Once Your Net Worth Hits $100,000, Do These Things To Reach $1 Million Faster

Every year, hundreds of Americans reportedly join the "Seven Figure Club," that is, they each reach a personal net worth that exceeds $1 million. In fact, CNBC reports that there are already over 23.8 million people in the United States alone who could be classified as millionaires. While that number grows every day, it can feel very far away for someone who just hit the $100,000 personal wealth milestone.

First, take a moment to congratulate yourself. Believe it or not, this is actually a very hard number to reach in terms of net personal wealth. You have managed to save or earn tens of thousands of dollars at a time when life in America is more expensive than ever. While research by the Social Security Administration shows that on average, most Americans will earn between $1- and $3 million over the course of their lives, very few will have successfully held onto a fraction of that money by the time they reach retirement age. By clearing the six-figure hurdle, you've demonstrated that is possible to put yourself on the path not just holding onto money, but building considerable future wealth.

Clearing that $1 million milestone, will take more work, but there are multiple approaches that will eventually allow you to achieve this goal. If you're serious about reaching a million dollar net worth as soon as possible, below are suggestions to help you make it happen.

No doubt, proactive saving strategies played a large role in your ability to increase your net worth to $100,000. That said, getting to a million dollars will likely involve an even more aggressive approach over a longer period of time. Perhaps you set aside at least $800 per month over a period of years. If one of your goals in getting to $1 million is to prioritize savings, you will have to take an even more aggressive approach if your goal is to hit seven figures as quickly as possible. 

The good news is that as your current net worth is $100,000, that likely means that your savings is well below the $250,000 maximum deposit covered by the Federal Deposit Insurance Corporation (FDIC). At this point, you don't technically need  only one savings account. As time passes and your account gets close to or exceeds $250,000, it may be a good idea to consider opening at least one new account. This not only opens multiple avenues for earning passively from monthly interest payments into your accounts, but it also allows your savings to remain safely insured by the FDIC. 

As for the type of savings account you should have it ultimately depends on a variety of factors such as your funds, willingness to pay monthly fees, and exactly how much money you're willing to looking to earn annually. For instance, if you put $50,000 into a high-yield savings account (HYSA) and leave it alone, with a base rate of about 4.9%, you could see it grow to more than $63,000 within 5 years. If you are steadily adding money to savings, that will only serve to accelerate your earnings. As you can see, aggressive saving strategies, if done right, can be a decisive method in closing that seven-figure gap.

It might not be too outrageous to think of a 401(k) as free money. After all, when you put money into your company's 401(k), they also put money into it on your behalf. This helps you steadily accumulate wealth over time, making it far less stressful to ease into retirement. As CNBC notes, there isn't a general consensus on the exact amount you should pay into a 401(k). However, some believe that 15% of your yearly income is a good starting point. 

If you're putting $10,000 to $50,000 per year into a 401(k), within a decade, that represents $100,000 to $500,000 of your contributions. If your employer contributes between $0.50 and $1 for every $1 you add to your 401(k), within 10 years, you could be sitting on between $150,000 and $1 million. That said, CNBC reports that most employers, on average, are likely to contribute to between 3% and 7% of your yearly salary. Moreover, per USAFacts, it's rare for American workers to remain at a company beyond four or five years.

The good news is you can pay into multiple 401(k), IRA, etc. plans at once, though there's allegedly a cap on how much you can pay into these combined plans every year. If you have lingering doubts about 401(k)s, Ramsey Solutions' National Study of Millionaires found that eight out of 10 respondents had successfully contributed to at least one on their way to a seven figure net worth.

Whenever people start making more money, there seems to be an irresistible urge to start living accordingly. When you go from a $50,000 to $150,000 per year income, for instance, you may decide this means living in a larger home or nicer apartment. Your clothes become more expensive. You go out more or want to treat yourself and friends to more extravagant meals. The logic is that you should do these things because you can afford them now. The likely and unintended consequence is that you are still living paycheck to paycheck, even when you should have more money left over than ever. 

