What’s it like to make $100,000 per year?

Just like every other money question, it’s all relative.

If you a in you are 20’s, single, and don’t live in California or New York it is pretty great. If you are making $100,000 in your mid 20’s, you are probably on a path to make 4–5 times that when are older and in your prime earning years. $100k will also be more than most of your friends make at that age. An average college grad makes about $50,000 their first year out of school, if you start at double that you are doing pretty well. Also when you are in your twenties even your smartest and most ambitious friends probably haven’t hit their stride and made real money yet. Your “smart” friend who became a doctor or lawyer likely won’t get their first big paycheck until they are around 30. The entrepreneurial types usually take several years before they hit success and make big money. The highest paid people in their 20’s are mostly good sales people. You can find a good sales job with little or no experience and make $100,000 within a year or two of leaving school, if you are good at it. If you are 25 with this high of income you will have the money to do everything your friends are doing and generally have a feeling of financial success amongst your peers.

$100,000 per year is enough money to do 90% of everything you want to do. You can live in a comfortable home in most places, drive a nice car, pay for entertainment and travel. You will have enough money in the budget to do everything you want on a day to day basis. You won’t be driving a Ferrari or living in a mansion, but there won’t be very many times when you miss out of something because of money.

If you are in you are older married and have kids, $100,000 is nothing to get excited about for most people. Once you start splitting that money among 2, 3 or 4+ people, your lifestyle will obviously take a hit. Your priorities will change. You will spend more time worried about money. $100,000 for a single person is mostly disposable income that gets spent on discretionary items that can be easily cut back in a crunch. This means you don’t have to spend a lot of time worried, you can easily adjust your budget if needed. If you are married with kids, most of that $100,000 is going to be allocated to fixed expenses like housing, health insurance, and basic household necessities. This create a much tighter budget and little flexibility in the case of a financial setback.

There is no typical lifestyle for someone making $100,000. If you are asking this question, it is safe to assume you make less than $100k, probably a lot less. I’ve been in a situation where I made minimum wage, I’ve also had years where I made around $100k, I’ve even had times where I’ve made $100k in a month. There is a difference between all three scenarios, more income will let you approach life with more confidence. Knowing you can take care of yourself is important, it lets you do more things that you want to do but might be afraid of. You also start to quit worrying about small problems. It’s amazing how many things can be fixed with a little bit of cash. The ability to quit worrying about small amounts of money will relieve stress and make you happy.

In the end there are more important things that money to make you happy. For most people, money is tool to get other things they want. It’s important, it will impact many other areas of your life, but ultimately there are probably other things that are more easily attained than money which will make you happy. You don’t need a lot of money to make friends, find a partner you love, explore you interests and passions. Most of the excitement in my life cost $0, so no, I don’t need to spend a lot of money, I don’t need $100,000 or a $1,000,000 or whatever number you think you need. I need security, I need to provide, I need to take care of myself and others, that is what’s important to me.

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