250. How Much Money Do I Need to Feel Safe?

0:00Tiffany Aliche:I asked women how much they need to be making a year in order to feel rich. And the numbers pissed me off. And yeah, honestly, I'm probably about to call you out. This episode is sponsored by Squarespace. And we've appreciated their support of the Financial Feminist Podcast since 2021, the first season of the show. And we appreciate you supporting them too, because they are my default recommended website platform. You can offer services on Squarespace. They have cutting-edge design tools where you can drag and drop. You don't have to know how to code. and you can basically do everything in one place.

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1:05Tiffany Aliche:Rocket Money is a personal finance app that helps find and cancel unwanted subscriptions, monitors your spending, and helps lower your bills so you can grow your savings. My favorite thing about Rocket Money is the single dashboard so that you can see your checking, savings, loans, and investments all in one place so you can make strategic decisions and you don't have to remember your logins every single time. Let Rocket Money help you reach your financial goals faster. Join at rocketmoney.com slash FFpod. That's rocketmoney.com slash FFpod. Rocketmoney.com slash FFpod.

1:47Tiffany Aliche:Hi, I'm Tori. I'm a multimillionaire. I'm a money expert and I have helped over 5 million and women get better with money. And we had an Instagram post that absolutely blew up where I post the question, how much does your yearly salary need to be in order for you to feel rich? I didn't expect to do a podcast episode about this. I didn't expect to do another video about this. But the answers were so interesting. The reason I asked in general is I have this general curiosity, right, of how people define wealth, how people define what feeling rich looks like, But also, our whole thing at Her First Cinder K is to try to get people to talk openly about money.

2:25Tiffany Aliche:And there's nothing more open than specific numbers and exactly what you might need in order to actually live the life you want. So I'm going to go through all of the data here, including the average amount that people said in the comments, but also some really illuminating things that poke more at the psychology of money, about what we generally feel about money and the people who have it, and the amount of money we actually truly need versus the amount we think we need. Okay, so let's talk about the numbers first. We got a range of responses. We got some people who were saying, I need$20 ,000 a year in order to feel rich.

3:04Tiffany Aliche:And we had some people who were saying, I need$5 to$10 million in order to feel rich. And again, this is your yearly salary. And I assumed in just asking this question that it was a one-person salary, right? It was just your personal salary, not a dual-income household. But maybe some people were saying dual income at that$5 to$10 million amount. The common benchmark, though,$100K popped up a lot. This was the first threshold for what people felt like they needed to be making in order to feel rich, especially people who had never made six figures before. Now, there's a reason that 100K number feels pretty significant.

3:45Tiffany Aliche:It's part of the reason why her first 100K is named her first 100K. There's a common phrase or a quote out there that says, saving your first 100K is the hardest. And it might be adapted in this situation to be making your first 100K is the hardest. I think that for somebody who has never made six figures, if they're at$50 ,000 a year or even less, if they're at$60 ,000 or$70 ,000, getting up and jumping to that$100 ,000 mark can feel absolutely liberating. It can feel like you can finally breathe a little easier. You have a little bit more of a wiggle room. You can maybe afford some nicer things or to travel more.

4:25Tiffany Aliche:But just I think the security of that jump from, let's say, 70K to 100K feels significant. For a lot of people in the U.S. who responded, 250 to 300K was more common. This is the number that a lot of people cited. And I would assume that these kind of folks have already experienced what making$100 ,000 feels like, but also what being in a high cost of living area feels like. If you're making$100 ,000 in New York, that does not go nearly as far as making$100 ,000 in Omaha, Nebraska, right? So that$250 ,000 to$300 ,000 number came up a lot for people in those bigger cities where rent or a mortgage is going to cost multiple thousand dollars a month, where the price of eggs is really expensive, where gas is really expensive.

5:17Tiffany Aliche:So I can understand why that number increased pretty substantially from$100 ,000 to$250 ,000 or$300 ,000 when you start considering the higher cost of living areas. Then we got in to the other common number, which was 500K. Now, I know if you're listening to this episode and you're like, I have not broken that 100K number. I don't make over 100K a year. That 500K feels crazy. It feels insane. But for people who live in a high cost of living area, who maybe have dependents, who have children, who have ailing family members, and who also want a certain lifestyle where they are traveling and going out to restaurants occasionally, 500k with inflation, with how expensive everything is, is a number that a lot of people are saying they need not just to get by, but to feel rich.

