You can 'ease off the gas' once you hit $100,000, said Charlie Munger. Here's how to get there as fast as possible

While joining the millionaire club may feel out of reach for many young Americans, the power of compounding can make it possible.

It's simple: You invest a small sum of money each month into a low-cost index fund. When you earn dividends, you automatically reinvest those proceeds to buy more shares and your returns grow over time.

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But there's a catch, says self-made millionaire Mark Tilbury: The magic only really happens after you've invested your first $100,000.

"Don't worry about earning millions," Tilbury said on his YouTube channel (1). "Instead, focus on the first $100,000 because, after that, your net worth will go crazy."

That's the advice he heard from a millionaire he admired as a kid. Clearly, Tilbury isn't the first to note the significance of this milestone.

In fact, the late billionaire investor Charlie Munger has often been credited with popularizing the importance of the first $100,000, once describing it as "a b—, but you gotta do it" because "after that, you can ease off the gas a little bit" (2).

But hitting that $100,000 milestone is tough for young Americans today — especially when you consider the increased cost of living and sky-high home prices. About 74% of Americans believe the cost of living is on the wrong track, according to a survey conducted by Ipsos in May (3).

Reaching $100,000 can also be challenging because "a massive portion of that comes from just boring old saving and investing," said financial advisor Brian Preston on a recent episode of The Money Guy Show — not from "finding some diamond-in-the-rough investment" that will "absolutely rocket" you to wealth (4).

Once you cross six figures, however, compounding begins contributing a much larger share of your portfolio's growth, said Preston — making the next $100,000 arrive much faster.

So, while it might take you longer to reach that first milestone than it did previous generations, it's still worth pursuing.

Here's why the first $100,000 is so important and how to reach it quickly.

After you hit $100,000, "compound interest stops being lame," Tilbury said on YouTube. "Getting that chunk of money as fast as possible is the key. Once you get to this point, it's almost inevitable that you'll be wealthy if you just invest in a low-cost index fund."

To get there, Tilbury suggests people follow what he calls the GROWTH method:

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