Why Net Worth Skyrockets After $100K #Finance

have you ever heard of the phrases money makes money the rich are getting richer the more money you have the more money you make in this CashNews.co I wanted to take you behind the scenes to explain why phrases like this exist why your Net Worth takes off at 100K and give

you tips on what to do to get around this 100K number and what to focus on instead let’s start with the why why does your Net Worth explode at 100K many people believe that reaching a certain threshold suddenly grants you to exclusive access to better opportunities and these

opportunities mean better Investments which come with higher returns and that is why the rich get richer in fact there are two other important factors that come into play as to why your Net Worth explodes at 100K and neither of which are related to the type of

investment you have access to the first of those is the scale of Capital let’s first consider the reInvestments different scales all of which offer the same 10% return so suppose you invest $1,000 with a 10% annual return after one year your investment would

go to $1,100 so Profit of $100 if you invest $10,000 with the same 10% annual return your investment will grow to $111,000 after one year same percentage return that same 10% just a larger absolute number so your Profit is $1,000 and then looking at a $100,000

investment with the same 10% annual return would grow to $110,000 resulting in a Profit of $10,000 the investment the risks the period are the same in all three cases but the Profits are significantly different scaling Capital allows for higher

Returns on a larger amount of your money and as you increase the size of your investment the absolute return also increases proportionately which ultimately means you grow your wealth at a faster rate the second thing that people Miss is what they call the eighth wonder of the world and that is

compound interest compound interest is put simply the interest you earn on your Investments so with compound interest not only are you earning money on your original money or the principal balance but you also earn money on the interest you’ve already made through that

original investment it’s hard to explain this without using numbers so let’s say you save $1,000 every month with an 8% annual average return after 7 years you reach a Net Worth of $100,000 that’s quite a long time about 7 years to get to that first Milestone of

$100,000 but to get to the second milestone of the next 100,000 that time period shortens drastically this time you’ll earn an 8% return on a larger amount you’ll earn it on the first 100,000 that you’ve already saved and you’ll earn it on the interest that that first

100,000 has also accumulated so as a result the time it takes to reach the next 100,000 Milestone reduces to 4 years almost half the time it took to reach the first 100K Milestone and then to reach the next 100,000 Milestone after that it’ll take you just over 3 years and you’ll notice

that the time it takes to earn each additional $100,000 after that gets shorter and shorter as you have money working for you already and then money working for that money and then money working for that money and then once you reach $1 million an extra 100,000 from interest a load will take you

just over a year the hardest and the most timec consuming part is often at the beginning because you don’t have compound interest working for you so you have to do a lot of that heavy lifting yourself and that’s also why a lot of financial content for people at the start of the journey

is based around optimizing every penny cutting out those oat mil lates not buying XY Z is centered largely around deprivation because at this point every small Financial win may feel really hard and like it’s not moving the needle much but it’s those small wins that when you put

together gets you to that first 100K once you reach that every success then adds up pretty quickly and the further into the Wealth Building process you go the easier it gets so keeping these two factors in mind Capital scale and compounding what are some of the

things you can do to make sure you’re not left behind if you don’t have that 100k saved up the first is to increase the amount of time that you invest for let’s say you’re on a salary of 60,000 and you’re investing 20% of that that means you’re investing 12,000 a

year after 23 years at an 8% average return you’re going to have about $730,000 but if you invest for four more years after that just four more years you’ll have over a million the real gain comes at the end of The Journey not at the start and so every single day that you’re not

investing you’re losing out on the opportunity for time and compounding time is the most important thing you have on your side so even if you don’t have 100K to start with start with what you have with more time your Investments start to earn more interest and then that

interest and the principal compound think of it like a snowball rolling down the hill gaining snow getting faster getting bigger and the further down it goes it just gets bigger and faster to the point where is just Unstoppable and the gains are exponential by the way if you are a place where you

want your Savings to do more for you but you don’t know where to begin and you’re watching this CashNews.co saying yes you’re telling me to invest and to make the most of compound interest but how then I’m hosting a completely free masterclass in the next

month where I’ll talk you through what to invest in how to develop a strategy that works for you and some of the key rests you need to avoid it’s completely free to join if you want to check it out I’ll leave the link in the description below the second thing that you can focus on

is increasing the amount that you can invest it doesn’t mean you need a 100,000 lump sum to invest in straight away but thinking about ways to increase what you could contribute on a monthly basis and notice I haven’t said at this point to find Investments with a bigger

return I’ve seen people obsessing over what they invest in trying to get a 1% or 2% increase per year in their Investments optimizing for the best fund the best strategy the best platform which yeah sure it does make a difference but the thing that’s really going to

drive the results is just increasing the amount that you can invest to illustrate this if you’re investing $200 a month for 30 years at 10% you get just under $400,000 but if you get an extra 2% per year from your Investments you are left with just under 600,000 which agreed

huge amount but what about if instead of focusing on the Stock Market and trying to optimize for the best returns which let’s be honest is largely outside of your control you focus on increasing the amount that you can earn daytoday instead and look at the Stock

Market as just a way to multiply your wealth and a place to park your money that you generate in your day day life so maybe through negotiating your salary investing together with your partner earning more money through a side business and let’s say instead of getting that extra 2%

return in the Stock Market you’re able to double what you invest every month instead so instead of investing $2200 a month you invest $400 a month then you get to $800,000 although there are many rules for Building Wealth the path varies for everyone my personal way to go

about this is to focus on earning more through what you do in your day today really kill it in that area whilst also investing a small amount on a monthly basis into the Stock Market so that you can learn the investing habits early and also let compound interest work for you that

way when you do have a lot of money and you’re ready to invest a l sum or a large amount you won’t be starting from scratch and you would have already had that Head Start so don’t underplay the combination of what increasing the amount you can invest in and the time that you could

invest for has an impact on your overall Net Worth if you like this CashNews.co here’s another two that you might enjoy why so many high earners are broke and other high Income skills that you can learn today and see you there