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What does a six figure salary REALLY look like? And when is it not enough?

Is making a 6 figure salary really enough anymore? We talked to 4 six-figure earners to see what their thoughts are on the subject.

Earning a six figure salary, earning over $100,000 a year, can be the finish line.

It can be the golden milestone, the badge of honor showing to the world that you made it and have now claimed your fat slice of the American Dream.

You can save more. Invest more. And most importantly, spend more. Once you start earning six figures, you’re a “high earner.” You get the velvet rope treatment and enter a club with other high earners basking in your newfound echelon of society.

Well, that used to be true. What was unimaginable before is becoming increasingly common: Some people need much, much more than $100,000 a year to get by.

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Six figure earners in the most expensive cities in America

The internet lost its collective mind in July 2018 when the U.S. Department of Housing discovered that a family of four living on an income of $117,400 would be considered “low income” in San Francisco.

Of course, at first glance this sounds ludicrous. Six figures is the gold standard of high-earning. How is it possible that you’d be considered “low income” when you’re earning more than $100,000 a year?

“I live in the D.C. area, so $100,000 doesn’t make anyone’s jaw drop,” says Steve, 41. “If you’re making $200,000, that’s good but it’s still just upper-middle class around here.”

Like many in the area, Steve (not his real name: several names throughout this piece have been changed) is a contractor for the federal government earning roughly $200,000 a year. He’s also very familiar with the high income needed to sustain living around our nation’s capital, which is home to the richest county in the nation.

“I once did a cost of living analysis of D.C. and found that it was comparable to some of the most expensive cities in America,” he says.

And he’s right. Washington, D.C., stands toe-to-toe with the likes of Manhattan, New York; San Francisco, California; and Los Angeles, California, as one of the the most expensive cities to live in.

Nearly 3,000 miles away in the shade of the San Gabriel mountains, Marc, 47, knows the feeling too. He lives with his wife and two sons in Burbank, California, just north of Los Angeles.

While his job as a freelance television editor provides him with roughly $175,000 a year, he also feels the constraints of the city he lives in.

“Housing is pretty ridiculous in LA,” Marc says. “We bought our house in Burbank in 2009 at the height of the housing market crash. Even then it was still pretty expensive.”

A recent report by CoreLogic, a real estate analytics firm, found that home prices in Los Angeles are actually grossly overvalued. In fact, housing prices are 10% above where they should be with long-term trends.

The result: Home costs in LA are outpacing the consumer’s ability to purchase them.

Marc sometimes struggles with a high mortgage. As an independent contractor, he goes through frequent periods of feast or famine. Depending on the season, he might not get work for a while.

“Over the past year, I’ve had three weeks where I just didn’t have work,” he says. “It’s a little bit of a hustle. Finding work can be a pretty consistent thing, but maybe it’s because I have a family to support and a mortgage. I feel pressure to keep the machine running.”

That pressure can follow you even in the best of times too.

Carly, 34, lives out of Staten Island with her husband and two-year-old son, and works in New York as a business consultant earning a base of $135,000 a year. But that wasn’t always the case. In fact, she lived for a decade abroad earning a fourth of what she does now.

“I’ve always been very ambitious,” says Carly. “So whatever I’m making, I always want to make more. On the one hand, though, I’m making six figures, which is considered the gold standard for high earning.”

Living in the NYC area comes with its own challenges though. Finding affordable housing in the city is so difficult it’s spawned memes, YouTube vids, and even a Tumblr blog dedicated to terrible and expensive New York apartments.

That hasn’t stopped Carly from starting a family though.

“The fact that I’ve broken through [to six figures] is exciting,” she says. “Financial institutions think so too since I recently got approved for a mortgage.”

She has high hopes for her future and building out her version of a Rich Life — and her income helps with that dramatically. But still, even she’s a little nervous about the future.

“I’m the main breadwinner right now,” she says. “So I’m in the position where I’m trying to keep my family afloat. It adds a lot to stress.”

She continues, “I remember a few months ago, my family was renting in an apartment that turned out to be infested with mice. It was terrible. If I were single, I’d just go sleep on someone’s couch. No big deal. But since I had a family, we were essentially facing homelessness. I had many moments of panic.”

