In Why People Who Openly Declare They Are Rich Should Pay More For Everything, a friendly reader mentioned she did not believe a 26 year old making $250,000 a year was a big deal. I responded that telling everyone you make $250,000 as a 26 year old puts him in the top 1%.
Then she replied, “$250k is not in the top 1% even in 2011, according to CNN Money. I have seen numbers as high as $585k to qualify. I am unsure why his age has anything to do with him being in the top 1% or 5% at that?”
Instead of citing CNN Money, there’s an authoritative article highlighting how much the top income earners make by percentage right here on Financial Samurai. It takes time to work your way up to higher income amounts. If you are making $250,000 as a 50 year old while supporting four kids and a spouse in Manhattan, then $250,000 is no big deal. But to make the same amount at 26 is killing it!
Hopefully everybody agrees that everything is relative in finance. If everybody makes a million dollars a year, making a million dollars a year won’t be anything special anymore. $3 million is the new $1 million due to inflation.
Let me share a chart to highlight my point.
Ages 27 – 31: You are in the top 1% if you make roughly $170,000. You are in the top 0.1% if…