Six figures in money is a lot of money. It’s more than just a six-figure salary–it’s the kind of money that can change your life. It can provide you with financial security and independence, and it can give you the freedom to do what you want with your life.
But what exactly is six figures in money? How much is it? And how can you make six figures in your own life? This post will answer all of those questions and more.
What Are Figures In Money?
A figure is simply a digit. It can be used to represent any number, but we usually use figures to talk about money. For example, if someone tells you they earn six figures, they say their salary is six digits long.
In most cases, six figures in money refer to an annual income. This means that if you earn six figures, you bring home at least $100,000 per year.
However, six figures can also refer to other types of money, such as savings or investments. For example, if you have six figures in savings, this means you have at least $100,000 saved up.
In most regions of the US, six figures is considered a lot of money that can provide you with financial security and independence.
For example, let’s say you earn six figures per year. We know this means you bring home at least $100,000 annually.
In most states, this six-figure salary could cover all your major expenses like a mortgage, car loans, and other discretionary purchases.
Alternatively, let’s say you have six figures saved up. This could be enough money to cover a down payment on a house, pay off all of your debts, or start your own business.
In short, six figures is considered a lot of money because it can give you the freedom to pay off your debts and indulge in the finer things in life.
Before or After Taxes?
When we talk about six figures in money, we’re usually referring to gross income. This is how much you earn before taxes.
Your net income is after tax. So, if you earn six figures gross, your net income will be lower.
How much lower depends on your tax bracket and the state you live in. The higher your tax bracket, the more taxes you’ll pay.
For example, let’s say you earn $100,000 per year. If you’re in the 35% tax bracket, your net income would be $65,000.
This means you’d have to pay $35,000 in taxes, leaving you with $65,000.
On the other hand, if you only have to pay 25% in taxes, your net income would be $75,000. This means you’d only have to pay $25,000 in taxes, leaving you with $75,000.
As you can see, your tax bracket and the state you live in make a big difference in how much money you actually take home.
Revenue vs. Profits
It’s important to pay attention to revenue vs. profits when people talk about six figures.
Revenue is the total amount of money a company brings in. This includes money from sales, investments, and other sources.
Profits are what’s left after a company pays its expenses. These include things like salaries, rent, and other costs of doing business.
Some companies may have six-figure revenue, but their profits are much lower.
For example, a company has $300,000 in revenue. But, they have to pay their employees $200,000 in salaries and benefits. They also have to pay $40,000 in rent and other expenses.
This leaves them with $60,000 in profits. So, even though their revenue is six figures, their profits are only five figures.
Similar to net vs gross income, when people talk about six-figure companies, they usually refer to companies with six-figure revenue.
How Much Is 6 Figures?
As we mentioned before, six figures usually refer to an annual income. So, if you earn six figures, you bring home at least $100,000 per year.
However, six figures is a large range of money. It could mean you earn anywhere from $100,000 to $999,999 per year.
That is why when most people talk about six figures in money, they give a range like low six figures, mid-six figures, or high six figures.
- Low six figures: $100,000 to $399,999
- Mid-six figures: $400,000 to $699,999
- High six figures: $700,000 to $999,999
- Multiple six figures: $200,000 to $999,999
If you hear “six figures” without a modifier like low or high, they are usually referring to low six figures.
How Common is a Six-Figure Salary?
In the United States, six figures is considered a lot of money that can provide you with financial security and independence.
According to the IRS, in 2019, only 19% of workers made six figures or more. This means that six-figure salaries are not very common. However, this does not mean it is impossible.
How to Make Six Figures
Making six figures is a goal for many Americans. To understand how to make six figures, you first need to understand what that looks like on a monthly, daily, and even hourly basis.
Once you understand this, you can start setting realistic expectations on how to achieve six figures.
Breaking Down Six Figures In Money
The first step is to break down six figures into manageable chunks. We’ll look at the minimum you need to make to make six figures, $100,000, and how much that looks like in annual, monthly, and hourly figures.
