What it Means to Have $100000 in Savings - We Want Guac (2024)

2019 was a gangbusters year for me in reaching a $100k net worth. That took some doing to save up, and now I get to enjoy everything that comes with that. Since the beginning, I’ve known what it means to have $100000 in savings but never wrote it out in full. I’ve also noticed there aren’t many articles out there that discuss what having six figures means. I mean, it ain’t a million dollars so is it at all worth celebrating?

Dude. Of course it is. Six-figure wealth means you’ve got more money than roughly two thirds of the US population. If you’re looking at the net worth in your specific age group, the scales likely tip even further in your favor.

Via DQYDJ here.

Which puts you as one of the wealthiest people on the planet. Anyone would love to get a six-figure windfall solely for the breathing room it offers. You now have that breathing room through nothing else but your own hard work and intelligence. And if you’re still working towards those six digits, here’s what’s now yours for the keeping.

You Have an Incredible Amount of Security for Hard Times

2020 is good as an illustrative point, if nothing else. “Hard times” definitely covers a universal pandemic with wide-ranging health complications that also causes 20% of the workforce to lose their jobs. There are millions of folks out there now forced to weather a fierce storm with little – if any – warning. I could have easily been one of them as I started out in the exact same place they did. The only reason I am not experiencing the storm with them is through a mix of using my privilege for a good job title and a ridiculous amount of opportunity. But neither of these things are guaranteed long-term, and at some point I could find myself otherwise unemployed with no paycheck coming in.

Yet if that does to pass, I’d still be okay. Having $100000 in savings means I have roughly four years’ worth of spending money at my disposal if need be. If I choose to restructure my lifestyle to spend even less, that money stretches even further to cover half a decade. Having that security is an incredible comfort whenever I’m feeling anxious about the world at large. It also means most of my money worries have gone for good; there’s nothing left but calm when you run your investment numbers and know that money’s there for you. There is almost nothing that can knock you off your feet with that kind of backing behind you.

You’re Gaining Five Figures of Wealth Per Year, Minimum

So if times are bad, you know you’re covered. But when times are good, on the other hand, you’re literally rewarded for having that much money.

I actually have most of my net worth invested, which tops out at over six figures while generating growth and dividends in the index funds I’ve chosen. The average return of the overall stock market is ten percent, which I can reasonably expect to earn as well with said index funds. That means, on average, you’re growing your net worth by ten thousand dollars every 365 days. That’s how much money you’d get after a year working a $9.60/hour part-time job. Instead of trading twenty hours a week away, however, all you need to do for this ten grand is wait around for a year. Yes, really.

Keep in mind that the 10% figure is the average return; some years give you more, some years give you less. If it’s a year like 2019, you could see a $25,000 return with zero extra work. A year like 2018 could see $0. But overall? How could you miss it?

Best part of this is that the money you gain will start to generate money of its own. Thanks to compound interest, you’ll see that $10,000 you grew in Year 1 generate an extra thousand dollars in Year 2, along with another $10,000 on top of that. In less than five years you’d be 50% richer, all without lifting a finger.

It’s compound interest that enables the rich to keep getting richer, which you are now a part of thanks to $100k in savings (that is an affiliate link). Given enough time, that will grow to seven figures without any further tweaks on your end. It’s a one-and-done deal that secures your retirement future… or most futures, for that matter.

Your Financial Skillset Can Be Deployed for Other Goals

All that optimization you’ve learned how to do will leave you with bundles of cash you can put towards whatever else you want. It’s a big deal!! I wouldn’t go gallivanting off to spend your new $100k savings, as it will work hard for you while also shielding you from hard times. But hey, if you could save that much money you’ve got some serious skill with far-reaching influence.

Let’s say you’ve managed to save at least $10,000 a year for easy math. At that rate, and assuming it’s grown by 10% each year, you would have needed seven years to raise that much. That means you had the discipline to keep grinding and budgeting instead of just spending it. You were also a good planner for both investing it properly and keeping your expenses low enough to allow for the growth. Anyone with discipline, planning, and a goal they know how to hit is freaking unstoppable. Ain’t no way I’m betting against you, and there won’t be many that will.

Because dang, you’re a rockstar who knows how to prepare for opportunity. The world is now open for you to explore. You’ve grown your power, and you can do so much more than last year’s you. Before I know it you’ll have raised a sh*tload of money for charity, or became the next biggest business investor or checkers champion or something. Having endless options in your life is what it means to have $100000 in savings. You can pursue whatever it is you particularly want out of life and, better yet, be poised to achieve it. Whew!

You’ve Got a Confidence Boost Only $100k Savings Will Buy

The reigning queens at Bitches Get Riches are quick to remind you we live in an oppressive capitalistic hellscape. Remembering that is massively important, as is how much it tends to be disgustingly unfair to folks below a certain socioeconomic threshold. There’s also plenty of weird dynamics happening behind the scenes to keep those folks financially illiterate and encouraged to be mindless consumers.

And yet, there’s you. A person that’s balked against the status quo and boosted your networth into six-figure territory. Face it, you’ve got the same skill sets as the greatest people in history do. A person who is also going to just keep getting more powerful with the passage of time, not less. Nobody knows what you’ll do next, but they do know it’s going to be hella impressive.

And that’s a massive confidence boost, knowing your worth and having that reflected a little by cold hard cash. You’re proud of your achievement and justified in feeling so! Because that’s amazing and you’re amazing! What an incredible victory that you’ve reached despite all the odds. It’s a victory that will protect you and keep paying you dividends the rest of your life. There isn’t much that’s better than that.

You’re That Much Closer to Becoming a Millionaire

I touched on this in a previous post, but what having $100000 in savings means is having a proven track record for generating wealth. Since you have the seed funding and the skillset to properly deploy it, it’s literally only a matter of time before you have a million dollars.

If I keep that money invested, I’ll be a millionaire when I’m fifty years old with a 10% return. If I keep that money invested while maintaining my current savings rate, it’ll happen before I’m forty. And if I add a side hustle on top of that? I’m a millionaire within the next decade.

Anyone else with $100000 in savings is in the same boat I am with that. Whether there’s storms up ahead or some awesome weather, you’ve got a co*cktail on the beach waiting for you either way.