Why the first £100,000 is so hard (and the next is easy)

Charlie Munger famously once said how hard the first $100,000 dollars is to get hold of, but why you should do everything in your power to get it. In this video I am discussing why this is and why the next 100,000 is much easier.
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Hi there! My name is Tom Morgan, Founder & Financial Planner of Orca Wealth Ltd, welcome to my KZbin channel ‘That Finance Show’. I’m very glad to have you here because this channel gives me the opportunity to help people and share information with those who wouldn’t normally get it.
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When investing remember, your capital is at risk. Investments can fall and rise and you may get back less than you invested. Tax treatment depends on your individual circumstances and may be subject to change. This channel is for information and entertainment only. The information provided by Tom and That Finance Show is not intended to address your particular requirements and should not be construed as advice. Neither Tom or ‘That Finance Show’ will not be held responsible for any actions you take as a result of watching these videos.
#thefirst£100k #investingforbeginners

[@MrGravity304]

I received a sizable inheritance in January. I struggled with this question. I invested most of the money over a 2-month period. I'm currently up 10% overall for the year, so I'd say that's a win. An important thing to consider is if you have a brokerage account that offers a cash holding fund making 4.5%+ yield, the cash is working for you at a good rate while you make decisions on what to invest in for higher returns.

[@NotyourBusiness-urto6]

The best strategy depends on your financial situation, account types, tax bracket, and investment goals. Consult an advisor or tax professional to tailor these strategies for maximum tax efficiency.

[@MiddleclassAmerican-7220]

I’m currently working towards financial freedom with a focus on dividends & growth investing. Since 2014, I’ve built a portfolio made up of 30% NVDA, 25% SCHD and over 40% in digital and alternative assets, thanks to my CFA. This strategy has helped me earn $56,000 a year in dividends. Back in 2014, I only earned $21 in dividends.

[@freedomisEexpensive-08]

Oh I've heard similar things about hiring an advisor. It's hard to choose one that's very good though. Could you make some useful recommendations?

[@MiddleclassAmerican-7220]

I'm cautious about giving specific recommendations since this is an online forum and everyone situation is unique, but I've worked with Melissa Elise Robinson for years and highly recommend her. Look her up to see if she meets your criteria

[@GREGG-43]

Thank you for the lead. I searched her up, and I have sent her an email. I hope she gets back to me soon.

[@rickybishop8388]

📌 *Nice video, love how you take your time to educate your viewers. You gave me the mindset to invest my savings now I have made profits over $120k Right now and still making more , I am enjoying a good life with what I made investing. Indeed ‚building a Portfolio income (investing) through a licensed investment adviser is one out of many ways to earn passive income.*

[@malone7655]

Quite impressive but HOW!!?😊 I know it's possible, my colleague at work got her first investment return of 40K after two weeks and she quit the job , I would appreciate if you show me how to go about it..

[@SophiaBint-wj8wn]

I began investing at the age of 33, primarily utilizing my hard work and dedication. Now at the age of 38, I am delighted to share that my passive income exceeded $100k for the first time in a single month. This advice is truly valuable, so don't hesitate to take action. Remember, it's not about achieving wealth quickly, but rather about building wealth consistently and persistently.

[@philipcollen482]

This is superb! information, as a noob it gets quite difficult to handle all of this and staying informed is a major cause, how do you go about this are you a pro investor ?

[@blessingpaul5484]

I understand the uncertainty of tomorrow, and I agree that starting to invest today can be challenging, especially without a clear understanding of where and how to invest. Since I've personally tried navigated the path to passive income, I'd be delighted if you can offer me some guidance based on your experiences that help you embarking on your own journey towards financial security.

[@SophiaBint-wj8wn]

I never expected it, but after closely monitoring my portfolio's performance, I was astounded to see it generate a staggering $473k in just the past two quarters. This eye-opening experience has given me insight into why experienced traders can achieve remarkable returns even in lesser-known markets. Taking this leap was undoubtedly the boldest decision I have made recently.

[@brittanynicolette9473]

That's impressive! I could really use the expertise of the advisor, my portfolio has been stagnant.... Who’s the person guiding you?

[@SophiaBint-wj8wn]

The Adviser I'm in touch with is *'Nolan Velden Brent'* , he works with Merrill, Pierce, Smith incorporated and interviewed on CNBC Television. You can use something else. for me his strategy works hence my result. He provides entry and exit point for the securities I focus on.

