What's up you guys? It's Graham here. So, it's been said that your life is going to dramatically change once you get your first $10,000.
In fact, plenty of people believe that this is the most significant financial milestone that you could reach because once you get to this point, doors are going to start to open that you never even knew existed. So, if you've ever been curious exactly how your life changes throughout every financial milestone from $10,000 to $100,000 to a million dollar and beyond, and why $10,000 could actually be the most significant from all of them. Keep watching because I promise this is about to change your entire perspective on money.
Oh, and also big thank you to Cook Unity for sponsoring this video, but more on that later. To begin, let's start with everyone's first major milestone, $10,000. Even though this certainly isn't enough to go and buy a house or a crazy nice car, the good news is that with this amount of money, you'll gain enough financial confidence to know that if you could do this, you could level up in practically any area of your life that you put your mind to.
Like I remember when I hit my first $10,000. Just the idea that I could go and buy a used car outright gave me such a sense of accomplishment and that early feeling of success really sparked a lasting motivation to continue optimize my saving and spending. On top of that, on a more practical level, $10,000 is an amount of money where you'd be able to cover almost any immediate financial emergency without going into debt.
For example, if your car breaks down, most repairs are probably going to be a few hundred to a few thousand dollar. If your pet gets sick and you get hit with a vet bill, you've got it covered. If you lose your job, you got $10,000 sitting there until you find a replacement.
This just takes the small stresses out of life. It starts opening up the door to take on a little bit more risk and it gives you the autonomy to make decisions based on choice and not necessity. Whether that be taking a little bit more time off work, pursuing further education, or simply enjoying experiences without feeling guilty.
This is why your first $10,000 is so significant. It literally provides the framework and the freedom to begin pursuing activities to increase your income without being stuck in the daily grind of living paycheck to paycheck. I've also found that at this level, you really become intentional about your spending because you understand just how much work it takes to get there.
And this also serves as inspiration for the next milestone of $100,000. At this level, you have enough to protect yourself against most major financial emergencies, whether that be a job loss, a medical issue, or an unexpected expense or repair. Really, at this point, your worries are less about the stresses of living paycheck to paycheck, and more about long-term career growth and taking calculated risk.
You're also going to find that $100,000 you might begin embracing a greater sense of control because you're no longer going to feel as pressured to stay at a job you don't like simply because you can't afford to leave. Oddly enough, once you have this level of financial security, the safety net you get from this allows you to prefer even higher yielding opportunities because you could take the risk like moving to a new city, starting your own business, or just taking time off to plan your next endeavor. However, I will say the biggest impact of your first $100,000 isn't going to be so much mental, but rather your ability to start earning way more money because of compound interest.
In fact, Charlie Mer famously said that your first $100,000 is a But you got to do it. I don't care what you have to do if it means walking everywhere and not eating anything that wasn't purchased with a coupon. Find a way to get your hands on $100,000.
After that, you could ease off the gas a little bit. In his eyes, this is where your investment returns begin taking over and all of a sudden your net worth starts to explode. As an example of this, let's just say you have $1,000 invested.
At an 8% return, that means you'll have $80 in a year, which is good money, but it's still just 20 cents a day. On the other hand, when you have $100,000 invested, that 8% return amounts to $8,000, which is pretty significant money. To take this a step further, if you have $100,000 and you never contribute another dollar to this ever again at an 8% return if you just wait 30 years, that'll grow to an amount of a million.
This is why your first $100,000 is going to change your life more than you could ever imagine. And that sense of freedom and happiness will continue to grow even when you hit your next financial milestone of $500,000. To me, this is the point where you finally start to feel financially secure.
Like, sure, $100,000 is a lot of money, but it could also be gone fairly quickly in the event of unemployment, a divorce, a medical issue, or a prolonged recession. $500,000, on the other hand, really is able to cover most of that. Sure, at this point, all of your financial worries aren't magically going to go away, but it does take the pressure off constantly budgeting, checking prices at the grocery store, and it lessens the sting of these unexpected $100 to,000 expenses that just come up out of nowhere.
This is also the point where some people start coasting in the sense that depending on your age, you don't need to be as careful about your budget. your investment returns begin growing at a rate that might outpace what you're able to save. And you could start spending a little more money on enjoyment.
This might include slightly longer vacations. You could afford to take a little more time off work. You could start buying yourself reasonable items that you don't need purely because you want them.
