The 3 Major Financial Milestones (This Will Change Your Life)

on this episode of the Personal Finance Podcast,

the three major milestones that matter more than anything.

[♪ OUTRO MUSIC PLAYING [♪

Oh, what's up everybody and welcome to the Personal Finance Podcast.

I'm your host, Andrew Founder of MasterMoney.co.

And today on the Personal Finance Podcast,

we're going to be talking through the three financial milestones

that matter more than anything.

If you guys have any questions,

make sure you join the MasterMoney newsletter

by going to mastermoney.co, slash newsletter,

and don't forget to follow us on Apple Podcasts,

Spotify, YouTube, or whatever podcast player.

You love listening to this podcast on it.

If you want to help out the show,

consider leaving a five star rating

and review on Apple Podcasts, Spotify,

or your favorite podcast player.

Now, there's a moment in every person's financial journey

when everything changes.

You're checking your investment account,

you're grinding away at work,

and you're wondering if any of this stuff is actually working.

Well, then one day, you wake up,

and your portfolio is generating more money

than some people earn at their day jobs.

And some of you, this may have happened by,

hey, you randomly check your 401k one day

and realize, oh my goodness,

I have way more money than I ever thought I would

inside of this account.

It is not because you did something different

and it's not because you got lucky,

because the math finally cut up

and you already put the work in.

And for the most part, this is all just math.

The moment does not happen randomly.

It happens with three specific numbers,

three milestones that are gonna act like tipping points

in your financial life,

where once you hit these milestones,

the way that money works for you will completely change.

And so today, I'm gonna show you exactly

what those numbers are,

why hitting each one accelerates everything

that comes after it,

and how to stay consistent during these stretches

when it feels like nothing is happening,

because this is when most people quit,

and as wealth boaters, I want you to note

that as we go step by step

through these different milestones,

you're gonna see how they can absolutely change your life.

Now, there are two things that we are gonna talk about here.

We are gonna talk about the three major milestones

that you were gonna hit during your financial life.

And as we go through those three major milestones,

each one is gonna fundamentally change

how money works for you.

They represent a shift in your finances

and it's gonna be a tipping point

for each and every single one.

Then we're also gonna talk about markers.

Now markers are going to be the points

in between these bigger financial milestones.

And as you see, once you hit that first financial milestone,

it may take a number of years

before you can hit the second one.

And so we wanna have markers in between.

We wanna make sure that you stay motivated

when you were trying to hit these goals.

We wanna make sure that you are progressing

when you were trying to hit these goals.

And so in order to do that,

we put markers in between each of these milestones.

This is gonna help you when you are thinking through the process.

Now the simple way to think about this

is that milestones are the areas

where your finances are dramatically changing

and markers are keeping you motivated

as you power through a long the way.

Now there are a couple different things

that I want you to note

because early on in your financial journey,

when you are trying to get to some of these early milestones,

it is gonna feel like you are in a slog.

It is gonna feel like you are in a grind

and it's gonna seem like your money

isn't doing anything for you.

And that is a concept that I think a lot of us have felt

in the past where it feels as though

you are doing so much, you're investing your dollars

and that money doesn't seem to be growing at all.

Well, this is because in your early years,

compound interest really isn't taking over.

It is more about the amount of money

that you are putting into these investments.

In fact, a lot of times compounding

is something that you could think about this

in a way where the compounding curve is actually backloaded.

The more dollars you get invested

and the sooner you get those dollars invested,

that means that the money that your money is going to make

will compound more and more and more all for time.

In the early years, almost all of your growth

is gonna come from your contributions.

It's not gonna come from your returns.

For example, if you have $5,000 invested

at a 10% rate of return, you're gonna earn $500 that year.

But think about the same exact thing

if you had $500,000 invested.

Well, $500,000, a 10% rate of return

is $50,000 that you're gonna make in that given year.

That's more than some people in this country

make in an entire year.

And it's more than most people

can ever save an entire year.

This is why I mean that your money can work

so much harder than you ever can.

And once you realize that your dollars can work harder

than you ever can, it's going to make you

really wanna get those dollars invested

because the sooner you get those dollars invested,

the sooner and closer you can get to financial freedom.

You wanna do this for your family.

You wanna do this so you get your time back,

your energy back and all those different things.

And this is why the second thing I want you to understand

is that your first 100K is gonna be the hardest.

Why?

Because you, specifically you, yes,

you listening right now are doing all of the work.

You were essentially pushing a boulder uphill.

And your goal is to get to the top of the hill

so that boulder starts to roll downhill

without any effort from you whatsoever.

See, compounding is gonna be helping you early,

but it's only gonna be helping you a little bit.

It's not gonna be taking over your entire situation.

Also, the numbers at the beginning

are gonna feel small because they are small.

And this is just part of the process,

embrace that as part of the process.

But this is not going to be something

that is relative to what comes later.

So if you go from zero to $10,000 for example,

this is gonna feel like it takes forever,

especially if you're not investing a lot of money.

But 900,000 to 1 million is gonna happen

really, really quickly because of the power

of compound interest.

So these are completely different experiences in life

and you have to enjoy the process and understand

this is how the process works.

Now the rule of 72 is brutal

when it comes to looking at this in reverse.

The rule of 72 is this really cool rule

that is gonna tell you how long it's gonna take

before an investment will double.

So let's say for example, you got a 10% rate of return,

it's gonna take you 7.2 years

before that investment is going to double.

So once you realize this and understand

how the rule of 72 works,

then you're gonna understand man,

the contributions that I make in these early years

are gonna be the real reason and the math

behind why it takes a little longer to get started,

but once you get started and once that snowball starts to grow,

all of a sudden it gets so much easier at times

as time goes on.

And so I just want you to note that up front

as we start to talk through this episode

of why it is so difficult in the early years to build wealth

because you are doing all the work

and we'll talk more about this as we go on,

but I just want you to note that before we dive deeper.

So we're gonna go through these three milestones,

we're gonna show you how powerful this can actually be

and I'm gonna show you how to build wealth

step by step so you can methodically get to the next goal.

So if that's something you're into,

let's get into it.

Pfft!

Workplace chaos, you know the feeling,

deadlines are stacking up, emails are flying,

and then someone on your team gives notice.

That's when you think this is a job for sponsor jobs.

