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The First Million is the Hardest

It is a common cliche, the first million is the hardest. In fact you also hear it as the first $100,000 is the hardest. But is their any truth in this common saying? Is the first net worth dollar figure harder than multiples of that number.

Mathematical Truth of One Million

Well first there is the obvious. If you are talking about mathematically then the first million is definitely harder than the second. When you have 0 dollars the only contributor to getting to a million dollars is your savings. But when you have one million dollars you have the power of compounded interest working along with your savings to hit your next million.


No matter where you invest money it typically earns some sort of interest. Let’s say you chose to invest in the S&P 500. Since 1950 the S&P gas retired an annualized return of 7.42%. Now the thing to remember is during the first year you earn 7.42% adjusted for inflation  on your million. The second year you earn 7.42% on the million plus the prior years 7.42%. In practice that means your returns compound. Each years earnings builds on each other to raise at an ever increasing actual dollar rate.

The Rule of 72

The rule of 72 is a mathematical concept that states you can determine how quickly compounding will cause a value to double by dividing it’s annualized percent return into 72. So in the case of our S&P annualized 7.42% we would expect our million to double adjusted for inflation in less than ten average years. So in the average 10 years your million dollars will become two million real dollars with no additional savings needed. Now nothing in life is guaranteed of course, risk in the market still exists, but lets assume for a moment that things our average over the next ten years. In addition to any savings you add each year you now have a significant helper in the form of interest.

Money begets Money

This leads me to the first lesson I ever learned about money: Money begets Money. Long before I practiced or even understood frugality I came to the realization that having money is the easiest path to more money. I actually realized this in high school and during that period it led me to focus on increasing my income earning potential. Here we are almost 2 decades later and it has paid dividends (sic). Thankfully, I picked up cost control somewhere along the way which has allowed our personal net worth to take off.


The thing is the first million is not only the most difficult because of math. It is also more difficult because of psychology. The first of anything represents something still to be achieved. Especially with a large number like a million that will likely take years to achieve it is easy to stray from the path. This is why I espouse smaller goals so often. If your only goal is to be a millionaire you will likely fail. Why? Because after the first 5 year pass and you still have less than 500K, with no other goals, odds are you will probably quit. After you achieve your first of something you have a notch on your belt showing to yourself it is doable. So psychologically the second million is easier as you already have a win.

Compounding and Psychology

Compounding itself also adds to the psychological easing of the second million over the first. That assist I mentioned earlier means things move more quickly, shortening the time between goal attainment. As numerous studies have shown quicker goal attainment can lead to a psychological boost that keeps you motivated.  These two items combined likely go a long way psychologically to making the second million easier.

Psychology and Lower Savings Rates

Furthermore, the leg up can allow you to be a bit less drastic with your savings rate if so desired. I am not saying you should let life style inflation go out of control, but once you reach a certain level it is easier to get to the next. As such should you choose to do so, within reason you can loosen the reigns a bit as compounding can take up the slack. For those who might need a change or a mid life crisis that might not be a bad thing. After all, life is about the journey, not the destination.

Financial independence is ultimately important, but you need to ensure you enjoy each day as you step towards that goal. So if you were depriving yourself at all during the first million, during the second you have even more reason to remove that deprivation as growing your net worth is now easier. An easier life likely means an easier path to the second million.

Financial Security and Risk

Finally, while a million may not be enough for financial independence for many, it should be enough for increased financial security. Financial security increases your ability and willingness to take risks. If you can support yourself for multiples of ten years then you are in an entirely different situation then a person who is living pay check to paycheck. You can choose to take reasonable risks that may lead to a better lifestyle or even more goal attainment.

Even if you do not take advantage of slightly riskier options, not worrying about those risks (or worrying less) should mean that the next million will be easier on you then the first million. At a minimum you’ll be worried about things like job loss less.  These are things that make the road to the first million less enjoyable.

In Closing, “One Million Dollars”

I wrote this for two reasons. One I was thinking about the math and psychology of goal attainment. But a secondary and perhaps larger reason was in response to those that might think it’s no big deal to hit a million in net worth. Externally it is no big deal, after all no one cares about your numbers except you. However, from an internal perspective it can perhaps mean a very big deal to your life and your future wealth progression. Now one could argue that the value one million is largely arbitrary and my rationale could also apply to 999K and 990K. You would be right. So take this as more a post about the general vicinity of one million rather then an exact number. Besides, as was pointed out in Austin Powers, “One Million Dollars” just sounds cool.

Do you believe the first million is the hardest? Why or Why not? Do you believe achieving a million dollars, or thereabouts, changes your situation.