Eating out at restaurants is no longer something you really have to carefully think about. And to me, this is where you really start getting into a stronger sense of freedom. However, as great as $500,000 is, you're still not at a point where you could afford not to work.
You're still worried about the economy. You still have to think about major unexpected expenses. You still can't afford a home in a major city.
Sometimes it's just better to continue renting. Truth be told, some people might actually get really frustrated at this level because theoretically, you could go and splurge on a really nice car, take an extravagant vacation, or drop $10,000 on a whim. But it would be incredibly financially irresponsible to do so, especially if you want to reach the next milestone of a million dollar.
Although before we go into that, despite what you might think, you don't need a ton of money to eat well. Like to give you an example, throughout my entire journey, I still ate most of my food from home. I rarely ever went out to restaurants, and I did my best to find the highest quality foods for the best quality price.
That's why if you want to eat like a millionaire without having to spend a fortune, then our sponsor, Cook Unity, can make that happen. For those unaware, Cook Unity is the first chef to consumer platform, delivering freshly prepared, pre-selected meals right to your door every week for an amazing price. It's convenient, they use extremely high quality foods, and best of all, it's really simple.
All you got to do is select from hundreds of meals prepared by award-winning chefs every single week. They're delivered fully cooked, so all I have to do is heat them up. They have plenty of options under 600 calories if you're looking for something healthy like me.
And lunch or dinner is done in as little as a few minutes with no cleanup or meal planning required. On top of that, their subscription is super flexible. You could choose between four to 16 meals per week, and they're commitment free, so you could pause or cancel at any time.
Without exaggeration, Cook Unity tastes like a meeting out at a high-end gourmet restaurant without having to go in the car, sit in traffic, wait for the food to be cooked, and pay an exorbitant price. Plus, when I broke down the cost per meal, it was cheaper than I was paying for a bullet chipotle, and it tastes significantly better. And if you want my specific recommendations, I loved the roasted salmon and lobster sauce by Chef Andre Mendes, mustard crusted salmon by Luda Leaf Fave, and herb roasted salmon with truffle mashed potatoes by Chef Stacy Bing.
So, if you're interested in trying them out for yourself, just go to cookun. com/gram or use the link down below in the description and use the code graham50 for 50% off of your first order. Honestly, at 50% off, it's an incredible price and it's probably way cheaper than the meals that you're already eating.
Plus, I've yet to have a dish I didn't absolutely love. So, again, the link is down below in the description. Thank you so much.
And now, let's get back to the topic at hand, $1 million. You know, it's funny. I distinctly remember the exact day I hit a million dollar net worth.
I had been tracking my net worth on Mint. com every single day, religiously, just waiting for the moment it was going to hit a million dollars. And when it did, I didn't tell anybody.
I just got some friends together and we ate happy hour sushi to secretly celebrate. But it was awesome. From my perspective, from every financial milestone I have ever reached, this one to me was probably the most significant.
Like, in my mind, as long as I didn't screw it up, a million dollars invested would be enough to cover all of my expenses and overhead without ever having to work a job ever again. To give you an idea of what that would look like, if I had it invested in real estate at a 5% return, that's $50,000 a year. And I could easily find a way to be very happy living on that income.
This meant that to me, I had achieved financial freedom. I didn't have to work if I didn't absolutely want to. I could say no to the things that I just didn't feel like doing.
And even though, sure, it's not Lambo penthouse money, it just meant that a million dollars gave me a completely blank slate and a world of opportunity. Now, even though at this point I felt comfortable taking two week vacations because the timing just worked out and I didn't exactly worry about paying bills, I was still living extremely frugally. I budgeted everything down to the dollar.
And I think from the outside looking in, you would think I was just a broke college kid. Just to give you an accurate idea of what I'm describing here, I was worth more than a million dollars, living in a one-bedroom, 700 ft duplex where I'd rent out the other side to help pay my expenses. My daily driver was a used Prius.
I paid for all of my trips and credit card points. I never bought designer clothes. I bought the cheapest food from the grocery store.
I didn't have any TV subscriptions. I never splurged on restaurants. So, in terms of lifestyle, I was basically living the same as I was at $100,000, except now I was no longer reliant on having to keep an income.
Obviously, I'm a bit of an extreme when it comes to frugality. But for most people, when they hit a million, they could start to be a bit more selective of where they work. They could choose to walk away if something doesn't align with their goals.
