Summary: Some say that hitting your first million in net worth is harder than hitting subsequent million-dollar milestones. This post examines whether or not this is true.
Ever hear the quote “the first million is the hardest” (meaning the first $1 million in net worth is the hardest to achieve)?
Is it true? And if so, why?
Today we’ll discuss this topic and uncover why I believe it is true.
The First Million and Google
Whenever you want to know something the first place you stop is Google, right?
So I typed “the first million is the hardest” into the top search engine and got the following as the first three results:
Article #1: The psychological reasons why earning your first million is the hardest
You have probably heard the expression “the first million is the hardest to earn.” That statement is absolutely true. The first million dollars you earn is by far the hardest million dollars to make. Most people believe earning their first million is the hardest because they start with nothing, while subsequent millions build on the previous.
Article #2: Why The First $1 Million Is The Hardest
One of the reasons that the first $1 million is so hard is that it is such a large amount of money relative to where most people begin. To go from $500,000 in assets to $1 million requires a 100% return – a level of performance very hard to achieve in less than six years. To go from $1 million to $2 million likewise requires 100% growth, but the next million after that requires only 50% growth (and then 33% and so on…).
Article #3: Why is “the first million the hardest”?
Mathematically, $1MM is a 100000000% increase over a base of $1, but $2MM in only a 100% increase over $1MM – much easier. With compounding interest, gaining further millions is just a matter of patience.
Money makes money, and money made from money is taxed at a much lower rate than money made from work. With a million dollars, you don’t even need to work to make the next million. You just need to invest prudently, hope the economy doesn’t collapse, and wait patiently. Making that first million sounds pretty dang hard by comparison.
Why the First Million is the Hardest
Let’s pull all the above together and summarize what they say. The first million is the hardest because:
- You are starting low — maybe at $0. So you need to create some money before your money starts working for you in any meaningful way.
- Once you get a sizable amount (like the first million) now you are adding to it by your actions PLUS your money itself is adding to your fortune through compounding, making it much easier to get to $2 million.
My First Million was Certainly the Hardest
I didn’t realize just how true this saying was in my life until I opened up Quicken and looked at the numbers.
Here’s the amount of time it took me to reach various stages:
- $1 million net worth — 19 years, 3 months
- $2 million net worth — 4 years, 9 months
- $3 million net worth — 2 years, 8 months
- $4 million net worth — Not there yet and likely won’t get there since I just retired. That said, if I 1) added in the increased value of my properties and 2) kept working I’d very likely beat 2 years, 8 months!
So you see the old adage is true for me. The first million was the hardest, the second was next hardest, and so on.
Here are the major milestones that hit during each of these times:
- $1 million net worth — We were just starting out. My salary was at its lowest point and I had no additional sources of income. I had to pay off $5k college debt, $20k I borrowed on a car out of grad school (the last time I borrowed to buy a car), and ultimately our mortgage. We also had all the expenses of starting a family.
- $2 million net worth — This period started off with a bang, then hit the 2008/2009 market crash. During this time I invested lots of extra cash into the stock market which then came roaring back. I bought our rental properties near end of this time.
- $3 million net worth — These were peak earning years and we were saving/investing massive amounts because we hadn’t increased our standard of living/spending much. In addition our rental real estate got up to full speed and started earning sizable amounts of income.
I know there are at least a few, if not several, ESI Money readers who have at least $2 million in net worth.
If you’re willing to share how long it took you to make it to each $1 million level, that would be great.
It will be interesting to see if the principle held true in your lives as well.
And for those of you looking to hit your first million, here are the steps I’d take today if I was younger and trying for $1 million or more.
ESI follower says
I followed ESI (different blog) when the market was down, it was amazing to see how you stuck to your guns and kept investing and it paid off. You walked the walk!
Here’s mine, I don’t follow as closely by you (not each month):
-January 2010 about 1.1M (approx 8.5 career yrs to reach, post university)
-January 2013 about 2.1M
-July 2014 about 3M
-July 2016 about 4M
You are on a roll!!!!!
