I really decided to take investing seriously up until just a short time ago. I have everything in VOO and it is compounding quite nicely tbh. Is it true once I hit 100k in VOO I will be pretty much set? I keep hearing that from a bunch of people and videos I watch?
Is it true once you hit 100k in investing, it really just takes off from there?
byu/Historical-Serve-652 ininvesting
Posted by Historical-Serve-652
30 Comments
Compound interest is awesome.
How long have you been investing in VOO?
You’re not “all set” but it’s massively easier from there due to the compounding.
Once you have around 5-10x your annual income invested, you’ll be making just as much or even much more on average from investment gains than your job. It’s not steady but the compounding just beats your salary.
Yes. The big mental shifts:
(1) I hit $100K in investments
(2) My investments outearned my annual salary
(3) I can retire if I quit my job right now
Depends how old you are
No one can give you a proper sense of your “being set” without knowing your time horizon, i.e. your age and your target retirement date or target amount.
At 21, $100k in VOO would be legendary. At 60, oy vey.
Yes and no, depending on what your understanding of “takes off” or “pretty much set” means. Your rate of return doesn’t get higher because your principal is higher, but in absolute dollars your total balance is growing faster and faster.
If you’re only able to save $10k a year, getting 10% return a year is only $1k. But once you reach $100k, getting 10% return is now your entire year’s worth of saving. And that $10k will compound and get you that same $1k as before, and so on. The returns outpace what you’re able to save, so relative to your saving rate, it does take off.
>Is it true once you hit 100k in investing, it really just takes off from there?
$100k is just a common saying. For each person it depends on how closely you look.
A +1% day on a $1,000 portfolio is only +$10. The same +1% day on a $100,000 portfolio is +$1,000 dollars. But is it really much of a difference from a $95,000 portfolio that gains +$950? What about $80,000 earning $800 that day? Or $50,000 earning $500?
The first million is almost impossible, the second million is inevitable. I’m between 1 and 2, and this investing maxim is spot on.
Not necessarily. Over 100K helps, it seems you don’t make any progress until you get to $100K. I’m investing now in multiple streams each less than $1M, so it doesn’t seem I am making progress on any of them since they hover above or below $1M.
Keep adding to it automatically. We will see if you panic sell. That 100k assumes you get the panic selling out of your system.
Everyone has a plan until they get punched in the mouth -Mike Tyson.
Best of luck!!
Closer to 250k in my epxerience
Not really. Maybe at 1M
I feel like the number is different and should be adjusted for your own circumstances. For example, if you’re able to invest 50k a year, then reaching 100k will feel super fast and compounding effects will feel super slow still. Whereas, if you’re only saving lets say 10k a year, then compounding will feel like a much larger impact. For each case, a 10% interest returns 10k a year. For the person saving 50k it’s 20% of what they save a year. For the person saving 10k a year it’s 100% of their yearly savings.
Saving the first $100k shows that you have the financial discipline to actually save up a sizable investment without spending it. This is why for many people the first $100k is the hardest part, so yes… if you keep this discipline up you’ll be in very good shape in the future.
However, you’re not “all set” in the sense that you can’t just let off the gas and coast on only that $100k.
Just keep doing what you’re doing with your savings, avoid the temptation to take money out (or panic sell), and watch out for lifestyle creep.
only if the market goes up.
Depends.
I hit 100k right around the beginning of the lost decade.
It was about 10 years of very slow growth.
The last 10 years however has been great.
So, the market decides.
Lol no. I didn’t feel that until ~2 million.
Yes. Eventually you get to a point where the interest is double or triple your salary, or more
For me it was around $500k when things started to take off. That’s when I’d get $5k daily gains if the market went up 1%. At $100k, I didn’t really notice the $1k daily gains.
Now things really take off once you get to a million, that’s when you start to see the $10k-$13k daily gains.
Yeah. I have 5X my salary and wouldn’t quit my job just yet…
$1 Million in VT
When I hit that I paid off my house. So for me, it was a mental peace that really took off. (100k was my goal and balance)
More money, more problems.
No it doesn’t “just take off”, that’s just a made up fairytale that some gurus use in their clickbait videos. The compound interest just earns you slightly more than before and it’ll take you slightly less time to hit the second 100k etc. Nothing extraordinary though.
Also, almost no one here talks about the possible market drops or crashes you’ll probably live with your VOO investment. There are times it’ll go up and down and your performance is literally 0%, or sometimes even lose 20% like it’s nothing.
At one point, the money you contribute is trivialized by the portfolio’s own compounding returns. 100K is just an arbitrary number but low six digits is generally where that turning point lies.
No, not really.
The capital gain numbers get bigger but volatility gets bigger too. So instead of seeing $10-100 daily swing now you are seeing $1000 daily swing.
there’s no real magic number, it’s not like your rate return gets magically higher, but it’s just a matter of compounding returns
I personally passed 100k many years ago and I wouldn’t say it feels like its magically gotten easier
small percent off small number = Small number
Same small percent off big number = big number
Imagine a snowball but with interest. Big or small is relative to you (and your lifestyle). 1% resulting in a $1k gain a day may be miniscule or massive based on you.
I took a screenshot and then it immediately dropped 15%.