Making at least $100,000 a year is a big step for many on their way to financial freedom as it generally guarantees them a good lifestyle as well as considerable savings. No, $100,000 isn’t a lot everywhere, and if it isn’t a lot where you live I would suggest moving to a lower cost of living area if you can. In this article I’ll break down how achievable reaching 6 figures is for the average American and how to take some of the best paths to get there.
I will divide this into 3 overarching categories – your career, businesses or side hustles, and your investments.
Career
For starters, you need to pick a high-paid profession for your 9-5. Six figure incomes aren’t reserved for upper management or business owners, many careers will pay you $100,000 or more by themselves. However, you aren’t guaranteed a 6-figure income out the gate just because you want it, or just because you got a specific degree – there is a lot more that goes into it than that.
With whatever career you choose, determine whether the payoff is worth it in terms of the price and time required for the education aspect, and verify that the market can reliably provide a job for you at your desired pay rate. Other than that, make sure it’s also a job you can enjoy. Passion isn’t everything, but it’s important to not dread your job either.
Once you have the prerequisites to enter a field, you still have more work to do. You need to be confident going in. Know what you can bring to the table and be willing to make a case for yourself and be sure to ask for the appropriate compensation. Sometimes a company’s first offer is their best offer, but frequently they will try to offer you less than you’re worth. Try to remember to negotiate – if you handle it well, the worst-case scenario is that they say no to more than their initial offer.
Don’t forget to have a general idea of the career path you want to follow. It’s okay for it to change (and it likely will), but it’s always good to have a sense of direction.
Networking Matters
Additionally, make an effort to network with as many people in your industry as possible. I know a lot of people are shy about that, but who you know has a direct impact on the opportunities available to you.
Don’t underestimate how valuable it is to just have a low-level employee at a company be able to give a personal recommendation. Companies are frequently more willing to hire a slightly less qualified person if they can be confident that the abilities on their résumé are accurate AND that they can work with others well.
Take Risks
Last but not least, if you’re not willing to take risks, you’ll be kept at lower pay. Don’t be afraid of taking calculated risks to further your career, but don’t gamble it away either. As opportunities arise try to determine if they can put you in a better spot, and if they can try to see if it is an opportunity you can afford to take. For example, an unpaid internship may be a great way to get an “in” to your ideal company, but if you have bills to pay and are the only source of income in your household, you may not be able to pursue that opportunity.
Successful Careers
I can’t recommend an ideal day job to pursue. There are a lot of industries and many jobs that frequently provide a 6-figure income. Here are some which you may be interested in:
- Engineering – petroleum, electrical, mechanical, etc.
- Doctors and other specialists in the health industry
- Federal contractors – being contracted by the federal government (or working with a private agency that works with the government) can be incredibly lucrative, but if you are a federal employee you will likely be paid a bit less than market-value
- Professors – although the cost related to the years spent obtaining your education may be a bit steep
- Information Technology – software development, networking engineering, security, and data engineering can all fetch a pretty penny. In my opinion, the opportunity cost for tech workers is low and the payout is great (I am admittedly biased)
- Sales or real estate – there is a wide variance for income in these professions, but they can still get you well over the $100,000 mark
- Management – managers of the aforementioned fields often make even more, and can make copious amounts once they break into the upper ranks, but these positions usually require a lot more experience
If you’re interested in changing jobs or applying to anything mentioned here – check out ZipRecruiter. It can even be helpful if you’re just trying to “feel out” the different markets and job requirements.
Businesses & Side Hustles
In my opinion, starting your own business or side hustle is a fantastic gateway to financial independence. If you’re not sure what I mean or where you could start, check out my article on side hustles that can make you money. Be aware, many businesses and side hustles can be started with next to no up-front costs, but most do have significant up-front costs, and if you ever want to scale it to be able to replace your primary source of income you will need to invest into it. How much? Perhaps a few hundred. Perhaps a few thousand. Maybe even more. Don’t let that stop you, but let it be something you consider going forward.
For this type of work where you have to be a self-starter and independent, I recommend trying something you both enjoy (enough to spend hours each day on) and CAN make money doing. You almost certainly have some skill or interest with overlap in both categories, but you may have to get a little creative with it. These days people can make money online doing just about anything, so when you brainstorm don’t be too quick to cross anything off.
Once you have a solid idea, be sure to figure out who your audience is:
- What is their problem?
- Where are they looking for their solution?
- What are they looking for in their solution? Do they want the problem solved in a specific way?
- How can you get in-touch with them?
- What is their demographic? Age, location, income, etc.
These questions may not apply to every endeavor but use them as a starting point to figure out who your target customer or audience is.
Investments
This may go without saying, but make sure you eliminate high-interest debt. Investing can earn you more than you’d have to pay back, but if you think about it, paying back debt is a GUARANTEED return. You don’t need to pay of a mortgage before investing but eliminating big-ticket items like consumer debt (particularly credit card debt) are a must.
Now, there are a million and one ways to invest. Investing in some sort of education or training for your career can pay you back handsomely, as well as investing in courses and more tools for your business or side hustle. Of course, if you don’t feel the need to get more training, one of the best ways to invest is in the stock market through low-fee index funds. M1 Finance is my top pick for investing in index funds and ETFs because it makes it easy to build a portfolio and set up automatic investments. Real estate is another option with great potential – although it can be a very “active” investment.
Whichever you choose to do, making sure you keep your money working for you will be a boon.
Conclusion
If you want to make over $100,000, then put the effort in to make that much. It could be hard, or it could be easy. However, don’t compare yourself to others and be sure to keep pushing through the hardships. Staying optimistic throughout the process can do wonders not only for you, but with how you come across to others. It’s up to you to keep yourself going through the hardships, and it’s up to you to make yourself consistent through it all.
However you choose to get there – good luck! If you have any tips, tricks, or helpful tidbits please leave them in the comments. For more content like this, and a free budgeting template and financial goals worksheet, be sure to sign up for the Bitter to Richer newsletter.
