Income isn't always measured in dollars and cents. It can also be described by other metrics like "6-, 7-, or even 8-figure salaries." What exactly does it mean when someone says they have an eight-figure income? How do these numbers relate to one another? And what are the kinds of positions that earn this type of pay scale?
There's no standard definition for earning $8 million over your lifetime, but there are several different ways to describe levels of high incomes. For instance, some people may consider anyone making more than six figures ($75,000 per year) to be at the top of their field. Others might define the highest earners as those who bring home seven-figures annually. Still others say that the best paying jobs go beyond the nine-figure mark. So let’s break down exactly what all of these terms mean so we know where to aim if our careers take us there someday.
A seven-figure salary means any annual earnings above $7 million, according to Forbes' website. That equates to roughly $161,667 per month (or $1,666 per day). However, because there is such variation between companies on average monthly salaries, it's not uncommon to see huge discrepancies from person to person. One engineer told LinkedIn he made about $2 million in 2017 while his colleague said she earned just under $1 million during her first full calendar year with the company. Even though both were working at similar places, their experience was very different.
The number is derived from multiplying two parts together — base salary plus bonus compensation. The former includes things like hourly wages, commissions, tips, bonuses, overtime, benefits, and other perks. But the latter part is only applicable to the higher wage earner. Bonuses are typically paid weekly, semi-annually, quarterly, or yearly depending on the situation and contract length. Some employees will receive them automatically based on performance. Others need to meet certain goals set forth by management. In general, however, most people don't get lumped into the same category until after they've been given the big check.
"It's hard to pin down," explains Michelle Moore, founder/CEO of career site MyCorporation.com. "While many employers give raises every year along with incentive plans, I frequently hear stories about individuals being offered a large amount up front without additional incentives."
So what happens once someone hits the $7-million mark? Are they guaranteed a promotion to CEO status immediately, or must they wait? As mentioned earlier, it depends entirely upon the individual circumstances. Many companies offer various types of promotions within their ranks, including mid-level managers, senior directors, vice presidents, etc., which could increase total compensation accordingly. At least one survey found that nearly half of workers think they'll reach it before 20 years. Others believe it takes closer to 10 years. There are also cases where a worker doesn't advance past the lower rungs of the ladder due to poor performance or lack of skill-set related reasons.
Many experts agree that financial stability is key to achieving success in life. Once someone reaches the $7-million mark, it's time to start thinking about investments and retirement accounts. According to CNBC, the median household net worth has increased since 2014 from $12,900 to $40,600. That's a massive jump!
If you're trying to decide whether or not you should pursue a particular line of work, knowing the exact dollar amounts involved can help point you toward the right path. A lot of factors come into play, including market demand, industry growth potential, and overall employee satisfaction rates among others. Here are some examples of what constitutes a 7-figure position.
One executive director reported having a salary of $200,000 per year. He had worked his way up through the ranks to become a regional manager with a title that brought him a little less than $150,000 annually. By comparison, the director estimated his next step would put him at around $500,000 per year. This meant that he'd soon enter the upper echelon of salaries worldwide. His new responsibilities included overseeing five offices, managing three staff members, and dealing with budgets totaling hundreds of thousands of dollars.
Not everyone gets a chance to move upward quickly like that, especially considering there are plenty of entry-level roles that pay well enough to support themselves comfortably. But it gives a sense of what's possible when you hit the jackpot. Of course, the fact that this person was able to find a position that pays almost twice as much as his previous role indicates that luck plays a significant factor. People often want to believe that they deserve their rewards, but sometimes reality checks happen regardless of merit.
Another example comes from a salesperson who recently joined a major corporation. She began her career at $25,000 per year and now brings home $100,000 annually. Her employer estimates that she'll eventually double her current salary in just four years. This is considered a great accomplishment in today's competitive world, but it certainly wasn't achieved overnight. Over several months, she focused on building relationships with clients, developing strong networks, and honing her skillset. All of which contributed significantly to her eventual rise.