What you're experiencing is a problem known as "lifestyle creep." It's a problem that CNBC and other sources describe as what happens when your spending increases with your salary. Sometimes called "lifestyle inflation," the tendency to spend more as you earn more is enough to keep even high earners, Americans with salaries above $500,000, practically living paycheck to paycheck.

The good news is that by reaching the $100,000 net-worth milestone, you have already built positive habits that, if leaned into, can curb any future temptation to spend near or more that you are earning. Continue to cut back on wasteful spending, including repeated luxury shopping trips and pricey destination travel. Trade them for a periodic splurge or "staycation," and your bank account will thank you. The more proactive you are, the less likely you'll be caught off guard by lifestyle creep.

It's true that most people don't like to think about tax obligations at all, as this money is often viewed through the lens of subtracting from their personal net worth. However, it is crucial to stay on top of taxes, if only to avoid running into costly errors or problematic penalties. As you build your personal finances, it will likely take you from one tax bracket to another, meaning that you may become responsible for paying out a higher share of taxes. It can take quite a mental adjustment to go from being taxed 12% by the IRS while earning under $50,000 to a 32% tax rate for a $200,000 income. Still, there is good news overall. Moving to a higher tax bracket is an obvious sign that your net worth is increasing which is the goal.

Also, with the right deductions, you can significantly reduce the amount of money paid towards federal and state taxes each year. Applying credits, meanwhile, helps reduce the amount of tax money owed. Combined, credits and deductions will let you bring down your tax burden significantly. Tax experts also recommend maxing out yearly contributions to individual retirement accounts (IRAs) and health savings accounts (HSAs) are other ways to lower your tax payments. You should also look into charitable donations.

Taking these steps can not only help you decrease your yearly tax payments, but may also be enough to technically drop you into a lower tax bracket despite your increased yearly income. If you're not confident enough to navigate protecting your growing net worth while figuring out taxes, you should consider working with a knowledgeable expert such as a certified public accountant or reputable financial advisor.

When it comes to compounding wealth quickly, some recommend looking into a dividend reinvestment plan (DRIP). Companies typically pay out cash dividends to investors. By opting for a DRIP approach, you would simply use your cash dividends to buy more stock. 

In addition to allowing you to gradually garner a larger share of the company, this approach allows you to compound your wealth without really doing anything. Choosing this plan is also a cost-effective way to gain additional stock while not having to worry about paying out commissions or brokerage fees. According to Sharesight, another upside to DRIP is the ability to buy the same amount of shares in regular intervals, allowing you to predictably and steadily increase your net worth over time.

There are a couple of potential drawbacks. For example, Sharesight notes that while stock purchases are automatic, you have no control over pricing; at times the stock may be worth more and at other times it could be worth less. The expectation is that everything evens out in the long run. You might also want to be wary of a portfolio that is a bit too weighted and isn't quite diversified enough. Still, if your goal is passive and generally reliable net worth building, this is one option that can get you closer to that desired million dollar net worth.

It's possible bringing the gap between a $100,000 and $1 million net worth is switching careers. Per Ramsey Solutions' survey of millionaires, the top five jobs among respondents were accountants, managers, engineers, attorneys, and teachers. Glassdoor estimates that technology engineers earn an average of $129,000 per year. Meanwhile, the College of Law says that the attorneys most likely to reach a seven-figure net worth work in patents, intellectual property (IP), taxes, or practice corporate and trial law.

If you aren't too keen about starting all over again in a new field, even if it pays very well, it may be possible to grow your net worth by moving up the company ladder. This strategically makes the case not only for a more advanced job role, but earnings to match. It won't necessarily be easy, but you should be willing to self-advocate at work. 

Document as many instances as possible of you receiving positive feedback for a job well done, especially from clients. Make a list of projects you contributed to with measurable positive outcomes. When up for a job review or pushing for a promotion, you'll be able to refer to specific examples that justify your request for more responsibility and a pay increase to match.

