A 6 figure salary is a huge goal for many people. Whether that’s through a career or a side hustle, or both, getting to a 6 figure salary is quite the achievement. It can open a lot of doors for you when it comes to freedom. Freedom of time (not for all, however, as you’ll see later on that some jobs that pay 6 figure salaries require a lot of hard work), and financial freedom.
For many people, reaching a 6 figure level income is a successful milestone in life. But not everyone knows how to get there. So how do you get to a 6 figure salary? What jobs pay 6 figures? And what kind of life does a six figure salary get you? We’ll explore all these in the article below. Let’s dive In!
Before we get started, check my post about what 6 figures, 7 figures, 8 figures, and 9 figures mean.
For starters, what is 6 figures? A 6 figure is any number between $100,000 and $1 million.
When talking about salary, it’s any job that pays you between $100,000 to $1 million a year. That’s a really big range, as you can see.
A six figure salary these days isn’t as uncommon as it used to be 20 years ago. But it’s still not that common as you’d think.
A report by IBISWorld tells us that about 34% of American households earn $100,000 or more in 2022. While that percentage isn’t high, it still highlights the fact that earning a six figure salary is definitely doable.
Let’s discover which professions pay 6 figures a year.
Believe it or not, there are many careers that pay a six figure salary.
Don’t be mistaken, while these careers are lucrative, they aren’t the easiest to get. You’ll be required to have a higher education or a specialized skill to land a job in this salary range. But that doesn’t mean it’s impossible.
Naturally, when you ask people what they think are the highest earning careers, they’ll most likely say a CEO or a doctor. Which is true – the median pay for CEOs is $788,338 and $242,190 for doctors. But there’s definitely more to add to the list.
- Finance Manager
- Nurse Practitioner
- Construction Manager
- Marketing Manager
- Software Developer
- Investment Banker
Keep in mind that most 6 figure careers require higher level education and skill to acquire, so you’ll need to commit a number of years to become valuable enough to get there.
BUT…having a 6 figure job isn’t the only way to get a 6 figure pay. While the traditional way is to go to college and pursue a high paying career to attain this goal, there are other ways possible.
A six figure income is different from a salary. While a salary comes from a job, an income can be made up from multiple sources – for example, a job and a side hustle.
This is why side hustles and passive income streams are a great idea!
So you don’t have to be a celebrity or a big company CEO to be a 6 figure earner. With a business going on the side, making over $100,000 is very achievable.
What many people are doing these days are starting YouTube channels, e-commerce stores, blogs, freelance gigs, and much more to supplement their salaries. It’s a great strategy to have a stable income and extra money to reach your financial goals faster.
There are many lucrative side hustles you can start to set yourself up to become a 6 figure earner.
Does a 6 figure salary help attain wealth? Yes. Is it the only way? Nope.
There are several routes you can take to build wealth even without a 6 figure salary. It requires discipline and managing your money the right way.
Debt is one the biggest factors that impacts your journey to becoming wealthy.
It can have strong effects on your long term savings goals. That’s why it’s smart to pay off your debt as early as possible. The sooner you pay it off, the sooner you can start growing your money.
Start with writing down all your debts and see which ones you can make bigger payments towards. This will save you a lot of money from interest charges over time.
Learn about the different debt pay-off strategies to start building wealth. For starters, you can look at the snowball method and the avalanche method to see which one is right for you.
A key part of building wealth is by first writing everything down to create a proper budget.
Whether it’s on the back of an envelope or a spreadsheet, having a full picture of where your money is being spent is going to show you areas where you can maximize your earnings. This can be cutting down on eating out, getting rid of streaming subscriptions you don’t need, or even negotiating a better price for your utilities like internet and phone.
It’s no secret that saving your money is one of the most important steps to take in building wealth.
When you start to save your money, you’re setting up the building blocks for a more secure financial future. It’s a huge amount of stress off your back knowing you have money in the bank.
You can get started with an emergency fund first (have enough in your savings account to last the next 3 – 6 months in case you lose your job), but if you want to retire early or not have to worry about money in the future, you have to start saving your money.
Make a goal to save a certain percentage or amount of your income daily, weekly, or monthly. Whether that’s 10% or 50% depends on your financial well-being, but every little goes a long way.
Saving money alone will only take you so far. That’s why investing your savings takes you much further. When you invest, you’re basically employing it since you’re making your money work for you.
Investing allows your money to grow over time. The more money you invest and more time you keep it invested, the more it can grow. There are different investment strategies you can use that take your current situation into account (because everyone’s situation is different so things change, such as how much risk you can take, your age, etc.).
