This Is How to Save $100,000 in 2023, According to Humphrey Yang

Many or all of the products here are from our partners that compensate us. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. Terms may apply to offers listed on this page. APY = Annual Percentage Yield. APYs are subject to change at any time without notice.

KEY POINTS

  • Humphrey Yang says your first $100,000 will likely consist of about 85% savings and 15% investment returns.
  • To save $100,000, focus on earning more by finding and leveraging a high-income skill.
  • Also, live a frugal lifestyle so you're able to put away more of what you earn.

The first $100,000 is often the most difficult, but these tips will help you get there faster.

Your first $100,000 is a crucial milestone on the path to financial success. Starting from $0 and saving $100,000 is difficult, and some even say it's the most difficult part of building wealth. But once you accomplish it, you'll have the financial habits you need to reach bigger and bigger goals.

Former financial advisor Humphrey Yang recently shared advice on saving $100,000. The first thing he explains is extremely important for those starting out with building wealth -- "getting your first $100K is rarely about investment gains." He says the first $100,000 usually consists of about 85% savings and 15% investment returns.

As your money grows, more and more of it will come from investment returns. That's the power of investing in the stock market and earning compound interest. In the early stages, it takes a lot of saving to get your portfolio off the ground.

It normally takes years to save $100,000 in your bank accounts and investments, but what if you want to speed up the process? Yang provided three valuable tips on how to potentially reach this milestone in 2023.

Our Picks for the Best High-Yield Savings Accounts of 2024

APY
up to 4.60%
Rate info Circle with letter I in it. You can earn the maximum APY by having Direct Deposit (no minimum amount required) or by making $5,000 or more in Qualifying Deposits every 30 days. See SoFi Checking and Savings rate sheet at: https://www.sofi.com/legal/banking-rate-sheet.
Min. to earn
$0
APY
4.75%
Rate info Circle with letter I in it. Our Disclosure: Annual Percentage Yields (APY) is subject to change at any time without notice. Offer applies to personal accounts only. Fees may reduce earnings. For High Yield Savings accounts, the rate may change after the account is opened. Visit synchronybank.com for current rates, terms and account requirements. Member FDIC
Min. to earn
$0
APY
4.25%
Rate info Circle with letter I in it. See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of April 11, 2024. Rates are subject to change at any time before or after account opening.
Min. to earn
$0

1. Be irreplaceable

The amount you can save depends on your income. As Yang correctly points out, "the more irreplaceable you are, the more money that you are going to make."

If you're one of few people who can do a job, then you can command a high salary. An example Yang mentions that most are familiar with is professional athletes. Some people complain about the salaries of sports superstars, but they earn those salaries because hardly anyone else can do what they do.

On the other hand, if anyone can do a job with a week or two of training, it probably doesn't pay all that well. Since there are so many people who could fill that role, there's no reason for an employer to pay a premium.

Nobody's completely irreplaceable. But the better you are at what you do, compared to the average person, the more you can make. This is where Yang's second tip comes into play.

2. Find your high-income skill

The key to increasing your income is leveraging your skills. Think of areas where you have more knowledge, experience, or natural ability than the average person. A good way to find your skills is to consider what you're better at than your friends and family. Once you've found a potential high-income skill, brainstorm ways you can monetize it.

Remember that you don't need to be the best in the world at something for it to be a skill. If you're above average at it, then you could make money from it. That's especially true if you're easy to work with.

What if you can't think of any high-income skills you have? There's a good chance you have some that just haven't come to mind yet. However, if you're really stumped, dedicate a year or two to developing a high-income skill. Here are some options that Yang suggests:

  • Graphic design
  • Videography
  • Copywriting
  • Social media marketing
  • Web design

3. Be as frugal as possible

The first two tips are all about boosting your income so you have more money to save. This final tip is about getting into the habit of living on less so you save more.

Yang recommends being as frugal as possible until you have a net worth of $100,000. When you're going to spend money, he says to first see if there's a lower-cost alternative available. For example, instead of going out to eat, try meal prepping.

Frugality is important, but to be honest, you don't need to take it to an extreme. An easier approach is to simply commit to saving a certain portion of your income per month. A good target is 20% of your income to your savings accounts and retirement accounts, but this depends on your financial situation. If you can only afford 10%, then do 10%. If you can afford 50% and still maintain a good quality of life, go for it.

To set realistic expectations here, even with Yang's advice, the average person won't go from $0 to $100,000 in 2023. After all, the average U.S. salary is under $100,000. What this advice will do is get you on the right track toward saving that much and continuing to build wealth from there.

These savings accounts are FDIC insured and could earn you 11x your bank

Many people are missing out on guaranteed returns as their money languishes in a big bank savings account earning next to no interest. Our picks of the best online savings accounts could earn you 11x the national average savings account rate. Click here to uncover the best-in-class accounts that landed a spot on our short list of the best savings accounts for 2024.

Two of our top online savings account picks:

Rates as of Jun 15, 2024 Ratings Methodology
Advertisement
SoFi Checking and Savings Capital One 360 Performance Savings
Member FDIC. Member FDIC.
Rating image, 4.50 out of 5 stars.
4.50/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair
= Poor
Rating image, 4.00 out of 5 stars.
4.00/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair
= Poor

APY: up to 4.60%

APY: 4.25%

Min. to earn APY: $0

Min. to earn APY: $0

Our Research Expert

Related Articles

View All Articles Learn More Link Arrow