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6 Figure Earners And Personal Finance: What You Need To Know

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6 figure earners and personal finance – it is amazing to me how many guys I meet that work like I do in IT and have ZERO knowledge of personal finance.

About 1/3rd will complain of having no money but they are making more than their parents ever did. I know I am making probably 3 – 4 times more than my dad ever did.

Where does it all go?

Simple they don’t know how to save or invest money so it just flows out of their wallet as fast as it comes in – or even worse much faster.

Who knew an $80k car would have such high payments, taxes, and insurance costs?

I do, which is why I drive a paid-off $18k car because I don’t view cars as investments.

As a 6 figure earner you shouldn’t be in debt and if you are in debt let’s get you out of it, starting today.

This post may contain affiliate links which means that I may receive compensation at no extra cost to you if you make a purchase from a link found on my site. Please review my privacy policy for further details.

These ideas are based on my personal experience and opinion and should not be considered professional financial investment advice. Furthermore, the ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

Confident looking man in nice clothes looking at the camera with a knowing expression holding a cell phone - 6 figure earners and personal finance - what you need to know is written on the screen

Why Personal Finance Is Important For 6 Figure Earners

When you hear the term “personal finance,” you may think it’s only relevant to people who are struggling to make ends meet. But if you’re earning a six-figure salary, personal finance is just as important for you. Here’s what you need to know about managing your personal finances.

Saving Money As A 6 Figure Earner

As a six-figure earner, it is important to be mindful of your spending and saving habits. While you may have a higher income than the average person, it is still important to live within your means and create a budget.

The first rule of saving money is to bank at least $1,000 in savings for an emergency. Most Americans and about a third of those making over 6 figures can’t pay an unexpected bill for $1,000 without going into debt.

So that is the first milestone. $1,000 in savings.

Then you will want to figure out what it actually costs you to live. Like if you lost your job tomorrow what would you need to actually spend money on to live for 6 months?

Now work on saving that much money as well.

Just know this doesn’t have to be done overnight. In fact, you can do a quick audit of your bills and see what you can cut out. If you want some very practice tips please see my article on how to save $3000 in 3 months.

Once you have your $1,000 emergency fund it is time to look at investing and debt payoff.

Debt Payoff and Budget

If you are stuck in thousands of dollars of debt like I used to be (80k in student loans, more than 10k in credit cards and two car payments, etc.). This can help you.

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Investing Money As A 6 Figure Earner

If you’re one of the 6 figure earners out there, you’re probably doing pretty well for yourself. But even if you’re making a good income, it’s important to invest your money wisely. Here are a few things to keep in mind when it comes to investing your money as a 6 figure earner.


Head shot of Robert Kiyosaki

It’s not now much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for.

— Robert Kiyosaki, Rich Dad Poor Dad

Save For Retirement

Just because you’re making a good income now doesn’t mean that you’ll always have that income. So make sure to put away some money each month into a retirement account. If invested properly then this money can grow over time to be many multiples of what you originally contributed. If you want to know what your options are for investing please read my article on How to invest on autopilot.

Take Some Risks With Your Investments

Many people will tell you to invest in bonds and that could be a strategy you may want to adopt but not if you have 15 years or more until retirement. Instead, you will want to put your money into stocks and into a well-diversified portfolio with a small number of fees.

Many of the mutual funds that your money is automatically deposited into have higher fees and lower returns than if you just invested in the S&P 500.

Know Your Retirement Number

The quick way to figure this out is to take 75% of your salary and multiply that by 25.

This will give you a rough estimate of the amount of money that you will need to retire.

Before we move on let me give you an example. Let’s say you are 35 years old and haven’t been contributing any money into a 401k program and you make $150,000 a year. You could live on less, but we want you to be comfortable.

70% of $150,000 is $105,000. This means that you will need roughly $105,000 a year to live on.

This also assumes that your major expenses will drop when you retire. Meaning you have paid off all car loans, your mortgage, etc. and you can live on less.

