A salary of six figures can appear like a dream that comes to life. After all the efforts, you’re awarded zeros on your pay. One important thing to be aware of is that the zeros you earn aren’t always the key to a luxurious life.
Many consider a six-figure annual income as the peak of their potential earnings. But, many people never achieve these earnings. What is a six-figure salary, and how does an income of that kind help you attain it?
Let’s look at what a six-figure income means to you and your financial health. (P.S. You can also read our blog posts about the meaning of the five numbers; 7 figures and ten numbers are as well! )
What are six numbers in dollars?
So, what exactly are six figures in the money, anyway? It’s easy to say that any amount greater than $100,000 but less than one million is considered six figures in cash.
Then, from that perspective, what exactly is a six-figure salary? The amount of money is quite significant in the context of the definition of what a six-figure payment is. In general, any job that pays more than $100,000 per year but less than one million dollars is thought to be a six-figure income.
What kind of jobs can earn six figures?
If you’ve figured out the meaning of a six-figure salary, you might be thinking about what you can do to earn it. If you’ve got hopes of becoming a successful earning person, you’ll need to discover an attractive career route.
There are a lot of six-figure jobs available. Of course, lawyers and doctors immediately spring to mind as the highest-paid professionals. Doctors make the median of $208,000. Lawyers make a median salary in the range of $120,910. Both have a six-figure income. However, doctors earn significantly higher median wages.
Other career options that are lucrative include:
- Investment bankers
- Controllers for air travel
- Commercial pilots
- Pharmacists
- Marketing managers
- Human resource managers
- Actuaries
- CEOs: Chief Executive Officers (Such as Oprah Winfrey, founder of Harpo Productions, and Huda Kattan, the CEO of Huda Cosmetics)
Professionals can earn more than six figures per year. But, traditional routes aren’t the only choice. With the assistance of the internet, many entrepreneurs can put together an impressive income without having to go through the rigorous process of the school. But remember that you don’t need to pick only these career paths that pay high wages.
What’s a six number income?
Although you may not technically earn a six-figure income at your job, 9-5 doesn’t mean you aren’t making more than six figures! What is a six-figure salary, and how does it differ from a six-figure job?
The main distinction between “income” and “job” is where extra income streams and side hustles are involved. You can earn more than six figures by boosting your income stream by utilizing these avenues.
Many are learning to become freelance YouTubers, bloggers, writers, virtual assistants and then hustling up the ladder, all at ease at home. Some lifestyle influencers even make 6 figure salaries!
Who would have believed that you could be an entrepreneur with a six-figure salary working from the comfort of your home! This is proof that other people can make more significant earnings than professional athletes and actors!
Some earn a hefty living from a passive income stream. You can make over six figures per year if you diversify your income streams.
The good news is that you don’t require a college degree to earn six figures too!
Life after earning six figures
Many dreams of an income of six figures. The typical ‘dream lifestyle is characterized by luxury cars, luxurious vacations, and massive houses. But, living a lavish lifestyle that includes expensive items will begin to consume your income fast.
The fascination with an income of six figures is the sense that you’ve achieved it. A large salary can make you feel like you’ve acquired the American Dream a reality. But, this isn’t necessarily the case.
If you are spending all your earnings on a ‘rich life’ brimming with glittering items, you’ll find yourself in a downward cycle. Even though your pay will be higher, it is still possible to be caught in the process of living paycheck to paycheck.
The root of the problem lies in the fact that many people misunderstand the concept of income and wealth. Wealth is the money you’ve saved and grown over time. It is a sum of money that flows to your bank account every payday.
Wealth is available for you to utilize regardless of whether or not you have an income. Your income can be used to increase your wealth. However, it would help if you didn’t rely on income as a way to replenish wealth.
What is the average 6 figure salary? Six factors that impact your salary
Even when you hit the six-figure salary threshold, many variables will impact the amount you receive in your pay. You might have obligations outside your control that require most of your payment.