- Annually: $100,000 per year / 12 months = $8,333.33 per month
- Daily: $100,000 per year / 260 working days = $384.62 per day
- Hourly: $384.62 per day / 8 hours of work = $48.08 per hour
Now, let’s look at some traditional jobs that pay six figures.
Traditional Jobs That Pay 6 Figures
There are many traditional jobs that pay six figures. Here are some examples:
- Physicians (Surgeons, anesthesiologists, etc.)
- Financial Managers
- Software Developers
As you can see, most of these jobs require special training, degrees, or experience.
To become a physician, you need to complete medical school and residency. This can take up to 12 years or more.
Lawyers need to go to law school and pass the bar exam. This process can take three years or more.
Financial managers usually need a bachelor’s degree in finance or a related field. They may also need to get certification from the Financial Industry Regulatory Authority (FINRA).
Actuaries need at least a bachelor’s degree, but many have a master’s degree. They also need to pass exams administered by the Casualty Actuarial Society (CAS) or the Society of Actuaries (SOA).
Software developers usually need a bachelor’s degree in computer science or a related field, and
pilots need a commercial pilot’s license from the Federal Aviation Administration (FAA). Pilots must also have a certain number of flight hours.
So, as you can see, traditional six-figure jobs require significant investment in time, money, and education. However, there are Non-Traditional Jobs That Pay 6 Figures.
Non-Traditional Jobs That Pay 6 Figures
There are also many non-traditional jobs that pay six figures. Here are some examples:
- Business owners
- Real estate agents
- Lawn care business owners
- Ecommerce store owners
- Freelance writers
As you can see, most of these jobs do not require special training, degrees, or experience.
For example, business owners just need to start a business. This can be done with little to no money, depending on the type of business.
Real estate agents need to get a license. This can be done online in most states for minimal money.
Lawn care business owners just need lawn trimming tools and to live in an area with residents in need of their service.
E-commerce store owners just need to create an online store. This can be done with little to no money, especially if you leverage a dropshipping or FBA business model.
Freelance writers just need to start writing. They can sell their services on sites like Upwork and Fiver.
Podcasters, bloggers, and Youtubers just need to start creating content. Most content management platforms cost no more than $20 a month and Youtube is completely free.
The caveat with all these jobs is that you will not see a six-figure income immediately. When you get a job as a software engineer, you can expect to get paid every two weeks as soon as you start.
When starting a business or doing any freelance work, you only get paid as often as you can get customers. At first, your income will be at zero, but with enough persistence and dedication, you can achieve a six-figure income.
Do You Need to Earn Six Figures?
The simple answer is no, you don’t need to earn six figures. If your goal is to make enough money to live comfortably, you can certainly do so without six figures.
However, if your goal is to achieve financial freedom or retire early, you will need to save as much money as possible. And if you want to save a lot of money, you will likely need to earn a six-figure income.
Whether or not you need to earn six figures depends on your lifestyle goals.
If you want to live a very lavish lifestyle with expensive cars, homes, and vacations, then low six figures will likely be the bare minimum of what you need.
On the other hand, if you are content with a more modest lifestyle and a small family, six figures could be more than enough.
It all comes down to your personal preferences and goals.
If your goal is to build wealth for a goal like retiring early or paying off debt on a large purchase making six figures should be your goal. However, you don’t need six figures to start building wealth.
- You can begin building wealth with any income by following some simple steps:
- Save at least 10% of your income
- Live below your means
- Create and invest in a diversified portfolio
- Don’t succumb to lifestyle creep, which is when you allow your lifestyle to increase along with your income
If you follow these steps, you can begin building wealth regardless of how much money you make.
Understand the Value of 6 Figures in Money
The reason $100,000 – $999,999 is called six figures is that those numbers have six digits. It is no doubt that six figures is a lot of money.
It can undoubtedly help you achieve financial freedom and retire early. There are many ways to achieve six figures. You can have a traditional job, like being a doctor, or a non-traditional job, like a restaurant owner.
You could even have a mix of the two that add up to six figures.
The takeaway is that six figures is a lot of money, regardless of how you make six figures. The important thing is that if you bring home at least $100,000 per year, you’re doing pretty well for yourself.