Of course, there are exceptions to everything. Sometimes a company's internal policies prohibit advancement unless an employee meets strict requirements. Or maybe a hiring decision goes against someone's personal beliefs. In those situations, nothing really changes unless someone chooses to leave voluntarily.
As far as whether or not something qualifies as a 7-figure salary, that's largely dependent on a person's own perception. If you feel comfortable telling friends and family your true earnings, then that's probably sufficient proof for you. Otherwise, it's important to remember that averages tend to paint broad strokes. When looking for a new opportunity, examine a range of different options rather than focusing solely on whatever seems to garner the most attention. It's easy to assume that anything above $70,000 is going to result in stellar outcomes. Yet this assumption isn't necessarily accurate.
Obviously, it varies greatly based on location, age, education, marital status, children, health insurance coverage, and other factors. You never know exactly what you'll end up bringing home until the ink dries on your employment agreement, but here are some helpful guidelines to keep in mind.
According to data compiled by Glassdoor, the national average salary for software engineers hovers around $97,000. Senior executives, meanwhile, pull in approximately $138,000 per annum. Marketing professionals enjoy slightly better compensation packages averaging $120,000 per year. Salespeople bring home $116,000 per year on average, whereas customer service representatives pull in roughly $110,000 annually. Administrative assistants and receptionists make an average of $62,000 per year. On the flip side, truck drivers pull in a whopping $135,000 per annum while administrative support services personnel earn $84,000 annually.
Generally speaking, the higher up an occupation sits on the corporate food chain, the more likely it is that its average salary will exceed $90,000. As previously discussed, this is due to larger organizations needing bigger resources to function properly. They also require specialized knowledge, training, and expertise that smaller entities simply cannot provide. Another thing to note is that this data reflects an American workforce. Salaries vary widely across countries, so it's beneficial to look internationally and compare numbers accordingly.
When comparing yourself to your peers, it's important to keep in mind that your unique background influences your capabilities. Someone who majored in business administration won't perform as well as someone else who studied electrical engineering. If you're doing fine financially, it's okay to stick with what you currently possess. But if you aren't quite living paycheck-to-paycheck, you may want to explore further opportunities.
On the whole, it's safe to say that 7-figures represent a solid middle ground between poverty and extreme wealth. While it sounds nice to imagine pulling in millions or billions of dollars per annum, chances are that those sums wouldn't benefit your quality of life too much. Most successful entrepreneurs will tell you that happiness comes from maximizing your talents in areas that interest you. Anything below that threshold feels unsatisfying. Think of it like this: Would you prefer to be rich or happy? Choose wisely.
Most Americans fall somewhere in the middle when talking about their salaries. Unfortunately, that still leaves a sizable portion of the population stuck in low-wage jobs. According to recent statistics released by the National Low Income Housing Coalition, 1.5% of U.S. households spend 50 percent or more of their disposable income on housing costs. These include rent, utilities, property taxes, homeowner's fees, and mortgage payments. Other research shows that 30% of renters nationwide spend upwards of 35% of their pre-tax income towards shelter expenses.
Income is often referred to in multiples of $100k or 10x annual salaries. One common example might be that someone earned $1 million last year. If we add up all the zeros it comes to roughly $10m. This would mean that they made $900k (or around $90m). But what if you want to earn more than this? How do you get from there to earning $8m or even $9m per year?
Well, here's where things start to get tricky...
There are many different ways for someone to become wealthy. Some people may have inherited wealth, others will come into their inheritance at some point and still other people work hard day after day to build up enough assets to retire comfortably when they're 65 years old. The type of job you choose has an impact on your lifestyle and therefore determines how rich you'll end up being. For instance, becoming a doctor requires a certain amount of education but not everyone wants to go through 4+ years of school before starting their career. However, while doctors usually make good incomes, most won't ever reach millionaire status since they don't typically make enough to support themselves financially during retirement without drawing down upon their savings. On the flip side, software developers with high levels of expertise tend to enjoy higher earnings potentials due to the fact that the skills needed to create successful applications aren't easy to find within just any person. Therefore, if you decide to pursue a career path like these two examples then it will take time and effort to achieve financial success.