This means that your earnings aren’t as high as you believe! What does a six-figure salary worth when these elements take into consideration?
Let’s look at some ways that your earnings could be affected.
1. Credit card debt
A salary of 6 figures can be plenty if you’re overloaded with the debt of your credit cards. The high-interest debts can quickly consume your earnings, leaving you with any money left at the close of each month.
It does not matter how much you earn; if your expenses are living beyond your means, you’ll always be in a paycheck cycle.
2. Student loan debt
Debt from student loans can be a common problem that is a constant burden for Americans. If you took out many student loans to finance your education, you’re stuck with huge costs. In some instances, you might have required an expensive education to get employment with a good salary.
For instance, a typical medical school graduate owes $241.600 on student loans!
After finding a well-paying job, your student loan debt will not disappear. It eats away your earnings while you earn a steady income. If you don’t have a strategy to pay off the debt from student loans and pay it off, it could be an expense to your earnings for a long time.
3. Where do you reside
Living expenses can vary significantly across the United States. In general, cities with larger populations come with higher prices of living. San Francisco, New York City, and Washington D.C. are just three instances of cities with a high cost of living. If you reside in a cost-intensive living region, your earnings may not go far.
For example, the typical price of a one-bedroom apartment in New York City is $3,225 each month. If you’re paying more than $38,700 per year for just the basic rent for your home, other expenses can increase. You’ll have to think that your utility bills, transportation costs, and food prices are likely to add up fast in a city of a large size.
However, Orlando, FL. has cheaper costs of living. The cost of one-bedroom apartments within Orlando costs $1,597. If you’re paying less than $20,000 for renting an apartment, you’ll be able to extend your money even further.
The same applies to purchasing an apartment. Don’t overextend yourself to the point that you’ll become “house poor” due to your high mortgage!
Remember this as you look for a six-figure job. A good income in a low-cost living area could be better than a high salary in an expensive city.
4. Happiness
It is said that money can buy joy, but is it real? You get an income of $100,000, yet it makes you miserable. Does that colossal salary bring your satisfaction if you’re unhappy for a minimum of 40 hours per week?
You cannot purchase true happiness. Sure, earning more money may aid in easing financial sure in specific ways, but do not work in a place that makes you miserable.
Therefore a six-figure salary isn’t essential to real happiness.
5. Time
Whether we like it, our time is our most precious resource. We all have all day, every day, to do what we want and only a few days in our lives. What we do with those days is crucial to our overall happiness.
Many people spend between 60 and 80 hours per week in the office to earn a six-figure salary. The time you spend in the office is a distraction from your life. You may long for more time with your family, pursue a new hobby, or relax in the afternoon.
If you’re short of time, you’ll tend to make more expenditures to help you out. For example, you may not cook meals at home to cut down on time or avoid exercise because you’re running out of time. The small decisions you make can result in an expensive lifestyle, which reduces your income even more.
6. Taxes
Uncle Sam and his family will take a percentage of each penny you earn. Even though your earnings may exceed $100,000, the amount you take home is what you’ve made. However, the post-tax number could be more disappointing.
Let’s consider a person whose six-figure salary is $100,000 before taxes. We also assume that they reside within New York City and are single. If they use an income tax calculator, the take-home salary will be approximately $68,000.
This figure is after federal taxes, state, and other taxes. While $68,000 is still quite a money, it’s significantly smaller than $100,000!
Based on the state that you reside in, you could be subject to different tax rates. Find out more about this here to get an idea of what taxes will cost you every year.
7. Lifestyle creep
Achieving six figures is a fantastic method of living. But, it is essential to be aware of the rise in lifestyle costs. This is when you start to increase your expenditure due to the increasing income. Whatever you earn, you must make sure that you are spending within your budget to stay clear of the effects of lifestyle change.
If you do not, you’ll always live from paycheck to paycheck, regardless of money.
Do you require a six-figure salary to make money?
