I sat down to write this article, and honestly was super excited by the prompt. Here’s the thing. I wrote an article a few years back on how to make 100K a year. It was a lot of fun. And I think I had some good insights there.
But the thing is, the way that I broke 100k was with a job. I got hired to be a senior policy analyst, and it paid $100,000 + change.
It’s actually relatively easy to make $100,000 at a company (I know, it doesn’t sound like it if you’re not making that). But when you start to look at 200,000? That’s a very different ball game. Only 10% of Americans make 200k or more.
But I also spent time last year interviewing 37 people who doubled their income. Some of them made 200,000. Many of them made more.
So in this article, I want to tell you how to make 200k a year. This is going to be a road map to take you beyond the salary, and start to think differently about wealth. Here we go.
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1. Shoot for executive
I’ll start by talking about how to make 200k in a job. As in, working for an employer.
Obviously, there are far fewer jobs that pay 200k than 100k. So if you want to make this kind of money on a paycheck, you will probably have to take the executive track – unless you have some very in-demand skills, which we’ll talk about next.
Make a plan to move as quickly as you can into positions of leadership, that require you to make decisions.
You will also certainly need to oversee people at some point, so work on your people management skills. You can take courses on things like budgeting, project management, and communication skills, that will help move you toward being a serious contender for top jobs.
Ultimately, for the vast majority of companies in the U.S., you will only crack 200k at the executive level, with a few exceptions we’ll talk about below.
2. Learn a high-income skill
I think that we are living in a super interesting time in human history. The fascinating thing is, college is still a part of our society. And college can be a great ticket to a lower-middle-class life.
Can be. It’s no guarantee.
The bizarre thing is that thanks to technological change, there are serious shortages of some super valuable skills. Skills you can learn yourself.
If you learn to do things like AWS Cloud architecture or UX research, you can often move pretty quickly towards a 200k salary mark.
As I write this, there is a lot of uncertainty about the future of tech. Salaries may dip. But shortages in certain Fields aren’t going to change anytime soon.
People are excited about AI writing this week, so they are going to need to be people who are experts in AI.
Teach yourself this stuff.
3. Find performance incentives
There are some careers that have huge financial upsides based on performance. For example, big consulting firms like McKinsey and Bain often pay a ridiculous amount to their senior people. These can come with generous year-end bonuses. This was often the case on Wall Street too.
But you don’t need to be a powerful consultant or Wall Street trader to have a career with a performance upside. For example, sales is a career path that, if you are working on commission, has almost uncapped earning potential. If you can get really good at your job, you can make bank.
Another example is law. Lawyers can bill at a very high hourly rate. So often there are hefty performance bonuses, and high salaries as you move up.
4. Start a business
When I interviewed the 37 people who doubled their income, the majority of people who went beyond 200k had started their own businesses.
Obviously, there are different types of businesses out there. You need to find the one that works well for you, interests you and has good margins.
But here are a few ideas.
Starting your own consulting business will often let you leverage your time, you can work by deliverables instead of hours. And as a consultant, you can often charge quite a bit more. I bill anywhere from $100 to $150 an hour when I consult.
Companies that hire consultants know that this is the norm, and so they don’t sweat it. They still end up saving money, because they just get what they need and they don’t have to pay health insurance, retirement, and God knows what else.
That makes consulting a really great business. But, the upside is limited.
As a consultant, you are going to run out of hours in the day. And you will often find that it’s a struggle to balance selling and working. For example, you get so busy doing the work you have that you forget to find new clients. And then the work finishes, and you don’t have new work, so you have to go out and sell full-time. It’s a traditional consultant’s dilemma.
Consulting has been great for me to bankroll other business things I’m working on. But the earnings are limited. However, if you build your network, create a clear offer, and find something companies are willing to pay for, it’s not hard to get to 200k as a consultant.
- Online business
Obviously, I love online business. You’re looking at mine.
Online businesses can be a great way to get to 200k a year. But you have to be good at what you do. The most straightforward way to do it is probably to pick a product or service-based business and run some type of sales funnel to it. Clickfunnels is a pretty great option.
Product-based businesses are good because they give you scale. Obviously, digital products are best, because you can often just give somebody access an unlimited amount of times. The upside is huge.
There are a lot of myths about online business. You can make a full-time living as a blogger, a YouTuber, a content creator, or whatever. But you have to be the best, and you are swimming in waters infested with people who are really good at this.
I’m not saying it’s impossible. I’m just saying, if you have a specific product or service you want to build and sell, that’s probably your better bet for online business.
It’s really easy to set up a Shopify store and start selling something. If you want to make money with the blog, you can do it, but it will take a lot of time and work.
- Local business
Another way you can earn 200k a year is by starting a successful local business. In fact, some of the richest people I know have started businesses like plumbing, landscaping, electrician, etc.
They’re not sexy businesses, but they are solid.
I’m not going to talk much about this because it’s not my area of expertise, but it’s definitely possible.
- Big business
If you have some business sense, and a good business model, building a business with employees is definitely an awesome way to get beyond 200k a year.
You take the risks, but you get the rewards as they come.
I don’t always have employees, but when I have hired people, I’ve enjoyed the leverage. If you can find the sweet spot where people earn more money for your company than they cost in salaries, you’ve got a business you can grow.
5. Cash-flowing assets
Most of the things we talked about above have been active income. Let’s talk about some ways that passive income can get you to 200k a year. The most obvious thing is that having cash-flowing assets can get you there.
If you’ve read my favorite wealth book, Robert Kiyosaki’s Rich Dad, Poor Dad, you know that his definition of an asset is something that puts money in your pocket. He famously said that your house is not an asset, and pissed off a lot of traditional personal finance people.
So what kind of cash-flowing assets are out there? I’m so glad you asked. Here are some cash-flowing assets that can get you to 200k a year.
- Real estate
As I write this, interest rates are soaring and people are getting depressed about real estate. Frankly, this is a welcome change after the last 3 years of insanity through the pandemic.
I don’t know what house prices are going to do, but I do know that real estate is going to continue to be a good asset.
This doesn’t mean that every single real estate deal is a good one, you didn’t hear that from me. But if you have rental properties of some sort that pay you, you can eventually build a passive income stream that hits 200k a year.
If you don’t have enough to invest in direct real estate, you can choose a REIT – that’s a real estate investment trust, and get a piece of the action that way.
There are a lot of different types of investments. I won’t get into them all here. But a good investment portfolio can pay 200k a year with time.
If you are the type of person who can grow an audience, whether you’re a YouTuber, an influencer, or a blogger, it is possible to make 200k from this. Like I sort of said above, getting to 200k would probably come from some combination of creating a product, turning on advertising, or selling affiliates ( AKA influencer marketing).
It is possible, so I included it on this list. But you gotta be serious about it. Only the best will come out on top.
For true passive income, you’d need either a blog, YouTube channel, or some sort of audience that’s not online – ie. book readers, music buyers, etc.
- Licensing or IP
I’ll just mention this one really quick, because it probably doesn’t apply to most people. But if you have some sort of special process you can copyright and license, or intellectual property, you can make passive income off of that.
Basically, you’ve come up with something and patented a way to do it. People have to pay for the right to use it.
So these are my ideas to get you to 200k a year. Like I said at the top, it often takes a different way of thinking about money to get there. But it’s a great challenge. Because for a lot of these ideas, if you can take them to 200k, you can take them to a million.
You might be wondering why I left startup off this list. While I left startups, they can take a long time to pay out. Often they are great wealth-building tools, but the wealth often comes from the increased value of the company rather than increased salary from year to year.
So, there you have it! I wish you luck on your journey to 200k.