Once you've decided which profession you'd like to focus on, let's look at what kinds of jobs pay well and put together a list of careers that could potentially bring in millions in a year. These numbers aren't exact because they depend heavily on factors such as location, experience, industry trends, etc., so keep them in mind when making comparisons between various fields later on.
Here's one way you can determine whether you can expect to make more than $7m per year based on your current position and qualifications. First, divide the number by 52 weeks to arrive at an average weekly wage rate. Then multiply this value times 2580% (the minimum wage percentage) to see how much you should theoretically be able to earn annually. Here's what this calculation looks like using our hypothetical example above ($800/week x 0.2580 = $20,000 X 2580= $5.6m):
$5.6 / 52 weeks=$ 1125
$1.12/hour * 5 hours/day * 50 days/year = $5.607562
If you currently make less than this number, you probably shouldn't expect to increase your salary significantly anytime soon unless you plan on getting promoted quickly! Of course, none of us know exactly what to do next, so let's move onto another section of this article to discuss what types of jobs actually produce eight digit salaries every year.
The following professions are among those that provide opportunities for individuals who wish to earn $8m or more in a single year according to Glassdoor data. We looked specifically at industries that have been reported to generate over $3.2 billion in revenue per quarter, so if you're interested in pursuing one of these paths then read on!
1. Software developer
Software development companies have long attracted top talent looking for lucrative positions with plenty of opportunity to grow both professionally and financially. To illustrate, Google alone generated about $106B in revenue in 2016 and employs nearly 60,000 employees worldwide. As the company adds new products and services, its engineers need to develop features and functionality for existing ones. And although many of these roles require specific degrees or training programs, having an interest in programming or web design helps boost your chances of landing a job in these areas.
2. Financial planner
Another popular career choice for those seeking to maximize their income is working in finance -- especially investments, banking, insurance and securities. According to CNBC, the U.S. saw $1 trillion change hands in stock trades at the beginning of 2017 alone. Although there are no official requirements to join this field, anyone interested in helping clients manage their finances properly should consider going to college first and obtaining relevant certification afterwards. After graduating, you must learn everything possible about taxes, loans, investments, estate planning, pension plans, 401(K), IRAs, brokerage accounts, real estate investing, and credit cards, just to name a few financial topics. Having knowledge about all of this makes it easier to understand client needs and help guide them toward better decisions when it comes to managing their funds.
3. Real estate agent
Real estate agents play a critical role in assisting buyers and sellers navigate the housing market. They receive commissions from either party depending on the deal completed. In addition to negotiating contracts, conducting inspections, preparing reports, coordinating showings, answering questions, and organizing paperwork, agents also perform background checks, arrange financing, coordinate home improvements, and handle legal issues. An associate degree in business administration or communications provides basic training for aspiring brokers. It takes several months of intensive study beyond graduation to gain familiarity with the intricacies of local laws, mortgages, property tax assessments, title searches, and escrows, however. Realtors are expected to become licensed professionals, which means they have to complete continuing professional education courses throughout the year to stay updated with changes in the industry.
4. Insurance salesperson
Insurance representatives sell life, health, auto, homeowners, commercial, and umbrella policies to consumers. Salespeople are responsible for prospecting, qualifying clients, developing proposals, handling orders, tracking renewals, ensuring policy compliance, and servicing customers. Many entry-level candidates begin their careers selling cars, appliances, electronics, jewelry, toys, and similar merchandise door-to-door. A bachelor's degree in marketing, economics, or related discipline is required for most positions, though associateships and internships may allow you to obtain licensing sooner. You can advance your career prospects further by gaining additional certifications, attending seminars, joining organizations, and participating in contests.
