How I Saved $100,000 By Age 25


$100,000, the infamous start to six-figure wealth. At the age of 25, I was in a very exciting time in my life. I was just finishing my master’s degree and was working in consulting, travelling across the country, enjoying all the aspects of my newly started career. In fact, it was during these long trips that I did a lot of reflection and on one occasion I pondered how I was even able to amass this sum of money. After thinking about it for a while it dawned on me that I had taken specific steps to ensure my wealth grew over time and as such I want to share with you the seven steps I took to save up $100,000 by 25!

Step #1: Start Early

When it comes to succeeding in your money saving journey, the sooner you start the sooner you will reach your savings goals. It’s for this reason that I began to save from a very early age. I was lucky to grow up in a household that preached the importance of frugality and saving money and whenever I would get money for my birthday or a holiday, instead of spending it on a new toy or video game I put it in my piggy bank instead.

Now, while saving this money didn’t amount to much, maybe $5,000 during my adolescent years, what it did do was help me cultivate the habit of saving. You see, it can be easy to overlook saving when you aren’t able to accumulate much money however simply going through the motions of saving instead of spending is crucial as you begin to earn more money. And this was exactly the case when I got my first job at the age of 18.

From the age of 18 to 21 I worked in a grocery store part-time during college and full-time in the summers and while this didn’t make me rich it did help me see my savings rise much more than ever before. In fact, this is when I began to gain some financial confidence as seeing a 5-figure savings balance proved to me that my hard work was paying off.

Luckily during my later teens and early 20 years I was very into reading and more specifically reading books on finance and early retirement. Not shockingly, these books preached the importance of investing early and often and so at the age of 18 I bought my first stock in a Canadian Oil company. Within a year of holding that stock I made around $1,000 in profit and from that point forward I was hooked on investing and began making regular contributions to my investment portfolio.

In fact, during this time I came across one of my favorite investing quotes which is that:

“It’s not timing the market that matters; it’s time in the market.”

Starting at age 18 certainly contributed to my ability to save up $100,000 by the age of 25. And it’s no secret that I am a huge proponent of the power of compound interest. While my investments only sat in the market for 7 years from when I began until age 25, it certainly helped me increase my net worth and is why I continue to keep money in the market no matter how good or bad it is doing.

And this can sometimes be hard to do when the market is in a decline but it was the story of Jeff and Steve that truly solidified the importance of investing early and letting the market do all the work.

You see, in the story, Jeff began investing at age 25. He invested $10,000 every year for ten years and stopped completely at age 35. That initial $100,000 then sat in the market earning the historical 7% return and by age 65, Jeff had over $1,000,000 with just 10 years of contributions.

Then, there was Steve. Steve only started investing in his mid-30s and because time wasn’t on his side as much as it was for Jeff, he had to invest $11,000 a year, every single year, from age 35 to 65 just to have the same lump sum at the end as Jeff. In case you didn’t do the math, Steve had to fork out an extra $230,000 over the course of his investing journey just to reach the same point as Jeff.

So what lesson did I learn from this story? Start now and that goes for both saving and investing.


Step #2: Go To School On The Cheap

If there is one thing that seems unavoidable when you’re a young adult it’s college. If you don’t go to college then you are usually looked down upon by your friends and family and while I wish this wasn’t the case, it is unfortunately the world we live in today. Luckily, school doesn’t have to be as expensive as you think and going to school on the cheap is key to saving up $100,000 in your mid-twenties.

Now, my particular educational path will probably be different than many other peoples. You see, after graduating high school I was faced with a tough decision — do I go to community college or go straight into university? I was in a unique position because my Mom worked at the college in my city which made my tuition free but if I were to go to college versus university I would be the laughing stock of my friends. Being the frugal guy that I am I opted for the community college route and was able to obtain 3 years of college for next to no cost.

Now I know that this is useless context given that most people don’t have this same luxury but after graduating college I was in the same position as everyone else attending university paying thousands of dollars a year. In fact, when I was in business school I was paying around $8,000 a year and my part-time job at the time definitely wasn’t covering all of this amount which is why I had to get creative. One way I was able to attend university while taking less of a financial hit was to take advantage of educational scholarships. My good grades from college allowed me to get a few thousand dollars towards my tuition which helped tremendously. Moreover, I applied for different grants and bursaries which allowed me to lower my tuition expense to an amount that I could then cover with my part-time income. Essentially, I graduated with my bachelor’s degree with zero student debt and this is important because you can’t start to save up $100,000 when you are thousands of dollars in the red.