So in order to retire you will need to have $2,625,000 in the bank.

Yes, $2.6 million dollars.

To accumulate $2,625,000 from 35 years old to 67 you will need to invest $1,040.69 a month if you can average 10% annual returns on your investments with only 3% a year average inflation. You will invest $399,623 during that time but have $2,225,377 in interest.

If you can save a little over $1,000 a month or roughly $520 a paycheck into an investment account like a 401k then you will be able to hit $2.6 million dollars if you invest for 32 years.

You are putting in just under $400k and earning just over $2.2 million. There are a lot of assumptions in these numbers. For example, you would need to be invested in stocks and not bonds this entire time.

You would have to watch events like the next 2008 crash probably two to three times and do absolutely nothing but put in just over a $1000 a month. You can’t freak out and sell your stocks.

Also, it assumes a 3% annual inflation rate. During the 2010s inflation was low but then it spiked to roughly 11% in 2022 for a time. Again you would need to just hold your money and commit to the process for 32 years.

Jim from the office asking "Who wants free money? This guy" as he points two thumbs back at himself.

Invest As Much As You Can As Early As You Can

Compound interest can be your friend. I wish I had the means to save earlier in life but I didn’t stumble upon how money worked until my mid-30s and by then I was over $100k in debt.

Therefore, I had to dig myself out of debt before I could invest my money which cost me several years of compound interest. If you are in debt at least get any company matching you can as that is free money and then use the rest to pay off debt.

The reason to pay off debt after you get the free money from your company is simple. You will make roughly 10% on free money over time. Yes, you will pay a little more to credit card companies, but not as much as you think. Most 401k programs are set up to be pretax so even if you are investing 3% – 6% of your money in a retirement account that is not the same as 3% – 6% of your post-tax income.

Therefore, most people don’t miss this investment since some of that money would disappear in taxes (32% for me after Federal / State / Local taxes kick in).

Max out your 401k and IRA

If you make 6 figures as an employee try to contribute the maximum amount the US government allows per year. The company matching doesn’t impact this amount and is just free money over and above the maximum amount. If you have to use a percentage of your salary in your brokerage round-up to overfund it by a little. They will carry the balance to next year or cut you a check.

If you have any interest rate debt that is higher than 8% a year don’t max out your 401k and IRA plans. Pay off that debt first, trust me it will save / make you more money in the long run.

How to invest on autopilot

Where Is Your Money?

Most people don’t know what they are invested in when they start a new job and open up a 401k.

Do you know exactly what the fund or funds you are investing in even are?

How much are you spending on fees?

What if there was a way to invest in the biggest companies in the world easily and with fees less than 0.1%?

Click here to read how to invest on autopilot to learn more.

Debt Management As A 6 Figure Earner

As a 6 figure earner, you may be raking in a good salary. But what you may not know is that your debt management skills are just as important as your earning power.

Here are a few tips to help you get started on the path to financial freedom:

Get Organized

Make a list of all your debts, including the interest rate and minimum monthly payment for each one. This will help you create a budget and see where your money is going each month.

Create A Plan – Debt Avalanche

Once you know where your money is going, it’s time to create a plan to pay off your debts. Start by paying off the debt with the highest interest rate first. Then, work your way down the list until all of your debts are paid off. This method is called debt avalanche and WILL save you the most money.

However, if you need to see that you are actually getting ahead in your bills then you will want to do something a little different.

Snowballs stacked on a field

Debt Snowball

You will want to use the debt snowball method instead. It is psychologically easier as you make small wins quickly and that can help you to pay off debt and remain debt free – which is the real goal.

To do this list out all of your debts by their loan amount from smallest to largest.

Pay off the smallest one first and just pay the minimum amounts on the rest.

Once the first bill is paid in full you then tackle the next one. It is called a debt snowball because you keep applying the money you used on the now paid-off bills to tackle the next smallest bill.

For example, let’s say you had a $100 credit card bill, a $500 personal loan, and a $12,000 car loan.