Jon @ Be Net Worthy says
Great post! I was actually thinking of writing something similar. I started hearing this phrase at the end of b-school and I remember thinking, the FIRST million, holy cow, if I could ever even get to that level I would be happy! Obviously, I had not really dived into personal finance at that point and was oblivious.
I would say it took around 22 years from undergrad for the first and we are on track to hit the second around 5 years after that.
I like to think of it like a factory too. It’s tough to make that first widget. But, once you have a proven process in place that can make one widget, the second is much easier, right? I think it’s the same thing with money. You need to earn more than you spend, you need to be able to invest properly and you need to be able to do so at an acceptable level for a period of time. After you’ve been able to prove that you can do that once (e.g. made one million), then doing it again is much easier.
SBDad @ Small Budget Blog says
I’m not quite to my first million, but I’m on track to be there in about 4 years. I’ll be 40.
As things look right now, I can’t say I’ll have the best “money making factory” at that point to generate the next million. It will mostly be made up of our house unfortunately. Which will be debt free, but obviously won’t be generating any more cash.
What advice would you or your readers on the allocation of assets that builds a good factory to set us up for the second million?
Stocks, bonds, rentals, P2P?
I’m trying to think a few steps ahead. I don’t want to get to the first million and have to allocate the whole thing and face potential tax consequences.
For me it was a couple of things:
1. Growing my career/income and having a high savings rate. I saved/invested a TON of money every year.
2. Index funds. This was my mainstay for many, many years. It wasn’t until I began to look more for income that I got into P2P lending and real estate.
If I had to do it over again, I think I would have started with real estate earlier but it seems so high now that I can’t recommend it 100% at the moment.
So my thoughts would be to plow it into index funds.
What do others think?
What makes something expensive ?
Usually we fall back to relative value to recent history. If something has been going up compared to the last 5 years it starts to feel expensive. Relatively speaking it is. But value is not really relative. I made that mistake even 5 years ago passing on things that were better but more expensive than a couple years earlier. You can’t know where a market is headed for sure. Thus I try to assess value in terms of its long term prospects.
Real estate was at 50 year lows 8 years ago. So now it feels expensive. I cant know where it will be 5 years from now but with pent up demand for new househd formations and new building of single family homes still at levels only seen in previous recessions over the last 50 years I would be willing to bet that any real estate purchase delayed will be a regret 5 years later. I suspect that will be true for a while yet.
Econ 101 looks to me like a low supply environment is being created that cannot be worked off quickly.
No one knows what the future holds. I don’t know and you don’t know.
But IMO, it’s expensive in my market, so I’m not making any buys.
Will I regret it? probably not. Since I don’t need the income (or at least any more) there’s no need to risk it.
YMMV, but I’m sticking with what has gotten me this far…
When you say “a TON of money”, what yearly amount are you referring to? $10,000? $50,000? $100,000?
I ask because each person’s idea of “a TON of money” is different. Thanks!
Over the life of my career? I saved at least hundreds of thousands of dollars…
For me – it was 50% of gross income invested each year – the remainder went to taxes, living, playing…
When you say real estate, are you referring to yourself owning the property, private reits, or p2p real estate lending? The later two can take advantage of cheaper markets.
Rental real estate that I own.
Follow the links above and they’ll lead you to posts that tell about what I’m up to with RE.
I understand there are other RE investment options, but aren’t any with the cash flow I’m looking for and that I’m willing to manage other than owning/renting.
Jon P says
I think that is spot on and would add a few things:
-Most of us start out with limited earning capacity, unless you go into something like the medical profession, but even those professions are normally accompanied by large student loans balances.
-One strategy that worked for my wife and I early in our marriage, was a focus on reducing one of the biggest expenses- housing- and at the same time, learning the about the rental business. Short of living with your parents rent free, if they let you, you either have a rent payment, or the associated costs of home ownership (mortgage, taxes, insurance, maintenance & upkeep). We decided to buy a duplex, rent out one side of the house and live in the other. I would be happy to go into the detailed math if someone wanted, but in summary, our cash out of pocket each month to pay the mortgage, taxes and insurance was about $200. Not only did we have a nice place to live, for a fraction of what an equivalent apartment would have cost in cash out of pocket, but our tenants paid our mortgage every month. I am sure there will be people who have had bad experiences in the rental business, ours certainly wasn’t always fairytales and rainbows, but building wealth and learning a business is not easy.
