Earning $100,000 a year is no longer enough to feel ‘rich’ in the US

Madelyn Driver, a 30-year-old who earned over $100,000 last year working in the tech industry, said she dreams of a six-figure income.

“I remember thinking that winning $100,000 felt like an unimaginable milestone,” she told BI via email. “Now, my husband and I pass that number. We hardly feel rich, though.”

While they currently live in Pennsylvania, Driver and her husband work remotely, which allows them to expand their research at home across the US. However, Driver said they still faced significant affordability challenges.

“We’re finding that even in a country as vast as the US, housing options that match our desires for green spaces, a somewhat metropolitan atmosphere and cultural vibrancy are surprisingly out of the budget,” she said. In addition to high home prices, high mortgage rates have driven the cost of home ownership to record unaffordable levels.

Driver is among a group of Americans with six-figure incomes who are struggling to meet some of their financial goals. These people are sometimes called HENRYs or high earners, not yet rich. In recent years, as rising housing, food and childcare costs have weighed on people’s finances, a $100,000-a-year salary hasn’t gone as far as it once did. Americans say they need to earn $233,000 a year to feel financially secure and $483,000 to feel wealthy, according to a Bankrate survey conducted in June 2023.

For Driver, getting rich isn’t just about increasing income, it’s also about reducing expenses.

“If expenses, especially housing costs, were more reasonable, I would feel much more financially secure and wealthier,” she said.

To be sure, reaching a six-figure income may still be a long shot for many lower-income Americans. And across wage levels, wages have generally risen faster than inflation in recent months, which may help some HENRYs feel a little richer.

Business Insider asked Driver and two other HENRYs about their financial challenges and what changes to their income and expenses would be necessary for them to feel rich. BI has verified their earnings.

You may have to leave your country to feel rich

Christopher Stroup, a 33-year-old financial advisor based in Santa Monica, California, earned roughly $130,000 recently. year.

However, he said he is still paying his student debt and working toward his savings goals for a down payment on a house, starting a family, and retirement. That is why he feels far from rich.

“I wouldn’t consider myself rich yet because I haven’t achieved any of those goals,” he told BI via email. “Compared to the traditional arc of life, I feel behind financially.”

Stroup estimated that he would need an annual income of between $250,000 and $300,000 to feel that his finances were “fairly stable.” This would allow him to make significant progress toward his savings goals and have enough money to “enjoy life.” he said.

To feel “rich,” he figured he’d need an annual income of about $400,000 to $500,000 a year, more than triple his earnings in 2023. At that income level, he estimated that he would be able to meet his savings goals, enjoy life and have extra money.

If he can’t raise his income to the desired level, Stroup said there’s one more thing that can help him feel rich: moving to an area with lower housing costs. Business Insider has interviewed several Americans who have moved to different states in recent years in search of lower rents or mortgage payments.

“I rent a 450-square-foot alcove studio in Santa Monica for $1,650 a month,” Stroup said. “My sister, who lives in Cincinnati, rents a 1,600-square-foot house with three bedrooms, two and a half baths, and a full yard for $1,800.”

High incomes may come with “lifestyle inflation”

It’s not just high-income Americans who say they feel distanced from the wealthy.

Abid Salahi, a 25-year-old software engineer based in Vancouver, Canada, earned over $100,000 last year. However, his journey to six-figure income came with some downsides, he told BI via email.

For example, while going to college helped him become a software engineer, he eliminated a significant level of student debt. He said he has about $30,000 left and that his debt payments are an additional monthly expense he has to account for during the years-long repayment process.

Salahi said high incomes can also come with another challenge: “lifestyle inflation.” Commonly referred to as “lifestyle creep,” this refers to the practice of increasing one’s spending as one’s income increases and therefore does not greatly increase one’s savings level.

“Without proper management, increased spending can absorb additional income, leaving you with the same amount of savings as if you were earning a lower salary,” Salahi said.

Due to the high costs of housing and other living expenses in his area, Salahi estimated that he would need to earn about $200,000 to $300,000 to start feeling wealthy.

“I think feeling really rich means you don’t have to look at the prices when you go to a restaurant, grocery store or travel destination,” he said. “You also have a significant amount of savings and investments that can cover you in an emergency.”

Are you making over $100,000 a year? Are you willing to share your story and the impact this income has had on your life? If so, contact this reporter at jzinkula@businessinsider.com.

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