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The timeline for reaching $100,000 in a brokerage account can vary. Find out when you’d hit this target and why it matters.
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Having a six-figure brokerage account balance is a major milestone. Once you have at least $100,000 saved, you are well on your way to becoming financially independent.
But when will this happen to you? Here’s what you need to know.
Here’s when you’ll hit $100,000 in your investment account
The timeline for hitting your first $100,000 depends both on how much you invest each month and what return on investments you earn. The table below shows examples of when you’ll be on track to hit this target.
As you can see, the more you invest each month, the faster you will hit your target. But your returns make a big difference as well. You can cut off a few years of time if you earn a 10% average annual return compared to earning just 6% per year.
So it’s worth taking the time to make sure you’re exposed to the right level of risk, as investing too conservatively could impact your investment performance and make reaching your goals harder.
A good rule of thumb is to invest money in the stock market that you won’t need for around two to five years, as that will give you time to wait out any potential downturns. Another common rule says you should subtract your age from 110 and put that percentage of your portfolio in the market. Following these guidelines can help you earn the returns you need.
The sooner you hit $100,000, the better off you’ll be
Making a point to try to hit your $100,000 milestone ASAP is important because once you have that much money invested, compound interest can do wonders to help you grow your wealth.
A $100,000 investment can turn into $259,374 in just 10 years’ time, and in 30 years’ time, your $100,000 investment could be worth $1.7 million. So, if you can save your $100,000 early on, you could easily become a multi-millionaire by retirement, even if you don’t contribute much else over the course of your career.
Now, it can be hard to find the money to reach this major goal quickly. Investing $1,000 a month out of your bank account is out of reach for most people. But you can free up some cash to invest each month if you make a commitment to doing so. This may mean bringing lunch to work instead of dining out, or looking for free entertainment options instead of spending a lot of money for expensive nights out.
But the payoff will be worth it if you can hit your $100,000 goal quickly and then spend years watching that money work for you and grow into millions.
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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Christy Bieber has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Target. The Motley Fool has a disclosure policy.
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