-Adding to the Apex comment- real estate has certainly gone up, but it doesn’t mean it is too high and necessarily expensive. We have helped friends work through this same thought process recently, when they were shying away from buying another double. They bought their first double in Buffalo, NY about 7-8 years ago and since then, prices for similar properties have more than doubled. However, rents in the area, including their own, have gone up similar percentages as property prices. Therefore, the prices are higher, but value is the same.
I realize there are many different real estate markets across the country and this won’t work everywhere, but where it does, it’s certainly a way for a young person starting out, to kick start the process of building wealth on their way to financial independence.
It not only helped kickstart our situation, but as ESI advocates, grow our careers/ income because it afforded us flexibility early on to make better career decisions.
My wife and I are both 34 and although we are not to a million dollar net worth yet, with our high savings rate, I hope to cross the mark in the next year or two. When I do, maybe I’ll reach out ESI to share more.
Thank you for such a good perspective. I was wondering what did you use as the beginning demarcation point to calculate the 19 years or 22 years. Unfortunately for me, I did not start paying attention until later in life (which is a topic on itself. How to teach my kids to think finance from early on.). Fortunately, it did not take me long to make my first. I had not put any thought about making my second, but thanks. Now I have something to target, I did not have a real reason to invest.
I started counting from the time I left graduate school and had my first “real” job.
I’d add the first 100K is the hardest! It felt like it took us forever to get past that, paying off my wife’s school loans and living in an expensive city. But we fully funded our roths, started setting aside money for a home, and got there. So that took 12 years (we met ~ year 2, and dated for 8 years before getting married, she was mostly in school and I was working). That milestone was 5 years ago. I’d estimate we’re 3 years from the first million. It will have taken us 20 years including time in school (starting ~18 years old). So to sum up: 12 years to get 100K, 8 years to get the next 900K… but obviously income / jobs / time off for school factor heavily in all of that.
Good for you! I’ll be looking forward to hearing when you hit $1 million!
J. Money says
I feel like this is the fist time you’ve shared solid numbers like that?
I’ll have to tell you how long it took once I hit that first Milly (does half-a-milly count? if so – took my 9 years), but me thinks I’m going to politely copy another idea from you and do the $100,000 version for us up and comers 🙂
So thanks again for another fun idea! (And congrats on the multi-million status too, of course… Reminds me of that tweet where Drake talked about how hard the 1st million was and then T Boone Pickens came back with “the first billion is hardest” – BAM!)
Yes, it probably is the first time. Can I get on your bloggers net worth list now? 🙂
I’ll look forward to your $100k post. I’ll have to look back and see when I hit that mark and leave my comment.
LOVE the TBP quote!!! ha!!!
My first million was pretty difficult since I never had high earnings (averaging about 50-60k$ after college and was living in San Francisco for my first job.
I had one of those “mad as hell and I’m not going to take it anymore” moments on the Golden Gate Bridge and decided to move to the Midwest so I could pursue my dream of owning residential income properties.
From the time I graduated college to first million was 15 years.
2nd million was 9 years and the third will easily be in 5 to 6 due to real estate portfolio that has all my tenants paying all my bills and mortgages.
No regrets on living in an expensive city for three after college. It was a blast but it sure set me back financially!
Funny thing is I’m not focused on high w-2 or 1099 earnings anymore and devote all my energy to higher passive earnings.
The tax arbitrage of reinvesimg tax savings into tax favored real estate is huge.
Here’s my summary. 20 years out of college for first million. 3 more years for second million. Both big jumps due to an all-in equity strategy after side-stepping the 2000-2 bear. Lost $1.2 million in 16 months somewhere in there over the next two years. Been white-knuckling it ever since, 90% in fixed and content with blended 3-4% increases on top of living expenses. This includes my wonderful wife’s efforts, and a paid-off residence.
I’m only at 1.8 million, but the 1st million took 15 years. If I stay the course, the 2nd million should be here in 2 more years, for a total of 6 years. Looking forward to the 3rd million taking hopefully less than 6 years!
