Have you ever wondered who makes a million dollars a year? Making a million dollars a year or more puts you in the top 0.1% of income earners in the world. A top 1% income is over $500,000 today in America. With such an income, you should eventually have at least a top 1% net worth of over $11 million per person.
If you earn over $1 million a year, President Biden wants to raise the long-term capital gains tax rate from 20% to 39.4%. Despite only about 0.1% of Americans making over a million dollars a year, it sure seems like the number is much higher.
If you want to get rich, you might as well focus on joining industries that pay very well. But there’s more to just joining a well-paying industry to get you to a million dollar income.
You’ve also got to perform at a high level, survive cutthroat competition, and receive lots of luck along the way. Let’s see who makes a million dollars a year.
Corporate politics can be brutal on your climb to the top of the pyramid. Oftentimes, it’s those who’ve been able to successfully sell themselves internally who achieve the greatest rewards.
During my career in investment banking, I was too defiant. Despite getting promoted quickly in my 20s, I stalled in my 30s because I didn’t want to relocate to grind cities like New York or Hong Kong. Nor could I pretend to like enough people who could push me forward. In the end, I decided to see what I could do entirely with my own fingers.
We know that a top 1% income varies by age as well. You can’t compare a 25-year-old’s income to a 40-year-old’s income. Instead, it’s good to compare top 1% income levels by age. For those interested in making a top 0.1% income, let’s take a look at some career profiles.
I think you’ll be surprised at exactly who makes a million dollars or more.
The People Who Make $1 Million A Year Or More
Below are the people who make a million dollars a year or more. They hail from all different industries so there’s something for everyone. Here are the top 0.1% income-earners.
Managing Director, Investment Banking
Achieving the title of Managing Director has always meant that you’d finally break seven figures a year, at least when I worked in the industry between 1999 – 2012. The typical MD base is between $450,000 – $500,000. At year-end, these Managing Directors would often earn a bonus of $500,000 or more.
But the bonus is often paid in deferred stock and cash. For example, out of the $700,000 bonus, only $200,000 might be paid in upfront cash. The remaining $500,000 is deferred over four years.
If you quit before the four years is up, you lose your deferred compensation. This is why negotiating a severance is huge in any industry with deferred compensation is so important. Never let your deferred compensation go to waste. You earned it!
General Partner, Private Equity
Private equity is one of the most coveted next step careers for investment bankers. The hours are much better, while the pay also tends to be higher as well. These folks earn salary, bonuses, and carried interest, which can often lead to huge bucks.
Some of the top private equity firms include: Blackstone Group, KKR, Warburg Pincus, TPG, and various sovereign wealth funds like Temasek, GIC, and Abu Dhabi Investment Authority. People in private equity are truly some of the highest income-earners today. Many make millions and millions of dollars a year.
First year associates joining top private equity shops out of business school all make over $500,000 a year. Therefore, by year five, they are likely making over $1 million a year. Below is the average private equity pay in the United States, which is looking light nowadays.
Portfolio Manager, Hedge Fund
Again, your compensation is based on performance, size of assets under management, and the number of employees. First-year associates out of business school can make $300,000 – $500,000 at the largest shops.
By the time you become a general partner or portfolio manager, you should be making at least one million dollars a year if your fund is over $500 million. Hedge funds earn a lot of money due to their fee structure, which is still two and twenty after so many years of underperformance.
Portfolio Manager, Actively Managed Long Only Fund
Fund manager pay is based on tenure, performance, and assets under management. In order to earn $1 million a year, you will probably need to manage over $1 billion in assets under management and have a solid 5-year or longer track record of performance.
A 1% fee on $1 billion generates $10 million a year in revenue to pay the portfolio manager, analysts, office rent, marketing, other operating expenses, and the overall company.
But most of these actively run funds are charging less now (~0.5%) due to the proliferation of index funds. Companies such as BlackRock, Fidelity, Wellington, T.Rowe. Price, Capital, PIMCO, Prudential, Nuveen, Invesco, Janus, AXA, Legg Mason, TIAA-CREF and many more all have portfolio managers and some analysts who earn over $1 million a year.
What’s amazing about being an active portfolio manager is that even if your fund underperforms, so long as you have a large enough AUM, you will still likely get paid over a million dollars a year.
Principal/ General Partner, Venture Capital
Just like all the other money management industries, there are good venture capital firms and there are bucket shops. The largest VC firms like Benchmark, Sequoia, and Kleiner Perkins pay their General Partners multi-million dollars a year. This is especially true if one of their investments has a huge exit such as when Whatsapp sold to Facebook for $19 billion in stock and cash.
I consider being a VC one of the best vacation jobs in the world because you don’t have to build anything, you get to earn a nice salary with carry, and you don’t have to prove your investment returns for years given the normal 5-10 year lockup periods for funds.
By the time your limited partners discover you’ve made terrible investments, you’ll have earned a lot of money and moved on to a new VC or started a new fund within the firm.