When you need the right hire fast,

indeed sponsor jobs helps your posts stand out

and reach quality candidates.

Instead of hoping the right people see your listing,

sponsor jobs boosts it in search results

so you can match with candidates

who meet your specific criteria,

like skills, certifications, or locations,

and you only pay for results.

And here's something wild.

In the minute I've been talking to you,

companies like yours made 27 hires on indeed

according to Indeed Data worldwide.

That is real momentum.

Sponsored job posts directly on Indeed

are 95% more likely to report a hire

than non-sponsored jobs.

So when the pressure's on and you need someone

who can actually move the needle,

this isn't your job, it's the job of sponsor jobs.

So spend less time searching

and more time interviewing candidates

who can check all your boxes.

And listeners this show will get a $75 sponsor job credit

to help get your job, the premium status it deserves

at indeed.com slash podcast.

Just go to indeed.com slash podcast right now

and support our show by saying you heard about Indeed

on this podcast, indeed.com slash podcast,

terms and conditions apply.

Need to hire?

This is a job for indeed sponsor jobs.

Wayday is coming up and if you've been thinking

about upgrading anything around your house,

this is the time to do it.

From April 25th to April 27th,

Wayfair is running some of the best deals you'll see all year.

We're talking up to 80% off with free shipping on everything.

Now we've been slowly dialing in some of our spaces

and for me it's more about that clean modern look,

simple furniture, functional pieces

and stuff that actually gets used every day.

Wayfair made it really easy to find exactly

what fit that style without spending hours searching.

You can filter by size, price, design

and read thousands of reviews

and actually feel confident in what you're buying.

We picked up a couple of pieces recently,

some updated furniture and a few accent items

and everything showed up fast,

was easy to put together and just worked right away

in our space.

And what I like is that they have Wayfair verified

where their team actually vets products

so you know you're getting something solid,

no matter your budget.

Wayday is the sale to shop, the best deals and all.

We're talking up to 80% off with fast and free shipping

on everything.

Head to Wayfair.com, April 25th,

through the 27th of Shop Wayday.

That's w-a-y-f-a-i-r.com.

Wayfair, every style, every home.

Pfft.

All right, so before we start on these milestones,

there is one thing I want you to note

is these dollars that I'm talking about as we go through this

are the dollars that you have invested

because this is where you're going to reap

the benefits of compound interest.

This is not the dollars that you're putting

towards your emergency fund and so for those

who are in the early stages of wealth building,

you must prioritize your emergency fund first.

We have a process called the 136 method

where a, you're going to save one month of expenses,

then you're going to pay off high interest debt.

So any debt above a 6% interest rate, you want to get rid of,

then you're going to save up three months of expenses.

And then once you're at three months of expenses,

that's when we can start to branch off

and begin investing or dollars.

And so if you have not done that up front,

I want you to make sure that you are getting there first

because this is going to protect you

so that you can reap the benefits of compound interest

later and make sure that you're investing going forward.

And so it's very important

that you have these emergency funds set up

and you have a system in place

to build up that emergency fund.

It is one of the most important things,

especially in 2026 when we are seeing job loss

at an all time high.

We want to make sure that we have our finances protected

and our finances are going to be bulletproof

so that we can grow our money as time goes on.

And so that is the first caveat that I want you to understand

is you need to have that emergency fund in place.

And so let's jump into milestone one.

So milestone one is to get your first $10,000 invested.

Now for a lot of folks out there,

if you are brand new to finance

or you're brand new to investing,

this is going to be a really important milestone for you

because A, you need to build the systems

and put the systems into place

that are going to help you do this.

How do we put the system into place?

Well, number one, we need to automate our finances.

And if you haven't gotten to your first $10,000 yet,

that means you most likely don't have

an automation system put into place.

Number one, you need to automate your bills.

Number two, you need to automate your savings

into your emergency fund or any other savings goals

that you have in place.

And the number three is you need to make sure

that you are automating your investments.

So every single time you get paid,

you need to take a portion of that payment

and put it into your brokerage account

or put it into your retirement account

or put it into whatever investment vehicle

you are utilizing to grow your wealth.

This, my friends, means paying yourself first.

This is the concept of paying yourself first.

Money and investments should be treated like a bill.

They should not be treated as something at the end.

No, this is one of your most important bills,

your financial future and your freedom depends on this.

You need to act as such.

And so taking extra dollars and putting them

towards your financial freedom

will absolutely transform your life forever if you do this.

So I highly, highly encourage you to learn

how to automate your finances.

Now, we have a free automation checklist.

If you go to mastermoney.co, slash resources,

we have an automation checklist

that you can go and download.

And with that checklist,

this is gonna show you step-by-step

how to automate your finances.

So I highly encourage you to go to mastermoney.co,

slash resources and get the automation checklist.

Now, another thing you would automate is your budget.

Now, I use a tool called Monarch Money

to make sure I'm tracking my expenses

to know where my dollars are going.

Now, a lot of people when I say the word budget,

they almost treat it as a cuss word.

They don't want to hear it.

That's a okay for some of you.

You can do something like the reverse budget,

meaning saving off the top

and then spending what is left over.

But for most people out there

who don't have their first $10,000 yet,

I want you to budget every single month.

Why?

Because this is how you're gonna get there.

And especially if you're just getting started,

you need to have awareness around your money.

You need to have an understanding

of where your dollars are going.

How many of you have gotten to the end of the month

and you say to yourself,

I have no idea where I even spent my money.

Well, the reason for that is because you have

a lack of awareness.

I want you to remember this line.

What gets measured gets managed.

And if you don't measure where your dollars are going,

you're never going to manage or stay on top of your finances.

Now, this may sound restrictive to you.

It is not restrictive.

In fact, it is one of the most freeing things ever.

Why?

Because you can allocate your dollars

towards the things that you actually value

instead of the things that you really don't care about.

How many times do you walk into Target?

And you just spend way too much money

or you just buy a random things on Amazon

and you get to the end of the month

and you're like, I just overspent again.

I cannot believe I did this.

I got to stop doing this

or we got to stop overspending.

Do you say that a ton to your spouse

or people in your family?

Well, the reason why you're saying that

is because you're not measuring your finances

and the way to measure it

is to make sure you're tracking your money.

Now, number three is if you don't have one open already,

you need to make sure you have your investment accounts open.

