How much money is 7 figures? A major milestone of financial freedom
Defining 7 figures. What do these phrases mean? Let’s find out!
- 7 figures
- A number that is greater than or equal to 1,000,000 and less than 10,000,000.
- A number in the millions, which has 7 digits, but less than 10 million.
- 7 figure salary
- An annual salary that is greater than or equal to 1,000,000 and less than 10,000,000.
- The colloquialism of 6 figures most often refers to 6 figure income. So when someone says I make 6 figures, they’re referring to their annual salary or income. It’s not as clear with 7 figures. It appears when people reference income, net worth, or portfolio value.
- 7 figures meaning
- When people use the phrase 7 figures, they’re most likely talking about money. A very high income, a lump sum of money, a networth, or a portfolio value.
Is making seven figures good?
Hell ya. If you’re fortunate enough to clear 7 figures of income in a year. You’re doing it! According to an estimate by DQYDJ, only 0.2% of people earn more than $1,000,000 per year in the United States. That’s rare air to breathe. Must be lonely at the top.
For the high achievers visiting this site, there’s a chance you’ll get there one day. Mostly likely from a windfall year. If you own equity in your company, which I hope you do! A transaction or sale can get you there. Or if you work for a public company, a large slug of RSUs vesting, can also push a high income into the seven figures.
Suppose you’re living a good life. One rooted in simple money habits, you may find that life isn’t that different with a seven-figure income year. Life gets squishy when you break the top 1% of individual income in the US. The marginal rate of utility when your income exceeds $361,000 is meager if you’re not spending a lot of money. If you’re spending $100,000 per year, what’s the difference if you make $361,000 or seven figures? Not much. You’ll just have a hell of a savings rate that year.
How many people make seven figures a year?
Not a lot. 357,464 workers, or 0.2% of all individual American workers.
How many millionaires are in America, aka how people have seven figures?
There are 11.6 million millionaires in America. According to research published by Statista.
That’s about 3.5% of the population of America. It might feel like every one of your neighbors is a millionaire, but they’re not. They’re just acting rich. The millionaires next door are probably practicing stealth wealth so they fly under the radar.
Financial freedom milestone: seven figure networth
A six-figure networth is a significant milestone. It signals a lot about your financial habits and your potential trajectory. You’ve gone from a negative net worth to a positive. Aka, you dug out of all that student loan debt. You then got the good money habits going and starting investing. Hopefully, you celebrated a bit when you got to six figures.
The next significant milestone is seven figures. Getting that second comma in your networth is special. Congratulations! You’re a millionaire! Pop the champagne. Call your exes and teachers that told you you wouldn’t amount to anything.
“$1,000,000”
7 figures
It’s ^^^^ so beautiful. I wonder if I can make that into an NFT. Hmm.
Life starts to change when you get to a seven figure networth. Those following the path of FIRE with good financial habits start to pick up steam. The math of compounded returns starts to become significant. A 10% return on a stock portfolio of $1,000,000 is $100,000. You’re seven figure portfolio just made you six figures. Okay, now things are getting interesting.
You’ll find plenty of blogs touting the 4% rule and how getting to a $1,000,000 portfolio means Lean FIRE is possible. Withdrawing and living on $40,000 per year is now in the realm of possibilities. Work is starting to look optional.
Should you double bird your boss and call it a day once you become a millionaire? No. Not so fast, buckaroo. You’re on the path, but you still have work to do. A seven figure portfolio and simple spending habits land you in financial security. If you got fired today, you could cover basic living expenses for the foreseeable future. According to a survey from Bank of America, about 26% of millennials define financial security as having 1 million dollars or more. So give yourself some credit! Relax. Take a break from zoom for a second and be grateful for all that you have.
More millennials would self-identify as financially secure if they had better awareness. The key is bringing awareness about their spending and other financial habits.
How much are you spending per category? What’s your monthly savings mount? Are you automatically investing? Are you investing in stocks? Are you investing in low-cost index funds? Have you reviewed the long-term returns of assets classes like stocks and bonds?
If you can answer these questions, that seven-figure portfolio looks a lot different. First, you’ll realize that you are financially secure. Second, you’ll recognize you’re still on the journey to financial freedom.
How much will you need to get to financial freedom? Somewhere in this range below, check out my financial freedom matrix. I created this table to model different scenarios—columns of monthly spending and rows of safe withdrawal rates. The intersection calculates your target net worth for financial freedom.
