Is Making Six Figures A Year Considered Rich?

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.

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. 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.

  • Top 1%: $380,354
  • Top 5%: $159,619
  • Top 10%: $113,799
  • Top 25%: $67,280
  • Top 50%: >$33,048

What is probably more relevant is how much the top 1% income earner makes by age group.

Top Income Levels By Age Group

The top 1 percent income by age group - Is Making Six Figures A Year Considered Rich?

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 started diversifying into heartland real estate to 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 for Personal 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 their Retirement Planning calculator that 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.

Personal Capital Retirement Planner Tool
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