So the order of operations

and the way that I like to think about this

is to think through, okay,

well, we need first to get our 401K match.

Second, if you have a high deductible health plan,

look into the HSA or the health savings account

where money is going to go in tax-free.

It'll grow tax-free

and you can pull the money out tax-free

as long as you have a qualified medical expense.

Third, is the Roth IRA.

The Roth IRA is my favorite account overall,

especially if you're in the early years of wealth building.

You really need to look at a Roth IRA.

If you make too much money for a Roth IRA,

you can do a backdoor Roth IRA.

Four is a brokerage account.

This is just a regular old brokerage account

that you can open at Vanguard, Fidelity, or Charles Schwab.

And you are able to invest your dollars in buy stocks,

buy bonds, whatever else you are interested in buying.

And lastly, is your 401K.

That is the one that a lot of people talk about.

Ramsey Solutions did a study.

And over 79% of millionaires became millionaires

in their 401K.

I want you to make sure that you are hitting

that 401K match at a very minimum

because it is a 100% rate of return.

And this is gonna give you an instant 50 to 100% return,

depending on how your 401K match is set up.

Now, what are the things to do is if you don't have

your first $10,000 yet.

I want you to spend some time finding money.

What do I mean by finding money?

First, you can start in your house.

Start to look around your house and say,

what are some of these things that I don't use anymore

that I could go sell on Facebook Marketplace?

Start to sell some of your stuff.

Start to get rid of some of the clutter in your house.

Sell it on eBay if you have to.

And honestly, you'd be surprised

in how much money you can make on eBay

by just selling your old stuff from clothes,

to shoes, to kids toys, to all these different things.

You can absolutely increase the amount of money

that is coming into your household

just by selling your old stuff.

And once you do that, take those extra dollars

and put them towards your investment account

so that you can begin to grow your wealth.

Also, you can find ways to cut back

on some of your expenses as well.

If you know you're overspending in some categories,

pick one to two categories a month

and focus on slowly reducing how much you're spending

in those categories.

Because this is gonna help you then take the difference

the amount that you saved

and start to automate it into your broker's account.

The mistake that most people make

is when they save money.

Then all of a sudden, they don't actually

tell those dollars where to go next.

Instead, they decide I'm just gonna put it back

on my checking account and I'll figure it out later.

No, you need to make sure you're telling

those dollars where to go,

which is why automation is so important

and why your behavior is going to be the framework

on how you build wealth for the rest of your life,

your behavior during this time frame.

And so your first $10,000 is going to be established

almost entirely by your behavior, by your psychology

and the way that you operate when it comes to money.

This is 100% all about your savings rate

and you need to increase that savings rate

by one, increasing your income,

two, finding ways to find more money

so you can increase that savings rate.

And three, cutting back on some of the expenses

that are just excess or frivolous

that you don't really need.

And so this, your first $10,000 is an amazing milestone

and an amazing achievement for the beginner wealth builder

because once you get started, then you realize,

oh, I can do this and I can do this over and over and over again.

And so that's the first milestone.

Now between the first $10,000

and the next milestone, we have our first marker.

And so this marker is going to be the $50,000 level.

So again, remember, this is to keep you motivated

between some of these milestones

so that you have something to strive for.

And so the $50,000 marker is going to be the shit

where once you're past that first milestone,

the compounding engine still really isn't taking over yet

you're really still relying on your savings rate.

And so getting to that first $50,000

is going to see a big difference.

The cool thing about this portion

is once you get past $10,000

and you're starting to save and invest more,

you're starting to see that balance grow.

And your balance growing is going to feel really, really good.

It's going to keep you motivated over that timeframe.

And especially those of you who had a 401k for a long time,

for example, or maybe a Roth IRA for a long time

and you've just slowly been putting some dollars in there,

you've maybe seen this happen to you

where your balance has grown

without you even thinking about it.

Well, that's what we want to happen to you.

And so at this $50,000 level,

this is where we are going to see some really cool stuff.

Now income growth, once you get to $50,000,

is one of the areas that I want you to focus on.

Because this is the most powerful thing

that you can do to your finances is grow your income.

Why?

Because if you keep the amount of money

that you're spending the same,

but your income grows, well, all of the sudden,

you have all these extra dollars

to put towards wealth building,

to put towards your investments.

And when you do that,

especially when you're trying to get to your first $50,000,

this is going to make the biggest impact overall

because as you will see,

when your money begins to compound,

the majority of it is going to be your savings rate.

And so that savings rate needs to get increased more

and more and more if you want to achieve these goals faster.

And so we are actually going to give you a free calculator

that we put together.

If you go to mastermoney.co slash resources,

we have something called the financial milestone track.

And on this track, it's going to show you exactly how long

it's going to take for you to hit each of these milestones

that we're going to be talking about today.

And each of these markers today,

based on how much you're investing every single month

and the rate of return.

It's the coolest tool

and we are really excited to introduce this to you guys.

It's absolutely free.

So make sure you check it out by going to mastermoney.co slash resources

because let's say, for example,

you're trying to get to your first $50,000.

You can plug in the information into this tool

and it'll show you exactly how long it's going to take you

to get to that first $50,000.

So again, go to mastermoney.co slash resources

and it'll be there for you.

Now, as we start to grow our income,

I want you to take the difference of the increase of that income,

especially if you're under milestone two still.

And I want you to put as much as you possibly can

towards your investments.

Now, we want to have a little bit of a balance as time goes on.

But if you are under milestone two still,

then I need you to put as much as you possibly can

towards your investment goals.

That is really, really important as we start to grow this.

Now, the second thing you could do

is I want you to keep lifestyle inflation in check.

Lifestyle inflation is the one thing

that could absolutely destroy your progress

as you begin here.

And if you're under milestone two,

this is really going to hurt your progress.

You want to make sure that you are keeping it in check.

So what is lifestyle inflation?

This is if you get a race and all of a sudden,

your expenses raise to the same level

as how much you have made.

And so maybe, for example, you take on a new car payment

because you're making more money.

You're like, we can afford it.

I have the extra cash on hand.

So instead of investing those dollars,

you decide to take on a brand new car

even though the current car that you're driving is perfectly fine.

Or maybe you decide to upgrade your house too early

before you have enough money getting rolling and invested.

And so you've decided, okay, instead of investing my dollars,

I'm going to take the difference

and put it towards my personal residence.

