The term “5 figures” is often used when discussing salaries, income, savings, or expenses.
It refers to a number that has five digits, ranging from 10,000 to 99,999. Understanding what the 5 figures mean in terms of money is important for financial planning, budgeting, and setting goals.
In this blog, we will explore how much is considered 5 figures, discuss the different levels of 5 figures, and provide insights on living, investing, and building wealth on a 5-figure salary.
How Much is 5 Figures?
“5 figures” means any number between $10,000 and $99,999. It refers to amounts with five digits, like $12,345 or $90,000. When someone mentions a “5-figure salary,” they’re talking about earning within this range annually.
So, there’s a big difference between someone making $10,000 and someone making $90,000 each year.
How Much is Low 5 Figures?
“Low 5 figures” typically refers to an amount at the lower end of the range, specifically between $10,000 and $50,000. It suggests a yearly income or a figure within that range.
For example, a salary of $25,000 would be considered low 5 figures.
How Much is Mid 5 Figures?
“Mid 5 figures” generally indicates an amount falling in the middle of the range, specifically between $50,000 and $75,000. It suggests a figure closer to the middle of the five-digit range, often referring to yearly income.
For instance, a salary of $60,000 would be considered a mid 5 figures income.
How Much is High 5 Figures?
“High 5 figures” typically refers to an amount at the upper end of the range, specifically between $75,000 and $99,999. It denotes a figure nearing the top of the five-digit range, often associated with yearly income.
For example, a salary of $90,000 would be considered a high 5 figures income.
How Much is 5 Figures a Year?
If you make 5 figures in a year, it means you earn between $10,000 and $99,999 annually.
For instance, if you earn $5,000 every month, that totals to $60,000 per year, which falls into the 5-figure income range.
How Much is 5 Figures a Month?
Making five figures a month means you’re earning between $10,000 and $99,999 every month.
For example, if you bring in $25,000 each month from your job, a side business, or commissions, your monthly income hits the five-figure mark.
How Much is 5 Figures a Week?
Earning a five-figure income weekly means you make between $10,000 and $99,999 in just one week. Achieving a five-figure income weekly adds up to millions annually, which is a significant achievement.
How Much Is 5 Figures a Day?
Making five figures a day means you’re earning between $10,000 and $99,999 each day.
If you’re earning a high five-figure amount daily, you’re among the rare few who have the potential to make an eight-figure annual income.
Is a 5 Figure Salary a Good Salary?
If you make a five figure salary, it means you’re earning an okay amount of money, which is considered the average income in the United States.
How good it feels depends on if you’re earning on the lower or higher side. A low five-figure income is around $10,000 to $40,000, while a high one is from $70,000 to $99,000. Anything between is sort of in the middle of the average salary range.
Whether it’s good or not for you depends on personal stuff like:
Where you Live
If you stay in a big city like New York or San Francisco, everything is more expensive compared to places like Arkansas or Georgia.
So, if you earn a 5 figure salary, it won’t stretch as far in those cities. Your housing costs also depend on where you live and the kind of home you have.
For instance, if you own your home, you’ll have property taxes to pay. And if you live far from the city, you’ll need to budget for gas or public transportation.
If you Have Debt
Having a bunch of debt can really mess up your money situation, especially if you’re trying to get by on a 5 figure income. If you’re dealing with high-interest rates, it’s easy to get stuck in a loop of debt that can seriously hurt your finances.
Getting rid of debt is super important because it means you have more money to spend on stuff like saving for retirement or doing things you like.
If you’re dealing with a lot of debt, especially from credit cards, it’s smart to have a plan to pay it off fast so you can achieve financial freedom and get rid of it for good.
However, it’s important to be aware of lifestyle creep and avoid overspending on unnecessary items or expenses, as it can seriously impact your bottom line and hinder your ability to save money and reach your financial goals.
Your Spending Habits
One big thing that decides if a 5 figure salary is okay is how you spend your money.
If you’re always spending a lot, it might feel like you never have enough cash. Spending more than you make and not budgeting well can make it seem like money just vanishes.
To figure out if your 5 figure income is enough, look closely at how you spend. Even if you earn more within the 5 figure range, it’s smart to stick to a good budget. Cook meals at home more often and try not to splurge on unnecessary things.