- Analyst $ 80K – $ 150K
- Associate $ 130K – $ 250K
- Vice Presidents $ 200K – $ 250K + $ 0-1MM carry bonus
- Principal/Junior MD $ 500K – $ 700K + $ 1-2 MM carry bonus
- Managing Directors/Partners $ 1MM + $ 3-10MM carry bonus
Partner, Big Law
Big law partners regularly earn over $1 million a year. The starting salary for big law first-year associates is around $190,000. By their 8th year (34-35 years old), their salaries will have risen to around $330,000. The funny thing about big law is that everybody up to the 8th year all get paid pretty much the same across all firms.
Bonuses are nothing to write home about, often ranging between 0% – 20% of salary. Therefore, in order to make over one million dollars in law, you need to become a partner where you’re bringing in business and earning a percentage of profits.
Strategy Consulting, Partner
Firms like McKinsey, Bain, and BCG are some of the top strategy/management consulting firms. But to get to partner and $1,000,000+ generally takes about 10 years after business school, and only a few make it that far. Many will either burn out or go join a client for less pay.
Here’s the salary progression for a typical strategy consultant.
First-year out of undergrad:
- Base: $85k
- Signing Bonus: ~$5k
- Performance Bonus: up to ~$20k
First year out of MBA:
- Base: ~$165k
- Signing Bonus: ~$25k
- Performance Bonus: up to ~$65k
Manager/Project Leader (2-3 years out of MBA):
- Base: $200-220k
- Bonus: $100-140k
Associate Principal/Senior Project Leader (4-5 years out of MBA):
- Base: $250-320k
- Bonus: $130-230k
Junior Partner/Principal (6-8 years out of MBA):
- Base: $350-450k
- Bonus: $350-550k
Senior Partner/Director (10+ years out of MBA):
- Base: $450-650k
- Bonus: $500k+ (all-in, senior partners at top firms usually make $1M+; top partners can make $4-5M while ultra-performers can make more)
Division I Football Coaches
The average salary of a Division I football coach is roughly $1.8 million. It is the football coach that is often the highest paid state employee.
In 2021, LSU head coach Ed Orgeron is expected to earn $8.7 million and football likely isn’t going to even be played. Not bad! In 2022, Lincoln Riley at USC and Nick Sabin from Alabama are expected to earn $10 million a year.
Public Company C-Level Executive
Don’t let $1 salaries fool you. C-level executives are often paid mostly in stock compensation. The theory is to tie compensation to performance. They simply end up getting way more stock than anybody at the firm.
For example, Dara Khosrowshahi, CEO of Uber, reportedly got a $200+ million package to join Uber. Yet, Uber has seriously underperformed since he’s joined. Shareholders have made no money in Uber since 2015. Yet, the CEO still gets paid massively. Got to love it!
Google CEO Sundar Pichai has a base salary of around $650,000, but got a stock grant worth $199 million in 2016. In 2022, Pichai still makes over $100 million a year thanks to stock grants. The median CEO pay for the top 100 largest companies is over $16 million.
But you don’t even have to be a public company c-level executive to make $1 million or more a year. You can be a Vice President at Apple, Facebook, Walmart, P&G, or any of the giants. You will more than likely make over $1 million a year if you include your stock compensation.
Self-Help Gurus Easily Make Over $1 Million A Year
The self-help industry is estimated to be worth more than $12 billion dollars. It’s also growing because we’re all jockeying to make more money and gain more prestige. The self-help industry is also considered recession-proof since even more people are looking to get out of the muck during downturns.
Folks like Tony Robbins make millions selling $10,000 self-help seminar tickets. His net worth is estimated at $500 million.
TV personality Dr. Phil wrote a bestseller on how to lose weight and eat right, despite he himself being overweight. Then there are guys like James Altucher whose company generated over $11 million in sales selling himself as a cryptocurrency genius in order to sell his courses online.
There are self-help gurus who sell $2,000+ e-courses on information you can get for free make over $1 million a year. They are taking advantage of vulnerable people and their securities to make lots of money. If they were really there to help people, they will come out with a more affordable solution, like a book.
Whether you succeed or fail, these people will always succeed because people are always feeling bad about themselves in this ultra-competitive world.
Professional Athletes Make Over $1 Million
They make great money, but their longevity isn’t very long. One estimate says that if you are able to finish every professional golf tournament at par, you will average $1 million a year in earnings.
Based on the current 2022/23 cap estimate, next year’s NBA rookie minimum salary will surpass the $1MM threshold for the first time, while the minimum for a veteran with 10+ years of service will approach $3MM
The average NBA player will make ~$25 million during his career. This is based on an average annual salary of $5.2 million and a career length of 4.8 years.
In comparison, the average NFL player will make only $6.5 million due to a lower average salary of around $2 million a year and a shorter average career length of just 3.3 years. Elsewhere, the average MLB player earns about $3.3 million annually, while the average NHL player earns about $2.5 million.
Tennis star, Roger Federer is reported to have made over $100 million in 2021 due to a tremendous portfolio of endorsement deals. Too bad it looks like he’s retiring after getting a second knee surgery in 2021. Federer said he wants to give Wimbledon one more try in 2023.
Entertainers Make Over $1 Million
From actors, to musicians, to reality stars, being an entertainer today can be extremely lucrative. No wonder why so many people want to be famous! I thought Judge Judy’s salary was only $47 million a year. But according to Forbes below, she took in $147 million in 2018.