Many people dream of earning six figures; however, most people don’t. The Bureau of Labor Statistics shows that the median wage for all employed Americans above 16 is $908 per week or $47,216. The median increases slightly for people aged 25 to 34 up to $1,022 weekly or $53,144. Both figures are far from the $100,000.
Does that mean the majority of people can’t have financial security? No! It is entirely possible to accumulate wealth with much less income. Building wealth is more about the money you make with your money than the amount you spend.
As you accumulate money over time, your savings will get. Suppose you use your salary to the max and do not create wealth. For instance, you earn $100,000; however, you use your entire paycheck.
Are you better off than someone who earns $50,000 yet can save $10,000 a year? If you think about it over the long term, there is no way to know. While you might have the luxury of a ‘rich’ lifestyle, they’ll have the security of money to help make retirement possible.
How to make money without earning a six-figure salary
It isn’t simple to build wealth; however, it is easy to achieve. While it takes effort and commitment to accomplish your goals, you can create wealth and boost your net worth. Here’s what you have to do to make wealth without an income of six figures.
1. Find your reason
The process of building wealth is a lengthy project. It won’t occur overnight, and you’ll need to be a dedicated worker to achieve it. In many cases, you’ll have to decide to turn down your immediate desires to finance your goals for the long term.
If you don’t have a target in mind, staying focused could be a challenge. It could mean eating less food at home instead of avoiding going on a shopping spree or even opting for an older vehicle. All of these are perfectly acceptable to pursue an objective.
2. Pay off the debt
If you are in debt, it’s the perfect time to pay the debt off. It is incredibly likely to hinder your long-term wealth-building goals. The money you spend on your debt each month can be used as an investment strategy to build longer-term wealth.
Examine your debts. Make a list of everything you owe on one page of the paper, and then you can determine precisely how much you have to pay, both in white and black. It might be shocking to see the amount on paper. However, it’s an excellent opportunity to boost your motivation.
If you don’t do something about the debt you owe, it could take years to pay off massive high-interest loans. Make a plan and implement an effective strategy to pay off your debt today.
3. Evaluate your lifestyle
Take a look at your expenses to figure out if you can afford the lifestyle you want to live. It is crucial to be completely truthful regarding your expenditure to obtain an accurate view.
Explore ways to cut the cost of your purchases without hurting your enjoyment. You may be amazed by the number of savings opportunities found.
4. Save your money
The first step to creating wealth is making sure you save your cash. Even though you can begin by establishing an emergency savings account, the process of building wealth can go beyond the amount of a small amount of money. Imagine how you would like your life to unfold shortly.
Do you plan on working for over 40 more years? Or do you prefer to accumulate enough wealth to afford a more flexible lifestyle? If you’re planning on ambitious goals of retiring one day, saving cash now is essential.
There may be a feeling that you’ve saved enough But every penny matters. It doesn’t have to earn a six-figure income to begin saving money! Set out to save money incrementally.
5. Save your money
It’s not enough to save your money. You must also invest in it. The investment process can help your money to increase over time. When your investments are growing, you’ll be thankful for deciding to invest.
If you’re unsure where to begin investing, consider planning your investment plan. It is essential to understand how to construct a diversified portfolio of investments so that you can help your money make a difference for you!
6. Make more money
The first step is to solicit an increase. Although it might seem daunting to ask for a raise, engaging in negotiations with your employer could be lucrative. While you can make a fortune regardless of your salary, having more income can boost your progress. It is possible to get a better wage with the same work.
If you’ve tried salary negotiations, there are alternatives but have come to an impasse. Making a side business is a great way to earn more money. In addition, you’ll develop confidence in yourself when you stand with your beliefs.
A successful side hustle can boost your income. In addition, you’ll develop new skills that will help you become a better employee for your employer. If you are earning more, channel your earnings to wealth creation.
You can earn wealth without having a six-figure salary!
A six-figure income may be helpful, but it’s not the most critical aspect of wealth creation. Regardless of their size, what you decide to make of your earnings is the most important. If you are adamant about spending all of your money on living expenditures, then earning a substantial income will not go far over the long haul.