Well, for the most part,

a personal residence is not the best place for your money.

And honestly, it's not a very good investment whatsoever.

You got to run the numbers on this kind of stuff

to understand the trade-offs of exactly what you're doing.

So you want to keep lifestyle inflation in check.

This is where most people are going to get hurt.

Is overinflating their lifestyle.

And if you're in your 30s or you have a family now

and you have kids in your life,

lifestyle inflation comes at you like a thief in the night.

And you need to be aware that it exists

and you need to be aware of ways to combat against it

so it does not take over your financial life.

Things like daycare are going to take over,

things like increased expenses

because you have kids or because you have a spouse,

things like spending more on food,

spending more on dining out,

spending more on kids' activities,

spending more on sports, spending more on the bigger house

or the car payment.

These are all going to kill you

if you are not aware that this happens.

Now, the other thing I want you to note

is at this $50,000 marker,

you need to make sure that you stay invested

through market volatility.

The first real downturns are going to happen during this phase.

You're going to feel some of these 20% pullbacks,

30% pullbacks, and they're going to make you panic.

It's going to be the first time that you feel this.

It's going to be the first time

that you go through this in the market.

Let me say this right now.

The market pulling back is one, healthy.

Two, it is natural.

Historically, this happens every couple of years

that we have market pullbacks.

And in fact, every 10 years or so,

we have a correction or a recession.

And so because of this information,

you need to know that this is very, very normal.

When the market pulls back, in fact,

you hear people say this all the time,

buy low and sell high.

Until it's time to do some buy low sell high stuff,

most people are going to repeat that over and over again.

Then when it's actually time to buy low,

most people get too scared or they freak out

because they watch CNBC or they watch the news

and the news told them everything is crashing.

The sky is falling.

The news is there to try to get clicks.

The news is there to try to get you to watch.

The news is there to scare you into making,

really, the wrong decisions in a lot of scenarios.

Do not listen to what the news is telling you.

Instead, you need to move forward

and understand how the market moves.

This is a very normal occurrence.

And over the long run, you will win with money

if you're a long-term investor.

My favorite exercise to tell people

is to take out a stock market app

and go look at the longest time horizon of the S&P 500

and what direction does that market go?

It only goes in one direction, which is up.

Now we've done this a number of times talking through

what is the risk of losing money in the market

if you stay invested over the long term

and if historically, if you stay invested

in something like the S&P 500 for 20 years or longer,

people have lost money zero percent of the time.

And so if you don't want to lose money in the market,

stay invested longer.

That is the overall key of what history has told us.

So that is the marker in between milestone one

and milestone two is $50,000.

Now, let's jump into milestone two.

So lately, I've been noticing how fast things

are changing at home.

The kids are growing like crazy.

Clothes don't fit anymore and routines are changing.

And it just hits you.

Life is expanding.

And when your life grows, your responsibility grows with it.

That's something I've been thinking about more this spring,

making sure the safety net we have in place

actually matches the life that we're building.

And that's where policy genius comes in.

Policy genius is an insurance company.

They're an online marketplace

that helps you compare life insurance quotes

from some of the top insurers in America,

all in one place for free.

And their license team works for you,

not the insurance companies,

so they help you find the right coverage for your situation

without all the guesswork.

And they walk you through everything.

Answer your questions, handle the paperwork,

and help you get the coverage

that actually fits your life today.

And where it's going.

So protect your family with a policy that grows with your life.

With policy genius, you can see

if you can find 20-year life insurance policies

starting at just $276 a year

for $1 million of coverage.

Head to policygenius.com to compare life insurance quotes

from top companies and see how much you can save.

That's policygenius.com.

For a long time, I thought investing was something you did later.

Like once you had everything figured out.

More money, more knowledge, and more time.

But the shift for me was realizing

you don't need to have it all figured out.

You just need to start.

And that's why I like acorns.

Acorns is the financial wellness app

that makes it simple to give your money a chance to grow.

You can sign up in minutes

and start automatically investing your spare money.

Even if all you've got is spare change.

What really stands out to me is the potential screen.

It shows you what your money could become over time.

And that's powerful because it keeps you focused

on the long term instead of getting caught up in the day to day.

It's also all in one place.

You can invest, save, and stay on track with your goals

without juggling a bunch of different apps.

Sign up now and acorns will boost your new account

with a $5 bonus investment.

Join the over 14 million all-time customers

that have already saved and invested over $27 billion

with acorns, head to acorns.com slash PFP

or download the acorns app to get started.

Pay non-clined endorsement.

Compensation provides incentive to positively promote acorns.

Tier two compensation provided.

Potential subject to various factors

such as customer accounts, age, and investment settings

does not include acorns fees.

Results do not predict or represent the performance

of any acorns portfolio.

Investment results will vary.

Investing involves risk.

Acorns advisors LLC, an SEC registered investment advisor.

View important disclosures at acorns.com slash PFP.

Tax season is funny because for a lot of people,

it is the one time of the year where you actually sit down

and look at your full financial picture.

Your income, your spending, your savings,

maybe even your investments.

And when you see it all together,

you start asking different questions.

Am I actually making progress with my money?

Simplify your finances with Monarch.

Monarch is the all-in-one personal finance tool designed

to make your life easier.

It brings your entire financial life, budgeting,

account and investments, net worth,

and a financial planning together in one dashboard

on your phone or laptop.

Feel aware and in control with your finances.

This tax season and get 50% off your Monarch

subscription with Code PFP.

Now, one thing I do every day is my five-minute drill.

Just a quick daily check in with my finances.

Monarch makes that really easy

because everything is all-in-one place.

Achieve your financial goals for good with Monarch.

The all-in-one tool that makes money management simple.

Use Code PFP at Monarch.com for half off your first year.

That's 50% off at Monarch.com, Code PFP.

Starting something new is uncomfortable.

I remember when I first started building this podcast

in business, there were so many what-ifs.

What if no one listens?

What if this doesn't work?

And what if I'm wasting my time?

But pushing through was one of the best decisions

I have ever made.

And having the right tools makes a huge difference.

That's where Shopify comes in.

Shopify is the commerce platform

behind millions of businesses

and handles 10% of all e-commerce in the US.

Whether you're just getting started

or scaling something big,

it gives you everything you need all-in-one place.

You can build a clean, professional store

with ready-to-use templates.

Use AI tools to write product descriptions

and improve your listings

and run email or social campaigns

to actually get your product in front of people.

And the part I love is it simplifies everything.

Inventory payments, analytics, marketing,

it's all in one place.

So you're not trying to duct tape

a bunch of tools altogether.

Plus, if you ever get stuck,

they've got 24-7 support to help you through it.

It's time to turn those what-ifs into

caching with Shopify today.

Sign up for your $1 per month trial today

at Shopify.com slash pfp.

Go to Shopify.com slash pfp.

That's Shopify.com slash pfp.

So milestone two is going to be saving up your first $100,000.

Now, this is the hardest overall for most people

because this is a slog and this is a grind.

And it is very difficult to get to your first $100,000

because you are saving so much.

All of it is your savings rate.

All of it has to do with you.

All of it has to do with the amount of money

that you're earning.

You're getting up every single day.

You're driving through traffic to work.

You're listening to your boss all day.

You're driving home just to get enough money

to save a few hundred or a few thousand dollars

towards your investment account.

And so this is why it's so hard

because your first $100,000 has all to do with your savings.

Charlie Munger, who was Warren Buffett's business partner,

is very famous for saying your first $100,000 is a grind.

And there is math that explains why.

So let me say this, for example,

so saving a $500 a month at 10% returns

takes roughly 10 to 11 years to hit your first $100,000.

Saving $1,000 a month at 10% returns

takes roughly six to seven years

to hit your first $100,000.

And saving $2,000 a month at 10% rate of return

takes roughly four to five years.

Now use our tool.

You can actually use our calculator

that we just talked about.

If you go to masterbody.co slash resources,

it'll show you exactly how long it'll take

based on your situation and where you are starting.

But your savings rate is the biggest variable here.

A 10% return on $20,000 is only $2,000.

And so you need to realize that you need to save your way

to your first $100,000.

Let me say it aloud for the people in the back.

You need to save your way to your first $100,000.

You cannot out-invest a low savings rate.

It's just gonna take you way longer

if you do have a low savings rate.

And so we need to figure out,

well, how do we increase our savings rate?

It's again, income and cutting back,

which is why we talked about the market at $50,000.

You really need to focus on increasing your income,

building those skills that are gonna help you increase

your income so that you can get to that point in time.

Now, what do you need to focus on

to get to your first $100,000

and act this milestone once you cross this milestone?

Well, first, now that you've crossed the milestone,

we need to make sure that we are maximizing

tax advantage accounts.

So the Roth IRA, the 401K, any of those

are really, really important,

and especially the HSA if you're eligible.

Also, we wanna aggressively grow our income through skills,

we wanna do it through career moves,

maybe some side businesses,

but we wanna focus on growing that income

so that we can really get to the next milestone,

which is gonna be a big, big difference.

You also wanna protect this savings rate at all costs,

which is why we build the emergency fund up front,

is so that if something happens in life,

it doesn't derail your savings rate

and throw you off track.

No, instead, you have the emergency fund in place

to take care of anything that is gonna happen in life,

and then you just follow the 136 method.

If you haven't heard that episode,

we will link it up down below in the show notes.

It is a core tenant to what we talk about here

on this podcast is the 136 method,

and so you just follow back into frame

with the 136 method.

And then you need to also understand what you're investing in.

This is the point in time where now,

it is very important to understand asset allocation.

Sure, it's important at the other milestones as well,

but now you need to know why you're investing

and what you're investing in,

having your investment plan in place is very important,

and getting properly invested

and making sure you're not sitting

with any cash on hand that's supposed to be invested.

So getting those dollars in these accounts,

and then making sure you're buying the index funds

and ETFs that make sense,

that is exactly what you need to be doing

or whatever else you're gonna be investing in.

Maybe you're a dividend stock investor,

maybe you're an individual stock investor,

it just depends on what floats your boat.

I personally am an index fund and ETF investor,

and so this is why this is gonna change everything.

Now once you cross $100,000,

the math begins to flip,

and at 10% rate of return,

if you have $100,000 invested,

well that's fantastic,

because guess what,

you're gonna make $10,000 in that given year,

if you got a 10% rate of return.

And so that's without you doing anything,

which is why the math begins to flip,

and so in year two,

all of a sudden you have $110,000

if you didn't add anything else.

And this means that you're making that amount of money,

but also the contributions that you're putting in

is growing this account as well,

and you can see how this is gonna begin to compound over time,

where it could make a really big impact on your bottom line.

So now that we've gotten through milestone two,

now we're looking at our first marker,

because to get to our milestone two to milestone three,

there are a few different markers

that we wanna hit,

and this is where a lot of people become unmotivated,

and I don't want this to happen to you, okay?

So after the first $100,000,

the first marker is $250,000 invested.

Now compounding becomes a genuine contributor here

when you hit $250,000 invested.

It's just, it's not just a footnote

or something that's happening in the background.

Instead, a 10% return on $250,000 per year

is gonna end up being $25,000 per year.

Now some of you at this point in time may be saying,

well, this guy keeps saying a 10% rate of return.

Where is he getting that from?

Well, what we're talking about here is the S&P 500.

Google S&P 500 historic returns,

and you will see that the S&P 500 has returned

slightly above 10%.

Now you can adjust down for inflation

that is completely fine.

A lot of times what we teach people to do here

is to increase your contributions

by the rate of inflation of that given previous year,

so that you can still be investing

the same exact buying power.

So let's Google right now, as we're talking about this,

I'm gonna Google the S&P 500 historic returns

at the time I'm recording this

just so we can look at exactly what they've been.

So this is from 1927 to 2026.

Here's the returns of the S&P 500

as of the time recording this in 2026.

The 100-year average is 10.42%.

The 50-year average is 11.71%.

The 30-year average is 10.12%.

And the 10-year average is 15.62%.

That's since 2016, absolutely crazy.

After inflation, if you adjust that one down,

it's 12.02%.

And so if you're asking, well, where is he getting

that 10% rate of return from?

That is where I'm getting it from.

Now if you're planning for your retirement

or you're thinking through this,

when it comes to your retirement,

I actually like to even be more conservative of that.

You can use an 8% rate of return,

7% rate of return, if you wanna be really safe,

you can use a 9% rate of return,

but getting more conservative

when it comes to retirement planning

is very helpful for most people.

So this marker at $250,000 means you're making $25,000

per year at a 10% rate of return,

and you are now earning what many people earn from their job

just from your investments,

or at least a big chunk of what people earn from their job,

just from your investments at that 10% rate of return.

And so you wanna, during this timeframe,

continue growing your income,

but do not ignore your investment strategy.

It's very important to make sure

you're continuing with your investment strategy.

You wanna continue to diversify across account types,

so making sure you have pre-tax, post-tax, and taxable

in those different pockets.

You wanna think through, well,

if I am increasing my income more and more over this timeframe,

maybe I want to think about adding some exposure

to real estate, or maybe you want to add some exposure

to some other areas, you can absolutely do that,

or just continue with your investing plan,

and you wanna protect against a lifestyle creep

even more at this higher income level,

especially as it increases over time.

Now, if you're hitting your retirement goals,

some lifestyle creep is healthy,

but if you're not, you wanna make sure

that you are focusing and growing your income

during this timeframe.

Now, during this marker,

this is also a great time to make sure

that you're continuing your education.

Your financial education is one of the most important things

that you are gonna be doing,

and as you start to see this money compound,

you're gonna realize I need more and more

of a financial education as I get more advance

and down the line with my wealth.

And so this is a good time to be thinking through that.

So the next marker, after 250,000,

is probably you guess, hit $500,000.

Now, this is a real milestone.

You have invested and saved half a million dollars.

This is a big, big deal.

And for some of you, if you bought a house

during this timeframe,

you may be approaching a million dollar net worth.

But we are focusing on how much you have invested

because those are the real dollars that you can use

when it comes to retirement

and buying your financial freedom.

And so the 500,000 marker is gonna be a point in time

where you're gonna feel like, wow,

I am halfway to a million dollar portfolio.

This is absolutely amazing that I have come this far.

And it may feel like you've grinded

or it's been a slog during this timeframe.

Maybe it took you 20 years to get here,

but that's okay because once you get to this point in time,

you're gonna see how everything is going to continue

to accelerate.

Again, $500,000 with a 10% rate of return

means that your portfolio could be earning 50,000 dollars

every single year.

That is a solid salary from portfolio growth alone

for a lot of folks.

And so when you think about the rule of 72

and how long it takes for this money to double,

if you got a 10% rate of return

and this money doubles every 7.2 years,

well, in 7.2 years, you can anticipate

that you will have a million dollar portfolio

during this timeframe.

And so this is where you really wanna think through,

well, what do I wanna do next

and can I accelerate this path?

Because that is before you even add your contributions.

Once you add your contributions in,

your job at this stage is to stay invested

and to keep contributing.

The more you can contribute during this timeframe,

the faster you can accelerate your path

to getting to that next milestone.

So do not sabotage compounding by pulling money out

for lifestyle expenses.

I see way too many people saying to me,

hey, can I take a 401K loan out or a,

should I start to take some of the money

out of my Roth IRA that I contributed

or maybe I should use my taxable brokerage account

for something else?

No, do not interrupt compound interest unnecessarily.

You will make a mistake if you start to think this way.

You need to make sure that this money

that you have invested, that is untouchable.

In fact, it is 500 degrees

and if you touch it, your hand's gonna burn off.

I don't want you to think about touching that money ever

because once you start to interrupt compound interest

unnecessarily, it becomes a habit

and you feel like you can go back to the well

and keep on dipping into that well.

Never, ever, ever touch those dollars.

Also, you really need to think about asset protection

and start at least the estate planning basics.

Having a will in place, power of attorney,

those types of things are gonna be very helpful

as your wealth begins to grow

and also make sure you have all your beneficiary

designations in place going to the right people,

a portfolio this size and really any size portfolio,

you wanna make sure it's going to the right folks

and the right people.

And at this wealth level, tax strategy

is gonna become increasingly important,

especially as your income begins to grow.

If you are someone who could get this far,

I assume from when you were at the 10,000 or milestone one,

all the way up to this marker at 500,000

that you have most likely grown your income

over that time frame.

And so because of this and because you are someone

who has focused your time and energy

on growing your income,

you wanna make sure that tax strategy becomes

a part of what you're thinking about.

Now, if you're a W2 earner, you may not yet

need someone who is a tax strategist,

but if you're investing in businesses or real estate

or you have all these different things going on

and you feel as though your tax situation

is becoming complicated,

this could be a time where you move on to the next step

and find a CPA.

All right, so that is the 500,000 marker.

We're gonna jump into the next marker

right after this break.

So the third marker between these two milestones

is gonna be 750,000.

Now at 750,000, this is where you're making

some true progress.

And the cool thing about this is the timeframe

between when it takes to get from 500 to 750

is really gonna be a lot faster than you think,

especially if you are increasing your contributions

over time and all of a sudden you see

that 750,000 has been reached,

I really want you to focus on this.

In fact, let's use our calculator

to see how long it would take to go from 500,000

to 750,000 dollars,

because I think this is where a lot of people get surprised

on how long it can actually take.

So I'm gonna pull this up and show you guys

exactly how long this could take, okay?

So let's say for example,

you're contributing $1,000 every single month, okay?

And you're starting from zero

and you got a 10% annual rate of return.

Well, to get to that first 500,000,

it's gonna take you 16 years and six months

to get to that first 500,000.

And as you can see that's on marker here,

but then once you get to the point in time

where you're going to 750,

it only is gonna be 19 years and 11 months from zero

to that 750.

And so the cool part about this is

to go from 500 to 750,

it's gonna take you three years and five months

at a thousand dollar monthly contributions

with a 10% rate of return.

All of a sudden your money begins to compound

and it begins to accelerate.

You're gonna make 250,000 dollars in three years

by literally not doing anything.

And that is why we wanna get our dollars invested

as fast as we possibly can.

And why I love this tool so much

because you can go and play with the numbers

and adjust the amount that you're investing

and see how quickly this is going to happen.

So maybe you get to the 750,000 level

and you're saying to yourself,

well, I wanna figure out how long

it's gonna take me to get to my first million.

Let me use this calculator so I can tweak

and see how long it's gonna take me to get there.

And maybe I wanna contribute, you know,

an extra thousand dollars a month

over the course of the next 12 months

so that I can get there even faster.

Well, that's an amazing way to think about this

and an amazing way to plan out your finances,

which is why we wanna give this to you

so that you can utilize this going forward.

