Does a $100,000 Annual Salary Mean You’re Rich?

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In the 21st century, many people in the workforce are asking themselves how far their money will really go. A $100,000 annual salary may have meant a lot more even just 10 years ago than it does in today’s economy.

Here, we explore whether or not a six-figure job makes you rich — and what it means to be rich in the United States.

Who Earns What in America

“In the U.S., it takes a salary of $250,000 to put you in the top 5% of earners. About 18% of American individuals earn $100,000 or more,” said Scott Lieberman, founder of financial education website

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. Why is it that so many of these people feel that their money is not taking them very far?

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‘Rich’ Means Different Things to Different People

“Rich is subjective,” Lieberman said, “Some people think being rich means flying on a private jet.”

Think for a moment about what being rich might mean to you. As Lieberman said, some people believe being rich means flying private, owning multiple vacation homes or running a billion-dollar company. To others, being rich may mean being able to comfortably purchase a home and put their children through college. When evaluating if a $100,000 salary makes you rich, think about your relationship with wealth.

It can also be said that people who come from a wealthy background, who perhaps have family who can provide financial support, can take a $100,000 annual salary a lot farther than someone who does not have that support. With rent or mortgage payments, car payments, insurance and other cost-of-living expenses, people can expect to see money disappear very quickly. Someone who does not have loans or debt will also be able to utilize a $100,000 salary to its full potential. It costs a whole lot more to live in this economy than it did 10 years ago, and with a recession looming, there is even more to worry about.

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Read More: Why Stealth Wealth Is the Best Way To Handle Your Money

‘Rich’ Depends on Location

A $100,000 salary in a small city in Nebraska will take you quite a lot farther than it will in San Francisco or New York City. Factoring in cost of living when it comes to salary is something to keep in mind as well. It will be a lot harder for Californians to feel rich when the cost of a one-bedroom condo in Los Angeles is the cost of a house in a suburb of Houston.

“With more people working remotely, you can quickly ‘get rich’ by moving to an area of the country or world that is much cheaper,” Lieberman said.

Remote work has become a viable option in today’s post-pandemic era. Consider moving somewhere that will allow you to live comfortably on $100,000 — living in a low-cost-of-living area will surely make you feel rich.

Feeling Rich

“If you feel being rich is being in control of your time, being able to retire before age 60, eating at nice restaurants and going on plenty of nice vacations, then you might be able to do that on a $100,000 salary,” Lieberman said.

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Calling back to the concept that “rich” may be subjective, recognizing there is an emotional aspect to feeling rich may help you further evaluate whether or not $100,000 a year makes a person rich. Do you find that you compare yourself to friends, siblings or neighbors? Do you get a raise or a pay bump at a new job, and immediately purchase a car or expensive goods?

Feeling rich does not necessarily mean having nice things. Rich has many different meanings, and those who have the latest luxury car or a brand new home may be struggling financially. If that money is spent wisely, a $100,000 salary will take you much further.

Final Note

To a billionaire, $100,000 yearly is a tiny piece of their net worth. To others, $100,000 a year could be life-changing. A $100,000 salary no matter where you live is above the median income in America. Things like location and spending habits factor into how far your salary will take you. Though it is up to you to draw your own conclusions on whether or not $100,000 a year makes you rich, that salary will surely put you ahead of the majority of the country.

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