[@royshaft]

I thought Charlie was in the room with me !

[@ThatFinanceShow]

😂 you were like, ‘Charlie, is that you?’

[@HarveyHeckland]

It is always good to have a financial plan. I work with a portfolio manager and fixed income planner in the USA. The fixed income portion of your portfolio won’t simply serve as a buffer to the volatility of the equity portion of your portfolio, but will provide legitimate income.

[@virgilludwig]

Very true, people downplay planners role, until burnt by their mistakes. I remember just after my layoff 3 years ago amidst covid outbreak. I needed to stay afloat, hence researched for licensed fiduciary advisors. Thankfully, I came across someone of practical knowledge and decades of experience. I liquidated 200k of my 340k from my 401(k) it has yielded nearly 1M usd after subsequent investments so far.

[@virgilludwig]

I’ve shuffled through a few experts in the past but settled with Mr. CHRIS RYAN STEWART.

[@virgilludwig]

His strategy is recession proof, more specifically profit-oriented and most likely you’ll find his basic information on the net. He’s a very well known advisor.

[@trevorleigh6393]

I’m very inclined with his platform already, I have turned over more than $300kUsd investing with Mr. Chris Ryan Stewart on a very wide array of options and finally sticking to a few that have been favorable in the past 2 years

[@KarenOpenda]

I’m in need of professional insight into my finances. Who is this investor you speak of, does he have a contact?

[@cryptojoe57]

Im almost there! I have almost $100,000 in dividend stocks! Took so much sacrifice. I came up from homeless so it was painful. But oh my lord I am right on the threshold! Im so flipping excited every time I see the growth! Heck I remember a time I was getting literally pennies in dividends. Now I get thousands! I hope everyone realizes the power of investing!

[@playhousesound]

Crazy how the comment section is full of scammers.

[@davidc7636]

Just remember $100,000 in 1994 is equivalent of about $206,000 in 2023. Great video mate! Keep up the great content!

[@ThatFinanceShow]

Very true....gotta love inflation.

[@cameronmmj9291]

That's not what Munger was getting at, imo. His point was that compounding really takes off at that amount. Yes, it's worth considerably less than when he quoted that, but the principles, and reason why he said it, have not changed.

[@davidc7636]

@@cameronmmj9291 compounding takes off at every point in reality. I think his point was more along the lines of it’s at $100k that it becomes ‘life changing’ to the layperson. These days it equates to nearer $200k to have that same impact of the every day person

[@cameronmmj9291]

@@davidc7636 compounding takes effect, but the gains are very different. 10% on $10k = $1k 10% on 100k = $10k. Massive difference and speed of growth. That's what the 100k is about, the speed of that growth.

[@19grand]

​@@cameronmmj9291He says you can ease of the gas a little. That is you have to keep saving something to build wealth and security.

[@dcabral00]

I got to $100k, but what do I do next? This was deposited in a CD from savings (not investments) because I don't know what to do next.

[@AgileSnowWeasel]

Take it out in cash and roll around in it. Aside from that, ensure it is invested for the long term (i.e., more volatile, but overall higher return investments) if you want it for later in life.

[@joshwhitehead1683]

Ive got to 100k, taken me about 8 years... 1m seems a long way off but im 30 so fingers crossed ill have time!

[@ThatFinanceShow]

You’ll do it.

[@shaunblue3594]

Bro just needs to go all in on BTC / Gold & hold forever & cash out little amounts at each new ATH

[@CleverContrarian]

Plot twist: Once you get to 100k it IS anti climatic

[@noel3700]

Once you get to 1 million as well. You'll feel exactly the same as hitting the first 10k or 100k. Just have more options

[@Alan7997]

Listen to the advice, stay for the canine shenanigans!

[@ThatFinanceShow]

He wasn’t even meant to be in the video!

[@dazza4345]

Im still trying break the 30000.

[@usefulrandom1855]

The dog needs to be in every video! What's his/her name?

[@ThatFinanceShow]

He is called Dexter, he's a rescue English Setter that was found in a bin in Greece!

[@usefulrandom1855]

@@ThatFinanceShow No way, he is lovely!! Made me laugh

[@evaguo1]

@@ThatFinanceShow What? Someone left Dexter in a bin? He's so cute. I need an English Setter now.