Depending on who you ask, real estate is practically a cheat code in building a great deal of wealth very fast. Some estimate that, depending on your approach and level of financial investment, it could take anywhere from five to 15 years to see the level of progress that garners a $1 million net worth. Some real estate investors' profits can range between $10,000 and $120,000. 

With a current net worth of $100,000, it wouldn't be advisable to pour all of the money into a single fixer-upper house in the hopes of selling it off later for a massive profit. Instead, you'll want to start small. For instance, you could invest in real estate property despite not owning it directly. Real estate investment trusts (REITs) are a popular example of this. These are companies that own and manage real estate that produce income; some examples include hotel chains, apartments, and office buildings.

Other real estate options to consider as your net worth grows are real estate auctions and rental property. Though, if you do become a landlord, it's important to be knowledgeable of rental laws and also to be mindful that you will likely be responsible for paying for repairs. That aside, if you're willing to invest sensibly in real estate, it could be a quick path to building a million dollar net worth.

You might think that purchasing gold is more or less something to only ever think about during economic recessions. Rather than with the stated goal of building your net worth, it's more or less about guarding against losing money during uncertain financial times. However, when it comes to gold, attitudes may be changing.

It's important to understand that gold exchange-traded funds (ETFs) get traded differently by investors than physical gold purchases. With a gold ETF, you are investing in a trust that has gold under its own direct control; while you do not have physical access to gold, you are a partial owner of the gold belonging to the trust. Some reasons why investors may prefer gold ETFs is that costs are lower, liquidity is higher, and you don't typically need to invest as much money as you would attempting to buy and trade physical gold. Likewise, in some instances your ETF is IRA-eligible.

A gold ETF, like physical gold, is often looked at as a long-term investment. However, depending on your timing and your investment approach, you may be able to use this type of ETF to build notable wealth in a short amount of time. This may be why, as CBS News reported, investors have been jumping on cold as a way of not only protecting their wealth but also making moves with an eye on short-term gains.

While it's common advice to recommend starting a business or side hustle as a way to accumulate wealth, one thing that often isn't discussed enough is how you go about funding those ventures. You could look for someone or an entity to invest in your business, but then doing so often means selling a piece of the pie to them and being responsible for generating a return on their investment. Likewise, personal loans put you in debt, and paying directly out of pocket could start to chip away at your net worth.

If you aren't looking to take these kinds of risks but are still very keen to start a brand new business, you should look into getting a grant. The U.S. government alone offers well over 1,000 grants to aspiring businesses; there are hundreds to thousands more to be found across different states and cities. Some such programs are recommended through the United States Chamber of Commerce.

The best part about receiving a grant is that most of the time, there is no expectation that you have to pay it back. As long as it's applied according to the expectations of the person or organization granting the funding, you are free to spend it however necessary on the building and running of your company. Likewise, not having to come out of pocket at all protects your current net worth.

This is probably the simplest and most straightforward piece of advice listed, but you might be surprised to know just how many millionaires swear by this approach to shopping. Per Ramsey Solutions, the vast majority of millionaires they surveyed always make a shopping list before going to the store. Of that group, 28% claim that they strictly adhere to what is written down. In other words, they leave as little room as possible for overspending. 

There may be something to the grocery list approach, as some assert written shopping list can reduce your grocery bill by between 20% and 30%. One blogger claimed on The Dinner Daily to have saved nearly $350 in one month by using a well-organized shopping list. That kind of savings is crucial because it adds up over time. 

While some might not find shopping lists as impressive as REITs or stock purchases, what day signal is a proactive and deliberate method of controlling your spending. By making sure you're only spending on what you truly need and sticking to your list, you not only avoid overspending but you are demonstrating an awareness as to where your money is being spent and how. It's the kind of accountability that is necessary for establishing habits and a mindset that will enable you to see your $100,000 grow over time until you reach your $1 million milestone.