2nd million took less time than the two years I had anticipated. It took only a little less than a year since I wrote that comment above, for total of 5 years for the 2nd million! And I’m already 10% of the way to my 3rd million. The snowball is really gaining speed.
Mike H says
It took me 11 years to get to my first million.
3 years after that to my 2nd million
3 years after that to the 3rd million
That was 3 years ago so I could be on my 4th million already however I invested a healthy amount in a non-liquid start up that could either pay off or become a lost investment so I’m not counting it my net worth so I’m really not there yet.
I tend to focus more on the cash flow being generated out of my investments as that is what will help me retire, not the net worth number.
Very insightful post. Thanks for sharing your numbers. I’m on track to hit $1M this year, 20 years after college.
Reading comments and seeing #’s like this as I work towards my first million has given me really affirmed what I’ve been believing in for the last 1-2 years. +1 for what George said that the first 100k was the hardest, that really resonated with me as I reflect on how my net worth has grown. It took 3.5 years after starting my first “real job” to have a 100k net worth (thanks Personal Capital). My net worth was going up before then but I was only working part time and progress was slow. The next 100k only took 1 year and 8 months. The 3rd 100k will take even less time. When I ran the numbers I was fascinated to see how the million dollar-level concepts apply to the smaller amounts/scale and I’m excited to see how quickly I should have the first million. Really looking forward to the multiples thereafter too. Thanks ESI, and the rest of the commenters who already saved millions, for sharing your details.
General question for anyone out there, what were the main drivers for the exponential growth in your net worth? Did you experience tremendous salary growth in your career that fed your net worth or was it more a blend of moderate/steady salary growth and investments compounding? At what point did compounding become the main driver and start to outperform the gains from your day job?
For me, my NW growth has been fueled by salary increases through raises and promotions as I’m 5.5 years into my working career. I’m building towards the day when my investment gains really start feeding themselves.
Mike H says
Indeed. Charley Munger said at a talk that the first 100K is a b*tch but you have to just do what it takes to get there. At that point you have some healthy seed capital to make a hopefully wise investment, and it only gets easier from there.
For me, my NW is approximately half savings, half investment returns. My thought is to keep separate, so you truly know what your investment returns are and can compare to a benchmark. Time and steady savings, especially in the first decades, are the driver. Know how much of your NW is made up of savings.
See above for my two drivers. It was salary/savings mostly at the beginning and then growth from investments really kicked in.
I went back to look at how long it took me to get to each $100k mark and it was quite interesting:
$100k — 6 years, 8 months
$200k — 6 months
$300k — 1 year, 9 months
$400k — 1 year, 10 months
$500k — 11 months
$600k — 1 year, 9 months
$700k — 1 year, 7 months
$800k — 6 months
$900k — 1 year
$1MM — 1 year, 1 month
I could be off a bit based on how I counted months, but it’s close enough.
What a roller coaster ride!!!
I find it amazing how long it takes for the first million vs subsequent millions. Getting from 1-2 mil in only a few yrs for most and even less time for 3-4. Despite all the gloom and doom we are very lucky to be living during this time…just stick to the plan and you are almost guaranteed great results. Very inspiring post. Thanks.
Age 34: $392k
Age 35: $410k
Age 36: $530k
Age 37: $684k
Age 38: $842k
Age 39: $1 million
Still working on the first. 35, about 12 years into the career out of grad school and about 75% there.
No doubt that working hard and building a fondation out of the gate, and more importantly, building the habits, early in your life makes a huge difference. Honestly reading your other blog in my mid 20s gave me a lot of the logical money skills needed to do that.
So humbling and gives hope. Thanks and good luck everyone.
ESI & others, Can you pls tell what this Networth constitutes. I assume its investable money both in retirement and taxable account, across you and your spouse. In that sense, I assume it doesn’t account the house value (the living home, not the rentals), car’s value etc. Also can you pls clarify if it included the College 529 amount? I believe the first 100K and so probably didn’t have this college/529 saving differentiation, as you age and your kids went college, the amount you paid is just taken as expense and as seen in time taken from 2MM to 3MM or so. Am I in same page. Thanks
Here’s what I count in net worth:
Basically it’s all assets less all liabilities.
