Many people are asking is $200,000 a year good salary? The answer is a resounding yes, without a doubt. The biggest reason is because that is when your salary makes the most impact to your life. You are so far above the average at that salary.
When I first crossed the $100,000 figure, I thought I had it made. Only 18% of individual workers made six figures or more in 2022. And that’s from ALL individual workers. I was barely in my 20s at the time! Therefore, my emotions were running high.
And it’s not like I was living in a high cost of living city such as New York or LA. I was living in a mid cost of living city like Houston, TX. It felt like I was on top of the world! However, after earning $100k+ salary for a good 4 years, I realized just how little of a salary it is.
The real money and the real money compounding started at the $200,000 salary mark. So when people ask “is $200,000 a year good?” the answer is a resounding yes. After going through that salary, I can absolutely confirm that it can’t be beaten.
That is when I felt like I had enough money leftover after my 401k contributions to live life the way that I wanted. While still paying for the necessities in life at the same time. 18% of individual workers made $100k or more. Even far less workers made $200k or more.
Life is just much less stressful at $200k income.
Why $200,000 a Year is Good
So below are the concrete reasons why the answer to the question is $200,000 a year good? is a resounding yes.
1) You Are Well Ahead of the Average
Doing financially well has nothing to do with absolute terms. It has everything to do with relative terms. Is $200,000 a year good? Yes. Because you are so far financially ahead, relatively speaking. When everyone around you is making $100k and you are making $200k, you are so far ahead, it’s not even funny.
The median salary in the United States was $56k in 2022. At $200k per year, you are so far ahead than 50% of the United States that puts you over the top. Depending on your age, it may actually be top 1% income. As soon as I started making $200k/year is when I started to have a margin of error in my life.
That’s when building wealth became that much easier for me. When all my friends were making $130k and I was pulling in $200k is when I felt like I was making my way into the world. How rich you are is measured on a relative basis and not on an absolute basis.
2) Life is Easier
In 2022, I lost close to $125k in investments. I didn’t mind it at all because I got paid $135k in after-tax dollars. Which means even though I lost money, I still ended up making money. That couldn’t have happened if I was only getting paid $140k, like I was before.
Is $200,000 a year good? Yes, when you realize that life is just that much easier on that salary. Whether I want to admit it or not, I was struggling at $140k salary. And I was a single person! I can only imagine just how much harder it is to raise a family at that income.
No matter where you live. I still feel like I had to penny pinch every single paycheck and it hurt me every single paycheck because I knew I had to penny pinch. After 401k contributions, HSA, and Roth IRA contributions, it really wasn’t a lot of after-tax money.
At $200k, I can contribute to those amounts and still have excess money leftover.
3) Is $200,000 a Year Good? Yes, You Can Live Almost Anywhere
There are people who say $200k isn’t enough money to raise a family on in New York or LA. That is insane! There are plenty of people raising families in those cities while making much less. Is $200,000 a year good? Yes, when you consider that you can live almost anywhere in the world.
I live in the city of Austin, TX and $200k would allow me to live anywhere in the city. Would I want to pay $5k/month to have the privilege of living anywhere? No. But the fact that I can gives me a sense of happiness. I have my pick of the litter.
It doesn’t feel good when you feel like you are backed into a corner to live in only one part of town. Or in one particular city. For the rest of your life. When I first started out with a salary of $52.5k, I didn’t have that many choices to live anywhere. It didn’t feel so good.
Although I made do, I would’ve been much happier if I hadn’t had to do something like that.
4) You Have More Disposable Income
Is $200,000 a year good? Yes when you consider that your disposable income is actually disposable. When I was making $140k/year, I didn’t really have disposable income. Much of that money was tied up in retirement accounts such as the 401k and the like.
The disposable income can’t be discounted because that’s what makes you feel like you have wealth. My retirement accounts total $250k for now. I can’t imagine how I would feel if I actually had $200k in the bank account instead of my 401k.
Now that I have more disposable income, I feel like I have more wealth and breathing room to actually take risks outside of my brokerage accounts. My bank account actually increases every paycheck, whereas before, my bank account did not.
The increase in disposable income is what matters.
5) New Companies Can’t Bully You
When you make $80,000, what’re you going to do when the company offers you $100,000, all else equal? You take it. Even if their budget was $150k. Is $200,000 a year good? Yes, when you consider that you can say no to more jobs than ever before.
I got reached out by 11 recruiters in 2022. I turned down every single one of them because well, who cares? I’m getting paid $200k and their salary couldn’t even come close to what I was getting paid. You will feel great when new companies can’t bully you anymore.
When you have the power to confidently walk away without caring if you’re ever going to talk to them ever again for the rest of your life. New companies can’t bully you when you are already getting paid so well. What’re they going to do? Not hire you? They can’t afford you anyway.
