I went from making $15 an hour to a net worth of $275,000 in 6 years: Here's how

Darcy is the founder of the personal finance site We Want Guac.
Courtesy We Want Guac
Key Points
  • "Once I set up a budget for myself, it gave me permission to spend on what I most want to prioritize, while still putting hundreds away into savings and investments."
  • "I officially began investing in January 2017. Then, in October 2019, I woke up one day to see that my portfolio balance had passed the $100,000 mark."
  • "There will always be some risk involved. But I've found that one of the most important things to remember is to stick with your investing strategy during periods of volatility."

In 2016, I graduated college with honors and had hoped to feel a sense of joy and accomplishment. But as I stepped out into the real world, I felt terrified. At the time, I had zero job offers and my only source of income came from sporadic waitressing gigs. 

I realized how little I knew about basic personal finance. Almost all of my big dreams, like traveling the world and buying my own house, required a baseline of understanding about money that I simply didn't have. 

It was scary to see how much I needed to learn, even though I had spent the last four years focused on an education that was supposed to set me up for a successful future. 

I spent much of that first year out of school learning everything I could to better refine my approach to money, starting with building my first budget. I officially began investing in January 2017. Then, in October 2019, I woke up one day to see that my portfolio balance had passed the $100,000 mark. 

I went from a recent college grad who was clueless about money, to a six-figure investment portfolio by the time I was 25, and a net worth of $275,000 today. Here's how. 

I found resources that made sense to me

There are countless resources out there about personal finance and investing. And when I first started researching, I felt very overwhelmed. But one day, I stumbled across the Financial Independence, Retire Early movement on Reddit's personal finance forum, and that clicked for me. 

The FIRE framework seemed like it could be broken down into specific action steps, and blogs like the Frugalwoods and Millennial Revolution helped cut through the noise for me.

So over several months, I reviewed the basics of FIRE and came up with my FIRE number of $1 million. With my new budget, I looked at my income, subtracted my spending, and figured how much I had left over to put in my IRA or other taxable accounts.

Then I focused on learning about different types of investments. I decided to start investing my money into index funds that tracked the overall stock market. A few things stood out about index funds for me. Since they seek to replicate the performance of a market index, your returns should be in line with what the market returns, which 80% of active investment managers fail to actually beat

Plus, with index funds, there's no need to look at what you own every day and make new trades, because you already own a little bit of everything. If I can get an investment return better than most seasoned professionals without doing anything after clicking "buy," then I'm all for it.

As I started earning more, I prioritized investing 

Right out of school, my career began with temp work where I earned $15 an hour. Six months later, I was offered a permanent position, earning $20 an hour. I started investing then, but that job didn't offer retirement account benefits, so I opened a Roth IRA and another taxable account on my own. 

While I was grateful to have the full-time role, I knew it wasn't going to help much with my investing goals. So in concert with my personal finance education, I started looking for ways that I could network my way into higher paying roles. 

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Even something as simple as optimizing my LinkedIn profile with keywords from postings for jobs that I was interested in, started to get me and my work in front of recruiters on the platform, rather than just relying on sending applications into the digital void. Networking this way is what helped me land my next role in February 2018, where I earned a $60,000 salary. A year and a half later in 2019, I was offered a job with an $86,000 salary. 

Earning more meant that I had more to add to my investments and grow my wealth. My role where I earned $60,000 made it possible for me to invest tens of thousands of dollars in a single year, which was the first time I could manage that. My current job was my first to offer me a 401(k) and an HSA, both of which I've been able to max out the last two years.

I stayed the course during tough times 

With investing, it is normal that the value of the stock you own will go up and down at some point. There will always be some risk involved. But I've found that one of the most important things to remember is to stick with your investing strategy during periods of volatility. 

I learned early on in this process the stock market historically rebounds after dips. Knowing this, I was confident in holding tight. But this philosophy was definitely tested when the pandemic hit in March 2020.

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Almost overnight, my investments dropped by $40,000 and I seemingly lost my $100,000 milestone. 

Because I didn't pull my money out in an effort to protect what I had left, I saw my investments roar back to $100,000, then ramp up even further. This wouldn't have happened if I had been nervous about buying during a bull run, or got spooked when things got tough.

I started a dedicated emergency fund 

Life can always knock you sideways when you least expect it. When this happens, the last thing you want to do is take money away from your growing investments.

To ensure you won't need to dip into your 401(k) or IRA accounts, it's crucial to have some money set aside for emergencies. For me, investing is among my top money goals, but I still make sure to maintain about $3,000 in the bank as my emergency fund. 

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In the last few years, my biggest emergency was a pricey car repair this January. If I didn't have money already set aside in an emergency fund, which I first started in 2016 before investing, I would have had to take some out of my investing plan. Instead, I took care of the towing and repair fees without breaking a sweat.

Unexpected, urgent expenses can come at any time. This can include sudden repairs, helping a loved one, or a new medical expense. Without savings, dealing with them could snowball into losing out on investment gains at best or going into debt at worst. Neither outcome is a concern when your budgeting and investment plan includes how you'll take care of emergency spending.

I let my budget be my guide 

Before I created my budget, I actually found it hard to spend at all. I had something of a scarcity mindset, because I felt like I had so little in the first place, and I didn't want to let go of it.

Once I set up a budget for myself, it gave me permission to spend on what I most want to prioritize, while still putting hundreds away into savings and investments.

I've found that any stress involved in setting up a budgeting system has been offset by the power and control I gained over my finances. Laying it all out has made it easier to see where I could change my habits to be more in line with my goals. 

Tracking my spending helped me cut some smaller expenses, and I got into shopping secondhand. For example, instead of spending thousands of dollars furnishing my apartment with new and expensive items, I took my time to collect what I needed from sites like Freecycle, NextDoor, and Craigslist. I ended up getting quality pieces for free, including a flat-screen TV, kitchen barstools, and a complete dining room set.

Everything I saved from that experience I put towards my investments. 

Reaching $100,000 in investments was a major milestone for me, especially hitting that number at 25. Today, at 27, my net worth is currently $275,000. Using these steps have helped me feel confident about my finances and being able to grow my wealth in the future. 

Darcy is a writer and marketing manager based in Boston. She is the founder of We Want Guac, a site geared to aiding Gen Z in the path to wealth. She has won a Plutus Award for Best Generational Financial Literacy Content and has been featured across multiple publications and podcasts, including MarketWatch and ChooseFI. You can connect with her on Twitter or Instagram.

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The views expressed are generalized and may not be appropriate for all investors. There is no guarantee that past performance will recur or result in a positive outcomeCarefully consider your financial situation, including investment objective, time horizon, risk tolerance, and fees prior to making any investment decisions. No level of diversification or asset allocation can ensure profits or guarantee against losses.