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  • Writer's pictureTyler

$1M is the new $100k

In the late 90's in a Berkshire Hathaway shareholder meeting, Charlie Munger famously shared this, what some call "timeless", advice about earning your first $100k:

It’s a b*tch, but you gotta 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 can ease off the gas a little bit.

Financial Freedom: Your First $100k

Good Advice in the Wrong Context = Bad Advice

People still quote this sagely financial wisdom as gospel, as if it's frozen in time and just as applicable to you and me as it was to him. The only problem? It's hopelessly outdated. Charlie may have said this in the 90's, but he earned his first $100k in the 1950's when the average home was under twenty grand. How much does the average house cost today? I'll let you do the math. That $100k in 1950's dollars would be worth over $1M in 2023.

That may sting a little bit to hear. It hurts me to say, and I already know it, but this isn't meant to discourage you (although, recent economic times and the direction of our country do pose uniquely modern financial challenges - after all, one study claims that Gen Z has 86% less purchasing power in their 20's than Baby Boomers did at the same age). My intention in sharing this is actually to normalize how you might be feeling. You might have worked for years, and you're still nowhere near $100k, or maybe you've even hit that impressive milestone, but you're left wondering why you still feel poor, searching for some elusive hint of relief, wondering why you don't feel any different. If this is you, and you still haven't sensed that you can "ease off the gas" yet, you're not crazy, and you can stop wondering why you feel this way.

A Harsh Reality: $100k just isn't that much money anymore

$100k just doesn't carry the same weight today. It would be different if you could expect to buy five homes with that sum like you could in the 50's (wouldn't that be nice), but this amount buys you about one quarter of a single average U.S. home in 2023. The average US home price is $412k as of this writing.

Charlie was one of the greatest business minds of all time, but this advice has been taken woefully out of context (70+ years out of context). Because of the nature of inflation in the United States, this was always destined to happen. There are a few ways you could attempt to more accurately apply this advice to your present day self. The most conventionally accepted method would be to adjust the dollars in the statement for cumulative inflation since the time Charlie actually achieved this feat. $100k in 1955 dollars is roughly equivalent to $1,148,861.42 as of December 2023.

Get After It

So, if you're feeling behind, you're in good company. However, information is power, and if you've been wondering why you don't feel the positive riptide of financial freedom pulling you forward even though you're doing everything you were told to, you might just need to reframe and adjust your expectations. Does it suck? Sure. Amassing this kind of wealth in today's economic environment is a challenge not for the cowardly. The U.S. real median household income has been stagnant for decades, and every meaningful expense seems to have somehow outpaced inflation (the price of housing, medical expenses, groceries, utilities, etc - It almost feels like they're lying to us?!).


If it wasn't difficult, everyone would do it, and accomplishing it wouldn't mean much. Choose your challenge, get after it, and remember not to take yourself too seriously along the way.

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