5. Personal assistant
Personal assistants assist busy executives and entrepreneurs with administrative tasks including scheduling meetings, setting appointments, taking messages, running errands, and responding to emails. Duties include typing documents, filing papers, sending faxes, booking flights, paying bills online, updating databases, creating spreadsheets, finding information on websites, and researching names. Depending on the size of the employer, personal assistants may also serve as chauffeurs, housekeepers, nannies, security guards, interns, and receptionists. Bachelor's degrees in office management, customer service, hospitality, secretarial science, accounting, psychology, social work, nursing, or medical technology are typical prerequisites for employment, as are previous work experiences.
It's important to note that a personal assistant doesn't necessarily need a license to practice independently. Most states only require licenses for businesses that employ multiple workers, but employers sometimes prefer to hire individuals under contract instead of opening permanent offices. Companies use independent contractors for a variety of reasons, including increased flexibility regarding staffing, reduced liability risk, lower operating costs, and limited regulatory oversight.
Now that we've covered five occupations that offer the possibility of reaching $8m or more in annual wages, why stop there? Let's continue exploring options that could possibly lead to $9m or more per year.
Although the odds of achieving this goal are low, there are some careers that could potentially earn you upward of $7m per year. Unfortunately, the trick isn't simply doubling your salary across the board; rather, you'll have to hone particular skill sets in order to achieve greater results. That said, here are three unique positions that could lead to seven digits per year:
1. Event manager
Event managers organize large conferences, conventions, trade shows, fundraisers, parties, weddings, graduations, festivals, sporting events, concerts, and other gatherings. In general, event planners devote considerable time and energy to set up logistics, delegate responsibilities, supervise vendors, and ensure attendees' satisfaction. Events managers also collect registration fees, oversee sponsorships, prepare budgets, negotiate deals, recruit volunteers, secure permits, and monitor exhibitors.
To qualify for this occupation, you should possess strong organizational capabilities, attention to detail, communication skills, and patience. College graduates with backgrounds in project management, event production, hotel management, retail operations, catering, sports management, consulting, tourism, fundraising, public relations, media, journalism, graphic arts, advertising, and nonprofit sectors are particularly suited to succeed in this field.
2. Physician assistant
I'm sure that when you hear the phrase "8 Figures," you probably think about someone who makes $800,000 per year or more -- maybe even enough to buy their own island (or at least afford an amazing house on it). But what exactly does this actually mean and what kinds of careers are associated with earning these big bucks?
Well, first let's start by defining some key terms so we're all on the same page with our numbers. Here are some important things to know before making your next career decision...
A "year" means 360 days -- not 365 like most people think. So if you work 50 weeks per year, you'll be considered part time for tax purposes. If you only worked 40 hours during those 50 weeks, then your annual earnings would be limited to just under $50k ($24k + $26k = $50k). This also applies to freelance workers, contractors, etc., who typically don't receive benefits from employers but still want to take advantage of higher hourly rates. The IRS has strict guidelines regarding when employees should be classified as full time vs. part time, which includes determining the number of hours they've been paid over any sort of threshold period ("thresholds") of 52 weeks or less.
A "figure" refers to one hundred thousand dollars. Like above, this also relates to yearly earnings rather than monthly or weekly payments. For example, $10 million/year translates into $100K/month or $1M/week. It's helpful to remember that amounts made annually will always equal 100k regardless of frequency. In other words, $5 million in annual earnings equates to $50k per month, while $55 million equals $550k per week.
So now that we have that straightened out, let's get down to brass tacks! What kind of jobs earn 8 figures per year? How many years did it take to reach such high levels of wealth? And what about 9 figures? Read on to find out.
To become wealthy, you need two main ingredients: capital appreciation and compounding interest. Capital appreciation happens every day when stocks go up or real estate goes up in value. When stock prices increase, investors make profits off their investments because they sell shares at a higher price. With real estate, owners make gains when property values rise. Compound interest simply refers to multiplying your return multiple times. You'd be hard pressed to find anyone who earned six figures without either having large sums saved or investing them wisely through compound interest.
