If investing $100k seems impossible, you should know that the halfway point to $100k isn’t $50k—for most people, it’s actually about $25k to $36k. That’s about half the amount that you probably would have to invest before you reach a $100k net worth.
That’s because investing $100k doesn’t mean saving $100k of your own money. Because of the power of compound interest, the halfway point to $100k is actually a lot more doable than it may seem at first glance, especially if you don’t earn a high income.
This guide will show you that the halfway point on your journey to $100k if you invest $250 to $750 per month or about $3,000 to $9,000 per year.
Investing $250 per month to reach $100k
If you invest $250 a month—or $3,000 a year—it would take you about 16 years to reach $100k if you get an 8% rate of return.
While talking 16 years to reach $100k is not ideal, it’s much closer to the reality of what most Americans can actually afford to invest: According to one survey by NerdWallet, the median American saves just $250 per month.
After 8 years—the halfway point on your journey to $100k—you will have invested about $24,437.50 of your own money:
Investing $375 per month to reach $100k
If you invest $375/month—or $4,500 per year—it would take you just under 13 years to reach $100k if you get an 8% rate of return. Halfway to your $100k milestone, you will have contributed $28,875 of your own money toward that goal:
Investing $500 per month to reach $100k
If you invest $500/month—or $6,000 per year—it would take you about 10 and a half years to reach $100k, assuming you get an 8% rate of return. At the halfway point—about 5 years into your investing journey—you will have contributed about $31,875:
Even in situations where you can shovel a lot of money toward your $100k investing goal, the halfway point to $100k is still probably less than you might think it would be.
Investing $750 per month to reach $100k
If you invest $750 a month—or $9,000 a year—it will take you about 8 years to reach $100k if you get an 8% rate of return. At the four-year mark, you will have contributed about $36,000 toward your $100k goal:
Why is the halfway point to $100k is different for everyone?
The halfway point to $100k is different for everyone because of compound interest.
The sooner you want to reach $100k, the harder you have to work (and the more money you have to contribute) to reach that goal.
The longer your money is invested, the more compound interest you earn, which is why the halfway point to $100k is much lower for someone who invests $250 a month than for someone who invests $750 a month.
So although you should try to reach a $100k net worth as soon as possible because your wealth skyrockets after this milestone, you at least have more compound interest helping you reach this milestone if you’re not a high-income earner.
Focus on getting to the real halfway point.
If reaching $100k feels impossible, just focus on getting to the real halfway point on your investing journey—half of what you will have to save and invest to reach $100k. Again, for most people, that’s going to be somewhere in the range of almost $25k to $36k.
But if saving and investing $25k to $36k feels to out of reach, try to get halfway to that goal—or even just a quarter of the way there.
You can check out these articles to help you get started on your $100k investing journey: