Saving $100,000 may seem difficult, but it is a revolutionary financial achievement, and while achieving this goal may take years, it is well worth the effort.

In his report, published by the American Investedwallet website, writer Todd Kansman talked about the journey of saving $ 100,000 and how to grow his fortune.

How do you save 100 thousand dollars?

The writer mentioned that since 2014 he has worked hard to learn everything there is to know about personal finances and investing, determined the salary he needed to generate better income, opened a Vanguard account, transferred $500 to a brokerage account, and as of 2019 succeeded in saving 100,000 in a period of just over 5 years, and here are the most important steps you can take to save 100,000 dollars.

1. Striving to increase your salary or professional value

Improving income and enhancing your career value is not always easy, and it can take some time, so cut back on your expenses, budget and spend your money wisely.

The writer stated that during the past five years, he became passionate about digital marketing, worked for himself, and applied to a marketing agency to get more experience and learn more about this field as possible, and since the demand for this job is great, the salary increases as you gain more experience.

Not all jobs are the same, but you should look for ways to enhance your professional value and understand the direction of your job and your skills, and feel free to ask for the salary you deserve, but remember that a high salary will not guarantee you significant amounts of savings, because saving is about how much you stick to a specific budget and how you spend your money.

2. Pay off all your debts

The writer emphasized that during his quest to save 100,000 dollars, he was also working to pay off his debts, and instead of paying all his debts as quickly as possible, he chose to save and invest and was able to achieve large annual returns, and by paying off some of his debts, he was able to add more than 3800 dollars annually to his savings.

Kansman admitted that he could have repaid his current savings if he had paid off all his debts, but he would have missed out on some great travel experiences.

3. Don't just save, invest

Do you want to know how you can save 100 thousand dollars?

In addition to saving, you have to invest your money in the stock market. This does not mean investing all your money in one stock, but rather diversifying your investments.

The writer mentioned that he invested in “low-cost index funds” and when he had enough in his emergency fund (enough savings to cover his expenses for 6 months to a year) he started investing in a brokerage account.

Kansman advises against investing all of your savings in the stock market because it is known for its volatility.

4. Stably increase the saving rate

The writer reported that the average American saves about 5% or less of his income, and many reasons explain low saving rates, such as not making enough money, accumulated debts, or not paying attention to wasted money.

In 2015, Kansman said, he managed to save 15% of his income, and doubled that percentage to 30% before the big increase in his salary in mid-2017.

He was able to achieve this goal by giving up unnecessary expenses, adjusting his budget a little, making sure to constantly increase his savings rate, and saving any extra money he gets, and his current savings rate is 70%.

The writer advised setting a reasonable amount of savings that is within your capabilities and then gradually increasing it when additional funds or salary increases become available.

5. Learn From The Millionaire Next Door

The writer pointed out that his favorite book is "Millionaire Next Door...The Surprising Secrets of America's Rich", which highlights the common features between the rich and the way they manage their money.

And if you want to save $100 thousand and more, you have to learn to follow the examples given in the book, such as following a simple lifestyle, reducing expenses, and investing money.

Kansman admitted that when his salary doubled in 2017, all that changed in his life was his ability to save more and pay off debts faster, while he didn't change his home or car.

How did you manage to save $100k recently?

Along with the above tips that will help you reach $100,000, the writer has provided the exact steps that enabled him to achieve his current financial goal.

Increase your savings rate

The writer emphasized that he is trying to increase the savings rate every time his salary increases. In 2018, he managed to maintain a savings rate of nearly 55%, and last year he increased the percentage to 60%, and his goal is to reach 70% and more in the foreseeable future.

Spent less than last year

Kansman noted that he spent a lot last year because he traveled, but he does not regret the experience, and fortunately this year he does not have any weddings so he will be more conservative about spending his money.

When I get a raise, I also increase the savings rate

The writer emphasized that he takes into account each salary increase, and works to increase his saving rate accordingly.

Stick to your plan and ignore temptations

Kansman acknowledged that his savings plan was strict, and sticking to it meant giving up a lot of expenses and ignoring temptations.

What does investing $100k mean?

The writer pointed out that saving and investing $ 100,000 is a financial achievement that would give you a kind of comfort to bear the costs of many things, such as travel, home maintenance, avoid feeling any financial stress, and ensure you a strong basis for future expenses or retirement.

Final thoughts

Saving $100,000 takes good planning, consistent saving, smart investment and patience, and time and mindset are important factors for success in personal money management.