I do include the value of my home as it’s an asset.
I actually list the 529 accounts as assets but have corresponding liabilities equal to them so they net out at zero. It’s a bit geeky, but I was an accounting major for some time as an undergrad. 🙂
I also take depreciation off my cars monthly and have them all fully depreciated after three years (which is conservative, I know).
Awesome post, and it seems to be the common experience for many. I had never tracked my net worth until I started using Mint this year. Say what you will about that tool, but seeing an updated snapshot of my net worth has changed everything and I’m now aggressively trying to build it.
Working on the second million, gave up on the first million, it was too hard. :>)
Old Fi/RE at 53, now 58.
Dripping CEF, Reits, BDC’s, assorted growth dividend co.’s that are on track to double every 8 years.
The Green Swan says
Very interesting post and it was fun to read all the comments as well! For me, it took just under 10 years to reach the $1 million mark which I just reached earlier in 2016. So starting on my second million now, but hoping to reach it in 4-5 years and if all goes to plan I’ll reach my third about 3 years after that. Still a long ways to go, but plugging away and working hard at it.
I am still working on my first million. I have a plan to save $XXX each year so that in 2020 I’ll officially be a millionaire (at 57). Each year I find it easier to make my annual quota. It’s the same reason as stated in the post….Each year my saved money works harder to earn more towards the goal!!!!
Don’t have solid numbers, had a notebook that I keep education tabs in for a while.
1992 started working and saving. It was likely 1996 by the time we had our heads above water. Like many have said the effort to get to 100k was about as hard as reaching 1000k from there. That first 100k of equitable investments comes at the same time as buying a house, buying cars and having babies. Just as the ball gets rolling 9-11 happens and markets tank. There was little help from the stock market for nearly a decade, you continue to invest what you can with the hope that it will recover some day. Luckily it did, and it did rapidly, so if you didn’t sacrifice and invest all those hard years, you have little opportunity to take advantage of the recovery. We did what we could, my wife was without work for over two years at the height of the financial crisis. Now we’re investing machines. No debt, two good incomes and a big sum of investments powering forward with us, the first million as our wingman. We’re racing to the second million nearly effortlessly. Not sure where we’ll stop and retire. I’m thinking no later than 2020 or when we hit 2 million. With 2 million I think we can draw all we need and still watch it grow some as well. I don’t include real estate, cars, boats, or …in the timeline except when they were debt early on.
So estimated time line:
1992 $ -150k
1996 $ + 0
1998 $ +100k
2000 $ +250k
2001 $ +150k
2010 $ +500k
2013 $ +1000k
2016 $ +1500k
Xyz from Financial Path. says
Great post as always, I can’t wait for my first million! According to my diligent planning, I should get there in 10 years but we never know what could happen…
$1 mm 15 years
$2 mm 2 years
$3 mm 1 year
$4 mm 1 year
$5 mm 2 years
$6 mm 1.5 years
$7 mm 1 year
holy cow. how did you do that?
I’d love to know the same, even though it’s unlikely to be replicable. 🙂
i think in terms of earned income the next million can be made in 75% of the time, assuming wage increase & promotions etc. but the key difference is in the unearned income – a major part of that comes from the earlier million & that makes a big difference. i just realised that our household unearned income is very close to surpassing the earned income – hopefully that would help aid early retirement 🙂
Could be inflation plays a role too. That second million might be worth only $900k in first-million dollars. But I think you nailed the main reason: leveraging the first million to generate cash means the second million is easier. Takes money to make money, right?
Physician On FIRE says
Watching the net worth growth accelerate is addicting! It’s hard not to have One More Year Syndrome when you could add another million every 2-3 years.
I understand the concept of Enough and all that, which is why I won’t be working indefinitely. I had a particularly sleepless 24-hour shift yesterday and slept the morning away today. I’m not interested in doing That year in and year out.
When a decent year’s market returns can be expected to add as much to the personal bottom line as the job, work is definitely optional.
