To make “six figures” is a common goal in the United States. This is also a very logical goal given that research has shown a fairly strong connection to income above $75,000 per year and overall happiness. What’s interesting is that this is a very attainable goal for most people if they are willing to put in the effort.
Here are the highlights of a 10-minute lesson I shared with my kids this evening.
How to Make $100k in a year
The answer is simple – sell something valued more than $100k to someone with money.
What is Value?
Value is the subjective worth someone else (your customer) places on an item they want.
What do people Value?
Time, knowledge, status, material things, entertainment.
Simple Sales and Profit
To sell something the value to the customer must be greater than the price you are willing to sell it for. To make a profit your price must be greater than your cost.
Value > Price > Cost … Price – Cost = Profit
Examples
| Item | Value | Price | Cost | Profit | Quantity for $100k Profit |
| Time/Labor (j.o.b) | $20/hr | $15/hr | $5/hr | $10/hr | 10,000 hours (not possible) |
| Professional Time (Engineer) | $171/hr | $57/hr | $7/hr | $50/hr | 2,000 hours |
| Lower-cost Product (jeans) | $80 | $55 | $20 | $35 | 2,858 sales/yr 57 sales/wk |
| Skill Service (website) | $1,000 | $700 | $100 | $600 | 167 sales/yr 4 sales/wk |
| Medium-cost Product (car) | $7,000 | $5,000 | $2,000 | $3,000 | 33 sales/yr 1 sale/wk |
Higher-cost Product (Real Estate) | $500k | $450,000 | $350,000 | $100,000 | 1 sale/yr |
Remember to count the cost
A medical surgeon can make $400k a year; but they also have $200k in student debt and have to spend about 10 years as a student becoming a surgeon.
