Is making six figures a year considered rich? It depends on how big your six figure income is. Six figures can be anywhere between $100,000 – $999,000. Depending on where you live, six figures is considered rich by many people's standards.
Atop 1% income earnerin America makes about $470,000 a year nowadays. Further, it takes at least $3 million to be a real millionaire now thanks to inflation. Therefore, if you want to be certain you are rich, you might as well shoot to make at least $470,000 a year. This way, your six figures a year will be in the top 1%.
Making Six Figures A Year As A top Income
Here’s a table I put together based off information for the IRS in 2019. The numbers are about 25% higher in 2021.
What is probably more relevant is how much thetop 1% income earner makes by age group.
Top Income Levels By Age Group
Ages 27 – 31:You are in the top 1% if you make roughly $170,000. You are in the top 0.1% if you make roughly $300,000.
Ages 32 – 36: You are in the top 1% if you make roughly $210,000. You are in the top 0.1% if you make roughly $570,000. We are now in the ideal income zone of $200,000 – $250,000 a year per person where maximum happiness is achieved and increases no further the more you make.
Ages 37 – 41:You are in the top 1% if you make roughly $260,000. You are in the top 0.1% if you make roughly $820,000. I’m a little surprised that making only $260,000 at this age puts you in the top 1%. Given the median age in the US is around 36 and the median income for the top 1% for all income levels is around $380,000.
Ages 42 – 46:You are in the top 1% if you make roughly $320,000. You are in the top 0.1% if you make roughly $1.1M. This age group finally breaks the $1M income barrier. Nobody is going to deny someone making over $1M a year is rich.
Ages 47 – 51:You are in the top 1% if you make roughly $360,000. You are in the top 0.1% if you make roughly $1.5M. $360,000 is a level which makes the most sense as a top 1% income earner based on IRS data and multiple media reports.
Ages 52 – 58:You are in the top 1% if you make roughly $350,000. You are in the top 0.1% if you make roughly $1.4M. Finally! The income levels are going down because people are finally living life a little more and not so focused on making more and more money.
Enjoy the fruits of your labor because you can't take it with you. Making six figures a year is pretty good. If you don't make six figures a year, you can learn how at almost any age. Just don't forget to spend it! Cherish every minute of your life!
Invest Your Money Wisely
Real estate is my favorite way to achieving financial freedom because it is a tangible asset that is less volatile. Real estate also provides utility and generates income. Once I started making six figures a year, I actively invested as much of my year-end bonus as possible into real estate. By the time I was 30, I had bought two properties in San Francisco and one property in Lake Tahoe. These properties now generate a significant amount of mostly passive income.
In 2016, I starteddiversifying into heartland real estateto take advantage of lower valuations and higher cap rates. I did so by investing $810,000 with real estate crowdfunding platforms.Take a look at my two favorite real estate crowdfunding platforms.
Fundrise: A way for accredited and non-accredited investors to diversify into real estate through private eFunds. Fundrise has been around since 2012 and has consistently generated steady returns, no matter what the stock market is doing. For most people, investing in a diversified eREIT is the way to go.
CrowdStreet: A way for accredited investors to invest in individual real estate opportunities mostly in 18-hour cities. 18-hour cities are secondary cities with lower valuations, higher rental yields, and potentially higher growth due to job growth and demographic trends. If you have a lot more capital, you can build you own diversified real estate portfolio.
Recommendation To Build Wealth
Once you start making six figures a year, you need to start tracking your finances. Sign up forPersonal Capital, the web’s #1 free wealth management tool to get a better handle on your finances. You can use Personal Capital to help monitor illegal use of your credit cards and other accounts with their tracking software. In addition to better money oversight, run your investments through their award-winning Investment Checkup tool to see exactly how much you are paying in fees. I was paying $1,700 a year in fees I had no idea I was paying.
After you link all your accounts, use theirRetirement Planning calculatorthat pulls your real data to give you as pure an estimation of your financial future as possible using Monte Carlo simulation algorithms. Definitely run your numbers to see how you’re doing.I’ve been using Personal Capital since 2012 and have seen my net worth skyrocket during this time thanks to better money management.
FAQs
Is making six figures a year considered rich? It depends on how big your six figure income is. Six figures can be anywhere between $100,000 – $999,000. Depending on where you live, six figures is considered rich by many people's standards.