Everybody wants to become a YouTube star nowadays with top earners who look like everyday folk earning $10 – $15 million a year. My favorite is Ryan Toys Review, a six year old who pulled down $11 million in 2017 and supposedly over $20 million in 2019.
Streaming giants like Netflix and Amazon doled out $300 million to stars, including Ryan Reynolds (No. 18 on Forbes, $71.5 million), Billie Eilish (No. 43, $53 million) and Jerry Seinfeld (No. 46, $51 million).
Podcasters are making big bucks as well. Bill Simmons (No.13 on Forbes, $82.5 million), sold his podcast company The Ringer to Spotify in February 2020 for $206 million. Joe Rogan agreed to a licensing deal with Spotify for more than $100 million in May 2019.
Hamilton creator and star Lin-Manuel Miranda (No. 62 on Forbes, $45.5 million), made bank when in February 2020, Walt Disney paid $75 million for the rights to air the filmed version of his Founding Father musical.
It was also recently reported that Kim Kardashian is now a billionaire. Not bad!
Doctors Who Own Their Practices Are Top 0.1% Income-Earners
Due to popular demand, I’ve added doctors to the list. I didn’t include them in the beginning due to the enormous cost and time it takes to become a doctor compared to their compensation. Pay has actually been falling for doctors due to many factors, including: government intervention, private practice consolidation by hospitals, rising insurance costs, and more.
Orthopedists top the list with annual average compensation of $443,000, taking into account salary, bonus, and profit-sharing contributions, according to Medscape’s physician compensation report.
Cardiologists and dermatologists come in second and third for earnings, earning $410,000 and $381,000, respectively. The lowest earning doctors are pediatricians, which bring in about $204,000 annually.
In order to make over $1,000,000 a year as a doctor, you need to be a partner in your own private practice and have a great source of recurring clients. I personally think doctors are very underpaid for how much value the provide to society. Teachers too.
Online Entrepreneurs / Bloggers Can Easily Make 7-Figures A Year
Blogging is my favorite business in the world. You can simply write whatever is on your mind and advertisers will pay you, not your readers. Since you give away your product for free, there are no returns, no customer support, and no obligations to your customers. There is only freedom baby!
Once you build a brand and can generate organic traffic of over one million pageviews a month, there’s a decent chance you could make $1 million in revenue a year. Here’s a sample income report from a personal finance blogger.
There are plenty of online entrepreneurs who are generating a tremendous amount of cash. They are in e-commerce, SAAS, and info product space.
As we’ve learned from the lockdowns in 2020 and 2021, an online business is even more valuable that before, all things being equal, because its earnings are more defensive. When you can’t shut down an online business, its valuation clearly goes up relative to other business that are at risk of being shut down.
You’ll definitely be surprised at how much some bloggers are making for a living. It’s much more than you think!
Techies Can Make Over $1 million
Back in 2000, many college graduates pursued investment banking and strategy consulting jobs. Today, these same graduates are all clamoring into tech.
Big tech companies like Google, Facebook, and Apple are able to pay the most. They are the most profitable and have the largest market caps. Apple has a market cap of over $2 trillion. They have a bottomless pit of money.
However, you won’t be making over one million dollars a year at a tech company until you start getting into management roles. Engineers easily make between $200,000 – $500,000 all-in. First year software engineers out of college are making $180,000+ nowadays.
If you get incredibly lucky, your company’s share price might allow you to clear $1 million if you sell some RSUs along with your salary.
For example, let’s say you got a $400,000 Google RSU package and a $350,000 salary. You get to sell 1/4th of your RSUs each year. Google’s share price would have to increase by 6.5X for your $100,000 annual RSU payment to turn into $650,000 for you to clear $1 million.
Below is a snapshot of median pay at some big tech companies like Google, Facebook, and Twitter. $250,000 is a high median pay at Google. However, it’s not one million dollars a year.
After a robust 2020 and 2021, there are even more techie making more than one million a year. The equity gains have been massive since the pandemic began!
Mom & Pop Small Business Owners Can Earn Big Cash
There are over 30 million small business owners in America. Potentially up to 9% of these small businesses have sales of over $1 million. But as every small business owner knows, sales does not equal operating profit. Therefore, I estimate only about 1% of small business owners, or 300,000 earn more than $1 million in operating profit a year.
Some of my favorite small business types that have surprised me in terms of earnings. These small businesses include laundromats and real estate empire builders. Of course, online small business owners are still the best, especially in this environment.
Stock & Crypto Speculators
2021 reminded us that stock speculators can make a million dollars a year. It was crazy how much stocks like Gamestop, AMC and more went up thanks to huge shot squeezes. Meme stocks were going bonkers for a while.
In the long run, however, it’s hard to make consistent returns day trading and speculating on individual stocks. I don’t recommend going on margin and actively trading stocks for the long run. But you can hit it big once in a while.
2022 was a year that cryptocurrencies and growth stocks came back down to Earth. A bear market is always a good reminder to properly asset allocate and have the proper risk exposure.
The Million Dollar A Year Dream
The easiest way to make $1 million a year or more is as a public company non-founding CEO or senior executive. The compensation is outrageously high for what they do. CEOs have huge teams who do most of the work for them.
