Is $50,000 a lot of money? Yes, without a doubt. The median salary of the United States is $54,000. $50,000 in savings is a lot of money to have for anyone at any age because it buys someone’s labor for almost an entire year. That’s a lot of money.
Too many think the income and money it takes to be in the top 1% is $1,000,000, The media distorted our sense of wealth and somewhere along the way, we think billionaires are the norm when it comes to wealth and being rich. I got to a $500k net worth, one dollar a time.
That’s not true. Having just $50,000 is a lot of money because some 40% of Americans can’t cover a $400 emergency expense. Imagine how many more Americans can’t cover a $50k emergency expense. Almost 99% of Americans.
Is $50,000 a lot of money? Yes because that’s when the fun begins to build wealth with. It’s when the magic of compound interest comes into play and the interest earned from the money matters. I currently earn 4%+ on my savings account.
$50k would mean an extra $2k/year that goes towards my living expenses. My living expenses equal to about $20k/year. That means 10% of my living expenses are covered without me lifting a finger. That’s a significant amount of money.
Many people work their entire lives to come up with $50k and still come up short.
Is $50,000 a Lot of Money? 6 Reasons Why
Is $50,000 a lot of money? Below are the 6 reasons why it absolutely is. Those who say $50k isn’t a lot of money isn’t in reality!
1) It is Higher than the Median Salary of the U.S.
The median salary is $54k. That means, you have the ability to pick 50% of working employees and buy their time from them for almost an entire year. That’s not an insignificant amount of money. When I graduated college, I made $52.5k per year.
It took me almost an entire year to make $50k! It took me 21 years before I started having a $52.5k/yr income. Therefore, not only would the $50k have bought my labor for a year, it would’ve bought me 21 years of learning valuable information that would’ve made my employer more money.
Is $50,000 a lot of money? Yes, and the ones who deny that it is are not living in reality. Too many think they need millions to be wealthy and rich. That’s not the case. The developed world is living in a distorted sense of reality because we are living in a top 1% of the world place.
However, when we compare it and break it down to the rest of the world, it’s a lot of money. Some wouldn’t even be able to conceive of the amount. The ones who think $50k isn’t a lot of money are hemorrhaging money, hand over fist.
2) Is $50,000 a Lot of Money? It’s a Down Payment on a House
In 2020, my friend bought a house for $250k at a 3% mortgage rate. That house value skyrocketed to $350k in just 3 short years. A 60% return in just 3 years is a great return. Is $50,000 a lot of money? Yes, considering it’s a down payment on a wealth generating asset such as a house.
Not only that, a home provides security and a place to sleep. Ever since I missed the real estate boom of 2020 – 2022, I’ve been trying my hardest to get in the game. However, I’m unsuccessful because homes in my city of Austin, TX are so expensive.
There’s a reason why homeowners have a median net worth of 40x the net worth of renters. Homeownership builds great wealth. So when the $50k is enough to buy an asset that helps them skyrocket their net worth, it’s obvious to see why it’s a lot of money.
Home down payments are not easy to come by. Many take 7 years to come up with the down payment.
3) It Pays for College Tuition
A state school costs around $10k per year. Education can be one of the best returns on investment you can ever make. I spent close to $40k in tuition alone over four years. Then I landed a $52.5k job after graduation. That’s a 100%+ return in just four years!
After another six months, my pay increased to ~$88k. Is $50,000 a lot of money? Yes, when it can pay for the entire four years of a college education. I generally think college isn’t as important as people say it is. I think it’s more important to learn how to earn money outside of a job and a college education.
However, that doesn’t mean the value of a college education is zero. Colleges made many millionaires and will continue to make many millionaires down the road. There’s no need to attend a fancy and expensive private school.
I out-earn many peers who attended private school and spent only a fraction of their cost on education. There’s more than one path out there.
4) $50,000 is Multiples of Someone’s Yearly Expenses
Even though we had record high inflation in 2022 – 2023, I still live very cheaply and frugally. I spend approximately $20 – $25k per year. That’s just the necessities in life such as food, insurance, rent, and gas. The bear market of 2022 influenced me to cut back to my bare bones budget.
Therefore, $50,000 could pay for two years plus of expenses. That’s not even considering the risk free returns I earn through my bank that could stretch that time out even further. In two years, I’m confident I can earn more than $50k as well.
Is $50,000 a lot of money? Yes, considering that it can pay for multiple years of someone’s expenses. In 2023, I paid rent of $800/mo, all-in, because I had a roommate. In that instance, $50k could’ve paid for five years of rent expenses. That’s not an insignificant amount of time.
