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14 doable steps & the factory analogy
I recently wrote two articles that discuss saving your first hundred thousand dollars and saving your second hundred thousand dollars. The path to becoming a millionaire is not as smooth as butter, but it is certainly doable – even if your income is not six figures. Will it potentially take longer if you earn less income? For sure, but once again, nothing is impossible with creativity (financial resourcefulness), discipline, and living below your means.
In the two articles listed above, I mention fourteen steps you can integrate into the daily financial habits that can help you reach your first quarter of a million dollars.
Each Hundred Thousand Gets Easier
Each hundred thousand dollars that you save gets easier and easier due to compound interest. The rich consistently get richer because they have a large sum of money working for them around the clock 24/7. The more individual dollars you have, the harder your money works for you.
100 Factory Workers V. 1,000 Factory Workers
Think about it: Factory 1 has 100 workers. Factory 2 has 1,000 workers. Which factory do you think will have the highest productivity rate? It’s obvious; the factory with 1,000 workers. The more workers (dollars) you have working, the more money you will produce.
You want to have as many factory workers as you can get. It can take time, energy, and effort to gather these initial factory workers, but once you have enough, your factory workers will essentially start procreating more factory workers, increasing your production rate exponentially without you having to lift a single finger.
The 14 Steps To 100K
Stick to a budget.
Live below your means.
Cut the frivolous purchases.
Implement the buy five rule.
Maintain multiple sources of income.
Avoid large and unnecessary purchases.
Keep your investment portfolio diversified.
Focus on long-term instead of short-term satisfaction.
Live with other people to keep your housing costs low.
Continuously raise your income, but keep your expenses low.
Don’t try to keep up with your friends who are buying new cars, clothes, and houses.
Keep the goal in front of you whenever distractions confront you because they most certainly will.
Consistently invest most of your income in a diverse range of assets (e.g., real estate, private equity, crypto, and stocks).
Educate yourself on personal finance, so you can implement intelligent strategies that will work for you and your goals.
This content is for informational purposes only — not professional advice. Consult a qualified professional before making any major decisions.
This content is for informational purposes only — not professional advice. Consult a qualified professional before making any major decisions.