Beautifully Frugal: Lessons Learned and Insight on My First $100k Invested
Reaching your first $100,000 invested can feel like a significant milestone met – and it should be! It’s a combination of discipline, strategy, and a bit of patience, and it’s something to be proud of. To help those who may be struggling or looking for insight on how to achieve this, let’s explore my journey to investing my first $100,000 along with valuable lessons learned along the way.
Investing Education and Resources
Before making my first investment, I dedicated myself to learning about personal finance and investing. I explored books, podcasts, and financial blogs, gaining a solid understanding of stocks, bonds, mutual funds, and index funds. This knowledge boosted my confidence in making informed investment decisions.
If investing isn’t something you want to tackle on your own, that’s okay! Consider finding an advisor who emphasizes education and helps you make informed decisions that align with your goals.
Setting Clear Goals
My husband and I set a clear goal to accumulate $100,000 across all our retirement accounts as quickly as possible while still enjoying our current lives. Having this defined financial goal helped shape our investment strategies and kept us focused and motivated, especially during market downturns. Whether we were saving for retirement, a home, or simply building wealth, we made it a point to write down our objectives. Sometimes putting pen to paper can make a larger impact on your goals than you think.
Starting Small
Being a stay at home mom, my husband and I decided to start our investment journey by taking small steps. These steps included:
Increase my husband’s 401(k) contributions
Opened a Roth IRA with a modest initial investment (even if it was just a few hundred dollars)
I employed dollar-cost averaging, consistently investing a fixed amount regardless of market conditions.
These steps not only helped reduce risk but also cultivated discipline in our investing habits. Consistency was key to reaching our first $100,000. We made regular contributions to our investment accounts, even when tempted to spend elsewhere. Automating contributions ensured we prioritized saving and investing before discretionary spending.
Embracing Low-Cost Funds
As I explored various investment options, I capitalized on low-cost funds, which allowed me to reduce expenses while effectively tracking market trends. This strategic approach not only enhanced my investment returns over time but also supported my objective of creating a sustainable portfolio that balances efficiency and performance. By focusing on affordable options, I positioned myself to take advantage of the market's long-term growth potential while maintaining control over my expenses.
Building an Emergency Fund
Before diving deeper into investments, I made sure to establish an emergency fund. This safety net covered three to six months of expenses and provided peace of mind. Knowing I had a financial cushion allowed me to invest more freely without fear of needing to access those funds unexpectedly.
Understanding Market Fluctuations
Market fluctuations are a normal part of investing. There were moments when our portfolio dipped significantly, and it was tempting to panic. However, I learned to stay the course and focus on the long-term. Keeping a cool head during downturns has been one of the most valuable lessons.
Celebrating Milestones
Reaching our first $100,000 invested was a moment worth celebrating! My husband and I decided when we hit that milestone, we would treat ourselves to a fancy dinner—after all, enjoying delicious food is my love language — and it was an incredible experience! Not only did we enjoy the best meal I’ve ever had, we also discussed what our next financial goal would be. Recognizing milestones, no matter how small, is crucial for staying motivated and keeping a positive mindset. Whatever your financial goal is, make sure to celebrate when you achieve it! It takes significant hard work and discipline to stay on track, and celebrating those victories is important.
Conclusion
Investing our first $100,000 was an intricate learning experience that showed my husband and I the value of strategic financial planning and discipline. Although the journey hasn’t always been smooth and is far from finished, the benefits of consistent investing and financial education are worthwhile. Whether you’re just beginning or well on your way, keep in mind every step matters.
If you're unsure where to start and eager to dive in, reach out to our team—we would be thrilled and honored to accompany you on this journey and help you accomplish your financial goals! I’m living proof that even though it may seem impossible, with proper planning, proper money management, and discipline, saving for your future is possible for everyone.
Alexandria Miller, CPFA® Financial Wellness Advocate