Factors to Consider When Evaluating a Five-Figure Salary
Location
Where you live plays a big role in whether a 5-figure salary is enough. Depending on your location, it could be enough for a comfortable life or not cover basic needs. Costs vary a lot between cities and states.
In major cities like San Francisco, where living expenses are on the higher end, a 5-figure salary might not be enough money for a comfortable lifestyle, but in smaller areas like Harlingen, TX, it could be plenty.
When deciding if a 5-figure salary is good, it’s crucial to consider living expenses and other factors like inflation to see if it fits your needs.
Size Of The Company
When thinking about salaries, many people consider the size of the company they’re applying to.
Bigger companies might seem like they pay more, but it’s not always true. Small businesses can also offer good salaries and benefits.
So, don’t just judge by the company’s size. Focus on the job and how well you fit it. With the right skills and experience, you could get a five-figure salary anywhere, big or small.
Industry Sector
When you’re looking at a job offer, it’s smart to think about the industry and how much they typically pay.
Getting a job with a 5-figure salary might seem good, but it’s not a guarantee of success. You need to know about the industry you’re getting into and what chances you have.
What seems like a good salary in one industry might not be in another. It’s good to look up salaries in the same field and think about your skills to see if the salary is fair.
Even after you figure out what’s fair, there are other things to think about, like if you’ll enjoy the job, if there’s room to grow, and if there are chances to move up.
In the end, you have to decide what’s best for your career.
Professional Experience
When you’re thinking about taking a job with a 5-figure salary, think about your work experience.
If you just graduated from college or don’t have much experience yet, a 5-figure salary could be a good chance to kick-start your career.
But if you’ve been working for more than five years, you should check if the salary matches your skills and experience.
Also, look at the job benefits and if there’s a chance to move up in your career. Considering all these things will help you decide if the 5-figure salary is right for you.
Job Position
Different companies might value certain positions differently, so sometimes a higher salary doesn’t mean the job is better.
For instance, a job with more responsibilities might pay more, but it could also mean more stress and longer hours.
On the flip side, a lower-paying job might have fewer responsibilities, giving you more flexibility with your time. It’s important to think about what matters to you and weigh the pros and cons of each job before you choose.
How Much Tax do you Pay on a 5 Figure Salary?
How much tax you owe on a five-figure salary depends on your exact earnings and any deductions you can claim.
For instance, married couples have more deductions than single people, and you can deduct student loan interest payments. Tax brackets change each year, so it’s wise to check the IRS website. Generally, lower salaries mean lower taxes.
In 2024, for single filers, Forbes Advisor says the tax rate for income between $11,600 and $47,150 is 12%. Remember, U.S. federal income tax works in brackets, so higher earnings get taxed more.
Filing taxes might seem complex, but it’s usually straightforward, especially if your situation isn’t too complicated.
How to Invest on a 5 Figure Salary?
If you have a five figure salary and want to invest, here are some simple steps you can take:
Invest in an IRA
You can open a retirement account on your own, even if your job doesn’t offer one. It’s tax-deferred, so you only pay taxes when you take out money during retirement. This helps you save more initially, letting your investments grow faster without being taxed upfront.
Invest in ETFs with a Robo Advisor
Investing in exchange-traded funds (ETFs) is simple and smart. An ETF follows an index or group of stocks, so you spread your money out without having to pick each stock yourself. They often have low fees, saving you money compared to hiring a fund manager. You can use apps like Acorns or Betterment to invest in ETFs easily and even set up automatic investing.
Max out your 401(k) Investment (or Other Employer Retirement Plan)
If your job gives you a 401(k), it’s a good deal to invest as much as you can in it. Some companies also match what you put in, so you get even more money in your retirement fund. Just like with an IRA, a 401(k) has tax benefits, which means you keep more of your money for yourself instead of paying it in taxes. The best way to maximize your retirement savings is to max out your 401(k) investment or any other employer retirement plan available to you. This will help you save and invest more money for your future financial independence.
Can I Get Wealthy on a Five Figure Salary?
While it may seem challenging to become wealthy with a five-figure salary, it’s entirely possible with smart money management.
By creating a budget, cutting unnecessary expenses, and automating savings, you can take control of your finances and work towards financial security. Remember, even on a modest income, building wealth is achievable with discipline and planning.
