$100,000+ Salary

Why is a six-figure salary glorified? Do we just like big numbers? Six is big, right? Six figures is an arbitrary number, but I think there’s an argument for why it’s one good indicator of lifestyle. Disposable income. 100k isn’t just double 50k in terms of lifestyle. There’s a multiplier effect once you meet the threshold of meeting your minimal expenses. Imagine you’re earning $50,000 a year. After accounting for federal and state taxes—which we’ll estimate at around 24%—you might take home approximately $38,000 annually. If your essential living expenses amount to $3,000 per month (that’s $36,000 a year), you’re left with just $2,000 per year to save or invest. That’s less than $170 a month, which doesn’t offer much wiggle room for building wealth or handling unexpected expenses.

Now, let’s double that salary to $100,000. With a higher income, your effective tax rate also increases due to the progressive tax system. Let’s say your combined federal and state taxes now take up about 30% of your income, leaving you with a net annual income of $70,000. If you maintain the same lifestyle and keep your expenses at $36,000 a year, you’re now left with $34,000 in disposable income. That’s a seventeen-fold increase compared to the $2,000 you had when earning $50,000. The rich get richer, and the poor… should eat the rich.

Obviously, higher income increases your total earnings, but what’s truly transformative is the amount of disposable income you have left after covering essential expenses like food, shelter, clothing, and healthcare. This disposable income is the key to growing your net worth, investing in your future, and improving your overall financial situation. Penny pinching isn’t the way to go. What’s the best way to save more money? Make more money. How? I don’t know. [Figure it out.]

It’s important to recognize that as your income rises, so does your tax burden. For instance, in states like New York, an individual earning $50,000 might have an after-tax income of around $43,600, considering both federal and state taxes. If that same individual earns $100,000, their after-tax income might be approximately $80,500. The effective tax rate jumps from about 12.8% to 19.5%. So, while you don’t quite double your take-home pay when you double your salary, the substantial increase in disposable income is still a game-changer. I hope there’s enough TikTok videos on marginal tax brackets so I don’t need to repeat that breaking into a higher tax bracket doesn’t mean you lose money; if you make $100 more in that next tax bracket, only that $100 is subject to the higher tax rate.

Here’s where many people stumble: lifestyle inflation. This is the tendency to increase your spending as your income grows. You get a new raise, so you get a nicer car, bigger home, and eat better food. Do this in moderation, but you need to resist the urge to inflate your lifestyle because then you’ll be back to saving very little money. Do you really want to work forever? Although, if I’m handcuffed to a job because of my lifestyle, I’d like my handcuffs to be the most opulent gold.

Sometimes a more expensive lifestyle can’t be helped because you’re looking for a higher salary. Higher earners often find themselves living in more expensive areas, which can offset the financial advantages of a larger salary. Cities like San Francisco, New York, and Los Angeles boast high-paying jobs but also come with huge housing costs, higher taxes, and a steeper cost of living overall. According to the Council for Community and Economic Research, the cost of living in these cities can be 80% higher than the national average. Moreover, attaining a higher income often requires significant investments in education and training (like medicine, law, or engineering typically require advanced degrees), which come with hefty tuition fees and years spent out of the workforce. Student loans can take decades to repay, and the opportunity cost of time spent in school instead of earning an income is crazy. Maybe Joe Rogan was right… about the moving to Texas thing (very low cost of living). I should get some DMT and elk meat.

How much money do you really need to be happy? According to research by Nobel laureates Daniel Kahneman and Angus Deaton published in 2010, increased income boosts people’s emotional well-being only up to a certain point—about $75,000 annually at the time of their study. Adjusted for inflation, that’s roughly $90,000 to $100,000 today. This suggests that once your basic needs and some comforts are met, extra money doesn’t necessarily translate into greater day-to-day happiness; beyond this threshold, there are diminished returns, meaning every additional dollar won’t give you as much happiness day to day. Although earning significantly more may improve overall life satisfaction or “life evaluation” and this may be marginal again because you probably get a significant lifestyle change and a boost of happiness at, say, $300k, 1 million, or 10 million. Remember, “money doesn’t buy happiness”… And those grapes aren’t even ripe yet, I don’t need any sour grapes!

Earning a high income doesn’t automatically equate to a better lifestyle. Many high-paying jobs demand long hours, high stress levels, and significant personal sacrifices. Take, for example, a New York Capital Markets lawyer earning over $300,000 annually. On paper, he is affluent and supposedly happy, but the demanding nature of their work may leave him with little time to enjoy their wealth with their family and friends. Burnout is real in such professions, and no amount of money can compensate for chronic stress or deteriorating health. Financial success should not come at the cost of your well-being, and it’s important to weigh these trade-offs when pursuing higher income levels.

I’ll end with this. There was a palliative care nurse, meaning nurses caring for dying people, that shared the top five regrets people had on their deathbed:

One, “I wish I’d had the courage to live a life true to myself, not the life others expected of me.” Don’t just chase money and penny pinch because that’s what you’re “supposed” to do. Wake up, sheeple.

Two, “I wish I didn’t work so hard.” Spend time with your loved ones. I mean, I don’t have that problem; my people tell me my children are growing up to be excellent people.

Three, “I wish I’d had the courage to express my feelings.” Although I’m sure we’re all emotionally healthy in our day-to-day corporate work persona.

Four, “I wish I had stayed in touch with my friends.” Say it with me, your colleagues are not your friends. Stop cancelling plans with your friends. If you get hit by a bus tomorrow, that job will replace you in no time.

Finally, “I wish that I had let myself be happier.” Remember you will die. Memento mori. It’s a shame that only a few people have near-death experiences that really change their perspective on life. When you’re about to die, you briefly exit the matrix and see that money, status, or a career are all trivial. The challenge is that we don’t know when we’ll die and we need money to continue to live. But we should always be aware that it’s our choice that we’re sacrificing time with loved ones to work, it’s our choice to use our savings for life experiences, and we shouldn’t let the social pressures of having a “stable” career, with a “respectable” salary, and aiming for a “comfortable” retirement blind us from choices we can make in our lives to be truly happy.