A recent Pew Research Center study found that the average millennial household is earning $69,000 annually - an average that surpasses what older generations typically earned at the same age.1 That means that for the “average millennial,” working towards a six-figure salary is not an entirely unattainable goal. Whether you’re nearly there or still on your way, there are things you can do this year to help make up the difference between your current household income and the six-figure mark.
Overcoming the Wealth Gap
Black families throughout history have faced an uphill battle to generate and maintain wealth - from centuries of slavery to Jim Crow Era discriminatory laws, a history of oppression is reflected in the racial wealth gap today.
Research has consistently shown a stark display of racial disparities between white and Black families when it comes to building wealth. For example, the net worth of an average white family is around 10 times greater than that of a Black family.2 And while a white family may see a median decline of 26.1 percent of wealth during an economic downturn (such as what we saw in 2020), a Black family sees a decline of about 44.3 percent.2
As a Black millennial, now’s the time when (statistically speaking) the wealth gap is the smallest. Young adults rarely have had the time and ability to maintain or accumulate wealth. If you’re looking to close the wealth gap and improve your future financial standings, it’s time to start talking strategies. With time on your side, your earnings over the coming years may have the ability to grow significantly between now and retirement.
Tips For Reaching a Six-Figure Income
#1: Diversify Your Income
Becoming a six-figure earner may not be achieved by salary alone. In fact, having multiple sources of income can help you make more money faster. There’s a wide range of other sources you can use to earn extra income, including starting a side hustle, real estate and rental income, investments, book royalties and freelancing. Whether you want passive income or you’re willing to put in some extra work outside of your 9 to 5, there’s no limit on creative ways to earn extra income throughout the year.
#2: Switch Employers
Changing jobs is becoming increasingly common, especially as fewer employers offer pensions and other long-term incentives. Switching employers could help you find a position you find more enjoyable, but seeking higher pay is also a common reason to change jobs.
When leaving one employer for another, you may even find it easier to negotiate a higher salary - as opposed to asking your current employer for a raise.
#3: Salary Negotiation
When an employer extends a job offer, it’s an indication that they are excited to have you and believe you will be a positive addition to their team. This can put you in a favorable position to negotiate your future salary and benefits. Before presenting a counteroffer, make sure you take some time to prepare.
Your next steps should include:
- Sharpening your skills: Earn relevant certifications that will enhance the value you bring to the workplace.
- Having a range in mind: Decide how much income you will be willing to accept, and don’t discount the opportunity for future raises.
- Researching the job market standards: Be ready to back up your range with trusted, factual information.
- Practicing expressing your value: Be ready to authentically explain your qualities, values, skills and experience with your potential employer.
You may not be able to negotiate a six-figure salary right away, but think of it as a starting point for future promotions and raises.
#4: Start a Business
If you're already an entrepreneur, this may be the route for you to take to that six-figure income. Especially during times of economic uncertainty, it’s not uncommon for millennials to take a hobby or side hustle and make it into a full-time business. And by leveraging the internet and social media, you may be able to keep your initial costs low. With dedication, the hope is always that being your own boss will help solidify your future as a six-figure earner.
Earning six figures is somewhat of a status symbol, but for BIPOC families, it can mean so much more than that. As you work to close the racial wealth gap and become a six-figure earner, you will begin to have more opportunities to provide yourself and your family with the lifestyle you’ve always envisioned.
This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.