Now, when you're at 750,000,

this is gonna feel like that home stretch.

It's gonna feel like you are so close

to having a million dollar portfolio.

And again, our goal on this podcast

is to create a million, millionaires.

So I want every single one of you to get to this point.

Every person that is listening,

we want you to get to this point.

The key though is not taking your foot off the gas.

You may feel as though, wow, I made it.

I am here now really, really excited to be here.

But instead, what I want you to do

is focus your time and energy on accelerating,

getting to that first million.

Why? Because at 750,000 dollars

at a 10% rate of return,

your portfolio is gonna generate $75,000 a year in returns.

And that is more than media and household income in the US.

So once you get to this point in time,

you have the ability for your portfolio

to make more than the media and household income in the US.

So let's say you're married and you make some money.

Maybe your spouse is working as well.

They make some money.

Well, now all of a sudden you went

from two full-time incomes to three full-time incomes

because your portfolio also has a day job

and it's working it's but off for you.

This is the power of compound interest

and why we want you to get here.

I don't want you to make any major lifestyle changes

to increase your fixed expenses

when you get to this point in time if you can avoid it.

Now, sure, you can take your foot off the gas

a little bit once we cross that million dollar mark,

but I want you to focus on getting to that million dollar mark

so that we can reap the benefits of some of the compound interest

that we are trying to focus on here.

So this is marker number three is that $750,000.

We want to make sure that we keep going.

We want to make sure that we keep pushing.

Now we are getting to milestone three

and milestone three is your first million dollars invested.

This is not your million dollar net worth.

This is the million dollars that you actually have in investments

and most of us out there.

If you can get to this point in time,

you can find other income sources to have the ability

to know that you will be able to retire one day.

You will be able to be financially free one day.

Why? We're going to talk about that here in a second.

But let's talk about the math to get here from $100,000.

If you add $100,000 at a 10% rate of return

with no contribution, it would take you approximately 24 years

without contributing another dollar

to get to your first million.

$100,000 at 10% with $1,000 a month

reaches 1 million in approximately 15 years.

And $100,000 at 10% with $2,000 a month contribution

reaches 1 million in about 12 years.

This is why maximizing those contributions early

and hitting your first 100k fast

shortens the timeline on how long it's going to take you to get there.

Which is why we're going to focus on getting

to our first 100,000 as fast as we possibly can.

But this milestone is a lot different than the others

because once you cross that million dollar mark,

your portfolio, if you got a 10% rate of return,

is going to be making you six figures

at that 10% rate of return.

But imagine like some years,

maybe you get a 15% rate of return.

It can make you $150,000.

At a 10% rate of return, it's going to make you $100,000.

There's been some years recently that the S&P 500

had 25% rate of returns.

And so you have a $250,000 year within your portfolio.

Now, sure, the market goes down some years as well.

So you're going to have to anticipate that

and make sure you know that that's going to happen.

But that's why the average rate of return

comes right around 10% when we think about this.

Now, what is this milestone unlock?

Well, number one, it unlocks the ability

to think through, okay, well, at a 4% withdrawal rate,

I can now withdraw $40,000 per year safely

for the majority of my life and still have the ability

to be able to preserve most of my wealth

in this portfolio.

Number two, is this allows you to shift your decisions?

Maybe you have a million dollar portfolio

and you're working at a really toxic job.

Well, you could take a little time off

to go find the job that you want to go do

by subsidizing some of your income

with a percentage of this portfolio.

And then maybe the rest of your money

you can make somewhere else at a part-time job

until you figure out exactly what you want to do.

This gives you flexibility.

This gives you options in life.

And once you get here, your portfolio is going to compound

without you even having to do anything.

The compounding growth here is exponential.

Getting from $1 million to $2 million,

means it's only going to take you 7.2 years

if you think about the rule of 72.

Getting from $2 million to $4 million

is going to take you 7.2 years.

So you can see how this money continues

to compound every single year

and why it is one of those areas

that is so incredibly powerful.

So getting to your first million is the milestone number three.

And this is the final milestone

that we're going to have for most people

that are trying to achieve.

Sure, there's milestones after this

that we can talk about getting to $2.5 million.

A lot of people, a lot of folks in Master Money Academy

are trying to get there.

A lot of folks are trying to get to five.

Some folks are trying to get to $10 million.

And those are different milestones

that can be hit different ways.

But for a lot of people out there,

you want to get to your first million

so that you can cross that threshold

and get to the point in time

where you absolutely are changing your life.

And so again, there's three milestones here.

Zero to 10K, your savings rate is going to be that whole thing.

Zero to 100K, your savings rate again

is going to be the majority of that.

And then we have 100K to 1 million.

1 million is going to be mostly compound interest

and it's going to change the way that you see your money.

And from 100K to 500K,

when we're thinking about some of those milestones in place,

that's going to be your savings rate plus compounding.

Those are what are going to propel you

to get to some of those next levels.

Let me give you a couple scenarios, though,

because I want to dive into a few different scenarios

and examples, because I know you guys love examples

on what this would look like.

Okay, so we're going to shift our attention.

I'm going to actually share my screen with you guys on here

on the financial milestone track here,

where you guys can see exactly three different scenarios

of what's going to happen here.

So as you can see here,

this is the financial milestone track.

And I want to show you guys exactly how this tool works

so that you can use this

and I'm going to give you a couple of different examples.

So let's use scenario A.

I want you to think of scenario A as a 25-year-old person

starting from zero.

And they have a zero dollar starting balance,

and we're going to use $500 per month

and a 10% rate of return.

And so as you come down here,

you're going to see here's the calculator here,

and we are going to go with $500 per month

they're starting from zero

and a 10% rate of return.

And let's go through this scenario

and see exactly what happens.

Well, to get to their first $10,000 at $500 per month,

it's going to take you one year and seven months.

And so that's the quick win we're trying to get to.

And at that point in time,

their portfolio at a 10% rate of return

is making them about $1,000 per year.

To get to their first $100,000,

this is why it's such a slog,

it takes them nine years and 11 months

to get to their first $100,000,

and their portfolio is going to be producing

about $10,000 per year.

To get to their first 500,000,

it's going to take them 22 years and six months.

So starting from zero,

they went from 100,000 to 500,000,

and it took them about 13,

just under 13 years to get to that point in time.