Decide which investment strategy is best for you and watch your money grow!
The biggest differentiator between high earners and average earnings is their skill level.
That’s why you should always be looking to upgrade your skills in your profession. Take the latest classes in your field, learn new technologies, and keep up with industry trends.
Doing this will allow you to bring the highest value to your employer. The more value you provide, the higher you get compensated for it.
Increasing your income is the best and fastest way to building wealth.
You can do this by getting another job with a higher salary every few years by leveraging your skills, or asking for a raise.
Although asking for a raise can sound like an overwhelming task, it will do wonders for your goals. Even if you don’t get the raise, you’ll get a sense of what to do as next steps, such as learning better negotiating skills.
If finding a new job or asking for a raise don’t get you the results you want, you still have other options to explore. This is where a side hustle can help.
A profitable side hustle can fill in the gap from your salary to reach a 6 figure income. For example, if your salary is $75,000 a year, the remaining $25,000 can come from your side hustle(s) to reach your goal.
Make sure to save your side hustle earnings to stay on track for your wealth building goals!
Building wealth and increasing your savings account is a long term game. So it’s only natural that you’ll get demotivated at times.
That’s why it’s important to know WHY you’re on this path.
When you commit to saving your money, it means you’ll have to sacrifice some pleasures for the time being. This can be cutting back on eating out with your friends, driving an older car, holding off on buying the latest tech you want, etc.
You’ll get the urge to spend your money to enjoy these things, so think about why this goal is important to you. This will keep you disciplined and on track to reach your goals.
Even six figure earners can live paycheck to paycheck. After accounting for expenses, your take-home pay isn’t as high as we’d like it to be!
Let’s go over some factors that affect your income.
As mentioned earlier, debt from credit cards or other loans can greatly affect your income levels.
The interest from these loans can eat away your saving opportunities so it’ll take you longer to reach your desired results. This will keep you in an endless loop of living paycheck to paycheck.
Student loan debt is another huge financial burden many people have. For some people it can take years to pay off, that’s why implementing a smart debt pay-off strategy is a great idea to get rid of the loans as soon as possible.
Where you live will also affect your income levels.
You’ll find more people earning a 6 figure salary in high cost of living areas (HCOL), like New York City or San Francisco. This is simply because it costs a lot more to live there. So even though that level of earnings is great, your money doesn’t go that far since you’ll be paying a lot more to live there. Costs such as housing, food, taxes, and transportation are usually higher here.
On the other hand, lower cost of living areas (LCOL) such as Cincinnati or Memphis can be less taxing on your wallet. You’ll pay less for housing and everyday costs. This doesn’t mean living in a LCOL is always the best option. Most LCOL areas also pay less than HCOL areas.
The key to maximizing your savings is to find a location where income goes the longest relative to your expenses. The Indeed Hiring Lab team conducted this amazing study in finding examples of optimal areas to live in so you can make the best use of your income.
As your income increases, it’s very important to keep an eye on your expenses.
It’s very tempting to buy new things as you earn more. By doing this, even a high salary doesn’t mean much if most of it is going to pay for your lifestyle. This is why many people still live paycheck to paycheck even when earning a 6 figure salary.
Living within your means and keeping expenses as low as possible are key parts of building wealth and obtaining financial freedom.
The amount of money that makes you happy matters a lot when determining what your goals are. Where you live also matters here since people in different states have various salary amounts needed to be happy.
This is different for everyone – someone might need $100,000 or more to be happy, another might need $60,000. The goals of these two people will vary significantly since they require different steps.
Think about how much you need to earn to be happy and work towards that.
Whatever income you make, you’ll have to pay taxes on it.
When people talk about their salary, it’s usually their pre-taxed income. Meaning, if you earn $110,000 and live in San Francisco, CA, your take home pay is $77,402. This is your income after federal and state taxes have been deducted.
That’s still a lot of money, but not close to $110,000! Use an income tax calculator to see how much you’ll be paying in taxes for a 6 figure income.
Absolutely. But of course, this will depend on person to person.
The factors that affect this are your money habits, where you live, family size (how many dependents you have), your happiness level, etc.
Think about what the American Dream means for you and see if that can be achieved with a six figure salary.
For someone earning $100,00 a year salary who works 40 hours a week, that comes to around $48 an hour.
52 weeks a year x 40 hours = 2,080 hours.
$100,000/2,080 = $48
Again, this will depend on various factors such as how much debt you owe, your living expenses, where you live, etc.
A single person earning a six figure salary can live comfortably depending on where they live and how they manager their money.