They could prioritize happiness and health over money. They don't need to check grocery store prices. They could easily afford to eat out once a week without making a financial impact, but they're still very much aware of how much things cost.
Like, sure, a million dollars is a lot of money, but you have to be careful not to overlever your investments. You have to be very cautious about buying a home that you could actually afford. You're still checking prices on flights and hotels.
You might be able to take a few weeks off work, but you certainly couldn't afford to take a year-long break without dipping into savings. On top of that, at a million dollars, you're still at the whims of the market. the economy directly impacts you, any sort of stock market or housing market downswing is going to have severe financial and mental repercussions.
So even though sure you're insulated from a lot of the daily annoyances, you still need to play it safe. You still need to watch your spending and you still need to play it smart if you want to keep it. Although this begins to change at $5 million.
From my experience, if you live below your means and have reasonable expectations, this starts to become the level where you could begin buying back your time. This might include paying someone to wash your car, clean the house, or run errands in your behalf. This is also the point where it might begin to make sense to splurge on the occasional domestic first class or business plane ticket.
You don't really need to budget for the basic necessities. All of those $100 subscriptions really just become white noise, even if you don't end up using them. And really, you could live a solid upper middle class lifestyle throughout most of the United States or world for that matter outside of just a few select cities.
At this point, the economy is still going to impact you and a recession will temporarily hurt, but way less than it did at a million dollars. And from this point onwards, your ability to build wealth has a lot less to do with your income and savings rate and a lot more to do with investment returns. However, it's funny.
You know, as much money as $5 million is, in certain circles, $5 million is known as the poorest rich person. Or as they say in succession, $5 million is a nightmare. You can't retire, but it's not worth it to work.
The world's tallest dwarf, the weakest strong man at the circus. I know this sounds absolutely crazy for people hearing this, but $5 million is a strange number where you don't quite feel rich enough to do anything you want to, but you start to notice all the things that are just barely out of reach. Like to help put this into perspective, $5 million is enough to give you $200,000 a year before tax.
If you live in a place like California or New York, subtract 30% for state and federal taxes and you're left with $140,000 a year. Sure, that's a lot of money for not having to work or lift a finger. But throw in rent for the most basic home in a good area at $5,500 a month, $1,500 health insurance for a family of four, a $1,500 food budget, $1,000 for a nanny so you and your spouse could have a few date nights.
$1,500 for two car payments, gas and insurance, $8,000 for a 5-day vacation once a year. And all of a sudden, you have nothing left at the end of the year. And if something unexpected happens beyond that, you have to dip into your savings.
Yes, I know that sounds absolutely absurd and doing that is still an absolutely incredible life that most people would do anything for, but there are so many stories of people making $500,000 a year yet still can't seem to leave the rat race and barely have enough left over to get ahead. To me, $5 million is an amount where absolutely you are considered financially secure, but you're nowhere near the level of being able to buy first class plane tickets, flying private jets, driving exotic cars, living in mansions, or chartering yachts, especially if the economy sees a downturn. Although, this does begin to change at $10 million.
The way I see it, when you've hit this point, you have effectively won the game. With $10 million, you could live practically anywhere you'd want to in the entire world. You could do almost anything that you'd want to within reason.
Any financial emergency could be solved in a minute by writing a check. A recession is not going to have a material impact on your life. And as long as you don't massively screw this up, you are almost guaranteed never to be broke.
This is also the point where you don't really need to work anymore unless you want to work. And you really have the choice to do what you want to do when you want to do it. Like chances are at this point your wealth could generate substantial passive income to cover all of your living expenses without even worrying about most financial emergencies.
Like your car breaks down, no big deal. Just buy a used one the same day. Health emergency?
Hire the best doctor and pay out of pocket. Your friend plans a ski trip last minute. Book the hotel and tickets a few hours beforehand even though it's the busy season.
Real talk, at this level, unless your expenses are out of control, you could afford to do 95% of things and really not even have to worry how much money it costs. This is also the point where almost every basic task really isn't worth it to do anymore from your time perspective, and you could afford to hire out and outsource almost anything that you'd not want to do on a case- by case basis because your time is becoming incredibly valuable. However, on a deeper level, I think it's important to clarify that even though $10 million is still a lot of money, you are not rich enough to the point where money doesn't matter, private bankers still aren't going to take you seriously, and you still need to be prudent and careful with major purchases just to make sure you're not overextending yourself.
