Charlie Munger Said The Hardest Part Of Getting Rich Is The First $100,000 – But From There It Snowballs And 'You Can Ease Off The Gas'

Everyone wants to build wealth, but where do you even start? If you ask Charlie Munger – the billionaire investor, Berkshire Hathaway vice chairman, and Warren Buffett's legendary right-hand man – the answer is simple: focus on getting to $100,000 first.

Munger, who passed away just shy of his 99th birthday, left behind a treasure trove of financial wisdom. In shareholder meetings, interviews and books, he often spoke about the challenge of wealth-building. According to him, the first big hurdle isn't a million dollars – it's that first $100,000.

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Why Is the First $100,000 So Hard?

Munger didn't sugarcoat it: "The first $100,000 is a bitch, but you gotta do it. I don't care what you have to do – if it means walking everywhere and not eating anything that wasn't purchased with a coupon, find a way to get your hands on $100,000. After that, you can ease off the gas a little bit."

That quote, from a 1990s Berkshire Hathaway shareholder meeting, highlights the brutal reality of starting from scratch. When you're just beginning to build wealth, you don't have much working for you – no passive income, no compounding returns and no momentum. You're essentially climbing uphill with nothing but your own savings and discipline.

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Munger elaborated on this in Damn Right!: Behind the Scenes with Berkshire Hathaway Billionaire Charlie Munger, explaining that to reach that first $100,000 (and eventually a million), you have to be relentless about saving and avoiding lifestyle creep. "Getting wealthy is like rolling a snowball," he said. "It helps to start on top of a long hill – start early and try to roll that snowball for a very long time. It helps to live a long life."

The $100,000 Tipping Point

So why is $100,000 such a magical number? Because that's when compounding starts to work in your favor. Before that, your net worth depends almost entirely on how much you save. After that, your money starts working for you.

Here's an example:

• If you have $100,000 invested and it earns a modest 7% annual return, that's $7,000 in gains – without you lifting a finger.

• If you reinvest those returns, your money snowballs and suddenly, growth becomes exponential.

• Compare that to the early days when every dollar had to come from your paycheck.

Once you cross that six-figure threshold, building wealth gets noticeably easier. Your investments generate returns, which create even more returns. And since larger amounts compound faster, you reach the next milestone (like $200,000) much quicker than the first.

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The Psychological Shift

Beyond the math, there's also a huge psychological shift when you hit $100,000. It's proof that wealth-building is possible, and that realization can be life-changing. Once you see your money growing, you're more likely to stay disciplined, avoid unnecessary spending and keep investing.

Munger's advice is a reality check for anyone dreaming of financial independence. The road to your first $100,000 might be tough – filled with sacrifice, side hustles and strict budgeting – but once you get there, the game changes. That's when compounding kicks in, and wealth starts to build itself.

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So if you're still climbing toward that first big milestone, take Munger's words to heart: focus, save aggressively and don't give up. The hardest part is just getting started. But once you do, the rest of the journey gets a whole lot easier.

If you're starting from scratch, an advisor can help you maximize your savings and investment strategy. If you've already hit six figures or more, they can ensure your money is working as efficiently as possible. No matter where you are, having a roadmap makes the journey a whole lot smoother.

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