Saving money is something that does not come easy to everyone. For some people, money burns a hole in their pocket so fast it’s like it was never even there. I will tell you about some of the conventional, and not so conventional ways I used to save my first 100k.
Have a reason for saving 100k
The reason it is important to have a reason for saving 100k is because that can give you an idea about how you are going to do it and what will be your goal afterwards. Saving 100k should be your goal for investing in stocks, a house, land, or possibly a rental property. I think contrary to popular belief that you should not be saving up to spend money on cars or jewelry and even vacations. These should come as a product of doing so well that you don’t really have to worry about splurging on these extracurricular things every once in a while.. or more often depending on how well you’re doing.
The reasons I wanted to save 100k is because I realized that if I invested 100k in stocks at the bare minimum I would be able to make a 10 percent annual return. This means that no matter what I do for a job, every year I would earn an extra 10k. How many people do you know would kill to have an extra 10k going into their bank account every year.
Realize that it is very hard to do this alone
Something I realized very early on was that I was not going to save up this money doing everything on my own. If you are still living at home, think long and hard before you allow your ego to take over and you decide to move out like the rest of your friends. Housing is probably the biggest expense you will have out of anything in your entire life. If you are able to stay at home and avoid paying rent this will help you save anywhere from a couple hundred to 1000 plus dollars every month. Rely on your parents and support system as much as possible. It should not be considered taking advantage of your parents or living situations and getting your housing, car insurance, and phone bill paid for as long as you are actively trying to better yourself. If you have to move out make sure that you are doing it as frugally as possible. Move in with roommates, don’t splurge on unnecessary expenses such as cable and unnecessary subscription services.
Cut out all unnecessary expenses and stop eating out
One of the biggest ways people blow through money nowadays is through the use of many subscriptions services. You should really analyze what you subscribe to and make sure that you are getting ample use out of it and decided whether it is something that you really want and need. Being subscribed to 3-5 services could end up costing you anywhere from $200-$1000 every year. Another thing to watch out for is eating out at restaurants. If you live at home there is no reason you should be going out to eat multiple times every week and racking up big expenses. Even going out for just 3 meals a week(which is not very much for some people) will cost you in the realm of $30 and when you total that up over a year that’s an extra $1500 in expenses. I’m not saying that you have to live off of top ramen. In fact I thing part of the saving and wealth gaining process is enjoying life, but try to cook at home more and limit eating out. You will learn to make some extraordinary meals and hone a very important skill in the process.
You don’t have to be rich to start earning passive income. As soon as you possibly can you should be earning passive income. The easiest way to start earning passive income is through apps that you can download on your phone or computer and with zero investment! About a year ago I stumbled on some articles talking about apps that allow you to earn money just by installing them and possibly doing something once a month. At first I was skeptical, but upon further inspections it was all true and no catch 22s. Just search up making passive income from apps or be on the lookout for a coming article. Earning passive income is important because it will only add to your current income and won’t cause any stress from additional work.
No matter what percentage of your paycheck you plan on saving it is impossible to reach 100k if you do not start earning money. However this does not mean that I am recommending that you go out and get a job at McDonald’s so you can work your way up to 100k. Try your best to optimize what you are worth, if you have the option, find a job that pays you more per hour and allows you to work up through the company even if you don’t plan on staying there forever. The best thing that you can probably do is rather that going out and getting some brain-dead job, just start a small business. This doesn’t mean invest thousands of dollars and spend all the money you have saved into one idea, but try to start something small with a low start-up cost and barrier to entry. A Business as simple as picking up poop, mowing lawns, or helping out the elderly could earn anywhere from 20-60 dollars and hour and will teach you far more. By doing this you will be able to learn people skills, marketing, and how to best plan your time which will take you far past earning your first 100k.
If you implement a plan for saving 100k and realize that it will not come overnight then I have no doubt in my mind that you will have the success you are looking for. Once you reach 100k just remember that this is only the beginning and your ultimate goal should be a life where money isn’t an object and you don’t have to worry about certain events throwing you or your family’s life off course all because you didn’t have enough capital. Through all of this you will be learning how to effectively manage money and learning how to be rich. In the words of my favorite T.V. character Gustavo Fring, “You are a wealthy man now. And one must learn to be rich. To be poor, anyone can manage.”