A CEO is really just an ambassador of the firm. He or she tries to drum up positive PR and business development deals. They sign off on decisions that have already been carefully vetted. They neither invent new ideas or get in the weeds.
Hardest Way To Make $1 Million A Year
The hardest way to make $1 million a year or more is in a profession that relies mostly on individual performance. If you remove the CEO, the company will still run fine. The stock might even go up.
As a professional tennis player, nobody is going to win a match for you. If you are a fund manager, you’re either outperforming your respective index or you aren’t. As a professional blogger, you’re either going to come up with interesting content that gets shared or suffer in purgatory.
As a professional writer, you need to earn a massive book advance and selling a international bestseller to make over $1 million a year. I wrote a Wall Street Journal Bestseller and it’s not enough to earn a million a year.
Despite the difficulty of making over one million dollars as an individual performer, there is also a fantastic non-monetary upside. Individual performers get the most satisfaction.
Building something from nothing is more rewarding than jumping on an already established business. Working incredibly hard on your craft and then winning feels amazing.
I don’t have to tell you that earning $1 million a year is difficult. That’s $83,333 a month in income or operating profit. Even if you do get to such a milestone, it may be harder to stay there over the long-term due to competitive forces that will eat away at your product or services.
Never Take Your Luck For Granted
I’ve said it before and I’ll say it again. Your extraordinary wealth is mostly due to luck. Plenty of people make the right decisions and work hard every day. Yet 99.9% do not make over $1 million a year. 99% of Americans do not have a net worth over over $10 million a year.
Never assume you’ll make $1 million again the next year. Instead, it’s best to mentally rest to zero so you don’t rest on your laurels. If possible, figure out a way to build a brand around yourself or your business to protect or expand your earning power.
Always work on improving your craft because eventually, you will become irrelevant. When that time comes, however, you already will have saved up a lovely nest egg to support you for the rest of your life in peace.
Remember, you only need to get rich once! Once you get rich, make sure you stay there by protecting your capital. After you amass enough wealth, your life will not get better and you will not get happier trying to amass even more.
Loading ...Related: The First Million Might Be The Easiest
Recommendations For Getting Rich
It’s hard to regularly make over $1 million a year. Sooner or later, your luck and energy may run out. As a result, it’s important to save and invest your cash flow aggressively. Ideally, you want your money to work for you so you don’t have to forever.
1) Invest In Real Estate.
Every single wealthy person I know has invested in real estate in some form or another. With the migration to lower cost areas of the country thanks to the rise of work from home, real estate in the heartland looks attractive. Further, low interest rates have significantly increased the value of cash flow.
Check out Fundrise and CrowdStreet, two of my favorite real estate crowdfunding platforms that enable you to invest in real estate across the country. I’ve personally invested $810,000 in private real estate funds since 2016.
Fundrise focuses on diversified private eREITs to help you earn income 100% passively. The funds invest mostly in Sunbelt single-family and multifamily homes where valuations are cheaper and yields are higher. For most people, investing in an eREIT is the way to go.
CrowdStreet focuses on individual commercial real estate deals in 18-hour cities where valuations tend to be lower and cap rats higher. If you have a lot of capital, you can build your own select fund.
Both platforms are free to sign up and explore.
Real estate accounts for roughly $150,000 out of my estimated $300,000 in annual passive income. Thanks to technology and the pandemic, the work from home trend is here to stay. Below is my latest private real estate investing dashboard with over $620,000 in distributions paid out since 2017.
2) Start Your Own Business
Not a day goes by where I’m not thankful for starting Financial Samurai in July 2009. Recessions are a perfect time to try and start a business and do something new.
Here is my step-by-step guide to starting an online business. It takes less than $3/month and 45 minutes to set up. I truly believe building your own business and owning all the equity is one of the best ways to make over one million a year.
3) Stay On Top Of Your Money
Sign up for Personal Capital, the web’s #1 free wealth management tool to get a better handle on your finances. Remember, it’s not so much how much you make, but how much you keep. Run your investments through their award-winning Investment Checkup tool to see exactly how much you are paying in fees.
Then make sure you run your financials through its Retirement Planner to make sure your financial future is on track. There’s no rewind button on the road to financial freedom. Best get it right the first time!
Then maybe, you can get to the ideal net worth amount of $10 million and retire happily ever after.
Buy The Best Personal Finance Book
If you want to drastically improve your chances of making a million dollars a year, purchase a hardcopy of my new Wall Street Journal bestseller, Buy This, Not That: How To Spend Your Way To Wealth And Freedom. The book is jam packed with unique strategies to help you build your fortune while living your best life.
Buy This, Not That is a #1 new release and #1 best seller on Amazon, where there is a huge sale! By the time you finish BTNT you will gain at least 100X more value than its cost.
After spending 30 years working in finance, writing about finance, and studying finance, I’m certain you will love Buy This, Not That.
Who Makes A Million Dollars A Year is a Financial Samurai original post. I’ve been writing about personal finance since 2009. Sign up for my free weekly newsletter if you want to learn more ways to become a multi-millionaire.