The average person saves 2% of their household budget. They invest this amount once a month, which means in 25 years, it could grow to hundreds of thousands of dollars based on current investment standards. As an investor, Warren Buffet invests billions of his personal fortune daily into quality companies he believes in. He puts aside 5% of his net worth each year for growth. His company Berkshire Hathaway pays him back handsomely for doing so because of its solid financial footing.
As a result, he consistently ranks among Forbes' wealthiest people in America and is often referred to as one of history's greatest philanthropists. To put it bluntly, there aren't too many ways to spend money better than giving away cash.
If you didn't save anything and invested nothing, however, you wouldn't see very impressive returns unless you had a lot more money to begin with.
According to CNBC, the top 1 percent of earners control 57 percent of U.S. corporate revenues. Now imagine being in the top 0.01 percent -- specifically, the highest group of earners known as billionaires. These types of salaries tend to vary widely depending on industry, location, longevity, skills, education and experience, but according to Bloomberg Wealth Manager David J. Tyszka estimates the average 2014 compensation was around $3 billion. That said, it's possible to make well north of $4 billion in annual income, though few ever achieve the elite billionaire status.
There isn't a definitive list of what constitutes an eight figure salary. However, some sources say it takes approximately five years working 60 hour months to hit seven figures. Achieving eight figures requires another three years of consistent effort. At nine figures, you must continue working 80 hours per month for four years. Ten figures require 120 hours per month for six years. By comparison, Bill Gates reportedly earns somewhere between $75-$90 million per year.
It seems impossible until you realize that people are willing to sacrifice huge chunks of their life to pursue success. Take Steve Jobs, founder of Apple Inc. One of the main reasons why he became rich is due to his relentless focus on perfection. He refused to settle unless everything was perfect, no matter what. Many others would consider it extreme, but it works for him.
Here's something else interesting. According to research conducted by the University of Pennsylvania Wharton School of Business, the richest Americans today are more likely to inherit their fortunes than create them themselves.
In 2013, Microsoft cofounder Paul Allen surpassed Jeff Bezos to become the third-richest man in the world. Allen currently holds a net worth estimated at $18.6 billion. This doesn't include his holdings in Vulcan Inc. and Cascade Investment LLC. He owns a controlling stake in both entities.
His biggest source of wealth comes from technology ventures including Amazon.com Inc., eBay Inc., Intuit Inc., Quicken Loans Inc., Ancestry.com Inc., Evernote Corp. and Planetary Resources Inc. Some experts estimate that he may owe up to 90 percent of his fortune to his early business partners Bill Gates and Sergey Brin [Source: CNN Money].
In addition to owning lots of successful tech businesses, he founded several non-profit organizations dedicated to improving health care, clean energy, space exploration and human rights. In 2013, Allen donated $87.5 million toward cancer treatment facilities across Seattle. He recently launched Breakthrough Energy Ventures, meant to bring together entrepreneurs and researchers tackling climate change issues.
He's married to Ann Dusenberry, vice president of global communications at Google, where she oversees public policy efforts. Together, they established Venrock, a venture fund focusing on solving complex social challenges.
With the right attitude, dedication and drive, it's entirely feasible to amass a sizable fortune. All you need is passion, persistence and luck.
Forbes defines a ten-figure earner as someone who brings home anywhere from $9.2 million to $91 million per annum. Not surprisingly, this type of income tends to come from extremely specific fields. Most notably, hedge funds generate roughly half of all 10-figure incomes globally. Hedge funds are basically private pools of capital used for speculative trading in various securities. Since 2008, the median size of hedge fund assets grew from $788 million to nearly $2 trillion.
Other industries that produce 10-figure salaries include medicine, law, consulting services, oil and gas extraction, finance, media and entertainment, publishing, agriculture, retail sales, manufacturing, transportation and logistics, construction and mining and utilities.
Of course, achieving true 10-figure riches depends largely on factors outside of your direct influence. Your chances of becoming a millionaire depend heavily upon birthright, inheritance and timing. Luck plays a role, but so does opportunity.
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