ZJ Thorne says
I’m deeply negative right now, but I have hope. I did not have an IRA until last September. This September, there was $10,000 in my IRA. I still have debt to work on, but I am on the right track.
Jim Wang says
I love this discussion, interesting to see all the trendlines of folks’ NW, to add mine… it took me 5 years of working to reach $1mm. It was a mix of side business income, W2, and investment performance that put me over the top.
Ten Factorial Rocks says
I have similar results as you report ESI. The first million was definitely the hardest and longest – felt like forever! It’s interesting to see how compounding accelerates afterwards. Benign capital markets provide the tailwind, would take longer during prolonged bear markets.
Great post, very motivating! I haven’t quite made it to my first million yet, but I’m hoping to get there in 5 years (I’m a little more than halfway there). I contribute as much in my 401K as I can (I am limited by the IRS’ highly compensated employee laws), save about 40% in after tax income, own my condo and have one other rental property. I’ve recently started a blog and hope that in a few years I can start bringing in a little side income. I love watching my net worth grow over time, it is addicting as someone said above.
I’m late to the party.
But first $1 million 14 years 10 months post college and at age 36.
That was 1 year 7 months ago and I’m now at $1.135. My salary grew rapidly the first 4 years of my career and has grown at a steady but slower pace over the last 12 which is normal for my career path. I expect that I would have been there slightly faster but I started my career (first 8 years) in the HCOL NYC area and made some money mistakes early on.
I’m guessing I’ll reach $2 million in less than 10 years from the first million; unless I downshift my life and become a National Park Bum tomorrow.
12 yrs $1.4 m
1 yr $6.0 m
2 yrs $3.0 m
4 yrs $8.3 m (quit job)
2 yrs $5.0 m (financial crisis)
7 yrs $11.8 m (grinding out passive income)
Along the way, had a chance at $150 m but played too conservatively.
I just started reading your blog and our paths to independence are very, very, similar on a number of fronts. I did not pursue a graduate degree. Instead, entered the Technology Field with a BBA in Finance allowing me to quickly move up the leadership/executive ranks over my 30+ year career. It’s about wearing on me though and I’m ready to trade money for time to enjoy other interests.
I’m 53, have 2 kids a wife of 30+ years, living in the Midwest. Wife raised kids and worked a part time job to make her mad money. Son graduates college in May. Daughter is married in July. Kids public college education paid fully through 529 plans. My personal goal is to make it to 1/1/2020 to retire from corporate America @ 56 if I can make it that long as I see the light at the end of the tunnel and get anxious.
Our Networth Growth History looks like this and very similar to many others that I have read through on the comments.
First $1M took us 19 years 10 months.
to move to $2M was 6 years 11 months.
We are currently @ ~2.7M which has taken 3 years 11 months.
No debt with home valued at ~$500K and investable assets @ ~$500K (Taxable); ~1.35M (non-taxable; IRA/401K) and ~$300K (Cash), rest of NW in car value, small HSA and what will remain in 529 post college expenses.
Paulie @ droppedcoin says
Great post, made me look back at my own progress. I too am not yet a millionaire but it is just a question of time…
$0k – Approx Jan 2011
$100k – July 2012 (19 months)
$200k – April 2013 (9 months)
$300k – Feb 2014 (10 months)
$400k – May 2015 (15 months)
$500k – est. Dec 2017 (~31 months)
I have stalled somewhat lately because:
– I took a sabbatical year from work
– Many of my investments are based in the UK, and sterling has collapsed
On the plus side, if I can get back on track I can expect to hit 7 figures within approx. 5 years!
Live Free MD says
Well, let’s see. It took me 13 years post college just to get to a net worth of zero. I surpassed 100K a year later. Still nowhere near 1 million, but trying to save aggressively to make up for lost time. Early saving (i.e. in your 20s) is one of the most powerful forces for building wealth.
mario stellino says
I am new to your post .
But to me my more interesting question is :
How do you retire with 3 million at 52 ?
What kind of cash flow do you expect to have ( unless you continue to invest) ?
Do you have a link or a blog that talks about that ?
By the way I am 56 and have the 3 mil ( and retired )
and in case you are interested in my feed back …I was taken by your description of your life style after retirement …it seems that we like to do much of the same things with our plentiful free time .