You forgot online entrepreneurs. I started my main current online business a bit over 5 years ago with literally $200 and this year I will be netting over 1M not counting my other businesses or investment income. However, I should say that I first started in eCommerce in 2000 so I already had knowledge. I am in my late 40s now and this is most likely the last business for me as I don’t see much point in developing others. Money that I make from now on is basically money I won’t be spending myself and if you leave too much for the next generation, you might be doing more harm than good. My goal in life and much of my identity was tied to my financial progress but now that I have achieved everything I set out to save, buy or do, my next big and ultimate goal is to delegate as much of my work as possible and work no more than 5 hours per week. It’s time to relax and enjoy.
True, and online business is great, especially since I cannot be shut down as easily!
Did you notice your anti self help industry bias Mr Samurai?
At the end of many sections on different careers you spoke well of them reguardless of their merit in the world.
On the self help area you called into question if these leaders really want to help when things are free they charge $2,000 a coarse.
Can you clarify two things for me?
1- why celebrate the other paths with comments that are crass, I trust you can review your work and catch your own final lines…
2- why omit the fact that in these courses people are being supported during times of shaky self change as well as motivated to succeed because they made a sacrificial investment.
For example I went to a Tony Robbins seminar, and changed my health radically in 3 months, a benefit that lasted me almost 10 years.
I spent a months salary on what??? Ideas that were free?
I won’t lol you Mr Samurai, but like most Samurai… us Ninjas are hard to deal with, and come at you on your blind sides… hence stealth and specific elimination skill, not general power of the Samurai.
So please help me learn why you reserve such subtle content for the industry that changes lives specifically but you hail VC’s are awesome because they can abuse their position, move on in failure… and it’s all good.
Thank see no equality in your grading system Mr Samurai and hope to learn where I mis read you? Thanks for helping me understand you, if I don’t already.
If I’m right, and this is a small biases, maybe you can make a change, forgive yourself, and move onto more positive thought leaderships?
I appreciate you for being open to my comment and while I’m a little miffed, your a strong person for responding in awareness. Thank You and I bow deeply and lowly to you ;-)
“For example I went to a Tony Robbins seminar, and changed my health radically in 3 months, a benefit that lasted me almost 10 years.” Wonderful! And congrats. If the thousands of dollars you spent to attend the self-help seminar change your life for the better, then it’s worth it. Don’t let me tell you otherwise.
I’m hoping by $27 retail price book, Buy This, Not That: How To Spend Your Way To Wealth And Freedom will provide even more value. I hope you pick up a hard copy!
Regarding VCs, it is one of the best vacation jobs in the world. You can’t paid well, don’t have to take risks, and if your fund loses money, you still get paid. In other words, I’m being facetious.
Hi Rick,
What type of online business are you in? I’ve been looking for e-commerce idea to help grow my income. Do you have any tips or ideas you can share? also if you are still looking for people to delegate some of your work, I could be of assistance.
Thanks,
M
I sell niche products online. If you are planning to do online retail, the best is to find a niche where there isn’t as much competition. Also, avoid products that compete on price. The best are the ones where there is some sort of value-added intangible that you can create.
Funny, most of the jobs add very little to society, and you could easily make the arguement that many prevent us doing the right things to move society forward. I’m looking at you investment/money management industry.
If there was no investment / money management industry, then:
– Few new companies would get funded. There would probably be no cell phones, computers, solar panels, electric cars, electronic banking, etc.
– Existing companies would have difficulty growing. Far fewer medicines, movies, theme parks, airplanes, etc.
– New construction would be slow to occur: housing, restaurants, office building, schools, hospitals, etc.
– People would have much less money saved for retirement: they would have to work longer and retire with less comfort and enjoyment.
I don’t work in this industry. I own a small business that has steadily grown to 16 employees because I could borrow money.
Most of these jobs are very stressful. Most important thing is that you enjoy what you are doing. Blogging seems like a great option to me!
If you look at some of the houses for sale in California on Zillow and how it breaks it down by estimated monthly payment, you would definitely need to be earning around $12 million a year if you plan on putting 10% down, making payments, accounting for taxes/insurance, and following the 1/3 or ~25% of your income to housing schematic. There are houses that cost more than $40-50 million for sale along with what I think a rather high number of expensive homes. Definitely more than the people on the Forbes list up there.
I cannot imagine how anyone can afford the $25,000,000.00+ homes for sale around Lake Tahoe, in Nevada. I figure the monthly mortgage alone would be around 100K+ and what profession pays THAT kind of guaranteed money over a 30 year period that doesn’t have crime involved?
Well Joey, they do, or the houses wouldn’t exist. And no, crime is not the most profitable career track, I hate to break it to you. Jeff Bezos made over $100 billion completely legally.
I strongly doubt that Bezos, or any other billionaires in the world, made their mind-blowing fortunes in legal and ethical ways. Elected politicians (and unelected politicians, too, worldwide) help them hugely and unethically through legislation….while the real needs of societies at large are completely disregarded by politicians.
In the year I sold my business I made several multiples of $1m but it didn’t change anything for me, other than a significantly reduced level of stress!
It also feels good to know I am ‘FI’ and could ‘RE’ if I wanted to. Currently I enjoy what I do and it gives me purpose.
Maybe I will find another outlet for my energy but I am still well incentivised and treated well by my new corporate overlords ;)
-Sterling
Tripe.
