Unlocking Financial Success: Challenge of $100k and Road to Easy $1M

Introduction 

Hello friends! You all know about Warren Buffett but do you know about his partner Charlie Munger? Charlie Munger was Warren Buffett’s partner and good friend and vice chairman of his Berkshire Hathaway company. Sometimes Warren Buffett and Charlie Munger conduct meetings for their shareholders. A question came from an audience member at an old shareholder meeting like this, The question is what should I do to invest and build my wealth? When Munger was asked how to do this, even though he had saved his hard-earned money, he couldn’t build great wealth, and this was his answer.

“First $100K is a bit*h but you have to do it. I don’t care what you have to do”. No matter how frugal you are or how much you spend, you need to save the first $100K to build your wealth. “After that, you can ease off the gas a little bit”. Now We’re going to know why that first $100k is so important to your personal finance journey. Also, we are going to know some valuable things shared by Charlie Munger.

1. The Mathematics Behind the First $100K

Many people think that they will never be able to save that first $100k when they hear the amount. They said, If I get more money then I will invest and they will give excuses and do not make any effort. Let’s look at a small example to understand why they don’t do this. If a person invests ten thousand rupees or 100$ in an index fund at 12 percent, It will take him almost 18 years to earn his first 100k. After earning this first $100K, they earn the next $100K within 5.5 years. After that, they earn the next $100K in 3.5 years.

2. Start Investing early even with less Income

This is why those first $100K can be so difficult, and this is why so many people quit halfway through. Because it is at this stage that many people try to increase their economy. For example, if you invest 10000 thousand and withdraw it with 100 times profit you will get only 20000. But when this investment journey of yours starts to exceed $100K only then your wealth will increase. But even with a 15 percent return on this $100K, we have a total of an extra $15,000.

That’s why, Charlie Munger said, to save that first $100K as quickly as you can. Because for a lot of people in this world, going from zero to $100K is much harder than going from $100K to $1M. So if you earn that first $100K at a young age, that money will be very important in your financial journey and you will see it grow. This is what we call the snowball effect or the power of compounding.

3. Make friends with Eminent dead

You have to save and invest to reach this first $100K. But are you going to take 18 years to reach that first 100k like the example we saw earlier, or are you going to take five or six years?  If you are smart you will learn a lot from others and know how to get on that path quickly. Charlie Munger says that if you can’t learn much from the people around you, read a lot of books. When you learn from those who have already achieved success in the field, you can achieve your goals faster without making mistakes.

He also says that it is not good to be jealous of others when they have gone to great places. Understand that if you want your income to increase, you need to develop your knowledge more. Whether it’s a book, audio, podcast, or video that you can learn from, find the good stuff and learn from it. Charlie Munger says that you are no different from the uneducated if you have not learned the essential useful things in this world.

4. Become an Independent Thinker

If you want to be successful in your life you must be an independent thinker. You won’t be an independent-thinking person if you listen to what others have to say and go along with it. That’s why I’m not saying you shouldn’t listen to what other people have to say, I’m saying take only the good things from what they said, And you decide for yourself. Only if you make your own decisions in your economy can you grow to a great extent. As you learn this type of information, collect and process it in your brain.

Then think and make up your mind otherwise you will just be listening to what other people are saying. In this way, you will start moving towards what others expect from you, thereby benefiting them. For example, if an insurance agent sells you a bad insurance plan and walks away, he gets a commission but you don’t. So become an independent thinker and decide for yourself what you need.

Conclusion

Usually, as many people say trading makes more money options make more money than this. But Usually, if you buy a good stock low and sell it high you will make a good profit. In the long term if you are confident that you can invest in a company that can perform well then you can invest liberally as the company grows and your profit increases. Many so-called stock market experts will try to sell you fake courses and strategies as many people don’t know how to make money with these simple things.

They will also charge money for managing your fund. So Charlie Munger says make simplicity your friend and take a simple idea and work hard on it. Because that simple approach has made him a billionaire. Our page can be a valuable investment in your self-improvement path. If there are any flaws in this then write it in the comment if you like this then share this post with your friends.