The phrase “six figures” is common and most of us have probably heard it at one time or another. It usually describes an expense, income, or another money-related item. But how much is six figures exactly?
How much is six figures?
First, let’s start with what a figure is. In the context of six figures, a figure is one number or digit. If you combine 6 of them, you get a number that is 6 digits, or figures long. So, six figures refers to any number between 100,000 and 999,999. It can also be denoted like this: 100k.
Depending on the context of how “six figures” is used, it can mean any number of things. Most commonly though, it is used to describe one’s salary or salary which they aspire to have. This brings me to the next most common question.
How much money is six figures?
As you might guess from the previous definition, six figures in monetary terms is any amount of money between $100,000-$999,999.
Earning a salary of 6 figures used to be a big career aspiration or goal for some. While people still aspire to reach the threshold of $100k per year, it is not as meaningful as it once was in the 1980s. This is because inflation causes the value of money to decrease over time.
So if someone made $100,000 in 1980, they would need to make $325,000 in the year 2020 to be able to buy the same amount stuff.
Inflation is why you see that you used to be able to buy a McDonald’s cheeseburger for 5 cents in the 50s.
What does making six figures mean?
Today in the United States, making six figures means that you likely live a comfortable middle-class life. It allows you to afford the necessities like housing, food, and savings while having money left over for fun. Again, it is by no means an indicator of a life of luxury that it once was.
Is six figures a lot of money?
In short, yes it still is a lot of money, but it depends. Several factors determine just how far $100,000 goes.
The most important factor is where you live. In the United States, there are 50 states and the cost of living between them differs greatly. Some are cheap and some are expensive.
One of the most common examples is comparing the cost of living in California to the cost of living in Texas. Since most things cost more money in California than in Texas, you’ll need more money to buy the same stuff. Let’s look at a specific example.
Adjusted for cost of living
Assume that someone making $100,000 in Dallas wants to move to San Francisco and have the same standard of living.
How much more do you think that they need to earn to have the same standard of living in California?
Using Nerd Wallet’s cost of living calculator, they estimate that to have the same quality of life in San Francisco as Dallas on $100,000, you would need to earn $180,000 per year.
The majority of the difference between the two cities can be explained by the astronomical cost to buy or rent a house in San Francisco. Income taxes are also higher in California than Texas and this should be taken into account.
How to earn a six figure income
One thing that people earning six figures have in common is they have sought-after skills. Be it career-wise, a side hustle, or through investing.
There isn’t a set direction you need to take to earn $100,000 per year. In fact, multiple paths exist. Let’s dive into a few of them that you can use to earn or increase your income to $100k+.
Careers that pay six figures
The most straightforward path to making six figures is to get a job that pays six figures. This doesn’t necessarily mean you need to have a university degree or secondary education.
Quite the contrary. When a skill is hard to find, employers have two options. Pay more, or overlook some of the requirements. While there are some careers like Doctors that will always require education, there are some that don’t. In this case, think of careers like software development or real estate agents.
Six figure jobs:
- Doctor (Education required)
- Actuary (Education required)
- Financial manager (Education required)
- Petroleum engineer (Education required)
- Software developer
- Air Traffic Controller
- Real Estate Broker
- Nuclear Power Reactor Operator
Side hustles to earn extra income
If you find yourself working a job that doesn’t pay 6 figures, fear not. You can always pick up a side hustle to earn additional money.
A side hustle can be a hobby that you monetize (like this blog is for me), or a second job. There are plenty of opportunities out there to earn an additional $1000/mo or more.
A few examples of side hustles you can start:
- Sell things you create on Etsy
- Sell your skills on Fiverr or Upwork
- Become a notary
- Teach English online
- Drive for Uber or DoorDash
- Start a blog or a YouTube channel
Investing to earn extra income
The last suggestion that I will touch on, is investing to earn extra income. This is my favorite path toward earning $100,000 because it is largely passive.
There are several ways that you can invest. The most common are investing in real estate, the stock market, and now — crypto.
With real estate, you earn money by buying an apartment or a house and renting it out. If you do this a few times, you’ll reach $100,000 in no time.
In the stock market, you typically buy shares of companies in the hope that they will increase in value over time as the companies earn more money. Sometimes, stocks even pay a dividend to shareholders, which is a small percentage of their earnings paid out as cash.
Now, crypto is by far the riskiest option here. It may make you very rich or lose everything. If you are not familiar with it, I suggest you ignore this option before you doing your own research.
Conclusion
To recap, 6 figures is any number between 100,000 and 999,999. In terms of money though, it’s not worth as much as it once was though it still affords a comfortable life. You just need to be mindful about where you live.