Here is a post that gives most of the details:
The short answer is that I bought lots of real estate years ago:
If you’d like to do a millionaire interview, send me an email — we’d love to have you!
Here’s where you can find them to see what they are like:
Just got here from an online article. I think of all the early retirement blogs yours is the most realistic and close to where I might end up. I am 38 and and $1.7 million now and I think I just hit $1 million less than a couple of years ago (about 14 yrs into my first job). Certainly the first million is the hardest, especially if you run into a Great Recession along the way. I think I got to $100K in about 3-4 years based on my then savings rate of about $25K/year and I think that is easily doable for most people. My spending is limited so I could probably retire but I enjoy what I do, go in to work around 11am most days, get 5+ weeks of vacation and not sure what I would do otherwise. I see that you invest similar to me in a lot of income producing assets. Part of the reason I do that is so I can step away from my job at any time and have an income. Over the years however I am seeing the wisdom in Warren Buffett’s advice to invest in tax advantaged assets. I wonder if that makes a significant difference in overall returns.
Welcome! I hope to hear more from you and appreciate your perspective.
Wow. Just found this site and would love to be doing what you’re doing right now. My viewpoint toward retirement matches up almost exactly.
I finally hit 1 million at the end of 2016. The first 100k took about 6 years. My wife quit work to stay home with our kids so the ramp up to 1 million might be longer than others but it was something like
5 more yrs to 200k
6 more yrs to 400k (includes the financial crisis)
4 more years to 800k
2 more years to 1000k
Good for you! You’re on the way!!!!!!
Rachel M says
Glad to report my husband and I are at $3.6M. We were at dinner with friends (who knew a bit about our FIRE goals) when we dropped the first million quote. You could have heard a pin drop. But, it is so true. My dearest keeps detailed financial tracking so we are going to look at how long the first took. I do know the second and third were not nearly as painful. Thanks for sharing.
Rachel M says
My husband and I looked up our stats. The quick and dirty: first million was reached in March 2010 (15 years after graduating college). The second in September 2013. The third in November 2015. We don’t count our house (which is paid off). Proof the the magic doubling penny is AMAZING.
The first Million is definitely the hardest as for me it was the following:
1M – 19 Years
2M – 2.5 Years
3M – 2.1 Years
4M – 20 Months
5M – 7 Months
6M – 13 Months
7M – 8 Months
8M – 15 Month
The combination of starting my own business and realizing that self investing was not my core strength were two of the keys to help propel the grow and at 46.5 a neat feeling to have financial security but my “magic number” is 10M so still still a ways go 🙂
Love the blog, keep up the great work
My Own Advisor says
We hit $1 million net worth (Canadian) after 18 years of full time work. Age 40.
Now 43, just hit $1.25 M net worth excluding home equity.
I’m confident if we keep saving, investing and working hard we’ll hit $2 M by age 50.
Cool inspirational site.
There is definitely some wiggle room about where you start counting. I think I’m going to go ahead and start counting when I got married. Adding a spouse increased expenses but also income, is more representative of my household earning power, and is the expected state of affairs for the foreseeable future 🙂
Also many people graduate from college with debt, so they don’t even start with $1, they start negative and have to climb out of that hole.
Anyways, counting from when I got married, it took us 10 years 9 months to get to $1 million, then it took us only 3 years 7 months to get the second million. $3 million is in the future so who knows when we would hit that, but, if I had to guess I would say it’s a little over 3 years after we hit $2m.
One thing I notice from that is that as the time deltas get smaller, the absolute (vs relative) difference in the time frames gets smaller, shaving a few months per million.
I wasted the first 10 years after college basically spending…not saving.
I started saving and investing at age 33…had my first million by 37/38.
I had my second million by 40. And I am just short of 2.5M at 41.5…will reach that by 42 for sure (so 9 years total).
With a 60% savings rate and $900K of unvested stock forthcoming I should reach 4.0M before 45…so another 1.5M in 2-3 years.
I guess the first million is the hardest.
