hand, once you have reached 1 million and aim to grow it to 1.1 million, the task becomes comparatively easier. At this stage, your existing 1 million is actively generating returns each day, contributing to your progress.

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DISCLAIMER: The Broke Bunch are not financial experts and any information provided is for educational purposes only, using our own research and general knowledge. Please do your own research and consult with a financial expert before making any big decisions.

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