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When I said this on social media I got roasted.

People lost their marbles. They reacted out of emotion because they didn’t study the point I’m making. “This is white privilege” said some crazies who make everything about skin color.

I’ve been bankrupt multiple times. I’ve had over a million dollars stolen from my digital wallet. I spent a good part of my banking career earning a minimum wage income with as little as $20 left after each paycheck.

Waiting for canned soup to go on discount so I could buy it as my daily lunch wasn’t fun. Wearing an oversized suit to work because I couldn’t afford a real one and having colleagues say, “Why don’t you get a suit that fits?” was embarrassing.

Catching a bus to have coffee with girls I wanted to date caused a lot of them to think I was a loser and ghost me. Living through poverty forced me to think differently and find another way to earn a living.

I want to unpack why a $100K a year salary is now peanuts.

It’ll drastically change how you think and work in the future.

What a life of poverty actually looks like

Critics will say they earn $100K and live just fine.

What’s scary is when you ask them to describe “fine.” They’ll pause. Their face will go red. They’ll stutter. Then they’ll say some or all of this:

I don’t go on holidays much. I only eat out on special occasions. I think about money all the time. My home needs repairs. I rent. I have to do side gigs. I work long hours. I need to work some weekends as well. If I get sick I mostly just keep working. I take no more than 2 weeks off a year. That’s when my mom comes to stay with me. I have less than $5000 in savings.

This isn’t a life that is fine. And it’s definitely not the good life.

It’s still a description of poverty – and that’s what a $100K salary buys you whether the masses want to admit it or not.

The psychological effect of income numbers

$100K sounds like a lot of money.

That’s because if our parents earned that we would all have had childhoods living like Richie Rich and being driven to school in a Benz. But your life is not your parents’ life. And their view of the world is likely outdated in a world of AI.

$100,000 is the point when you go from being a 5-figure earner to a 6-figure one. That one extra zero changes your brain. It puts you in a different class.

In one of my prior banking gigs, I used to make $100,000 a year. Sounds like a lot. But I had to pay ~30% in income tax. Then every time I went to a coffee shop or bought some clothes, I’d pay another 10% in goods/services tax (a.k.a. VAT tax). Suddenly $100,000 is smaller than you think.

At the start of 2020, I paid about $3.20 for a coffee. Yesterday I paid $8.75.

While working in banking on $100K, I rented an apartment. That took another huge chunk of my salary.

The accommodation was laughable. I had a sink the size of a small picture frame. The bedroom was so small it could only fit a small bed with no bedside table. Every year my $100K salary didn’t go up. But every year my apartment rent did which is common. By the time I paid for gasoline and food, I had almost no money left.

How the f*ck is this the good life?

A $100K salary is the equivalent of poverty in developed countries like Australia and the USA. Before you troll me, I’m not talking about undeveloped countries like the Philippines, since 99% of my readers live in high-cost developed economies.

We must rethink what a $100K salary means.

Managing finances has nothing to do with it

$100K after tax doesn’t leave much.

You can be freaking Warren Buffett at investing and it still won’t matter. A typical investor makes ~7% per year on their little index fund portfolio.

With the tiny amount of money you have left over to invest after your living costs (assuming you don’t indulge in anything and never eat out), you won’t be putting enough into the market to build any true wealth.

There’s a deeper point that is missed though…

Stressing over where every dollar goes isn’t modern freedom. It’s poverty. For most people, their financial situation has become a form of mental illness they can’t stop thinking about.

If you have to run budgets or stress out when the car needs a major repair (which could throw out your entire budget), that’s not even close to living the good life.

Let’s stop pretending.

If it’s not a management problem, it’s a systemic one. To see why, we have to look at the ‘invisible’ rules of the game.