[@AgileSnowWeasel]

The first £200k (I missed the £100k date) took from 2007 (age 29, apart from an earlier pension that was tiny until it got adjusted for SERPs after 2007, I still don't understand this) to around 2021. If I had to guess the £100k date was probably around 2017. I'm getting close to £300k at the moment although some of that has to go on house maintenance (still, that's maintaining an investment, so valid expenditure) soon :(.

[@hustlinhitch]

I'm 51 and have saved £30k but that's only because I live with parents and have no dependants. I'm too ill to work now though. I'm still convinced fixed rate bonds are a better choice than equities.

[@ThatFinanceShow]

What makes you think fixed rate bonds are better than equities? Long term data says otherwise.

[@hustlinhitch]

@@ThatFinanceShow Personal circumstances, I suppose. At 51, and with health issues, I might not have a long-term game.

[@slabbygabby]

​@@hustlinhitchStill doesn't make sense. Tech etfs like iitu or the vanguard tech select make riddiculous returns

[@coderider3022]

It is nice to see a daily up /down in your pension that’s actually more than your daily / weekly wage.

[@autobotdiva9268]

the insults given when mentioned to save $100k is unreal. they choose the struggle.

[@killeremma]

Hi, a practical question here - I have an Isa with vanguard and another in HL - should they really be in 1 pot so that the compounding is higher?

[@randomname123456789]

Putting them in one pot will not make any difference.

[@robertthurmond8161]

I completely agree. The first $100k was the toughest, and I didn't really start seriously investing until I was 30 back in 1998. Today, I'm 55 and have a decent $1.2M nest egg thanks to my fa Emily Lois Parker. After learning all of this, my only regret is not starting earlier when I was 25. It may not seem like much but those extra 5 years are the most important.

[@Lorre386]

Is there any chance you could recommend who you work with? I've wanted to do this for a very long time now, but I've been very hesitant about it. I'll appreciate any recommendation

[@robertthurmond8161]

certainly, she goes by Emily Lois Parker. run a web search to connect with her

[@meredithelbert6608]

i'm happy there are lots of people doing so well...Love this channel for the transparency

[@tonimhamilton2072]

i also work with Emily Lois Parker, since last year i invested $100k with her and made over 400k profit in less than 3 months

[@robinsonbaker1963]

out of curiosity I did read about Emily Lois Parker on the web, she has a great resume.

[@19grand]

I wonder where people are getting the mythical 10% annual return. Doesn't exist as far as I can see.

[@shergill4301]

Yeah I agree but 8 is pretty possible......I think s and p has given more than 8 a year on average for 40-50 years....

[@WtfReal]

This is data of like 100 years with dividends re invested. If you just look short term you can’t see it

[@19grand]

​@@WtfRealyou would need to have it for more than a decade and endure losses. It ain't easy as everybody on KZbin is trying to make out.

[@AmandaTrivizas-ql6xe]

I lost over $80k when everything started to tank. Not because I was in an exchange that went belly up. I was just stupid to hold and because that's what everyone said. I'm still responsible. It just taught me to be a better investor now that I understand more of what could go wrong. It took me over two years of being in the market, I'm really grateful I found one source to recover my money, at least $10k profits weekly. Thanks Charlotte Miller

[@AmandaTrivizas-ql6xe]

she's mostly on Telegrams, using the user name

[@AmandaTrivizas-ql6xe]

GGRACE12💯.. that's it

[@RyanGabriel-el4gt]

I was skeptical at first till I decided to try. Its huge returns is awesome. I can't say much

[@kaxar6954]

Sounds like a scam posting names here.

[@johnnyneely282]

It’s a scam 😂

[@CrazySwiftGamer]

That doggo

[@ThatFinanceShow]

He's a good boy! (most of the time)

[@Dr.JubairsFinance]

I reached my first 100K recently, I really hope you're right

[@qprisaac1608]

tracking the journey jubair bro 🙏I would appreciate some feedback on my own portfolio if you had the time

[@ThatFinanceShow]

Congrats mate, it's no small achievement that, especially at your age

[@jacobmoney]

It's been 3 months ago...where are you at right now? 1 million..???😅😅 I hope to get my first 100.000 soon.....it's been a wild ride.

[@Dr.JubairsFinance]

@@jacobmoney I wish it was that quick. Since that comment, my net worth dipped to as low as £95k, but due to the recent increases in stocks, its looking good again today.

