What Makes a High Income Earner?

Who are the High-Income Earners?

The definition of this is somewhat arbitrary but I will come up with one. You may agree or disagree and there are hundreds of factors that contribute to how much income is “enough”.  The place you live, the number of children you have, the profession you enjoy, associated medical problems you may have and the expenses you feel are non-negotiable all contribute to your contentment with your income. For our purposes and the overall definition of this site, I will arbitrarily throw out the number of an adjusted gross annual income of $100,000. This puts you in the top 16% of Americans. To be in the top 10% of the world you merely need to make above the poverty limit in the US which is $11,700 per individual. So as you can see, the people in the U.S. are an extremely fortunate. 


How Much do we Make?

If you have come to this site chances are you could be considered a high-income earner. About 40% of the world has access to the Internet or around 3.5 billion connections and growing. If you are reading this, that includes you. The 56% of people in the United States that live on more than $50 dollars a day are considered “rich” by the world’s standards.

Income data lags by 1-2 years depending on the stats gathered, but the median household income in the US was $55775 in 2015. The top 1% income was $465,626 in 2014. The number of income tax returns in 2014 with AGI (adjusted gross income) over $1 million was 410,106. There were 148,606,578 tax returns filed in 2015 showing a total income of $9,771,035,412,000 (that’s trillions). Of those, the number of filers with incomes over $100,000 was 23,725,064. That puts you in the top 16% if your income was that high. The total income earned from everyone in this category is $5,708,181,972,000 (again trillions). That is 58% of the total income in the US.

2015 median United States income


What are Our Professions?

Remember we defined a high-income earner as someone earning over $100,000 a year. That is the top 15%. In this category, there are numerous fields and obviously, if you are at the top of your field in any business you have the potential to be a high-income earner. According to the most recent data(2012), the top income-earning professions meaning people who earn more than $100,000 include:

  • Managers
  • Chief Executives
  • Physicians
  • Lawyers
  • Sales Supervisors
  • Accountants
  • Software Developers
  • Finance Managers
  • IT professionals
  • Salespersons
  • Marketing and Ad Managers
  • Other Financial Specialists

If you are in one of these professions, I hope to direct a large part of material towards you.

Most of these titles are self-explanatory, but managers were defined as “the boss”. These are the people that run the small company, business or office. Finance Managers is a broad category, as is other Financial Specialists but it goes to show that there is some potential in high income when you are managing other peoples’ money.


How Much do we Pay in Taxes?

The answer is a lot! Just kidding. We do pay a big percentage of the federal taxes.

I just filled out my income tax forms. Who says you can’t get killed by a blank? 

The top 20% of income earners pay 87% of the total taxes in the United States. The top 1% pays about half the federal taxes. We live in a progressively taxed country. We have all been aware of this since we started paying taxes. As the income gap continues to widen the top income producers will continue to increase the percentage of federal taxes paid.

There isn’t much you can do about it unless you are prepared to sway the entire opinion of the country. In a representative democracy, it is pretty hard for 20% to sway to the other 80% to vote against their own pocketbooks. The best we can do is minimize the tax burden we pay. Of course, we can look at the amazing benefits and infrastructure we have in the country and look on the bright side. We will definitely be talking frequently about taxes and how to minimize the amount we pay.

Income Gap Growing

How Many Kids do we Have?

The number of children we have also contributes to the expenses we have. According to Money.com, the average cost to raise a child is $233,610 as of 2015. Of course, this can vary greatly. There is the economy of scale when you add more children but the bottom line is kids cost money. And this number is before the cost of college. This is only from age 0-17. As we know kids tend to linger around more today than they did a few decades ago. Here are some statistics about the trends in the size of U.S. families.

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    Family Size by Ethnicity

    children number per educated household

    Family Size by Ethnicity


    Take Home?

    So there are the numbers. This gives you an idea of where we are targeting our content with this website. By having an understanding of who we are trying to help I hope you will find information that is useful to you.

    What do you think of the defined income parameters? Should we narrow it? Feel free to comment and join the community so that we can help each other use our advantages and minimize our costs in raising awesome kids.

    Start tracking your expenses, deposits, and investments with Personal Capital. It’s a great way to keep track of all your accounts in one easy platform. I use it to track my investment returns and overall net worth. Just click the link to the right and start your account today. The best part is it’s all free. There is nothing else on the market today that is as powerful and easy to use. 

    Tom is a doctor and father of five with a passion for parenting and finance. When he isn't skateboarding, riding BMX, or jumping on the trampoline with his kids, he is reading and writing about personal finance. He helps high income parents educate and mentor their kids to become financially, emotionally, and intellectually self sufficient.

    6 Responses to “What Makes a High Income Earner?

    • I was nervous here, I am not a doctor and don’t make as much as a doctor. Luckily I do make over 6 figures, after maxing out retirement deferrals. Yay for me!

    • Glad I am not the only one who likes to poor over IRS publications just for fun! Nice compilation of different metrics.

      Thankfully, we are high earners which is allowing us to reach our retirement dreams faster. But I would just propose for sake of argument that a ‘high earner’ in some High Cost of Living Areas is a bit more challenged than other Lower Cost of Living Areas. In other words, $100k in NYC or SF does not mean the same saving capacity as $100k in a small rural town in the midwest. Would love to see that income dispersion chart by geography (hard to do).


      • That is a great point. A $100K isn’t the same everywhere. There is even a good deal of information that is different when a family makes $100k versus $500K a year.
        Statistics fascinate me because they get to the true core of where we stand in relation to each other. They are also a great way to eliminate bias and give people the facts.
        That would make for some interesting blog posts to differential the saving potential between a $100k earner in NYC vs Topeka, Kansas. Thanks for stopping by.

        Tom @ HIP

    • I think 100K is a good number. Being in the top 16% of anything means you’re one of the best. High income earners tend to congregate with other high income earners so someone who makes 100K probably doesn’t feel like they make too much. But compared to the average American, they definitely do! Great post.

      • Syed, thanks for reading.
        It’s hard to define what makes a high income earner and some people making more that 100k will definitely have different problems depending on family size and how the income is earned. That level does present some challenges and starts to make certain strategies more preferred over others for financial management. The goal of this site is to help those folks navigate those strategies.

        Tom @ HIP

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