6:12Tiffany Aliche:I want to remind you, this is not the number you need to get by. This is the number that you feel you need to be making in order to feel rich. Let's talk about some other extreme ends of the number scale. We had some people saying that 50 to 70K was enough in their country. I didn't see a lot of US respondents saying this. I saw a lot of people internationally and countries with universal health care, with a lot of social services support, with a lot of government support, allowing them to make less money, knowing as well that their company policies, maternity leave, PTO, might also be able to support that lower salary.

6:56Tiffany Aliche:There were other people on the end of the spectrum who said that a million dollars a year was the only level that allowed true freedom. Which brings me to part two. Something really interesting happened in the comments. Now, I use the word rich on purpose, right? I said, what is the amount of money you need to be making in your yearly salary in order to feel rich. I didn't really put anything else in the caption. I didn't define what rich meant or what certain milestones you needed to hit, right? I didn't say rich meant flying first class or maxing out your 401k every year or never having to be on a budget.

7:39Tiffany Aliche:Rich was interpreted by everybody in the comments. So something really interesting happened. A lot of people gave their rich number, but they also gave their comfortable number. They made a distinction between what it would be like or what number they would need to be making in order to feel comfortable, meaning it was covering bills, they were saving, they took an occasional vacation, and what it would feel like to be rich. which we can assume is freedom from financial stress, these kind of big luxuries, money is no longer a thought, right? The common comfortable range was$100 ,000 to$250 ,000 a year depending on household size, depending on location.

8:31Tiffany Aliche:That kind of makes sense, right? Again, especially if you're in one of these bigger cities, you have a child or two, you want a certain flexible lifestyle,$100 ,000 to$250 ,000 is a comfortable number. But when we're talking about rich, that number changes. Rich often started at double or triple that number or to the point where you don't even have to work. You could quit your job if you wanted to, right? You're making enough money, I guess passively, that you don't even have to think about putting work in to make a salary. This touches on something psychologically that is so interesting for me.

9:11Tiffany Aliche:Comfortable versus rich. Comfortable and the fact that we have to define that there is a difference between comfortable and rich showcases so many of the mental barriers and the hoops that we have to go through, especially as women, to define how much money we want, how much money we need, and how we have to couch any request for money that feels audacious, right? The fact that we have to say, this is our comfortable number. This is what would be comfortable versus this is what it would feel like to feel rich. This tells me that people have three numbers in their head when it comes to salary. They have the amount they're making now.

9:54Tiffany Aliche:They have the amount it would take to feel comfortable. And again, comfort is defined. Beauty is in the eye of the beholder, right? Comfort is defined the way this person wants to define it. And rich, which is, again, defined by this person. Comfortable versus rich shows me that there is an interesting level of psychological hoops to jump through where we can't just say the number we want or the number that would make our lives beautiful. We have to say the number that would be okay, right? Comfortable. Being like, life is good. Life is not completely stress-free or flexible when it comes to money.

10:33Tiffany Aliche:It's okay. This was also on a public forum, right? That's the other thing you have to think about, is that you are posting this publicly in the comments of an Instagram post. So other people are responding to you. Other people are giving feedback. When we're talking about the numbers that we saw, and this is part three, we were seeing that comfortable versus rich distinction, right? We were seeing numbers that were as high as a million, but we were seeing numbers that were also, for me, painfully low. Now, I have done so much research for this podcast. I have done so much research and talking with our millions and millions of people who engage in our community, who I've taught to be better with money.

11:14Tiffany Aliche:I did so much research for my book, Financial Feminist. I understand what it feels like to not make a lot of money and even make$5 ,000 more or$10 ,000 more, right? It feels like your entire life immediately gets better. That's why we're doing the work that we do at Her First 100K. That's why I host this show is that if I can help you be better with money, if I can help you get more money and learn how to manage it better, your entire life changes. So I acknowledge that. I know it. We have both the data and the thousands of interviews to prove it. However, if you are a woman out here saying that you are 100 % happy on$40K a year, which is a real comment I saw, that breaks my fucking heart.

12:05Tiffany Aliche:Because you are deserving of money. You are deserving of having enough money where you're not just getting by. you're not just able to pay your bills or you're not just comfortable you get to make the choices that you want to make and money is never the reason you cannot do something there was a handful of comments where I wanted to respond in all caps and say play larger than this but I also understand that so much of this is psychological and financial trauma and our relationship to money and feeling like I can't want money, I can't want more than just having a nice thing once a year, it's okay to want money.