[@MuscleBandit]

Somebody like me is 37yrs old, earns £10.50ph (min wage currently £10.42ph) has to work 60-70hrs per week just to maintain debt repayments and just barely cover costs of living and is wandering how on earth even the first 100k is possible let alone many more afterwards! I am repairing credit rating and getting driving licence clean ready for a career change for higher earnings but god it takes focus, will power and sheer gritty determination to muster and retain any positivity whatsoever toward the idea of building wealth and having a bright future, there are only so many yrs of life! One way or another I will do it though because in my 60's many people I know now will be relying on family and the system to carry them and that's not an option for me. I know the majority out there are in the same boat so just hold on to that "can do" mindset guys and girls, there is a way....£££

[@ThatFinanceShow]

I admire your determination mate, the very fact that you're now doing what you're doing tells me you'll get there. Keep going, keep me posted on your journey?

[@angus9541]

Don’t loose faith. I worked in hospitality on these rates with £18k debt. Thought I’d be stuck in a hole for ever. In a few years I switched to construction and found myself working on power stations. 70hr week minimum but I earn in a week what I used to get in a month. If you’re willing to work away from home there is huge money out there and you could bosh your debts and start banking wedge. 💪

[@MuscleBandit]

@@angus9541 Thanks for the comment. Funnily enough I'm planning to do long distance driving meaning time away from home which is okay while I'm single with no kids etc. It's all about getting that income up and staying disciplined enough to pay off debts and get investing instead of living the high life like most others do.

[@servicestwo4754]

that quote was awhile ago by charlie. with inflation it's now closer to $250k

[@Makalon102]

Inflation continuesly moves the goalpost

[@cameronmmj9291]

You're looking at it from a value pov, the principles of compounding has not changed at 100k.

[@servicestwo4754]

@@cameronmmj9291 value is a function of purchasing power, and purchasing power degrades with time. That's what inflation does. But if you're talking about the principal of compounding, in that case it hasn't changed from £10k or £1.00. But they used £100k because that's the point that its supposed to become meaningful. And that was meaningful when Charlie Munger said this a few decades back.

[@blongshanks77]

You completely missed the point. This has nothing to do with inflation. He’s not saying you can just stop investing once you hit 100k. He’s simply talking about how the power of compound interest really takes over once you hit 100K.

[@servicestwo4754]

@@blongshanks77 ​​⁠you don’t understand what inflation is. Compound interest works at every level. It’s just maths. They chose £100k because the gains “feel” significant, due to purchasing power. Inflation reduces purchasing power. Ergo, it’s about inflation. Although well done on baiting me on helping you with this by the provocatively incorrect accusation.

[@matthjas67]

The next 100,000 isn't that much easier! Doable yes, easy, no.

[@usefulrandom1855]

Well it almost happens on its own £100,000 at 7% will double in 10 years without adding anymore. In his example, it goes from 7.8 years to 5.1, a fair amount quicker!

[@ThatFinanceShow]

It's all doable for sure!

[@matthjas67]

​@@usefulrandom1855that's if you are totally invested in equity and you receive 7% per annum compounded. Unfortunately the markets don't work that way and the average punter won't get market headline rates. Vanguard forecast returns to be significantly lower in the next 10 years. I'm not saying don't invest, you should if you can.

[@williampope3503]

Yeahhh I'm not sold on this tbh - the maths is solid of course but it's not like hitting that first 100k makes any material difference to your life or how much / how hard you work. Fundamentally we basically don't register the satisfaction or joy of accumulation / compounding whereas we feel loss acutely, probably because we have the innate expectation of gain and do not hope or expect to lose. Get those dividends compounding though, and you'll start to notice the shift up in gears pretty quick. @@usefulrandom1855

[@estephehusain]

Amazing video! 💫👍🏼

[@ThatFinanceShow]

Thank you! Cheers!

[@estephehusain]

@@ThatFinanceShow also can you do an update on your KZbin analytic video?

[@ThatFinanceShow]

@@estephehusain yes I will do

[@estephehusain]

@@ThatFinanceShow thank you!

[@Summerrose400]

I’m living on a small NHS pension at £760 a month and a disability payment ESA at £320. I paid my mortgage off but obviously still have house hold bills to pay coming in at £500-£600 a month before food , petrol etc. How on earth do I save £100,000 ? I am unable to work due to a serious heart condition which resulted in me losing my nurses job so I can’t “earn “ money or walk dogs ! Apart from selling a dodgy spare kidney and ideas will be very gratefully received.

