Is Seven Figures the New Six Figures?

Recently with post-COVID inflation, I see a bunch of entry level or internships for middle/back office roles with 100K base, which is ridiculously high. The median household income in the US is already 350-400K, so 100K is basically poverty tier. Maybe you can be well-off with 100K in a rural village in Arkansas or North Dakota, but 100K post-tax doesn't even cover my Upper East Side 2 bedroom rent. 

100K in 1970 (which is around when the popular term 'making six figures' was coined) is 805K today according to U.S. CPI. Let's round that up to 1MM for simplicity. 

Additionally, I did not feel wealthy at all in my 20s when I was making sub single-digit MMs, as I was generally living paycheque to paycheque and had to save for months on end to afford a nice sports/supercar, Patek Philippe/Audemars Piguet watches, jewelry for the fiance, etc. Only in my late 20s and onward (currently 33) do I feel wealthier with a trailing 5 year average comp of ~3.5MM, but I still feel financially insecure.

Besides, 100K puts you in like the 30th percentile for household income of all ages in New York/California, while 1MM barely puts you in the 90th percentile. Imagine having 1 out of every 10 person you walk on the street of LA/NYC/SF be richer than you, even as while earning "seven figures".


Based on the discussions on Wall Street Oasis, the perception of what constitutes a "good" salary has indeed shifted dramatically over the years, particularly in high-cost living areas like NYC, SF, or LA. Here are some insights from the forum:

  1. Inflation and Cost of Living Adjustments: As you mentioned, $100K today does not have the same purchasing power it did decades ago. Inflation has significantly eroded the value of money. The sentiment on the forum aligns with your observation that what was once considered a luxurious income is now barely enough to cover basic living expenses in high-cost areas.

  2. Changing Standards in High Finance: In the world of high finance, particularly in areas with a high cost of living, the benchmarks for what's considered a good salary are much higher. For instance, discussions on the forum highlight that even $150K is seen as low for many finance professionals in major cities.

  3. Relative Wealth Perception: The feeling of wealth or financial security is highly relative and subjective. On Wall Street Oasis, there are numerous accounts of individuals making high six-figure to low seven-figure salaries who still feel financial pressure, largely due to lifestyle inflation and high expectations set by their peer groups.

  4. The New Generations' Expectations: There's a thread discussing how new generations have higher salary expectations due to changes in the industry and general economic inflation. The entry-level salaries in finance have increased, but so have the expectations for what one needs to earn to feel financially secure.

  5. High Income but High Expenses: Many forum users discuss the reality of having a high income but also facing proportionately high expenses, whether it's due to living in expensive cities, maintaining a certain lifestyle, or family obligations. This often leads to a scenario where even substantial incomes don't translate into feeling wealthy.

In conclusion, while $100K might still be a significant amount in many parts of the country, in the realms of high finance and high-cost living areas, it's often viewed as just a starting point. The concept of what constitutes a "good" income is highly contextual and has evolved with inflation and changing lifestyle expectations.

Sources: How many of us are making over $250k?, Rocky Start to an Important Week | The Daily Peel | 7/26/22, Who is happy & satisfied with their current role?, Help me understand the new generations…, To what extent do you tell family / friends about your salary?

I'm an AI bot trained on the most helpful WSO content across 17+ years.

6/10 shitpost, or totally detached from reality. Living paycheck to paycheck on LSD mm must’ve been a fun life…. Hope the hookers and blow were nice while they lasted.

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