When you get to a point where you can turn down so many jobs is when you’re going to feel happy.
6) Is $200,000 a Year Good? Yes, It Gives You More Options
When I was getting paid $140,000, I didn’t feel like I had many options. I was forced to work there. One of my friends was getting paid $115k. While that’s a respectable salary, he kept hustling and trying to get better jobs. He landed one that paid $300k.
After getting paid such an amount, he has many more options than ever before. If he wants to switch companies, he will, but he won’t move to another company that won’t pay as well. Or isn’t as good. You have many more options and choices when it comes to being paid that much.
Is $200,000 a year good? Yes, you have more choices than when you were getting paid $80k, $100k, or even $150k. You can be much more pickier and the company better be worth it for you to even consider interviewing. Your time is worth way more than what the company is willing to pay.
Having more optionality is a good thing, not a bad thing.
7) You Don’t Need to Penny Pinch
Even though I didn’t like it, I still felt like I needed to penny pinch when I was making $140k. A lot of that money was tied up in my 401k anyway so I didn’t have access to any leftover money after paying my bills. And I was living very cheaply! I was paying something close to $2.5k a month in bills.
Which isn’t that much money to begin with. Is $200,000 a year good? Yes when you consider that there’s no need to penny pinch anymore. Now, I go about my day without really thinking about my budget that much.
I used to be consistently obsessed with my budget, watching dollars and pennies I spend.
That’s just not a healthy way to live. It just doesn’t feel good when you have to calculate whether what you’re spending money on fits your monthly budget. It really does not feel good. After six years of doing so, I’m glad I’m not doing anything like that anymore.
Penny pinching can be good but only for a certain number of years. After a while, it gets old really quickly.
8) Increasing Income is Easier
When you make $200k, you can ask for $300k and not care if you get rejected. When I was making $100k, I was afraid to even ask for $180k because I still would’ve accepted something like $150k salary. Is $200,000 a year good? Yes because increasing your income is that much easier.
You’re not even going to consider jobs that pay $210k because is that extra $10k really going to do good for your life? It’s inconsequential. In 2022, I got offered 2 job offers at a $150k comp level. Handily and easily turned down both job offers and I turned down many more interviews at that comp level.
This is how the rich get richer. When you already have power, other people have to submit to you. This is how the rich get richer and the poor get poorer. The poor, generally do not have any power. The rich has immense power. They’re easily going to increase income.
Unless a job I’m looking at pays $250k and above, I’m not interested in any of the jobs. And I can confidently and easily reject any of those jobs that don’t meet those target levels.
9) It’s Easier to Max Retirement Accounts
This was my biggest problem when I was making ~$100k. After contributing to retirement accounts, I really didn’t have a lot of money leftover. After contributing $20.5k to the 401k and after $3.5k to the HSA, what’s leftover? Pretty much nothing.
Is $200,000 a year good? Yes, considering that you can max out your retirement accounts much more easily than ever before. These days, I have plenty of money leftover after maxing out my retirement accounts with a $200k/year salary.
When you make $100k/year with a family, it’s almost like living paycheck to paycheck after you contribute to your retirement accounts. And whether we like it or not, contributing to retirement accounts is a necessary expense.
We’re on our own during retirement. We can’t rely on the government to provide Social Security checks to us because it’s just not a guarantee.
Is $200,000 a Year Good?
By now, you should be convinced that the answer to “Is $200,000 a year good?” is a resounding yes. Without a debate. You can easily raise that income to higher levels as time passes on. Less companies can bully you with lowball offers.
You can just walk away and do your thing. Believe me when I say that $200k income is the most life changing income to hit. Now, I don’t care about making more money. I just want to do good work and have it all work out by the end.
If I have the ability to move up and raise my income, I’ll take it. However, I have no need to actively seek out those opportunities anymore. I have the ability to be more nimble and move around if I want to. This is a feeling I never got to feel when I was making $140k/year.
Is $200,000 a year good? Yes. That is when your life is going to change for the better as opposed to when you were making $100k. You are so far ahead of many others that it’s hard to not have a good life when you’re making that much income.
That is when your life is going to skyrocket and where the wealth building really accelerates quickly for you. Many people say controlling your spending is the way to riches. No. The real wealth is built by raising your income, not by cutting your spending.
It really makes a difference.
Is $200,000 a Year Good? 9 Shortlist Reasons Why
- You are well ahead of the average
- Life is easier
- Is $200,000 a year good? Yes, you can live almost anywhere
- You have more disposable income
- New companies can’t bully you
- Is $200,000 a year good? Yes, it gives you more options
- You don’t need to penny pinch
- Increasing income is easier
- It’s easier to max retirement accounts
