Six-Figure Salary to Build Wealth – Week In Review

Six-Figure Salary to Build Wealth

Six-Figure Salary to Build Wealth. A six-figure salary is a goal for many people. There is a certain cache about it. Turn back the clock to before WWII, and six-figure salaries made you very rich. The median income in 1940 was $956 for men and roughly $593 for women. The median income for all households in 2019 was $68,703. Married couples had a median income of $102,308. Single men had a median income of $48,496, and single women had a median income of $34,612. Your peak earning years are from ages 45 to 54, when the median salary is $92,211. The bottom line is that a six-figure salary is still quite a bit of money even today and can help you build wealth.

Which Jobs Earn Six-Figure Salaries?

A six-figure salary is good to have. A single person will be earning over 2X the median in 2019. You will also equal the median salary of a married couple. But what kind of professions earn six-figure salaries. More than you think. 

The US Bureau of Labor Statistics compiles many lists, and one is the mean and median salaries by occupation. The table has data on over 1,300 careers. 

The list below is sorted by median salary and includes only jobs with a median salary of six figures. The ones that say $208,000 means at least that dollar value. The usual suspects on the list are doctors, lawyers, dentists, scientists, engineers, IT, managers, and others. Almost all these jobs require a college degree, and in many cases, the jobs require an advanced degree.

Job	Mean Salary	Median Salary
Oral and Maxillofacial Surgeons	$    234,990	$        208,000
Orthodontists	$    237,990	$        208,000
Prosthodontists	$    214,870	$        208,000
Anesthesiologists	$    271,440	$        208,000
General Internal Medicine Physicians	$    210,960	$        208,000
Obstetricians and Gynecologists	$    239,120	$        208,000
Psychiatrists	$    217,100	$        208,000
Physicians, All Other; and Ophthalmologists, Except Pediatric	$    218,850	$        208,000
Surgeons, Except Ophthalmologists	$    251,650	$        208,000
Family Medicine Physicians	$    214,370	$        207,380
Chief Executives	$    197,840	$        185,950
Nurse Anesthetists	$    189,190	$        183,580
Dentists, All Other Specialists	$    194,930	$        183,300
Pediatricians, General	$    184,570	$        177,130
Dentists	$    186,300	$        164,010
Airline Pilots, Copilots, and Flight Engineers	$    186,870	$        160,970
Dentists, General	$    180,830	$        158,940
Computer and Information Systems Managers	$    161,730	$        151,150
Architectural and Engineering Managers	$    158,100	$        149,530
Marketing Managers	$    154,470	$        142,170
Judges, Magistrate Judges, and Magistrates	$    131,850	$        141,080
Natural Sciences Managers	$    154,930	$        137,940
Petroleum Engineers	$    154,330	$        137,330
Marketing and Sales Managers	$    150,400	$        136,350
Podiatrists	$    151,110	$        134,300
Financial Managers	$    151,510	$        134,180
Advertising, Marketing, Promotions, Public Relations, and Sales Managers	$    148,740	$        134,120
Advertising and Promotions Managers	$    147,560	$        133,460
Sales Managers	$    147,580	$        132,290
Aircraft Pilots and Flight Engineers	$    163,480	$        130,440
Air Traffic Controllers	$    127,440	$        130,420
Physicists	$    137,700	$        129,850
Astronomers and Physicists	$    136,480	$        128,950
Pharmacists	$    125,460	$        128,710
Lawyers	$    148,910	$        126,930
Computer and Information Research Scientists	$    130,890	$        126,830
Purchasing Managers	$    132,660	$        125,940
Political Scientists	$    124,100	$        125,350
Compensation and Benefits Managers	$    137,160	$        125,130
Operations Specialties Managers	$    138,590	$        125,040
Lawyers and Judicial Law Clerks	$    147,050	$        125,040
Lawyers, Judges, and Related Workers	$    144,970	$        124,360
Human Resources Managers	$    134,580	$        121,220
Astronomers	$    126,250	$        119,730
Computer Hardware Engineers	$    126,140	$        119,560
Aerospace Engineers	$    121,110	$        118,610
Public Relations and Fundraising Managers	$    135,580	$        118,430
Optometrists	$    125,440	$        118,050
Computer Network Architects	$    119,230	$        116,780
Law Teachers, Postsecondary	$    134,760	$        116,430
Personal Service Managers, All Other; Entertainment and Recreation Managers, Except Gambling; and Managers, All Other	$    123,980	$        116,350
Nuclear Engineers	$    125,130	$        116,140
Training and Development Managers	$    125,920	$        115,640
Physician Assistants	$    116,080	$        115,390
Judges, Magistrates, and Other Judicial Workers	$    116,390	$        115,150
Nurse Practitioners	$    114,510	$        111,680
Nurse Midwives	$    115,540	$        111,130
Actuaries	$    123,180	$        111,030
Mathematicians	$    112,530	$        110,860
Software Developers and Software Quality Assurance Analysts and Testers	$    114,270	$        110,140
Management Occupations	$    126,480	$        109,760
Sales Engineers	$    117,270	$        108,830
Industrial Production Managers	$    118,190	$        108,790
Chemical Engineers	$    114,820	$        108,540
Economists	$    120,880	$        108,350
Electronics Engineers, Except Computer	$    112,320	$        107,540
Economics Teachers, Postsecondary	$    123,720	$        107,260
Miscellaneous Physical Scientists	$    110,100	$        107,210
Physical Scientists, All Other	$    110,100	$        107,210
Makeup Artists, Theatrical and Performance	$      99,990	$        106,920
Top Executives	$    129,920	$        106,180
Psychologists, All Other	$    100,130	$        105,780
Software and Web Developers, Programmers, and Testers	$    109,950	$        105,310
Medical and Health Services Managers	$    118,800	$        104,280
Nuclear Power Reactor Operators	$    104,470	$        104,040
General and Operations Managers	$    125,740	$        103,650
Engineering Teachers, Postsecondary	$    114,130	$        103,600
Information Security Analysts	$    107,580	$        103,590
Electrical and Electronics Engineers	$    108,510	$        103,390
Miscellaneous Engineers	$    107,060	$        103,380
Engineers, All Other	$    107,060	$        103,380
Engineering and Architecture Teachers, Postsecondary	$    112,110	$        101,990
Electrical Engineers	$    105,990	$        100,830

