Charlie Munger, the man who served as legendary investor Warren Buffett’s right-hand man for decades, died in December, just shy of his 100th birthday. Buffett credits him as the "architect" of Berkshire Hathaway Inc. and referred to him as "part older brother, part loving father." Munger is renowned for his insightful and often blunt advice.

One piece of wisdom that resonates with investors is his take on building wealth. In the late 1990s, during a shareholder meeting, Munger said, “The first $100,000 is a b****, but you gotta do it.”
This statement emphasizes the initial hurdle many face in accumulating savings. Munger’s bluntness highlights the challenge of reaching that critical first $100,000.

“I don’t care what you have to do," he said. "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."

The reason behind Munger’s focus on this initial amount? The power of compounding. Once you have that base, the path to greater wealth becomes smoother. With compounding returns, $100,000 can grow significantly over time, providing a strong foundation for long-term financial goals.

“After that, you can ease off the gas a little bit,” he said.

Munger made this statement in the mid-1990s, and when adjusted for inflation, $100,000 back then translates to roughly $200,000 today. However, the core principle of his advice remains timeless. Many financial advisers today echo Munger’s sentiment: Accumulating the first $100,000 is the hardest and most important.
Munger’s words are a wake-up call. Achieving financial security often requires short-term sacrifices and discipline, but the long-term rewards can be life-changing. By persistently working toward that initial $100,000, people can set themselves up for a brighter financial future.

The specific strategy for accumulating this sum will differ based on individual circumstances. Some may need to take on extra work or explore side hustles, while others might need to cut back on expenses. However, Munger’s message is clear that building wealth starts with this crucial first milestone.

For those willing to put in the effort, Munger’s advice offers a path toward financial freedom. By embracing frugality and finding creative ways to save, people can position themselves for long-term success. Once that initial hurdle is crossed, they can, as Munger suggests, “ease off the gas” and enjoy the benefits of their hard work.