This California teen kicked a $100,000 field goal during ESPN’s ‘College GameDay’ — using worn-out shoes. Here’s why your first $100K is so crucial for getting rich and what to do with it

The 19-year-old civil engineering student didn’t say what he would use the payout for, but financial experts would suggest $100,000 is the toughest first step on the way to financial freedom. Here’s why.

Critical milestone

Charlie Munger, the late billionaire investor, Berkshire Hathaway's former vice-chairman and Warren Buffett's longtime business partner, once said that breaching the six-figure barrier was a critical milestone for anyone looking to build wealth.

“It’s a b—, but you gotta do it,” he said during an annual meeting with Berkshire Hathaway shareholders. “I don’t care what you have to do — if it means walking everywhere and not eating anything that wasn’t purchased with a coupon; find a way to get your hands on $100,000.”

The reason this milestone is important is the same reason investors like Munger and Buffett are wealthy: compound interest. Put simply, your money grows faster when you already have money to deploy.

For example, Mia has spotted an investment opportunity that delivers 7% annual growth. She deploys $10,000 a year into this investment and wants to reach $1 million in net assets as soon as she can. It would take her nearly eight years to reach $100,000 in accumulated assets, but only five years to reach $200,000, and only four years to reach $300,000.

The leap between every $100,000 gets shorter after the first one. Consequently, it would take Mia a total of 31 years to go from $0 to $1 million, but 26% of that time would have been spent accumulating the first $100,000 alone.

This is why Villasenor’s field goal puts him on an accelerated path. With the first and toughest hurdle out of the way, he can invest $10,000 every year in the same opportunity as Mia but it would take only 23 years for him to get to millionaire status.