12:56Tiffany Aliche:Because money means options. Money means choices. And as long as you are not exploiting people or pushing other people over in order to get that money. Money can be your freedom and your ticket out of situations that do not respect you and can be your ticket into the situations that do. So my third point here with these numbers is that we had people dreaming big. I love that. Some people were doing the comfortable versus rich distinction, which again makes sense and there were others who are so seeped in their financial trauma and so just in the scarcity mode of day to day that they can't see anything bigger they can't dream or understand that there might be a potential and a possibility to not just get by but to absolutely thrive when we come back we're talking more about the things that are affecting women's views of their comfort numbers, including considerations like location, and how sometimes we need to think about more than just money when we answer this question.

14:01Tiffany Aliche:See you back here soon.

14:06Tiffany Aliche:This episode is sponsored by BetterHelp. BetterHelp's model is designed to offer both strong earning potential and real flexibility for therapists with compensation that takes into account the full scope of care. So not just live sessions, but also the time therapists spend supporting clients between sessions. There are also additional benefits that BetterHelp provides therapists like a monthly health stipend for eligible therapists with a full caseload and opportunities for bonuses over time. Therapists don't need to pay for marketing referrals or annual fees to provide care on BetterHelp. And BetterHelp also hears from its therapists that they appreciate the diversity of clients they engage with, which often exceeds what they may encounter in a traditional office setting.

14:41Tiffany Aliche:With over 30 ,000 therapists, BetterHelp is the world's largest online therapy platform, having served over 6 million people globally. And it works with an average rating of 4.9 out of 5 for a live session based on over 1.7 million client reviews. Sign up and get 10 % off at betterhelp.com slash FF podcast. That's betterhelp.com slash FF podcast. So much of my work here at Her First 100K is making sure women are burying their heads in the sand when it comes to their finances. But even the most financially savvy women in our community have a hard time talking about one of the most important financial protections you can have, life insurance.

15:17Tiffany Aliche:Here's the deal. Life insurance isn't for you. It's for the people who would be financially devastated if you were gone tomorrow. The people who depend on your income or your labor, even if it's unpaid. It's one of the most powerful ways you can protect your loved ones. And so many people think it's complicated, so they just keep putting it off, which then compounds because life insurance only gets more expensive the longer you wait. Fortunately, SoFi has teamed up with Ladder to make it easy to quickly get life insurance. SoFi, the all-in-one finance app where you can bank, borrow, and invest now offers insurance.

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16:38Tiffany Aliche:All right, part four, location, location, location. High cost of living cities, New York, LA, San Francisco, Sydney, London, these numbers skewed way higher. This makes sense. This makes total sense, right? Some people were saying, I need 750k a year just to feel safe. That's a way higher number than, again, somebody in the Midwest United States. In these lower-cost areas or these even lower-cost countries, these were much lower thresholds. We're talking that 50 to 80 or even 100K. That was cited as rich. We also have some regional tax differences, which I thought was really interesting in how people chose to distinguish these.

17:20Tiffany Aliche:We were seeing Canada's higher rates of taxes impact the number people felt like they needed. European social benefits, I kind of talked about this before, but if you have a lot of support, right? If you are getting flexible paid time off and a lot of it, not just like two days, if you're getting family leave, if you're getting universal health care, these things are going to allow you to have a smaller salary number that you're citing in order to feel rich because you're not spending as much money on these things. So it makes sense that the cost of taxes, social benefits, these shift people's comfort numbers, but also that location piece, right?

18:03Tiffany Aliche:If you live in Hawaii or New York, this is a really, really expensive place to live. Everything's more expensive. Rent or your mortgage. Again, the price of eggs or groceries, insurance, Ubers, right? Everything's more expensive. Daycare, daycare, so much more expensive. So the increase in that number when we're getting into the$200,$300 plus$1 ,000 range, often it's because somebody's in that higher cost of living area. Part number five, this is not just about the money. And again, people were the first to cite this. Some people were brave and just said, I need this amount of money. And you know what?

18:44Tiffany Aliche:I applaud those people. No couching, no explanation, just this is the amount of money I need. But some people wanted to cite all of the things they wanted to do or all of the ways their life would change if they made that amount of money. So let's talk about some of the lifestyle goals. With the salary, they said they needed to feel rich. People were going to travel without checking their bank account balance and travel more frequently and travel in a more luxurious way, they were going to be debt-free, paying off student loans, paying off their mortgage, not worrying about that debt hanging over them.

19:18Tiffany Aliche:They also wanted to better help their family in terms of their finances, fund their children's futures, whether college or otherwise, but also donate more liberally to causes they believed in. And the biggest thing we kept seeing was people wanting to never worry about an emergency, about a repair, about an unexpected cost coming up. Now, what this tells me is what we've been talking about on this show since the first episode. Money is emotional. It's not really about the number in the bank. It's not really about the salary number you need to be making, right? It's not about the paycheck. It's about what the paycheck offers you.