Step #3: Save Wisely

If you want to save up $100,000 by age 25 or at any point in your life, then you need to save wisely and one way you can do just that is to leverage the power of pre-tax saving. When I first started contributing to my RRSPs (the tax equivalent of a 401K in the United States), my ability to save rose exponentially.

You see, when you invest in a pre-tax vehicle like an RRSP or 401K, you drastically reduce your income in the eyes of the tax man which means less tax to pay and more cash to save. This method works well beyond deferring tax because it ensures you save on a normal basis. Most employers offer retirement accounts to their employees and by deducting money from every pay you can make this contribution to your future wealth automatically. Not to mention, the money you put into your retirement account is managed and invested meaning that it will appreciate over time unlike when you save the cash in your checking or savings account.


Step #4: Avoid Consumer Debt

When people think of consumer debt they usually think of maxing out credit cards and before we banish the use of credit to make purchases, I think it’s beneficial to note that during my money saving journey I was a big fan of spending on credit. As soon as I could legally get a credit card I did because my parents always bestowed upon me the importance of building credit. And because I was living frugally, I was always able to cover my monthly statement balances.

However, when used incorrectly, leveraging high-interest debt, like credit cards, is personal financial poison. It tricks unknowing consumers into believing they can afford something they don’t yet have the money for. It dishes out the satisfying rush from a new purchase without the prior work. Then the interest rates kick in, and a constant financial drain sucks your savings dry.


Step #5: Live Simply

When people think about minimalism, they often think of furniture-less houses and plain white walls, but minimalism can also be used in the financial sense. A minimalist mindset, when it comes to your money, is simply realizing that more is not always better. It means becoming aware of the things that you own, becoming aware of the burden “stuff” can create, and carefully scrutinizing items bringing them into your life.

One method I used during my $100,000 saving journey was to use the 30-day rule when looking to buy something new. Quite frankly, when I was younger I was a sucker for impulse purchases. I would get the idea in my head that I needed a new phone or video game and without processing the thought fully I would go out to the store and buy it. Making little money to begin with, this behavior eroded my ability to save but luckily I found a way to trick my brain to avoid doing this.

That’s when I started to use the 30-day rule. By waiting 30 days before spending on non-core expenses, I started to realize that I didn’t want these items as much as I had originally thought and that saved me a tremendous amount of money!

Ultimately, you need to ask yourself how much happiness do your possessions really bring you? How much of your time are you working to buy these things? How much time are you spending maintaining your stuff? And most importantly, which do you want more, short term spending highs or the deeper sense of achievement of saving up $100,000?


Step #6: Live At Your Own Financial Pace

If you want to save up $100,000 by the age of 25 then you need to tell the Joneses to take a hike! The reality is that most people are a financial mess and emulating their lifestyles and spending will only put you in the same terrible position they’re in. Now, this can be tough especially when you are young and are still building your identity in the world and when I was on my own path to saving success I had to ask myself a simple question — do you want to reach complete financial freedom or impress others? The answer was simple for me. If I could be diligent in my saving and investing efforts, then I could achieve early retirement and be financially free when all the people who I avoided impressing would still be working into their later years.


Step #7: Supplement Your Income

Last but certainly not least is to supplement your income to ensure you hit your $100,000 saving goal. If you took the typical life path of going to college and then getting a job, this means that you will probably only be a few years into your career by the time you reach age 25. For myself personally, I was still doing my Master’s degree at this age which is why making extra income was vital to reaching this financial goal. You see, unlike some of my friends who took shorter college programs or went right into the workforce after high school, I had a lot less time to start banking my initial career earnings. This is where my side hustle journey began. Doing freelance work helped me earn thousands of extra dollars a year and made the difference between reaching this 6-figure goal and not.

So if you’re young and want to save up $100,000 or are older and still want to improve your savings balance then employ the 7 steps I just went over and you will be counting your cash before you know it!