Your wealth-building journey hits a tipping point once you have 100K invested, these finance experts agree. Here’s how to reach the magic number

But what makes $100,000 so special? Does it have some kind of money-growing magic?

The first $100,000 is considered a milestone in building wealth because it’s the tipping point at which the incredible power of compound interest begins to take effect.

Personal finance guru Ramit Sethi agrees with Munger. In late 2024, Sethi uploaded a video to his YouTube channel illustrating why entering the six-figure club fast-tracks your path to financial freedom (2).

Here’s a closer look at why it’s so important to get to that coveted six-figure savings mark — as well as a few tips for getting there.

Why $100K is the ‘magic number’

To show the power of six-figure savings, Sethi used the example of a saver who started with $0 and invested $833 a month for 40 years at a 7% rate of return.

It would take this hypothetical person roughly eight years to get to their first $100,000. From there, however, it would take just 32 years to hit $1 million.

That’s just four times longer to make nine times more.

More importantly, your journey will eventually hit a tipping point where you earn more on previous contributions and accumulated capital than on new contributions.

“This is where interest starts to explode. You’re actually making more from your existing money than from the money you personally put into it as the interest gets to this tipping point,” Sethi explained.

“When you reach a million dollars, about 70% of your wealth will come from interest alone.”

And that’s the power of six-figure savings — and beyond. But how exactly can you get there? Below, we’ll offer some additional tips on how to snowball your savings.

Save up — and invest

When thinking about ways of getting to that mythical $100K milestone, it’s perhaps a good idea to start with the man who kicked things off, Charlie Munger.

“I would argue that the people who get there relatively quickly are helped if they’re passionate about being rational, very eager and opportunistic, and steadily underspend their income grossly,” he said at the same meeting in 1999 (1).

“I think those three factors are very helpful.”

Elsewhere, Sethi has also offered his own advice on ways you can reach this important milestone, including automating your savings, putting raises toward savings instead of spending and keeping your expenses within a budget you can reasonably afford (3).

This is great advice, but it focuses primarily on saving habits. If you want to grow those savings, that’s where investing comes in.

Smart investments can make your hard-earned savings grow even faster.

For example, since 1957, the S&P 500 has delivered about 10% compounded annual return — and it has delivered 11.5% for the past 40 years, according to Fidelity (4).

Assuming you invest $833 every month, that means it would take you just slightly more than seven (rather than eight) years to reach that $100,000 milestone.

Even a year can make a huge difference in your savings journey.

Start planting investment seeds

Making a habit out of putting money aside every month is now easier than you might think.

While allocating a portion of your monthly paycheck is a good place to start, you can also take it one step further and begin investing spare change from everyday purchases with Acorns.

Here’s how it works: Once you link your bank account or credit card with Acorns, the app automatically rounds off your purchases to the nearest dollar and deposits the excess into a diversified portfolio of ETFs managed by experts at leading investment firms like Vanguard and BlackRock.

For instance, if you buy a donut for $3.25, Acorns will round up the purchase to $4 and invest the change in a smart investment portfolio. So a $3.25 purchase automatically becomes a 75-cent investment in your future.

Sign up today and get a $20 bonus investment.

You can go your own way

Not all investors have to buy ETFs and index funds, however. Many financial gurus like Sethi prefer to be more hands-on with their stock picks, and they enjoy staying on top of market performance.

If you’re an enthusiastic DIY investor, you’ll need the right kind of tools to help you make your trades easily.

That’s where Moby comes in. Moby offers expert research and recommendations to help you identify strong, long-term investments backed by advice from former hedge fund analysts.

In four years, and across almost 400 stock picks, their recommendations have beaten the S&P 500 by almost 12% on average. They also offer a 30-day money-back guarantee.

Moby’s team spends hundreds of hours sifting through financial news and data to provide you with stock and crypto reports delivered straight to you. Their research keeps you up-to-the-minute on market shifts and can help you reduce the guesswork behind choosing stocks and ETFs.

Plus, their reports are easy to understand for beginners, so you can become a smarter investor in just five minutes.

Make off like a bandit

Once you’re armed with the right knowledge, you also need a powerful platform to execute your trades.

Platforms like Robinhood are designed to make investing simpler and more approachable.

If you prefer a more hands-on approach, you can also buy and sell individual stocks, fractional shares and options (for qualified traders) — backed by 24/7 support. Stocks, ETFs and their options trades are commission-free.

With access to popular ETFs like the Vanguard S&P 500, you can build diversified exposure without needing to pick individual stocks.

The platform also offers both a traditional IRA and a Roth IRA, so you can choose the tax strategy that fits your retirement plan.

With its recurring investment feature, you can set up automatic investments of your preferred fractional shares, stocks and ETFs on your own schedule.

Over time, this helps make investing a habit and steadily grows your portfolio.

Earn up to 3% on eligible account transfers to a taxable Robinhood account through March 25th. Risks and terms apply. Robinhood Gold ($5/mo) subscription may apply.

Start a side hustle

While making smart investments is one way of getting there, another way is targeting higher contributions.

For example, a side hustle, freelance work or extra hours at your current job could help you contribute perhaps $900, or even $1,000, every month instead of $833.

Alternatively, instead of getting a second job, you could also start trying to build new sources of passive income. This way, you can join the highly coveted six-figure club without compromising a healthy work-life balance.

Real estate can be a lucrative investment avenue for generating passive income.

According to a 2025 survey by Gallup, Inc., 37% of respondents believed real estate to be the best investment option, beating out other traditional hedge bets, like gold (5).

However, amid the soaring housing prices across the U.S. over the past few years, investing in rental properties to build a stream of passive income might be unfeasible for many. Not to mention having to worry about property maintenance and finding reliable tenants.

If you don’t have excess funds to buy a second home — or simply don’t want to deal with the hassles of becoming a landlord — now you can start a turnkey real estate side hustle with the help of real estate crowdfunding platforms.

Keep it steady

Rental properties have long been a proven source of steady, passive income for high-net-worth investors. However, the time, effort and costs involved in managing and maintaining multiple properties prevent many from investing.

So, unless you’re a hedge fund titan or an oil baron, you’ve likely been shut out of one of the most profitable corners of the market.

That’s where mogul comes in. This real estate investment platform offers fractional ownership in blue-chip rental properties, which gives investors monthly rental income, real-time appreciation and tax benefits — without the need for a hefty down payment or late-night tenant calls.

Founded by former Goldman Sachs real estate investors, the mogul team handpicks the top 1% of single-family rental homes nationwide for you. Simply put, you can invest in institutional quality offerings for a fraction of the usual cost.

Each property undergoes a vetting process, requiring a minimum 12% return even in downside scenarios. Across the board, the platform features an average annual IRR of 18.8%. Their cash-on-cash yields, meanwhile, average between 10% to 12% annually. Offerings often sell out in under three hours, with investments typically ranging between $15,000 and $40,000 per property.

Every investment is secured by real assets, not dependent on the platform’s viability. Each property is held in a standalone Propco LLC, so investors own the property — not the platform. Blockchain-based fractionalization adds a layer of safety, ensuring a permanent, verifiable record of each stake.