“Six figures” simply refers to a number with six digits. Typically used with money, the term covers amounts from $100,000 to $999,999. (Once you hit 1 million, you’re in seven-figure territory.) Someone with a six-figure salary makes at least $100K.
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How to Make Six Figures
There is no one right way to earn six figures. That said, there are strategies that can better position you for this level of income. Getting a good education, while not absolutely necessary, is a solid foundation for the kinds of jobs that pay in the six-figure range. Another path is to start your own business.
The Bureau of Labor Statistics (BLS) lists 159 occupations with median salaries of at least $80,000. The degrees required for these jobs range from a high school diploma to a doctoral degree.
It’s important to recognize that certain careers just pay more than others. Once you’ve chosen a high paying field, you can determine the type of education and training you’ll need to pursue.
You’ll also want to learn how to manage and grow your money. A good place to start is by tracking your expenses and savings with a free spending app.
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Average Age to Make Six Figures in the US
According to the U.S Census Bureau, about 15% of households earn between $100,000 and $149,000. Another 8% earn between $150,000 and $199,000. And 10% earn $200,000 or more. Note that this is household income, not individual. Compare those figures to the national average salary of $60,575.
Some workers begin earning six figures in their twenties and thirties. Economists nickname them HENRYs, for “high earners, not rich yet.” But for most people, their “peak earning years” are from age 35 to 54. The majority of people who make six figures will do so in their 30s.
Keep in mind that annual income says nothing about someone’s financial health. An individual making $50K who manages their money well can be in a better place financially than someone making six figures.
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Examples of Jobs That Pay Six Figures
A look at the highest paying jobs by state offers insight into these types of careers. All these jobs make at least $200,000, and all but one are in the medical field. Texas is an outlier. There, chief executives, the highest paying job in the Lone Star State, earn $239,060 on average.
Other types of jobs that can pay a six figure salary include airline pilots ($174,001), IT managers ($136,745), and lawyers ($101,790). A construction project manager earns about $113,257, while a college development officer makes $163,600. It’s probably fair to say that, in any industry, there are successful bosses who make six figures.
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What Does a Six Figure Salary Get You?
What a six figure salary will get you depends on several other factors. A big one is the cost of living in your area. This is how much you spend on housing, transportation, food, and other necessities. When someone lives in a place with a high cost of living, they will typically have less disposable income and less to put into savings than someone who lives in a low cost-of-living location. This can be true even if both are making competitive salaries.
Another factor is household size. For a single person living in California, a six figure salary might be more than enough. However, a family of four living in the same area could be just scraping by.
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Do You Need a Six Figure Salary to Build Wealth?
Not by a long shot. That said, you need to have a reasonable income to live on. For example, a $20,000 salary typically isn’t enough for a household to meet basic expenses. Let’s look at rent. The 30% rule recommends spending no more than $6,000 on rent per year (that’s 30% of $20K), which works out to $500 a month. The average rent nationwide is now $2,000, four times what you could afford on a $20,000 salary.
What about a $40,000 salary? This may be enough for a single person in some areas, but probably not for a family. And while an individual could afford basic necessities, they may not have much left for building wealth — that is, saving and investing.
Another factor is existing debt. If you are paying down high-interest credit card balances, it can be hard to also put money toward savings.
The income needed to build wealth then is an amount that covers the cost of living in your location, allows you to pay off any debt, and provides enough extra to set aside money for an emergency fund, retirement, and investing.
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How to Build Wealth Without Earning a Six Figure Salary
As we hinted above, the steps to building wealth are the same for any salary. First, pay off your debt, especially high interest credit cards and loans. Money going to interest is money that could be going into your savings or investments.
Second, look for ways to cut back on spending: cooking at home instead of going to costly restaurants, closing fee-based apps that you don’t really need, and so on.
Finally, save and invest the money that isn’t going to credit card debt or other nice-to-have but not necessary expenses.
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The Takeaway
A six figure salary, meaning one between $100,000 and $999,999, is a benchmark for many people who want to meet financial goals. Having a good education is usually helpful but not always necessary, and certain jobs are more likely to come with six figure salaries. Having a good salary is helpful when building wealth, but the same strategies can be utilized on a five figure salary. Tracking your spending and automating your savings are two good first steps.
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