Therefore you would take any extra money and the minimum payment and pay the $100 credit card bill until it was paid off. You would continue to pay the minimum amount owed on the personal loan and car loan.

Once the credit card bill was paid off then you would take all the money you were putting into the credit card and pay that to the personal loan (plus the personal loan’s minimum payment). You would do that until the personal loan was paid off. Then take all of that money and pay off the car loan.

Man on computer with sticky notes on wall behind him. Text on background: How to Make More Money One Simple Strategy

Strapped For Cash?

There is one simple strategy that I have used for the last 20 years in my profession to make more money.

It has allowed me to 20x my pay in that time.

I used it to double my salary during the 2008 recession.

I have used it to double my salary in the last 5 years.

What is this simple strategy? Click here to read how to make more money: 1 simple strategy.

Debt Avalanche Vs Debt Snowball – What Is Right For You?

This is sort of what you do for debt avalanche but you sort by the highest interest rate and pay that off first.

The issue in the above example would be if the car loan had the highest interest rate. You would pay off the car loan but by accident, the minimum payments on the other loans would have paid them off and it could be months before anything is paid off.

If you are disciplined do debt avalanche. If you need to be told you are doing a great job every now and then (or a lot) then do debt snowball.

Believe In Yourself

The most important step to getting out of debt is to keep the faith. Keep your eye on the goal and convince yourself that you can accomplish it.

How do you eat an elephant? One bite at a time and with a plan.

Pick either debt snowball or debt avalanche and get started.

Accept Help

Having financial troubles doesn’t mean you should stop trying to improve your situation. By being here you are already taking steps toward getting debt free and financially independent. Read my article on How to achieve financial freedom to see what your next steps are.

Text on a green cover "5 Things to do to live comfortably and stop living paycheck to paycheck" free PDF

Are you living your best life or are you stressed about paying the bills?

In this quick 2-page PDF, I cover 5 ways you can get your financial life back on track.

I used to live paycheck to paycheck and after years of paying off debt and maximizing my investments I am now able to save and invest more than 45% of my wife and I’s gross pay.

This allows me to live comfortably (not a crazy rich person) and sleep better at night. If you want this let me know where I can send it to you below.

Wow, you read a lot to get here. Can you do me a favor, please? Can you leave a comment if this was helpful to you or if I missed something? Alternatively, it would help me out a lot if you shared this content with those that might need to see it. Thanks, you are the best!

The Importance Of Personal Finance For 6 Figure Earners

In conclusion, it is evident that personal finance is crucial for 6 figure earners. Without proper management, it is easy to overspend and fall into debt. By creating a budget and sticking to it, 6 figure earners can ensure that they are able to save for their future and live a comfortable life.

Picture of Dwight Scull sitting in his gaming chair in his office surrounded by board games and Role Playing Books.
“Marriage is hard. Divorce is hard.
Choose your hard.
Obesity is hard. Being fit is hard.
Choose your hard.
Being in debt is hard.
Being financially disciplined is hard.
Choose your hard.
Communication is hard. Not communicating is hard.
Choose your hard.
Life will never be easy. It will always be hard.
But we can choose our hard. Pick wisely.”

About Dwight Scull

I have been married to my wonderful wife, Rebecca, who puts up with me since 1999. I am a proud father to my Gen Z, son, and daughter-in-law. Grandfather to my favorite granddaughter who was born in 2021.

I lost my mom, father-in-law, and 12 others in 2013 and was DEEPLY in debt. I started reading and watching all the financial info I could find.

I chipped away at my debt and went from a negative $105k net worth having one home paid off, no credit card debt, and saving/investing 45%+ of my gross salary.

I used these daily habits to lose 100 pounds and keep it off.

I believe that you can overcome any challenge you face if you just take small daily actions and be consistent with them. It is how you will be financially successful.

Join my free Facebook group to get a ton of free resources to help you get out of debt, learn how to invest your money and work toward having the option of retiring early.

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