And then it takes them 28 years and 11 months

to get to their first million.

The key takeaway though,

is to start early with a modest contribution

and it still gets to a million

before a traditional retirement age.

Because if they bumped this up, for example,

and let's say that this same exact person

had a thousand dollars,

you would see that this would shift to 22 years

and six months is how long it would take them

to get to their first million.

And then beyond that,

it's going to compound even faster.

Now let's do scenario B.

Scenario B is a 35 year old playing catch up.

They're trying to get to

hitting these milestones as fast they possibly can

with a 10% rate of return.

And we're going to have a starting balance of $10,000.

We're going to look at $1,500 per month

with that 10% rate of return.

So let's have a starting balance at $10,000.

Then what we're going to do is we are going to invest

$1,500 per month.

And when we look at this,

if they start at $10,000 at $1,500 per month,

it's going to take them two years to get to $50,000.

It's going to take them three years and 11 months

to get to $100,000.

And it's only going to take them 18 years and five months

that starting balance is very important

for them to get to their first million.

So if you feel as though you're 35 years old

and you're starting too late,

it's not too late.

You can see how playing catch up

can really get you to a point in time

that changes your life.

Let's talk through the high earner.

Maybe we have a high earner who starts too late

and they want to make sure that they actually get on track

to be able to do this.

Well, this high earner who starts too late,

let's say they start with a $25,000 starting balance

and they are contributing $3,000 per month.

Let's see exactly where they're going to land

when we do this.

Well, at $3,000 per month,

they would obviously get to their first $100,000

in one year and 10 month.

And so that seems like, oh man, that's a slog,

that's a grind.

But they would get to their first million

in 12 years and nine months.

It would take them eight years and one month

to get to their first $500,000

in only 10 years to get to their first $750.

But because they're contributing so much,

they can play catch up and increase the amount of money

to get to this point in time.

Contributions matter more than almost anything else early on

and because they have at least a little starting balance there,

it is never too late to get started.

This is why I tell you guys,

it is never, ever too late to get started.

If you just get the ball rolling,

you can absolutely transform your life that quickly

as long as you increase your income.

If you got the income in place

and you've got the delta in place,

you can get to your first million in 12 years

and nine months, but $3,000 per month.

And so this is why this tool is so important.

It helps you track through all this stuff

so that you know exactly what is going on.

All right, so before we wrap this episode up,

I want to go through the biggest mistakes

at each of these milestones that people make

just so you know some of the things to avoid.

It's a number one, between 10,000 and 50,000.

I want you to try to avoid lifestyle inflation

as much as possible.

Lifestyle inflation will derail your progress

because your savings rate is so important during this timeframe.

That is the one thing that I think

you really need to understand is that

do not let your lifestyle inflate until you get to at least,

at least some of these other milestones.

At 50,000 to 100,000 sitting in cash

is one of the most important things

that you do not want to do.

I see way too many people sit in cash

because they think the market is scary.

No, you need to get your dollars invested.

This entire exercise to show you that getting your dollars

invested is going to help you more than anything else

in this life.

From 100,000 to 250,000 under investing

because you finally feel comfortable.

A lot of people will take their foot off the gas

and they will stop contributing as much as they should.

I want you to make sure you avoid that at all possible.

I see this happen time and time again.

And instead, I don't want you to have this false sense of security.

People slow down contributions

because life starts to happen.

Instead, I want you to put your foot on the gas.

At $250,000 to $500,000,

a lot of people avoid thinking through tax strategy at this level.

And so I want you to think through tax strategy,

how you can say more in taxes

so that you can take those extra dollars

and put them towards wealth pudding

so you can buy your freedom back.

And then lastly, from 500 to 1 million,

pulling money out for lifestyle purchases

is the number one thing I see.

People are like, man, I got this nest egg already in place.

I can start to pull this out to buy a house

or I can start to pull this out to buy a car

or I can take a 401k loan to start this business.

No, I don't want you interrupting compound interests

unnecessarily.

Instead, we need to make sure that we are focusing on

the task at hand, which is building wealth.

So really excited for each and every single one of you

to get started focusing on these milestones.

These are our milestones that we want you to focus on

and then going beyond there to $5 million to $10 million

or whatever else your financial goals are.

For some of you though, you just want to get to that first million

and then decide where you need to be from there.

And I think that is a great goal to have in place.

Listen, if you want direct help from me

and you want to be a part of a community of people

who are all working towards these milestones,

I would love to invite you to join MasterMoney Academy.

MasterMoney Academy is the place

that will transform your financial life

where you're going to go from someone who feels stressed out,

anxious about money.

You don't know where to put your next dollar

to the person who knows exactly where the next dollar

needs to go.

They have financial clarity and they know exactly

how to hit these milestones.

They have an investment plan in place.

They're tracking their retirement number

and they know exactly what they need to do next.

MasterMoney Academy is where we walk you through that

and we help hundreds of people every single week

inside MasterMoney Academy.

And if you ever get stuck, we have a step-by-step framework

that shows you exactly what to do with your next dollar.

And when you get stuck, you can ask me

on our weekly live coaching calls

that we do every single week.

I'm helping people every single week

in MasterMoney Academy on those coaching calls.

In fact, the MasterMoney Academy members

got a copy of this calculator

before any podcast listeners did.

We test a lot of this stuff out with them.

And so you get access to all kinds of different perks

that most people don't get who just listen to the show.

So I would love to invite you to join MasterMoney Academy.

And if I don't want to invite you to join MasterMoney Academy

without seeing what's behind the curtain,

so I'm going to give podcast listeners a seven day free trial.

So you can test it out for seven days,

see if it's right for you and behind the curtain,

and that's the best way to see

if MasterMoney Academy is going to work for you.

So click the link down below in the show notes

for that seven day free trial.

Join MasterMoney Academy.

Join one of our weekly coaching calls.

Have a conversation with me live on those calls

so that you can see if MasterMoney Academy is for you.

Can't wait to meet you inside

and really appreciate each and every single one of you

listening to this podcast episode.

If you got value out of this episode,

leave a five star rating review on Apple Podcasts

or Spotify.

It truly means the world to us.

And if you're watching on YouTube, Spotify,

or Apple Podcasts, make sure you're subscribed

to get some of the future content that we have coming up.

Thank you so much for being here.

We will see you on the next episode.