CEO position is more taxing than most, you’re essentially the custondian of millions/billions and have the stress on thousands of employees to care for.
Anything individual is relatively easier.
Managing funds
Consultant partner (very long hrs much less relative stress)
Owning half decent small-mid-tier business
Best option is to have 50M in the family book allocated to you.
Agreed. I work closely with my CEO. As the CEO, the hours are long, EVERYTHING is your responsibility, and something big is wrong every single day — usually multiple big things are wrong. Yes, the CEO can delegate nearly everything, but the ultimate responsibility is still theirs, and believe me, they feel that. The stress is enormous.
Thinking the CEO does little is as ignorant as saying that it’s easy to be a good blogger and produce high quality content everyday. Blogging is hard and being a public-company CEO is far, far harder.
Hey, Sam.
Call UC Berkeley. Find one of those professors who makes $1 million/yr, tax-free (due to treaty) teaching in Saudi Arabia. Multi-year contract. Check the sciences. Would be an interesting interview.
Have you ever lived in Saudi Arabia? I would divorce my husband on the spot, money is not worth it.
My wife and I started off like many college grads with average pay and jobs that we didn’t love. By the time we were in our late 30’s we had both found careers that we enjoyed and were disciplined enough to save about 30-40% of our gross income, tough to do when 30% plus is going to taxes.
30 years after college graduation I’m now retired and my wife is still working only because she loves her career and we have one teenager still at home. The interesting thing is, when you are younger and don’t often love your career, you’d love to quit working if only you could afford it. When you are older you might find that you love your career and you don’t want to stop working, especially if you have teenagers still living with you that you wouldn’t see anyway between the hours of 7:00 am and 5:00 pm. My wife love her career and doesn’t want to retire until our 3rd child is off to college. I on the other hand, found it very easy to retire and stay busy with all my outdoor activities and spending time with our teenager.
Our passive income is now 7 figures and until a couple years ago when we finally bought a couple expensive vehicles and a boat, nobody would have known that our income puts us solidly in the .01%.
I made a typo in the last sentence. We are solidly in the top 0.1% of income earners but not yet in the top .01%, which in the United States would require an annual income above $8.5 million.
I’d imagine those w passive income over 1mm are much more rare
My path to 1 mil+. I never graduated college, I started working in IT as a consultant, then joined a bunch of Wall Street firms (some with us, some no longer). I transitioned back and forth between salaried and being a con man, I peaked at about $300K per annum (salary + bonus).
I am now a Director at a Fortune 50, in my early 40’s, pulling in 400K combined base/incentive comp (55 hours per week on avg), but also have two businesses on the side that I started 8 years ago. These businesses have steadily been increasing in revenue and now bring in 900K to 1.2 mil per annum for the last 3 years.
Wife (doesn’t work), 2 dogs, 2 kids.
The biggest life lesson is to be aggressive when young and forecast your future goal of retirement. Years and life go by quickly.
Save early, bet big and don’t regret.
I lost 15K in my first year “investing” with a broker and then learned to play the market and made big wins.
I walked into job interviews with confidence, clearly lacking the educational background of others but with the ability to look at others in their eyes and articulate why they would want me on their team.
Moral is… Life is a gamble, with luck but most importantly, being just a bit smarter than your competition (shockingly easy).
I actually envy those born to this new generation. The new generation’s work ethic is so clearly different now, that the all-stars are actually average but look like all-stars compared to everyone else.
Amazing career! What are your two side businesses? I imagine if you have a FT job they must be running on autopilot!
I can comment on individuals in the healthcare field. If you are making 1Mill/year, you are not practicing you are selling medicine. You have crossed over an ethical line to serve the public. Every MD I know works their asses off for decades, many times with 50-80hr work weeks, and starting 1mill in debt from school/practice loans. The key IMO is saving/investing. Balance, family, the long haul. My work week in my practice is M-Th 8-4, and I will enjoy working until age 70? My investable assets 4-5 mill. but it took 25 years.
The “quick kill” to a mill, then retire. I don’t get that, unless you are very unhappy with what you do.
Don’t see trader,( currency, options, stock etc) on that list. Based on anecdotal evidence I believe quite a few of them qualify.
A lot of small business people make a million a year. Franchise owners, Insurance Brokers, R/E Developers, Construction Companies, hotel owners. Plenty of them don’t do much work anymore either.
Financial Samurai – how do you correlate this annual salary data with the networth tables you’ve developed? At 1M + consistently for 20 years (say mid 40s onwards), you’re looking at a potentially much higher networth than the “networth of the top 1%” tables suggest. How would you reconcile this? What would a realistic networth for this cohort be?
It depends entirely on how much you save and successfully invest.
I know several people 50-60 years old now who sold their company for eight figures or ending up with tens of millions after an IPO. Impossible to spend that much money, right? Mix in extravagant spending habits (a couple with legitimate family medical issues), bad investments and divorces (one with with 2+ divorces) and you end up pretty much like everyone else in the end. All pretty damn smart people, BTW and fortunately the exceptions.
At least all of them can back on track pretty easily. After you’ve learned enough to earn money that way, it’s really not that difficult to recover. Maybe not to the same level, but none of them are particularly concerned about eating cat food in retirement.