Like, sure, you could easily go out and buy a 2014 used Lamborghini Huracan, not have to worry about it, but a brand new Lamborghini Revolt is still out of reach. Yes, you could occasionally fly international first class, but don't even think about chartering a private jet unless you split the cost amongst 10 of your friends. A recession might seem like a good buy the dip opportunity on paper, but a 30% hit to your net worth is going to cause some serious anxiety, especially if you've gotten used to a much more extravagant lifestyle.
Now, before people get triggered and call this out of touch, trust me when I say this. I've been around a lot of people worth $10 million or more, and almost all of them tell me that they're still worried about an economic recession that lasts a lot longer than they expect. Not to mention, things like gambling, addiction, divorce, and mental health issues can cause you to blow through the vast majority of this money very quickly if you aren't careful about it.
Which then brings me to the next financial milestone of $25 million. Without exaggeration, this is the point where you're able to do 99. 9% of just about anything you could think of doing without worrying about running out of money.
This is the amount where you could start to buy multiple properties. Any financial emergency under$1 or $200,000 barely even makes a difference. You might not even notice it.
And any recession turns into a buy the dip opportunity. At this level, instead of optimizing for growth past $25 million, most people shift their focus from play to win to play not to lose. Really, I think wealth conservation is more important for people at this level, and they just want to lock in their lifestyle without running out of money.
And at this point, their time becomes the utmost of importance. After all, at this level, time is something that means so much more to you than an extra few thousand. So, you'll pay for convenience.
You'll pay for things to be easy. You'll pay for things just to get done without you having to think about it. Separate from that, this is also the point where you just start running out of things to buy.
Like, you could only live in so many houses. You could only drive so many cars. You could only wear so many watches.
So, you start to focus instead on health, wellness, and philanthropic endeavors, and maybe education. After all, all of your basic needs are already met. Anywhere you'd want to live around the world, and then some.
You could easily stay in four to fivestar hotels on a regular basis or spend $2,500 on a suite because you feel like it. There's really no financial situation at this point that could destroy your life out of something severely catastrophic or a black swan event. At this point, you'll also begin to notice diminishing returns on your money.
Like going from $100,000 to a million is a huge step upwards, but going from 25 million to 25. 9 million makes no material difference in your lifestyle whatsoever. In fact, this difference could just be the point of a good week in the stock market, and most days you're up or down $100,000 in the market without even realizing it.
However, just like our other examples, you still at $25 million need to be somewhat careful of how you spend your money. Like, you still can't afford to fly private jets on international trips. Most high-end trophy real estate is completely out of reach.
And don't even think about collecting rare artwork, vintage cars, or thoroughbred horses. Although a lot of that does become possible at $100 million. Now, I've spoken with quite a few people at this level and beyond.
And surprisingly, they say that $und00 million is the minimum they would want to fly private jets, get yachts, and multiple residences around the world. In fact, at $100 million, most people still think that a private jet is too expensive and it's much more economically feasible just to fly first class instead. Honestly, even though they had so much money that everything just effectively becomes free past $und00 million, there's not much else that money could buy you.
And the excitement of buying something new really just wears off at this point. A lot of them have said that any additional money they make brings them no extra enjoyment whatsoever. And if they had the opportunity, they would trade all the money away just to be able to start over again and be 25 years old.
Yeah, seriously, let that sink in. If someone's willing to pay $100 million just to be 25 years old again and you're 25 years old or you're in your 20s just wasting your time, that's someone else's milliondoll opportunity that they would gladly pay for that a lot of people just take for granted when they don't realize that right now is the best time to be alive. That's why when all of them look back and say that the early milestones were the ones that brought them the most joy, that means that these are the times right now to cherish the most.
right after, of course, subscribing and hitting the like button if you haven't done that already. So, with that said, guys, thank you so much for watching. Feel free to comment down below.
Let me know what you think. And by the way, if you're into tracking your expenses, I have some friends of mine who are setting up a new mint. com alternative for tracking expenses and they want to make it really good and they're just starting out.
So, if you want to be a part of that process and be like a beta tester for this, I'll link to them down below in the description. Let me know what you think of that, too. I'm sure you could give them some great feedback if that's something you're interested in doing.
