They Banked Six Figures by 25—Without a Six-Figure Salary
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There’s no denying that saving money can feel like hard work at times: It requires a long-term mindset and at least a few short-term sacrifices.

Yet these three make hitting $100,000 net worth by 25 look easy. With specific plans in place to reach their goals and some serious discipline, they’re proof you don’t need a six-figure salary to build up a net worth of that much. Here's how they did it. 

“I treated saving money like a video game—and figured out how to beat it.”

Gwen, 26, IT specialist in the Midwest

“I never set out to save $100,000 by a specific age—I just wanted to save as much as possible. My ultimate goal is to retire by 35, so I’ve been prioritizing saving and living below my means since college.

I was fortunate to have some great financial role models: My parents made me save 50 percent of my allowance and gifts, encouraged me to avoid debt and ingrained frugal habits, like paying for cars in cash, reusing plastic bags and buying second-hand.

When I started my first full-time job, I adopted smart habits of my own: I built up a $10,000 cash cushion, and automatically transfer money into my 401(k) until it’s maxed out, $100 into my Health Savings Account (HSA) and $450 into my Roth IRA. I cut costs by living with a roommate. I drove the car I'd had since college and visited friends and family for vacation instead of traveling to luxury spots.

Over the following three years, my income increased, too—I hit $77,000 last year—and I worked up to saving about 75 percent of my take-home pay. This ultimately helped me hit a net worth of $100,000 last July—which felt great, and really validated all my frugal choices.

My next goal? Grow my savings and investments to $200,000 by the end of the year. (I’m around the $150,000-mark now.) I know accomplishing this is somewhat dependent on the market continuing its upward climb—but I’ll do my part either way.”

Her advice for others: “Treat your savings like a game! What skills can you sharpen to earn more money? How can you optimize your spending in order to keep as much of your money as possible? What else can you do to make your money work for you?

I know saving is hard, especially when you don’t earn much. But it’s entirely doable if you start with small changes. It can be as easy as shopping with a list and ordering fewer drink at happy hour. Once you’ve mastered the habit, you can watch the effects compound.”

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July 6, 2017

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