You've probably heard people say money

goes to money or the more you have the

more you make. These aren't just

cliches. There's a real reason why once

you've got about 20,000 saved,

everything changes. If you're new here,

hi, I'm Nisha. I'm a charted accountant

and a former investment banker. And in

this video, I want to take you behind

the scenes to explain why phrases like

this exist, why your first 20,000

changes everything, and give you tips on

what to do if you don't have 20,000

saved up just yet. Let's start with why

it changes everything. Number one, it

makes the biggest difference in

financial well-being. Before you have

any money saved, you're living from a

place of scarcity. You take the first

job offer that comes your way, even if

it's not really what you want. You stay

in situations you absolutely hate

because you can't afford to leave. You

say yes to things that you don't want to

do because you need the money. You're

constantly making decisions based on

fear. Fear of running out, fear of not

having enough, fear of what happens if

something goes wrong. And when you're in

survival mode like this, your brain

literally can't think about growth.

You're not thinking about investments.

You're not thinking about building

wealth or starting that side business.

You can't. you're thinking about making

it to the next paycheck. But there's

some really interesting research done by

Vanguard that shows that just having

$2,000 or equivalent in emergency

savings has a 21% increase in financial

well-being. $2,000 and suddenly you feel

21% better about your entire financial

situation. And if you can push that to 3

to 6 months of living expenses saved,

depending on your situation, that adds

another 13% of a boost to your financial

well-being. And that's why for a lot of

people that 20,000 is the first mental

barrier to overcome. It's where you

start feeling like you're just getting

by and you start feeling like you

actually have money. It's a

psychological shift that's hard to

explain until you experience it

yourself. Once you have that emergency

money saved up, whatever that amount is,

you can now have money to compound. It's

the momentum you need to get you to the

next milestone and the milestone over

that. That brings me to the second point

as to why it changes everything. And

that is momentum. There's a reason why

compound interest, one of the most

powerful forces in finance. And once you

hit 20K, you'll see exactly what it

means. Your money doesn't just sit there

anymore. It starts earning returns. And

then those returns start earning their

own returns. It's like planting a tree

that grows even more trees for you. So,

let's use a number to break this down.

Say you're putting away 1,000 every

month and getting an 8% return. Getting

to your first 20,000 takes about 19

months of grinding and saving. But

here's where things get interesting.

Your second 20,000 doesn't take another

19 months. It only takes around 17

months. Why? Because now you've got that

first 20,000 working alongside your

monthly savings, generating its own

returns. By the time you're going for

your third 20K, the timeline shrinks

even more. Your money is doing more of

the heavy lifting whilst you're doing

the same amount of work. And when you

get to the bigger numbers, the time

shrinks even more. Once you hit 400,000

in your portfolio, you can make your

next 20K in just 5 months. The same

amount that took you nearly 2 years to

save initially is now happening through

your investments. That first milestone

is hard. But then every single 20,000

milestone after that gets easier and

easier. Which brings me to number three.

The maths gets better as you go. People

always assume there's some hidden

investment world that unlocks once you

reach certain wealth levels. like you

get access to these secret hedge funds

or exclusive opportunities that regular

people can't touch. But that's not

really what's happening. The truth is so

much simpler. It's just basic maths

working in your favor. So think about it

this way. You put 1,000 into an

investment that grows 10% in a year. Now

take that exact same 10% growth and

apply it to 10,000. Suddenly you're

looking at 1,000 in profit from the same

investment, same time frame, same level

of risk. This is why hitting 20,000

feels like such a turning point. Up

until that point, your returns feel

almost insignificant because you're

working with smaller amounts. But once

you've accumulated some real money,

those percentage gains start translating

into amounts that actually matter. When

you've got 20,000 sitting in

investments, earning 8% annually, that's

1,600 flowing into your account over the

course of a year that you can then

reinvest. Money you didn't have to earn

through your job. money that showed up

because your existing money was also

working on your behalf. The investment

strategy isn't any more sophisticated

than someone with 1,000 can use. The

only difference is the scale. And that

scale is what transforms small

percentage wins into real financial

progress. And number four, you've built

the most important habit. This is

arguably the most important point out of

the four when it comes to why hitting

that first 20,000 is the most important.

And it's something that most people just

overlook or completely miss. When you

save 20,000, you've actually done

something way more important than just

putting money in the bank. You've built

discipline to get there. And that

discipline is going to change your

relationship with money forever. If

you've never done it before, you

probably had to take some sacrifices,

put in some discipline, and really track

where your money was going. You had to

say no to things that you wanted so that

you could set money aside instead. And

as a result, you became the type of

person. You have the identity of the

kind of person who can actually save

20,000. You've basically proven to

yourself that you control your money,

not the other way around, and that you

can delay gratification when it really

matters. If you're watching this and

you're thinking, "I haven't even got

close to the first 20,000." Here are

three practical ways to accelerate your

timeline in getting there. First,

understand what your financial position

is right now. You can't hit 20,000 if

you don't know where you're starting

from. Most people have no clue how much

they're actually spending each month or

what they could realistically save.

Those are the first things that you want

to know. And I put together a financial

well-being tool kit that walks you

through this step by step. Figuring out

how much money you have to work with,

understanding your money personality and

how that affects your saving style and

getting started with investing based on

what works for you. If you want to fast

track your way to that first 20,000 and

stop guessing about what you need to get

there, check out the link in the

description for more information.

Second, use technology to automate your

progress. There are loads of apps now

that can analyze your spending. Figure

out what you can afford to save and

automatically move that money aside for

you every few days. They even have

special features like rounding up every

purchase to the nearest dollar and save

the extra change without you even

noticing. The key is to pick a tool that

works with your habits so you're

building wealth without constantly

thinking about it. One of the tools that

I've mentioned in previous videos is

Plum. They're really good for this.

Again, link in the description if you

want to check out anything that I'm

mentioning in this video. And third,

don't underestimate the power of earning

more. Sometimes a job switch or even

just asking for a raise can boost your

income more than years of small saving

tweaks. If you love your current job and

you're happy to trade some of your

financial goals in return for security

and happiness if your job doesn't pay

that well, that's great, but just know

that your financial goals might take a

bit longer. But if you are someone who

is working in your job for the money,

for the paycheck, don't be afraid to

push for more. And if you're not getting

it, look elsewhere. Earning more is

often the biggest lever you can pull to

speed up your savings because you can

only save up to how much you earn. So

that is it. why your first 20k changes

everything and what you need to do to

get there. If you want to check out

anything I mentioned in the video, it's

all linked in the description below. And

if you liked this video, you will also

enjoy it. This video right here. See

that?