Here is how fast money grows…I just looked and realized I am at $2.8M now so here is an update…
I wasted the first 10 years after college basically spending…not saving.
I started saving and investing at age 33…had my first million by 37/38.
I had my second million by 40. And I am just short of 3M at 41.5…will reach that by 42 for sure (so 9 years total).
With a 60% savings rate and $900K of unvested stock forthcoming I will reach 4.0M before 45… in 2-3 years. So that is 4M+ in 12 years.
I guess the first million is the hardest.
I came to your blog via Dr. PhysicianonFIRE and enjoying reading about how you went about gaining financial indepence and enjoying retirement.
I am new to the tracking of my assets and kick myself in the butt for not putting anything into my 401k in the first 4 years of having access to one. I just got all of my accounts linked up on Personal Capital and was pleasantly surprised to see that our net worth is just a bit over 1.265M. I can guess on the first million as being somewhere in the 15 year range. Staying on our current path puts us at 2M in the next 6-7 years.
Since I’m finally paying attention to this money stuff now, I plan on opening up a taxable account now and funding it with part of the 200k in cash and 200k in company stock that we have. I was lucky that my wife has awesome grandparents that gave her a leg up and she came into the marriage with significant assets as a 27 year old.
Keep up the writing as I like to read.
Jeff B. says
We got married in 1999 and started a bit with a negative net worth….should easily hit $5M net year.
Wow. Huge jump in 6 months from 6/30/2013 to 12/31/2013. Did you find a bag full of cash on the side of the road? 🙂
Jeff B. says
I think that is where we moved money from Chase to Vanguard at the end of 2013. Quicken doesn’t always keep the best historical records.
Lily | The Frugal Gene says
I consider our first million as easy because it was by accident. But the time frames sounds about right. We’re in a similar boat as The Green Swan above.
My husband didn’t track his first $100k but it probably took him 2-3 years post college to reach $100K and 4 years for the rest of that $900k. Our first million took 7 years to reach with very little self awareness (although we’re both to have documented the official crossover.)
I’m his little money bookkeeper so I should know 😉 Do you mind if I write a follow up inspo to this?
The money snowball is hypnotic. I’m hoping the 2nd million will take 4 years, 3 years if the market is good.
Write away! 😉
Me and my wife just crossed the 1m threshold earlier this year at age 45 and 43. We are a little different than most, me being a high school drop out, now the owner of a small construction business and my wife as an at home daycare provider. Over 80% of our NW is in our primary residence and only started investing in retirement a few years ago. I am determined and hopeful to reach the 3m goal by age 60 with heavy retirement investing along with building another custom home (out of pocket) for our retirement home. Then, sell our current house and purchase 4 rental house. This along with a roughly 1m retirement account should provide us with a 100k sustainable income.
1994 = -$2K (graduated college with 2K debt)
2007 = $1M
2013 = $2M
2016 = $3M
My first (3) $1M milestones took half the time each time. 13 years, 6 years, 3 years. Next milestone was not 18 months so trend ended. I should hit $4M in 2018 so looking to be a 2 year time frame (close).
Peter Miller says
I will provide a little different angle: I finished college in 2000 with a lot of debt. I saved nothing until 2008. It took me 6 years after that to reach $1m. After 1.5 years I reached $2m. It took me 2.5 years to reach $3m, where I am now. My main factors were:
-I lost about $100k in real estate
-I started gambling in the stock market in 2008 and made quite a bit of money
-I have been living overseas since 2008 and saving a lot
-I have lived tax free for 1.5 years and my maximum effective tax rate the last 8 years has been 16% with an average of 12% (excepting tax free years).
Guy from Park City says
Your article is encouraging me to retire. The point that resonates the most is to continue to live below your means as your income raises. Using your definitions our Net Worth accumulation time line was something like this:
$1M 32 years (from college grad)
$2M 8 years
$3M 4 years
$4M 1 year
It is tempting to keep working in these high income years but life is short and I desire a more purposeful existence.
Lingyun Xu says
When you published this article, I saved it into my Kindle. Since then, I read it from time to time. I track our net worth every month. It is funny it took exact 4 years and 9 months to reach $2M milestone.
That’s awesome! Congrats!