States with Six-Figure Salaries

There are more households with six-figure incomes in specific states. States with a mean household income over $100,000 in 2021 are Alaska, Hawaii, California, Washington, Oregon, Illinois, Minnesota, Virginia, Maryland, New Jersey, Connecticut, Massachusetts, New Hampshire, Washington DC, and New York. There are no states with a median income over $100,000 or an average individual income of $100,000.

You can earn a six-figure salary in almost any state, though. However, the flipside is that there are more six-figure salary jobs in states in those locations based on the averages for household income. However, building wealth is probably easier in some states than others despite salary differences due to the expense side and taxes.

For instance, the average household income in Texas is ~$98,362, and it is ~$111,633 in California. I picked these two states due to the many well-publicized Bay area companies relocating to Texas. But after federal and state taxes (Texas has none), FICA, and Medicare, the annual take-home pay is ~$80,384 in Texas and $80,590 in California, according to the ADP calculator. We do not make any assumptions about exemptions and deductions which differ in each state. So you come out a tiny bit ahead in California, assuming your family earns the mean household income. On the other hand, suppose you take the same six-figure salary and move from California to Texas, you come out way ahead. 

Additionally, this simplified calculation did not account for the higher cost of living and housing in California than in Texas. Thus, in this comparison, it is probably easier to build wealth in Texas than in California.

However, low cost of living often comes with lower household incomes and, in many cases, higher poverty rates. The three states with the lowest cost of living are Mississippi, Arkansas, and Oklahoma, but the average household incomes are $65,648, $77,637, and $84,974, respectively. For perspective, the average household income in Massachusetts is ~$127,461. Comparing Mississippi with Massachusetts, net pay is ~$51,713 to $94,101, assuming you earn the average household income. This substantial difference makes up for the higher cost of living and house prices and should let you build wealth.

Final Thoughts on a Six-Figure Salary is Nice to Have

It is easier to build wealth with a six-figure salary regardless of where you live. However, the expense side matters as well. The cost of living is higher on the west coast and northeast, and taxes are higher, too, in many cases. For this reason, building wealth can be more challenging, but as many bloggers have written about, it can be done. Some tactics for building wealth include negotiating a raise, changing jobs, paying down debt quickly, saving more, and generating passive income from a side hustle.