[@heshamthearab]

The only tool we all have is our income. Unless you can increase it significantly anytime soon, you will likely find it an impossible task.

[@Summerrose400]

@@heshamthearab I thought so. At least I managed to pay off my mortgage before becoming I’ll and not being able to work. I would have lost my home if I hadn’t so I’m luckier than others in similar positions. The irony is my youngest brother is a multimillionaire in the US and hasn’t demonstrated any inclination to gifting a little money my way 🥴

[@ThatFinanceShow]

I’d keep your kidneys, think they are useful

[@wannabemusician7849]

Your a long time dead ……. Spend as you go … have that coffee … you might nor be here tomorrow… or you savings might not be there ..

[@slabbygabby]

You managed to type that long arse comment into youtube. Look for something where you work from home

[@benkershaw]

Thing is though once you have saved that 100k given blood sweat and tears and sacrifice for the average person its very very hard to see it swing about in the markets. Ive just sold £113,000 worth of shares 2 years on and only just broke even as i cant handle the volatility it was stressing me out. 2 years return was 0.10%. I will make more in 1 month when i put it in a 6% fixed rate bond than i did in 2 years investing. Takes some serious nerve does investing it aint that simple

[@01302]

Consider a more stable fund , such as vhyl or lifestrategy 80if it helps you sleep, but really reconsider your move here. The market can and does go up 20 percent in a year. You're waiting for the average, you might make 3percent a year at the bank over the next decade, even the lowest risk funds are likely to be double that.

[@benkershaw]

@01302 I understand what your saying mate. I've already sold just waiting for the money to land tomorrow so I've not yet committed the money to anything. Do you think I've made a mistake

[@01302]

@@benkershaw I keep writing replies but they must get blocked, so i'll keep it short, yes i think it's a big mistake!

[@benkershaw]

@@01302 what would you suggest I do now then mate

[@benkershaw]

@01302 my plan was to use the Interest to help do my house up and then pay the mortgage off next July. I'm in a job I don't particularly like and don't want to do as many hours anymore. I'm 34.

[@Makalon102]

How can you ignore your dog when hes being so adorable

[@ThatFinanceShow]

He gets lots of attention I promise!

[@TheInvestingVlogger]

Great Munger accent. Probably the best I have heard 😂

[@ThatFinanceShow]

Hahahaha it was awful, I won’t be doing that again

[@desperatelyseekingfi]

Great video Tom. That is exactly why i don't let my dog join my videos

[@ThatFinanceShow]

It wasn't planned!

[@williambaker427]

The Dogs mastered life ❤

[@ThatFinanceShow]

I know right, he's a rescue too so he's loving it.

[@Marenqo]

Noone listens, the dog stole the show :) ps. That's a good thing!

[@jimbojimbo6873]

I got a 100k but can’t get a mill

[@ThatFinanceShow]

If you can do £100k, you can do £1m

[@angus9541]

I’m am working 7 days a week/long hrs and living in a tent while I do contracting work. Next step move out of rental flat back home and into van to continue. The progress is rewarding.

[@opticnirvana]

I agree the first $100k was the most difficult. As a student I had to first pay off loans before even having the luxury of saving. I think the trick for me was to enjoy the process. I love tracking the money I make, generate graphs, research. It can be dry at first but after a while, it became fun for me. I feel that unless you get that, you just will be too tempted to use your savings on something else that is fun, that no longer works for you. And that to me, is no fun.

[@MeBeMat]

Hi Thomas, I used your referral link to get a free share when I joined Trading 212 -- I got a share in Nike worth about £10 (yay!) and I'm holding for when they sort out their drama with the Mary Earps England shirt thing and hoping the price will bump up a bit. Thing is, I already have a stocks and shares ISA with Vanguard so when I signed up I created a standard investing account. What do I need to know about my tax responsibilities when it comes to holding an account like this? I'm not planning to play the markets in any real way -- I stuck the £1 minimum opening balance into the company I work for to see what happens, and I may cash out that Nike stock at some point. But am I required to report that £11 figure to the tax man? How does it all work?

[@jonathantaylor4776]

A great video Tom. As you know I have taken the first baby steps and already my return is far better than I expected. I don't have lots of disposable income, as my kids get a little older, I hope to be able to invest more each month and keep on building! Thanks again for your videos and advice.