Is 6 figures a year considered rich? ›
Zippia's data also shows that 56% of Americans believe that earning $100,000 per year would make them rich, but Zippia notes that a $100,000 salary is generally considered upper-middle class today, rather than rich, and can even be lower-middle class in some cities.
What amount of money a year is considered rich? ›
You'll need to earn more than half a million annually to be considered among the highest earning residents in 11 states and Washington, D.C. "This comes down to cost of living," Murray said.
At what level are you considered rich? ›
Based on that figure, an annual income of $500,000 or more would make you rich. The Economic Policy Institute uses a different baseline to determine who constitutes the top 1% and the top 5%. For 2021, you're in the top 1% if you earn $819,324 or more each year. The top 5% of income earners make $335,891 per year.
Is six-figure income middle class? ›
In six cities — California's Sunnyvale, Fremont, San Mateo, and Santa Clara; Bellevue, Washington; and Highlands Ranch, Colorado — you need a household salary of more than $101,000 to be a middle-earner. A six-figure salary would put you among the upper class in the 10 cities on the opposite end of SmartAsset's list.
Are you rich if you make six figures? ›
Six figures can be anywhere between $100,000 – $999,000. Depending on where you live, six figures is considered rich by many people's standards. A top 1% income earner in America makes about $470,000 a year nowadays. Further, it takes at least $3 million to be a real millionaire now thanks to inflation.
How rare is a 100k salary? ›
According to the U.S. Census, only 15.3% of American households make more than $100,000 annually. A $100,000 salary can yield a monthly income of $8,333.33, a biweekly paycheck of $3,846.15, a weekly income of $1,923.08, and a daily income of $384.62 based on 260 working days per year.
What salary is upper middle class? ›
Many have graduate degrees with educational attainment serving as the main distinguishing feature of this class. Household incomes commonly exceed $100,000, with some smaller one-income earners household having incomes in the high 5-figure range. "The upper middle class has grown...and its composition has changed.
What is considered upper class? ›
The term upper class refers to a group of individuals who occupy the highest place and status in society. These people are considered the wealthiest, lying above the working and middle class in the social hierarchy.
Is 100k a year considered wealthy? ›
Earning more than $100,000 per year would put you well ahead of the median American household, which brings in $74,784 as of 2021. Assuming you're an individual without dependents, that salary would qualify you as upper class, according to three different definitions (Brookings, Urban Institute and Pew Research).
9 Signs of Wealth to Look Out For
- You're an Overachiever. It's hard to be modest when you're an overachiever. ...
- You Started Making Money At a Young Age. ...
- You Take Action. ...
- You Are Outspoken. ...
- You Possess a Sense of Urgency. ...
- You're Focused More on Saving Than Earning. ...
- You Know The Difference Between Needs & Wants.
Earning $700,000 a year would put your household in the top 1% nationwide — and well above the middle class — and in any state in the South or Midwest. But that still won't cut it in seven states. The Northeast dominates the rankings, with five of the 10 states with the highest 1% thresholds lying in this region.
What income puts you in the top 1? ›
How much do you need to earn to be in the top 1% income bracket? To be in the top 1% of earners, you're looking at an average annual income of $819,324. The top 0.1% of Americans earn an average of $3,312,693.
What is the average age of a six-figure salary? ›
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.
What class is a six-figure salary? ›
In the past, a lower six-figure salary would place most people in a comfortable place in their lives, but not anymore. Thanks mostly to inflation, individuals earning $100k+ are considered lower middle class in some parts of the country according to new research from GOBankingRates.
What is upper class income in 2024? ›
As of Apr 26, 2024, the average annual pay for the Upper Class jobs category in the United States is $59,699 a year.
How common is a 6 figure salary? ›
When you remove demographics such as infants, students, and stay-at-home spouses and focus only on full-time workers, around 18% of all earners in the US make at least six figures. Conversely, the median American household income in 2023 was approximately $44,225.
Is six figures upper class? ›
What does it take to be in the upper middle class based on income? If you defined the upper middle class as the top 15% of earners, in 2022, you'd have needed to earn close to six figures to be in this class group based on income.
Is $100,000 a year wealthy? ›
The median salary for Americans is around $70,000 a year, according to the most recent census data from 2021. A salary of $100,000 a year, with the assumption that you are an individual without dependents, would classify an individual as upper-class — but many of these people don't feel rich.
