How massive income (like $1 million a year) sounds great in theory, until you learn what you need to do to get there.
Would you like to earn $1 million per year?
Like all of these hypothetical money questions, the answer we assume everyone will say is yes. I mean, more money is better, right?
Well, maybe. The important question here is, what do you have to do to earn that kind of money?
In 2020, there were 184,631 households with wages over $1 million. So that’s not no one.
And while you may not have the choice of earning $1 million a year, you may have the choice to decide whether to push for a change in work that earns you a lot more money. So this question may not be so hypothetical.
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What is a millionaire?
First, let me get something out of the way.
A millionaire is someone with a net worth of a million or more dollars. It has nothing to do with income. If you’re unemployed and someone hands you a million dollar check, then you’re a millionaire.
However, someone who makes $1 million per year is almost surely a millionaire, but that’s not what people talk about when they talk about millionaires.
Regardless, what I’m talking about is supremely high wages, well beyond anything one would need to live a comfortable life. With wages this high, you could afford basically anything a typical person could want, without even breaking a sweat.
What would you need to do to earn this kind of income?
I don’t have a comprehensive look on jobs via income, but this post from Financial Samurai seems to cover the basics.
Among the professions where income is claimed to be at over $1MM, we find:
- Investment banking managing director
- Private equity general partner
- Hedge fund portfolio manager
- Law partner
- Professional athlete
- Doctors (who own their practices)
Not much of this should be surprising. Doctors, lawyers, athletes, financial professionals, that all makes sense, doesn’t it? That’s certainly where the money is.
How much time would it take?
Now here’s the crux of the matter. What do you think all of these jobs have in common?
They’re mostly taken up by men? Sure, but that isn’t my point.
These jobs require massive, ungodly amounts of time.
These are no 40-hours-a-week jobs. These are sleep-at-the-office, see-your-kids-at-graduation kinds of jobs.
You had better really like this job, because you are going to have to sacrifice basically everything else to get it. (So if you want to make this money for a little while and then retire, you had better hope that there’s something left of your life when you get there.)
$60,000 or $120,000?
I’ve often made this point in the form of a question. You have two options:
1) Make $60,000 a year and work 40 hours a week
2) Make $120,000 a year and work 80 hours a week
Which would you choose?
Why this matters
This decision is important because it highlights the role of work and income in your life. How much of your life do you wish to devote to earning income? How much of your focus will it be?
Because, except in vanishingly limited circumstances, if you want massive amounts of money, you’re going to have to pay for it with your time.
I’m not saying that’s necessarily a bad thing. I’m just saying that you want to be intentional about it. Earning massively more income usually comes at a price. Are you willing to pay it?
I don’t think I’ve ever heard of a high-paid person saying “you know, I wish I’d spent more time making money”. Whereas it’s not uncommon to hear many a well-paid person lament that he spent all that time doing things that didn’t matter as much as being with his friends and family.
And how many people who spent their time with friends and family wish that they had spent less time there, and more earning money?
For me, I love earning money, but not at the cost of my mental health, and maintaining connections with my friends and loved ones, all of which would suffer if I worked 7 days a week doing some job for lots of money.
So would I want to earn $1 million per year? Absolutely not. I can build my wealth more sustainably than that, while still having a life, and I invite you to do the same.