Thanks Chris – so would you agree then that even for this cohort, their networth will eventually be consistent with the “top 1%” table or would this be the case only for the examples you mention (the rest (majority?) being way more than these net worth tables would suggest?
what planet are you pulling those investment firm figures from? no one i know makes those figures. i live and work in fairfield county connecticut and none of us make $200k and get $500k bonuses… not even in our dreams.
Please share more. What is your years of experience, assets under management, title/position, performance versus the index, base salary, and bonus range. Thanks
The finance industry figures are pretty reasonable depending on the area, firm, experience and position. If you don’t know anyone earning that much, it just means you’re talking with the wrong people. A friend of mine with about a year or so at Blackstone is under six figures, but she’s surrounded by sales people and partners making high six and low seven figures depending on the year.
How many hedge fund managers do you know? Or people trading/managing funds over $500MM?
Those are definitely *not* $100-$200K positions. Much more likely it’s a percentage of AUM (Assets Under Management) along with bonuses. Venture capital funds are often setup as 2/20 which means 2% AUM fee + 20% of generated profits.
If you’re managing a $100MM startup fund, that’s $2M every year in management fees alone plus a slice of the profits. Not much of a downside for losing the investors money. Just convince wealthy individuals, fund managers or institutional investors that you’ll do slightly better in the market and ask them to write a check for a few years. Pick a couple of winners over the years and you’ll start thinking the FS numbers are ridiculously low.
The key is to have good sales guys who sell the funds to those rich but dumb folks to give hedge funds the money to invest. The bulk of the hedge fund income comes from percentage of AUM . The 20% profit really depends on the watermark the fund manager has to exceed. Very few if any of them could beat S&P 500 on a consistent basis. Only dumb pension funds would give them moneys to invest and the results are always consistent sub-par performance but with high fees. But then there are still many dumb rich folks and/or pension funds who would invest with such these hedge fund managers. Perhaps they are plain lazy.
I’ve come close on three occasions… $900,000, $800,000, and $875,000 since 2011.. I’m self employed and a one man shop. No employees. I’ve had $30,000 years too. Overall I average out around $500,000 per year.
Hi Rick, I’m also self employed and I outsource a lot of the work, so no employees.
If you don’t mind me asking what industry are you in? I’m in ecommerce.
Sorry I dropped out..
I put mergers together, mainly in aerospace. I find private companies ready to sell usually in the $20-$50 million revenue range and I place them with private equity buyers. I get paid upon close like a real estate agent. I was a CFO in aerospace and just found a void in the marketplace.
My son is a career changer, at 26 , he is now beginning medical school. Worked 2 years in commercial banking first. Anyway, he will be 30 when he graduates, then about 33-35 depending on medical specialty he chooses, before he begins earning a decent income. If he loves what he does, he can work 30 years or more (we are living longer). Before changing careers, he was not earning a lot, and HATED HIS JOB. So no matter what his lifetime earnings are (which should be triple what he would have earned at the bank over 40 years, if he could have even lasted that long), he will hopefully be happy and fulfilled most of the time! BTW, I am married to an anesthesiologist and we have a wide circle of physician friends. In our geographic area, the various specialities are earning about $150,000-$250,000 more than that chart indicates.
Best of luck to him! Thanks for sharing the data on the salaries. I have found that median and average salaries tent always seem a little bit lower across industries.
I’m studying to be an Oral and Maxillofacial surgeon, and while I was shadowing one of the docs in the group said they always under report their income on any surveys because of how the general population thinks doctors are overpaid. On surveys it says OMFS average 450k a year, but the docs I talked to said they make way more, all the partners at the group were making 800k+, and the most senior partner was making over $1 mil. Income surveys for doctors and dentists are mostly bogus.
I believe it! Thanks for sharing.
No problem. Also just a side note, even though doctors have a long training time and rack up student loans, an efficient surgeon can make $1 million + for the duration of his career without much fluctuation in income. A lot of other careers don’t have that kind of income stability. For example, an entertainer can lose their audience, a professional athlete might not get signed by a team etc.
I’ve already learned what “enough” means, but know plenty of millionaires that have not.
No interest in $1M annually and the matching headaches which are almost inevitable.
You need to add FIREd people with about a 15M net worth. They also make 1M a year if they’re not too conservative with their assets.
Half decent financial advisers in PWM also pull a significant income. If they manage $200-250MM, at a 1% fee and 45% payout you’ll hit $1MM.
I would say that those would be better than half-decent advisors. I have almost the same parameters you indicate but with a much higher payout – make about $1.4m a year. That puts me #150 or so in my firm with 16,000 advisors. So it is a rare bunch of us that make $1m+. That said, there are many making in the $300k-$400k range which is still better than almost any other profession.
Doctors have many non earning or low earning years before some of them make that big salary. An analogous article about total inflation adjusted income earned would be interesting too. Other careers would rise to the top of that list that weren’t on the list of single year highest year salary. Since we have a progressive tax code, the net income would be interesting to look at too. From that standpoint, it is better to have a more constant salary whose sum is equal to one of a highly variable salary.
Sounds good. I think another reason why I didn’t mention doctors is because it goes against my team “financial independence sooner, rather than later“ when it takes me to earn.
