Happy Friday! In today’s email:

• Getting To $100,000 is HUGE in Investing

• Stock Market Recap For The Week (Week return as of Friday, October 10th)

  • S&P 500 = +0.74%

  • Nasdaq = +1.12%

  • Dow Jones = +0.39%

Why $100,000 is so HUGE

When talking about the first $100,000 invested, Charlie Munger said “It’s a b*tch, but you gotta do it'“.

I know what it is like grinding for your first $100,000 invested. It feels like you are doing all the heavy lifting (because you kinda are… more on this later). But, if you stick with it, beautiful things can happen to your money. Every $100,000 after that gets progressively easier… until your returns in the market are eventually $100,000 🤯

Let me explain…

Who is Charlie Munger & why should I care?

Charlie Munger was the right hand man to Warren Buffett (you have probably heard of that guy, right?). Worth over $2,000,000,000 (that’s billion) at the time of his death, he gave good advice on long term investing, building wealth & all things money. He is famous for the quote at the top of this newsletter, saying the first $100,000 invested “is a b*tch, but you gotta do it”.

When looking at returns in the market, the MORE you have invested, the GREATER your returns will be (in terms of dollar value). Sounds simple, right?

If we assume a 10% return, someone who has $200,000 invested will return more money than someone with $20,000 invested. It is just percents.

$20,000 × 10% = $2,000 return

$200,000 × 10% = $20,000 return

The person with MORE invested, has GREATER returns, in terms of dollar value. So when you are on your journey of your first $100,000 invested, you are pretty much doing all the work. Compounding is happening, just on a smaller scale. BUT if you stick with it & keep investing (I hope you will), beautiful things can happen. Look at this:

In this tweet, it takes 10 years to get $100,000 invested if you were to add $500/month. P.S. this is where most people quit because “what is the point of investing”

But, if you stick with it, it would take HALF THE TIME to get from $100,000 to $200,000. Speeding up!!

If you keep sticking with it, to go from $900,000 to $1,000,000 it would only take ONE YEAR. So when people say the first $100,000 is the hardest, it is. But don’t give up. Don’t quit. If you stick with it, the next $100,000 takes less time. The next $100,000 takes even less time.

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That’s it for the newsletter this week!

I will see you next Friday!

— Kolin