If you’re just starting out in your career, $100,000 might seem like a lot of money. After all, the median salary of a 20- to 24-year-old, according to Bureau of Labor Statistics data, is just $37,024.
Shark Tank’s Kevin O’Leary recently took to X, formerly Twitter, to share his advice on how you can accrue $100,000 in savings by the time you’re 33 years old, if you start saving when you’re 23. “By the time you hit 33 years old, you should have $100,000 saved somewhere,” he said, urging viewers that they can accomplish this goal.
“Save 20 percent of your paycheck and let the market grow at 5% to 7% per year,” O’Leary said in the video. “You can get to $100,000.”
Does the math check out?
First, let’s assume you’re making at least the median salary for someone in Gen Z. Find a way to save 20% of your paycheck (before taxes) each month. In his X post, O’Leary suggested you can free up this money if you stop “buying things you don’t need.”
Depending on your cost of living, whether you rent an apartment or live with parents, and how much you pay in student loans, it might be possible to save more than $600 a month. Otherwise, you might consider taking on a side gig to earn $1,000 a month or more. Then, you could ramp up your savings even faster.
If you are earning $37,024 annually and save 20% each paycheck, you’d set aside $617 per month. Then, O’Leary suggested, invest it at a rate of 5% to 7%. The average stock market return has been roughly 10% for decades, so it shouldn’t be too hard to find an investment that yields at least 6%.
We plugged these figures into a compound interest calculator to find that $617 per month — growing at an interest rate of 6%, compounded monthly — would grow to $102,236 after 10 years.
Even better, if you keep that money invested for another 10 years, it will grow to $287,122. By age 63 — which is an age where you might start considering retirement — you’d be a millionaire with $1,235,511 invested.
You don’t have to park your money in the stock market, though. A more secure 401(k) can yield between 5% and 8% over time. Plus, if your employer offers matching funds, you only have to invest a little over $300 per monthly paycheck to reach $100,000+ in savings in 10 years.
Of course, as time goes on and you gain more experience in your career, your salary will increase. If you continue saving 20% of your paycheck, no matter how much you’re making, that savings will grow even faster.
And if you’re fortunate enough to start your career making more than the median salary for your age group, you can hit that magic six-figure savings mark even sooner.
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