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Today I highlight the Dividend Aristocrats with negative year-to-date returns. Currently, there are 11 Dividend Aristocrats with negative returns. The worst performing stock is VFC at (-18.8%). VFC is major player in branded clothing. Many stocks that did exceptionally well in 2020 are struggling in 2021 as COVID-19 tailwinds subside. Not all these stocks are deals, but the valuation is lower than in many months. I suggest taking a look at Clorox (CLX), McCormick & Co (MKC), Brown-Forman (BF-B), and Hormel Foods (HRL). The screenshot below is from Stock Rover*.

Chart or Table of the Week

Dividend Increases and Reinstatements

I have created a searchable list of dividend increases and reinstatements. I update this list weekly. In addition, you can search for your stocks by company name, ticker, and date.

Dividend Cuts and Suspensions List

I updated my dividend cuts and suspensions list at the end of September 2021. The number of companies on the list has risen to 531. We are well over 10% of companies that pay dividends, having cut or suspended them since the start of the COVID-19 pandemic.

There was one new company added to the list this past month. The company was Capstead Mortgage (CMO).

Market Indices

Dow Jones Industrial Averages (DJIA): 34,746 (+1.22%)

NASDAQ: 14,579 (+0.09%)

S&P 500: 4,391 (+0.79%)

Market Valuation

The S&P 500 is trading at a price-to-earnings ratio of 34.3X, and the Schiller P/E Ratio is at about 37.9X. These two metrics were down the past three weeks

. Note that the long-term means of these two ratios are 15.9X and 16.8X, respectively. 

I continue to believe that the market is overvalued at this point. I view anything over 30X as overvalued based on historical data. The S&P 500’s valuation came down as companies in the Index reported solid earnings lapping a Q2 2020 that had depressed earnings.

S&P 500 PE Ratio History

Shiller PE Ratio History

Stock Market Volatility – CBOE VIX

The CBOE VIX measuring volatility was down 2.5 points this past week to 18.77. The long-term average is approximately 19 to 20. The CBOE VIX measures the stock market’s expectation of volatility based on S&P 500 index options. It is commonly referred to as the fear index.

Fear & Greed Index

I also track the Fear & Greed Index. The Index is now in Fear at a value of 34. The Index is up seven points this past week. This Index is a tool to track market sentiment. There are seven indicators in the Index that are measured on a scale of 0 to 100. The Index is calculated by taking the equally-weighted average of each indicator.

These seven indicators in the Index are Put and Call Options, Junk Bond Demand, Market Momentum, Market Volatility, Stock Price Strength, Stock Price Breadth, and Safe Haven Demand.

Junk Bond Demand indicates Extreme Greed.

Market Volatility is set at Neutral.

Safe Haven Demand is in Fear.

Stock Price Breadth indicates Fear.

Market Momentum indicates Extreme Fear.

Put and Call Options are signaling Extreme Fear. 

Stock Price Strength is signaling Extreme Fear.

Economic News

The Commerce Department reported factory orders were up 1.2% in August to $515.7B and follows an upwardly revised 0.7% for July. The report marks four consecutive months of factory order increases. Factory orders are up 18.0% year-over-year. Orders for durable goods reported up 1.8% to $263.6B and followed a 0.5% increase in July. Most of the rise in durable goods was driven by transportation which was up 5.4% to $80.7B. Orders for nondurable goods advanced 0.6% percent to $252.1B.

The US Energy Information Administration reported that US commercial crude oil stockpiles increased by 2.3M barrels to 420.9M barrels for the week ending October 1st. Gasoline inventories increased by 3.3M barrels, while distillate inventories fell by 0.4M barrels. Refineries operated at 89.6% of their operable capacity, as gasoline production decreased an average of 9.4M barrels per day.

The US Bureau of Labor Statistics reported a weaker than expected 194,000 jobs were added in September and followed an upwardly revised August jobs figure of 366,000 from 235,000. Impacting the headline number was a 123,000 decline in government payrolls, while private payrolls increased by 317,000. The unemployment rate dropped to a post-pandemic low of 4.8%, down 0.4% from August. Leisure and hospitality added 74,000 jobs, followed by business services (+60,000), retail (+56,000), and transportation and warehousing (+47,000). Local government education dropped 144,000 jobs.

Thanks for reading Six-Figure Salary Is Nice to Have – Week in Review!

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