  1. KM
    KM February 7, 2018

    I am currently around $520,000 liquid net worth. Situation wise it has not changed a thing for me and not convinced a million will either. Still feels only like numbers on a statement and the same now as it was at $20,000. I do feel the rate of growth has picked up. I have been investing for about 13 years and should make 1 mil by year 20, perhaps earlier.

    • FullTimeFinance
      FullTimeFinance February 8, 2018

      Besides the rate of growth have you ever given thought to the safety net such networth gives you should you get laid off?

  2. Jim @ Route To Retire
    Jim @ Route To Retire February 7, 2018

    I’m still newer to the double comma club, but I would say that all your reasons seem to be “on the money”! 😉

    I do think that your point that money begets money is the biggest factor for me. I’ve noticed now that building wealth just seems to be easier and easier whereas the beginning was an uphill struggle.

    — Jim

    • FullTimeFinance
      FullTimeFinance February 8, 2018

      Sit back and let the compounding roll in…

  3. Steveark
    Steveark February 8, 2018

    Definitely, and I support that the first 100k is several times harder than the first million. That first 100k is purely saved, compounding hasn’t had time to help grow it. Plus your paycheck is still on the smallish side usually and you are still learning to be an adult. All that makes 25k, 50k and 100k seem impossible at first. Frankly I remember 100k, but I never even noticed million no. 1.

    • FullTimeFinance
      FullTimeFinance February 8, 2018

      I could see that. I’m sure the actual point is slightly different for each person. Theres something about achieving a large round number that changes your perspective.

    • Norah @ Money Management IQ
      Norah @ Money Management IQ February 9, 2018

      I totally agree with you Steveark that, the first 100k is purely saved, compounding hasn’t had time to help grow it. That time anyone is in the learning process how to make more money just like a kid trying crawl itself?

  4. GYM
    GYM February 8, 2018

    I can’t wait for the first million and to join the double comma club in a few years. Yes it is very hard but once you get that snowball rolled up, it gets bigger and bigger with much less effort.
    Great post!

    • FullTimeFinance
      FullTimeFinance February 8, 2018

      Thanks GYM. There comes a point when the snow ball rolls on its own and you are along for the ride.

  5. Caroline
    Caroline February 8, 2018

    No I don’t think it changes much at all, you just keep going for more!

  6. PiggyBanki
    PiggyBanki February 8, 2018

    I totally agree on your view that we become more comfortable and more prone to risks once we have a certain amount of money we consider high. The 1 million is just a cool benchmark! For me, it hit me when I reached 200k, I started being less risk adverse and considering seriously my investments and passive income.

  7. Damn Millennial
    Damn Millennial February 9, 2018

    I think it changes things!

    Same way it changed things when I saved first 50K, 100K, 200K etc….

    It is real and it is powerful. The more that gets added to the pile the faster progress is made. A million is still a very cool achievement and although it can reverse the next day I will still celebrate when I get there!

    • FullTimeFinance
      FullTimeFinance February 9, 2018

      So true about reversal, especially with the market volatility.

  8. Chris
    Chris February 10, 2018

    It’s especially hard when there is a 10% correction in 2 weeks time !
    I thought 2018 was gonna put me over the hurdle but maybe 2019 now!

    • FullTimeFinance
      FullTimeFinance February 10, 2018

      Don’t I know it. It’s hard not to think something like I could have bought a new car or in some cases a house for the amount of he decline.

  9. Mr. Need2Save
    Mr. Need2Save February 10, 2018

    Getting to the $1M mark seemed to take a while, as we rode through the recessions in 2001 (not too bad) and 2008. I’m still amazed at the power of compounding when I do simple spreadsheet exercises.

  10. Mr. Need2Save
    Mr. Need2Save February 10, 2018

    The first $1M seemed to take a while, as we rode through the recessions in 2001 (not too bad) and 2008. I’m still amazed at the power of compounding when I do simple spreadsheet exercises. Even if I assume 5% average yearly growth, we will be in great shape when we start pulling from our retirement accounts at 59 1/2.

    • FullTimeFinance
      FullTimeFinance February 10, 2018

      It’s great when it takes care of itself.

  11. Ms ZiYou
    Ms ZiYou February 15, 2018

    “money begets money”

    Love this quote, it’s something I think I need to remind myself of more.

    While I’m not near a million in pounds yet, it’s interesting to see I’m quite near a million in dollars. Yet we talk about a millionaires both sides of the pond, and seem to have similar ideas about what a millionaire looks like.

    • FullTimeFinance
      FullTimeFinance February 15, 2018

      A million pounds is definitely nicer then a million dollars at the moment.

  12. Mac | Financecareservices
    Mac | Financecareservices December 25, 2019

    It is no big deal, after all no one cares about your numbers except you. However, from an internal perspective it can perhaps mean a very big deal to your life and your future wealth progression.

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