My friend, after two fellowships, literally didn’t start making six figures until he was 34 years old. And that was the age that I left work for good. I cannot imagine just starting at 34 and having to work until whenever.
Y’know, many people actually enjoy their work despite still working toward FI.
You don’t seem to have any plans to shutter FS, right?
Sure. When did you reach FI and what is it that you do?
Mostly software. I’ve had a handful of tech startups and helped other founders raise money from angels and VCs over the years. Some residential real estate along the way before getting seriously pounded in 2008. That was an excellent way to earn a negative million dollars pretty quickly and took awhile to recover.
Nowadays, I have a niche web application that pays the bills with minimal time and effort. One of your posts offered the choice between a lifestyle business with 80% success rate or funded company with 20% success rate. I took both roads. Started with one funded company that didn’t take off and eventually converted it into a lifestyle business.
I haven’t quite decided whether we’re FI or not. Almost all the FIRE people come from the perspective of earn/save/retire/withdraw (e.g. Mr. Money Mustache). Nothing wrong with that, but working as an employee for 20+ years was never appealing to me. You just don’t put much emphasis on retirement savings when expecting to sell your business for $10MM in a few years. That didn’t happen and I lost interest in ever making it happen.
My perspective became cashflow based since coming across Rich Dad & 4 Hour Work Week about ten years ago. Monthly cashflow while working a few hours each week, spend less than we earn and enjoy the flexibility and free time to learn and travel. Those two books (especially Tim Ferriss explaining about automating an online business) honestly changed our lives. Never heard anyone talk about that approach to earning money before. Nowadays, cash magically appears in our bank account while I spent a couple hours this morning teaching my kids how to read sheet music and use a pantograph.
Looks like having an MBA or JD from a top 15 school is step one for most of these careers. Otherwise, you need to be a business owner. One takes brains and the other takes guts.
Ha, it never seemed like guts to me. I just HATED, HATED, HATED being told what to do by people who refused to change the way things were done. Even when everyone agreed it was stupid or could be easily improved. No surprise one of my first jobs as a teenager ended with the manager telling me “You know, you really have a piss-poor attitude.” Most of the serial entrepreneurs I know have a similar back story somewhere in their past.
I’m always amazed, and grateful, that many of these high earners continue working for many years putting their superior skills to work. I would have bailed out into FIRE long ago. I’m almost certain that for every one such 0.1% person there are ten who bailed out early and live happily in anonymity. So kudos to those who keep working, especially when they are largely vilified by the masses.
Good Alternative point! I have a long argued the pointlessness of making so much money after you have enough money. But I guess it is also impressive to keep on grinding away for more money when you don’t need it.
Money is very hard to quit! Even over family and friends.
I think these people also go a long way towards keeping our investment returns high enough so that we can FIRE.
Great research Sam, shows there’s plenty of paths to big wealth if you’re lucky enough to find the right path early on – and assuming that’s what you really want out of life!
Of course the hard part is then keeping some of that income and making it work for you if you really want to create wealth – many people in these careers are notorious for being big spenders and ending up with very little!
All of these paths require serious commitment and focus to a single skill, but I know you’re a proponent of multiple (passive) income streams – I assume your thoughts on this are make the money anyway you can first, then start diversifying to reduce your risk to any given income stream?
Cheers, Frankie
Glad that doctors are back on the list! I do agree with you about doctors and teachers getting the short end of the stick. That being said, those of us in the field are “stuck” in it until we find our better calling. Medicine is a gratifying field, and that’s what I keep reminding myself whenever I get stuck in the operating room in the middle of night trying to do good while getting compensated pennies for what services are delivered!
Most of these jobs are very stressful. Blogging seems like the best option of all. Hard work is required of course but less than a million would also be just fine if you could live from it.
As Sam knows, jobs in Investment Banks were the ticket. 10+ years at the MD level and 10 years over $1M; the last 5 over $2M. And yes, you were required to work hard, long, stressful hours along the way. That’s the good news. The bad news is that the profession is definitely becoming less lucrative and these types of jobs and comp levels are getting harder, and harder to achieve. Also agree with the commenter who said having a stay at home spouse was a key for many people with families, in my experience.
I know a half dozen people making 7 figure incomes in the small town I live in. They all have 2 things in common. First they all own their own businesses,”farmers, manufacturing, distribution, and construction.” Second thing is, they all are second generation owners. I guess that’s where luck plays a roll.
My spouse has one of the listed jobs. But one I know of and didn’t see is energy traders. They can make an insane amount of money and seem to operated within their companies with a huge amount of latitude.
the days of Enron are over. volatility has minimized and energy traders (for the most part) don’t make what they used to. energy trader jobs, themselves, are very unique in that it is a very specialized job and very few companies pay the big bucks that they did 10-20 years ago. I have first-hand knowledge of this!
Great article as always, Sam. Just to note, not all but some top software sales reps (SFDC, ORCL, MSFT, etc) pull down 7 figures.
Another group of people who consistently can make 7 figures is the Oil and gas employees. Especially, if you work for Big Oils like CVX, RDS, XOM etc. – many top level managers (pre VP positions) make 7 figures with bonuses. The new hire under grad petroleum engineering salaries are often ~150K range.