So, yes, you can definitely work towards wealth with a five-figure salary if you’re committed to saving and investing wisely.
What are Some Deductions I can Claim on a Five Figure Income?
Here are a few common deductions for people earning in the five figures:
- Standard deduction: This deduction is available to all taxpayers. In 2023, for single filers, it’s $12,550. For example, if you earn $30,000, you can subtract $12,550 from your income, leaving you with $17,450 as taxable income.
- Retirement contributions: If you put money into a retirement account like a 401(k) or IRA, you can subtract that amount from your taxable income.
- Student loan interest: If you’re repaying student loans and paid interest, you can deduct up to $2,500 from your taxable income.
- Charitable donations: If you donate to a qualified charity, you can subtract the donated amount from your taxable income.
How much you pay in taxes depends on factors like your filing status and income level. To ensure you claim all eligible deductions, it’s best to consult with a qualified tax professional.
Jobs That Earn Five Figures
There are several job opportunities that offer a five figure salary. While earning a five figure income is a significant accomplishment, it is important to note that salaries may vary based on factors such as experience, education, location, and industry.
Some examples of jobs that can earn a five figure salary include:
Proofreading
If you work as a proofreader, you can earn a decent salary ranging from $48,228 to $62,752 per year. To succeed in this job, you need to be really good at grammar and spelling. Being able to edit and fix documents accurately and fast is important too.
Bookkeeping
If you work as a bookkeeper, you can make a good amount of money every year, ranging from $40,209 to $51,397. Bookkeepers handle tasks like recording transactions and making sure financial records are accurate. This job can bring in a solid five-figure salary for many people.
Virtual Assistant
Working as a virtual assistant (VA) is a good way to make a consistent income, with salaries ranging from $34,317 to $50,626 per year. VAs help clients with tasks like answering emails, organizing schedules, and managing digital files.
Do you want the freedom to be your own boss and work on your terms? Depending on your skills and experience, you could earn a solid five-figure salary or even more as your own boss in this role.
Facebook Ads Manager
If you want to earn a good amount of money (almost six figures!) while working from home, think about becoming a Facebook Ads Manager. With over two billion people using Facebook, businesses need help managing their ads to reach customers.
As a Facebook Ads Manager, you’ll assist businesses in creating and handling their advertising campaigns on Facebook, helping them make money. You can learn the basics through online courses and tutorials available.
Freelance Writing
If you write freelance, you can earn a good amount, reaching a five-figure salary annually. Writers create content for various platforms like blogs, magazines, and social media.
You pick topics you enjoy writing about, such as money, food, or games. Freelance writing is popular for extra income in the gig economy. With guidance, you can start your own writing business and earn a solid five-figure income. It’s great for those who want a fun side job or to run their own business.
Electrician
Becoming an electrician can help you earn a good income. Electricians are in high demand due to aging population and advancing technology. If you have electrical skills, finding work is usually easy.
You don’t need a bachelor’s degree to become an electrician; training or job experience is enough to earn well. A bachelor’s degree may not be essential for a successful career in this field. Many electricians earn good money with technical training or work experience.
Chef
If you love cooking and want to earn a good living—maybe even five figures or more—doing what you enjoy, becoming a chef could be ideal for you. Cooking can turn from a hobby into a job where you earn a high income, and you can make a five-figure salary in just a few years of being a chef.
There are lots of chances for chefs to find well-paying jobs in restaurants, or you could think about being a private chef, caterer, or even a social media chef to earn even more money.
Jobs That Pay Six Figures & Up
Blogging
We’ve experienced firsthand that blogging can bring in money, even up to six figures a year, by writing about stuff we love!
But the yearly salary range we found doesn’t always tell the whole story. Some bloggers make well over six figures, even more than $150,000 a year.
Starting a blog is easy and affordable. You can get a domain name and host your blog on platforms like Bluehost for just $2.95 per month. With some effort to write articles and create content, you could make a lot more than that in income, maybe even a hundred times more.
YouTube Content Creators
The salary range varies yearly, not exactly six figures. YouTubers can earn significantly more, even millions.
Some YouTubers made $100,000 in a year. Only a few celebs make six figures, so don’t worry.
There are many other ways to earn money. Anyone can use YouTube with just a camera and some ideas.
Influencers
Becoming famous on social media during the pandemic can earn you a lot of money.
