Is the First RM100K the Hardest?

the first RM100K

Charlie Munger of Berkshire Hathaway has said that accumulating the first $100,000 from a standing start, with no seed money, is the most difficult part of building wealth. Making the first million was the next big hurdle. To do that a person must consistently underspend his income. Getting wealthy, he explains, is like rolling a snowball. It helps to start on top of a long hill—start early and try to roll that snowball for a very long time. It helps to live a long life.

– From the book, Damn Right: Behind The Scenes With Berkshire Hathaway Billionaire Charlie Munger


The First RM100K

I achieved my first RM100K in portfolio market value in the mid of 2014. It took me almost three years to get to that point, starting with RM3,000 I saved for 3 months which I deposited into my Jupiter Securities brokerage account in 2011. Learn how to start investing in shares HERE.

What did it take to get from RM3,000 to RM100,000 in three years? 

Well, a lot of hard work, persistence, consistent savings and investing.

I lived below my means day in and day out for years on end. I made a decision to continue living with my parents instead of getting my own place as the property prices were skyrocketing when I first started work. At lunch, I walked out of the air-conditioned premise to a nearby economy rice (‘chap fan’) stall when my colleagues ate at posh restaurants. I couldn’t bring myself to spend RM20 ++ every meal at the office. When I had to stay back to work late, I settled for Maggi and ramen noodles at the office.

Meanwhile, I also put myself in a position to become promoted at work and generate additional income. And I would come home after working for 10 hours to study stocks and try to create additional income above and beyond what my day job provided. I made it a habit of analyzing and looking at at least one new stock every day. I read books and listened to audiobooks on investing during my commute.

I thought about escaping the miserable rat race every single day.

And, perhaps most importantly, I religiously invested all the excess capital generated by living below my means into high-quality dividend growth stocks that rewarded me as a shareholder with growing dividends that allowed me to continue rolling my snowball at an ever-greater velocity.

Sticking To The Plan

What have I been up to since hitting the first RM100K? 

What else would I be up to other than sticking to the long-term plan?

I still live with my parents, even though I now own 2 properties which I’ve decided to rent out. I make it a habit of packing food from home whenever I can. I still choose to order the RM10 lunch set instead of the RM20 one.

And although I’m not eating Maggi and ramen noodles anymore (my body told me when enough was enough), I’m also not eating steak and going for buffets daily.

I do however find the time to treat myself to a nice meal or holiday now and then. Of course, all of these are within the budget I set for myself.

Now and Beyond

What has all this modest living, saving, and intelligent investing done for me? 

Well, my Freedom Fund closed at RM254,3482.62 in total market value on 31 December 2015. My modest portfolio produced a 2.97% dividend yield or RM7,544.14 for 2015.

Update (07/03/17): As at 31 December 2016, my portfolio has a market value of RM345,955.92. That’s almost RM100K a year for me. With the help of compound interests as well as some diligent investing, I hope to keep this RM100K a year trend going.

I’ve certainly also picked my fair share of duds along the way which has needlessly delayed my progress. But hindsight is 20/20, unfortunately.

Nonetheless, this is a real-time and real-life journey. No backtesting. No hypotheticals. No what ifs, coulda’s, shoulda’s, or woulda’s. Real-life progress, for better or worse.

And I think that’s what I really love about showing how financial independence unfolds in real-time with all the victories and setbacks that occur. It shows that it’s possible without nailing the perfect investment. Mistakes can be made. We can fall down. But as long as we get back up and keep climbing, we can reach the top of that mountain.

And I’ve been climbing, guys. For five straight years, I’ve been climbing. I know the view at the summit will be incredible. And because of that climbing, the portfolio is now hovering at RM250,000. It’s incredible!

But, like Munger said, it helps to start early and roll for a long time. I didn’t start particularly early. I was almost 21 years old before I  opened a brokerage account. But here I am at 26 years old, controlling a portfolio worth RM250,000 that’s chock-full of high-quality businesses across a spectrum of industries. I’m a real estate tycoon. An investment banker. A manufacturer. An insurance giant.

And these businesses will funnel ever-growing cash flow into my portfolio, which begets more cash flow in the future. That passive dividend income should exceed RM8,500 this year. And I haven’t even been rolling the snowball all that long.

Imagine what’s possible in five or ten years? Imagine what’s possible for you in five years?

What has your experience been? Was the first RM100K the hardest? Are you rolling your own snowball? Are you climbing the mountain? 

Cheers and thanks for reading. I will continue updating this post on an annual basis just to keep track of my progress from the first RM100K to my first million.

21 Replies to “Is the First RM100K the Hardest?”

  1. Hi, do you start investing with RM 3000 only which you had saved up and credited into your trust account? Do you consistently save up a portion of your salary since then and then pump it into your trust account or consistently but any company i.e. Dollar cost averaging?

  2. Keep up the good work! Thanks for sharing your stock experienced journey with us. Hope I can follow your foot step to meet my first 100k in stock before reaching my first million. 😄

    1. Hey Jady,

      Don’t call me sifu la please.
      I do buy often but I buy for the long term. Last year, I sold only 2 stocks. Most of the stocks I own have been with me since 2014.
      We only pay the brokers in fees if we trade (buy and sell). And it adds up, I’ve already racked up RM2,654.23 in total fees already.

  3. Good for you. Here I’m in my early 30s just starting out to save and planning to invest in stocks. was wondering when i’ll be able to achieve what you achieve

    1. Oh please, you will be able to reach your goals soon enough if you keep at it.
      Make sure to check on your financial goals quarterly to stay on track. =)

  4. Hi Divvy. I just graduated last year and started work with the goal to save 40% for investment purposes. Have been doing well till now. Knowing that you could do it in the amount of time you had encourages me alot.

    Hope to gain more knowledge from you 😀

    Thank You!

    1. Hi Bao,

      Yes everyone can do it. It just takes some patience and delayed gratification.
      Join us on our FB group and page if you haven’t already ya.

  5. This is a great article. I just graduated and I myself plan to save 40% a month for investments and I have done so till now. To know you actually made it, gives me encouragement. Thanks Divvy ! 🙂

  6. This was actually quite interesting as I’m doing almost the same by limit my own meal to RM5 per day (of course sometime will spend more). This might be a good idea to me on what to do after I get my 1st 100k and I always wondering how can I generate more money using the money I had in hand. Thanks for sharing.

    1. Hi Ivan,

      It’s great to hear that you’re saving your hard earned income.
      Like I mentioned, I invested most of my savings into stocks. Here is my PORTFOLIO as of 31 Dec 2015.
      My humble portfolio now earns me passive income every month in the form of dividends. THIS is what I received for February.

      If it is daunting for you on how to start investing in the stock market, I have a short guide HERE, hopefully it’ll help you.

      Onwards and upwards my friend.

    1. Hi Chin Seng,

      There is no set amount, but I make it a habit to save a minimum of 30% of my salary first every month. However, on average I’d say I was able to save more than 50% of my salary which would translate to around RM1K – RM1.5K a month.

  7. Hi Laislav,

    Thank you. A 3% dividend yield is commendable. What kind of stocks do you hold?

    No CDs don’t even come close in my opinion. Don’t forget the capital gains I made on the portfolio. My yield is low because a huge chunk of my portfolio are in growth stocks which pay little dividends. They are however increasing to 4-5% yield now as they grow in market value.

    Thanks for the comment. =)

  8. Congratulations for the snowball!
    I did personally as well made close to 3% dividend yeld which make me wonder is a CD with 1year fix more worth to consider
    Some banks do offer over 4,5%


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