“When you’re faced with the tremendous pressure of needing to have a job at all times, you start thinking, ‘What do we REALLY need to get by?’”

And in all likelihood, it’s more than what she earns now.

“It’s a lot of pressure,” she says.

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The six figure salary and the theory of relativity

Just a few hours south of San Francisco (home of the low-income six-figure family) lives Delaney, 52.

She lives in a small nondescript California city of 40,000 people. There the cost of living is very low — or at least it is when compared to LA and San Francisco.

Looking at her life, you wouldn’t think she’s a high earner. Unmarried and with no children, she lives in a small three-bedroom house amongst a neighborhood of others. She drives an old Fiat. For fun, she likes to play the guitar and go camping with friends.

However, she’s actually a web developer who makes more than $11,000 a month as a freelancer.

Despite this, she’s apprehensive to say that she’s a high earner.

“Relative to my community, I’m a high earner,” Delaney clarifies. “But if I lived in San Francisco, I’d be barely getting by. If I lived in New York, I’d be barely getting by. In my little bitty niche of the world, though, I’m definitely a high earner. I earn well over twice the median for my community.”

She continues, “It’s all relative though.”

And she’s right. The people we spoke to earned roughly the same salary — yet experienced completely different perspectives on what it meant to be a high earner.

While some felt like their income was just barely enough some days to get by (like with Marc and sacrificing his retirement fund), others were more than happy with what they had (like Delaney).

Earning six figures is an awesome thing to aspire to. And, depending on where you are, it can give you a great living and allow you to live out your Rich Life.

But six figures is not a catch-all solution.

What to focus on instead

Instead of aiming for some arbitrary number, focus on saving for the downtimes, investing for your future, and finding ways to boost your earning potential.

I’ve put together a free resource that will help you tackle the issue of personal finance. With it, you’ll be able to create a plan for your financial future so you’re able to live out your Rich Life regardless of how much money you make. 

To get the free resource, click the link below.

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  1. avatar
    aditi mishra

    Wow. Loved it. This morning I had a discussion on Purchasing Power Parity. How interesting it is to know life differs so much at different places.

  2. avatar

    I have friend whose cousin is a web developer in San Francisco. He earns six-figures and lives with three roommates; he can’t afford the housing costs. I don’t think there’s anything wrong with wanting to live in an expensive city, but have a financial plan. As mentioned at the end of this post, we should focus on upping our income potential. Negotiate a higher salary, upgrade your skill set, and create more value in order to afford where you want to live. Map out a plan so you won’t be stressed out over living expenses.

  3. avatar

    It also depends a lot on the political landscape. I live in Germany and pay up to 42 percent in income tax and about 1000 dollars a month in health insurance. Add more than 2000 dollars in rent for a 3 room apartment (in Munich) and 100,000 dollars before tax gets you nowhere.

  4. avatar

    Correction, I think half of the health insurance is paid by the employer.

  5. avatar

    We also live in Burbank, but we bought our home during the horrendous housing price crash in the 1990s. Just before the crash, the LA Times was publishing articles that said basically if you don't already own a house you'll never be able to afford one, so get used to renting. And featuring people like the woman who refused to sell her condo for 5x what she paid for it because she "didn't want to give it away." And talking about people who'd buy a house, put $200 worth of plants in the yard and then put it up for sale again for $50k more than they paid for it.

    When the day finally came that California finally ran out of rich fools who would pay any price because they were going to flip the place and Get Rich In Real Estate, there were people who owed so much on their property that they could not give it away.

    I think this is going to happen again, and for the same reasons. Overspending, over-optimism, and California once again running out of rich fools because even they can't pay the price.

  6. avatar

    It makes me wonder why anyone wants to live in San Francisco, DC, Manhattan, etc. This country has dozens of flyover states where you can easily make well over $100k and live a much easier life than you can in an expensive metro area.

  7. avatar

    There are lots of people who live there (including me). Why not ask them? Come back and let us know what you find out. There are some very rational reasons people choose to live in cities like NYC, SF, etc.