Even though life is becoming more expensive by the year, that doesn’t take anything away from the value of $50,000.
5) $50,000 is Higher than the Median Bank Account Balance
The Federal Reserve reports the median checking account balance is $5,300. $50,000 is more than 9 times the median checking account balance. That’s a huge multiple. Is $50,000 a lot of money? Yes, because it’s in many multiples of more than 50% of Americans.
When I had $50k in my bank account, I felt like I “made” it. All of my efforts were compounding and going towards building wealth and my bank account. Whether I want to admit it or not, I saw having more money as “winning” in the game of life.
Therefore, I’m always trying to increase my bank account by increasing income and spending less money. Every single year. Some years I fail and some years I succeed. However, what matters to me is that I’m in an overall upward trajectory.
Having $50k in the bank account just feels great. The fruits of your labor are actually showing. Not to mention the 10 benefits of saving money.
6) Is $50,000 a Lot of Money? Yes, it Grows into Millions
$50k invested at an 8% yearly return rate over 40 years equals over one million dollars. That’s a lot of money. Is $50,000 a lot of money? Yes, especially because it can grow into a million dollar+ portfolio over 40 years. Over a long enough time frame, it can grow to even millions, plural.
Too many see $50,000 and think they have to spend that money. That couldn’t be further from the truth. $50k should be used to create more $50k’s so that you only spend the interest on the $50k. But never the principal. Although the first years don’t feel like much, the later years feel significant.
In 2021, I was increasing my net worth at a pace of $100k every six months. That was because of the magic and power of compound interest. I was shocked that my net worth could accelerate at that fast of a pace. It starts slowly and then all of a sudden.
That’s the beauty and magic of compound interest. It’s more magical than people ever give credit for.
My Journey to $50,000
When I graduated college, all I wanted was more money. All I wanted was to be rich and wealthy. Therefore, I saved as much money as I could and minimized every expense I could ever possibly minimize. Unfortunately, I admit that I even lived cheaply, not frugally.
My rent was $640/month. And that even included water! It was a studio apartment that I knew I was only going to be in for six months. Afterwards, I moved out of Birmingham, AL and moved to Houston, TX where I kept rent comparably cheaply as well at $750/month.
When you increase your income from $52.5k to $88k but only increase your expenses by 15%, saving becomes that much easier. It took me three years of saving to have $50k in my after-tax bank account. Three grueling years of saving 50%+ of my paycheck.
Is $50,000 a lot of money? Yes, considering how long it takes to have that money in the first place. Although it was a very painful experience for me, I’m glad I went through with it. Now, my net worth sits at above $500k and my quality of life improved every single year.
It only takes me six months to save an additional $50k because I increased my income and bought all that I needed to buy for my life. Is $50,000 a lot of money? Yes because years do not go by fast when you save that much money every single year.
It’s more of a grueling process than people realize. Getting rich and wealthy is not as easy as people think.
Is $50,000 a Lot of Money? It Always Will Be
It doesn’t matter whether we’re in 2023 or 2050. Is $50,000 a lot of money? Will always be a resounding yes. Yes, the purchasing power will decline but $50,000 in 2050 will still be a lot of money and will buy a lot of stuff. No one gets something for nothing, and especially not money.
There will always be someone who expects a lot of things in exchange for $50,000. Goods and services are not going to get so expensive that you will have to dish out $50k to purchase them. After being in the wealth building game for seven+ years, I confirm that earning money is hard.
It doesn’t matter whether it’s earning money through a job or investments, earning money requires either luck, skill, brain power, or an insane amount of effort. It is true in 2023 and it will be true in 2050 as well. I can only imagine just how much harder it will be to earn a dollar in 2050.
Employees will be competing against artificial intelligence and technology that may do the job better than employees ever could on their own. Is $50,000 a lot of money? Yes and it will be worth more as time passes because the effort that’s required to earn that money will grow over time.
Other people have their own families to feed as well. There’s no one who can easily just hand out $50k without feeling the pain, even the billionaires. $50k is, and always will be a lot of money and the ones who tell you otherwise do not know what they are talking about.
The ones who don’t have $50k in the first place think $50k is not a lot of money.
Is $50,000 a Lot of Money? 6 Reasons Why Shortlist
- It is higher than the median salary of the U.S.
- Is $50,000 a lot of money? It’s a down payment on a house
- It pays for college tuition
- $50,000 is multiples of someone’s yearly expenses
- $50,000 is higher than the median bank account balance
- Is $50,000 a lot of money? Yes, it grows into millions