Many influencers make over $100,000 yearly, even those with fewer followers.
Some influencers with 10,000 to 50,000 followers can earn over $100,000 annually.
They achieve this by sharing engaging content and working with brands for promotions.
Doctors
Becoming a doctor is a fantastic way to earn a lot of money, reaching a six-figure salary. Doctors not only make good money, but they also feel great about helping others. They have the chance to really change people’s lives and usually have a secure job.
If being a doctor isn’t your thing, being a nurse is another option. Nurses give patients both physical care and emotional support, which could be just what you’re looking for!
Investment Bankers
An investment banker is someone who works in finance and helps companies and governments raise money by selling securities.
They often work long hours, but they also get to work with important people. They can earn more money through commissions, profit sharing, and bonuses if they do well with their investments.
So, reaching that $207,000 a year might not be too tough if you can navigate the market well.
FAQ’s:
How Much do you Pay in Taxes on 5 Figures?
When it comes to taxes, not everyone pays the same rate. If you earn a five-figure salary, how much tax you owe depends on how much you make in a year and what deductions you have.
Tax rates change every year, so it’s important to talk to a tax expert or use the IRS website to figure out how much you owe. In 2024, for example, single people who make over $100,525 (or $201,050 for married couples filing together) might pay a 24% tax rate.
Is Five Figures a Good Enough Salary to Live On?
Most folks would agree that a low five-figure salary isn’t enough to live on. Starting at just $10,000 per year, it’s tough for many to manage with that amount.
Yet, some people earn a bit more in the five-figure range and can live comfortably. It really boils down to how much it costs to take care of yourself—like food, clothes, and other necessities.
The cost of living isn’t the same everywhere. In some places, you can make do with a low five-figure income, but in others, you need a higher one to cover your expenses.
Can I Live on Five Figures if I Have Debt?
Living on a five-figure salary while having debts to pay can be tough, but it’s possible. If you owe money, it might be hard to cover all your expenses.
However, with careful planning, it’s possible to manage your finances and get rid of debt even on a five-figure salary.
How Can I Pay off my Debts?
Here are some ideas to help you handle your money and pay off debts, whether big or small, with a five-figure salary:
- Create a budget and stick to it.
- Try to spend less by changing your habits and cutting costs where you can.
- Consider taking on extra jobs or starting a side business to bring in more money.
- Sell stuff you don’t need or rent out extra space in your home on Neighbor or Airbnb.
- Talk to your creditors about lowering your interest rates or monthly payments.
How Do I Go From Five Figures to Six Figures?
If you want to move from earning in the five figures to earning in the six figures, you’ll need to make some changes to reach $100,000 or more. You can begin by exploring well-paying jobs that are needed.
Here are a couple of apps where you can find high-paying jobs:
- Steady
- Fiverr
- FlexJobs
- Upwork
How do I Start a Business when I’m Low on Funds?
Starting a business when you don’t have much money can be tough, but it’s possible with some creativity and effort.
Here are some tips:
- Have a clear idea of what you want your business to be and check if there’s a demand for it. We have lots of cool business ideas you can explore!
- Begin small and keep costs down. You can think about online businesses to save money. There are many low-cost options.
- Connect with other business owners for advice. It’s okay to admit you’re starting from scratch and ask for help from those who’ve succeeded.
- Use online resources like websites, forums, and blogs for free or cheap information and services.
- Stay positive and don’t give up! Starting a business takes hard work, but it can be rewarding in the end.
Can I Create Passive Income?
Yes, there are plenty of ways to make passive income while earning a five-figure salary. The trick is to earn money without having to work for it actively.
For instance, you could invest in real estate, stocks, or other types of investments. Another option is starting a business where you have regular customers. Alternatively, you could rent out property or equipment that you don’t need anymore.
Conclusion
In conclusion, understanding the concept of five figures is essential for financial planning and evaluating job opportunities.
Whether it’s a low, mid, or high five-figure salary, factors such as location, industry sector, and professional experience play a significant role in determining its value.
Additionally, knowing how to manage and invest your income can help you build wealth, even on a five-figure salary.
However, it’s important to consider your personal circumstances, such as debt and spending habits, when evaluating whether a five-figure salary is sufficient for your needs.
With careful planning and smart financial choices, you can make the most out of your income and work towards achieving financial stability and security.