19:59Tiffany Aliche:Those choices, those opportunities, that flexibility, right? And just making the amount of money people said they need to be making in order to feel that sense of richness allowed them to do really great things, right? I didn't see a comment that was like, when I get more money, I'm going to, you know, the doctor evil and exploit people and be a shitty person, right? But that's what we believe getting more money might mean. Because we all know a shitty rich person. We see shitty billionaires all the time. So we often push away money because we believe it'll make us a bad person, or we believe that the pursuit of money is wrong, or gauche, or gross.

20:43Tiffany Aliche:All the things that women are citing in the comments that they would do if they had more money are beautiful things. They would pay off their debt. They would fund their children's futures. They would travel more and open themselves up to new experiences. They would be able to care give for their children or their ailing family members without having to be concerned about the money. They'd be donating to causes they believed in. They would not have to worry about emergencies and they could show up as the fullest, best, baddest version of themselves. So what this tells me is that money can buy happiness.

21:21Tiffany Aliche:We've talked many times on this show that when you have money, every part of your life gets better. I would argue that's happiness. And that nothing bad happens when women have more money. Nothing bad happens. Nobody in these comments was being like, wah, ha, ha, ha. I'm about to contribute to climate change and kick puppies. Everybody was saying, I'm going to make my life better, my family's life better, my community better. Everything gets better when women have money. Part number six, our rich number changes over time. There is a number that past you thought she needed to be making in order to feel rich.

22:03Tiffany Aliche:There is a number present you feels like they need to be making in order to feel rich. And that number will probably change for future you as well. People's numbers shift. That's natural. Between career changes, moving cities, life milestones, home buying, children, again, caring for ailing family members, all of these things impact how much money you need to be making. When I was living in a one-bedroom apartment, I was living by myself. I was not making the amount of money I'm making now. Did I feel rich? No. Did I have enough money to get by? Yes. As my life started changing, I became more generous.

22:46Tiffany Aliche:I was able to afford nicer things. There were more responsibilities on me as an entrepreneur because I had a team of over a dozen women that I needed to make sure that our company could pay. my lifestyle shifted. That rich number shifted. We've heard about lifestyle creep before, right? It's this idea that as you earn more money, your definition of enough often moves upward, but also that it can very much sabotage you if you're suddenly making a lot more money, but have no idea how to manage that. So we need to understand that it's okay if that number shifts. that's natural just like I was okay staying in hostels and sleeping in a room of 12 people when I was 20 years old fuck that shit I am not sleeping in a hostel anymore where um the guy next to me has his underwear on the radiator which is a real thing that happened to me in Killarney Ireland I'm not willing to do that anymore I have back problems I'm not willing to sleep on the floor and sleep next to underwear man.

23:52Tiffany Aliche:That makes sense. Your lifestyle when it comes to money is also going to change, but I need you to know how to manage that change. And finally, there's so many external factors to why our rich number changes over time. Inflation, rising housing costs, so many other things impact that number over time. When we come back, we're wrapping up by talking about the emotional side of what we feel about being rich.

24:24Tiffany Aliche:I cannot tell you how stressful it is sometimes to run a small business. I think that small business owners listening, you understand. Everyone else, cut us some slack. It is hard out here. There is so much to think about between payroll and HR taxes, tax filing, direct deposits, health benefits. Like there's so many things that are really, really complicated about running a business. But Gusto has made it so easy for us. We have used Gusto for four or five years. And then I was using them when I was a nine to five employee on the other side. And they're truly so helpful. Gusto is online payroll and benefit software built for small businesses.

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25:40Tiffany Aliche:But even the most financially savvy women in our community have a hard time talking about one of the most important financial protections you can have, life insurance. Here's the deal. Life insurance isn't for you. It's for the people who would be financially devastated if you were gone tomorrow. The people who depend on your income or your labor, even if it's unpaid. It's one of the most powerful ways you can protect your loved ones. And so many people think it's complicated, so they just keep putting it off, which then compounds because life insurance only gets more expensive the longer you wait.

26:05Tiffany Aliche:Fortunately, SoFi has teamed up with ladder to make it easy to quickly get life insurance. SoFi, the all-in-one finance app where you can bank, borrow, and invest now offers insurance. SoFi can help you find term life insurance that's competitively priced, quick to apply for, and easy to understand. Just answer a few health questions and you could get up to$3 million in coverage with no medical exam or doctor's visits required. As your life changes, like getting married or buying a home, you can always adjust your coverage with a couple of clicks. No policy fees. Apply online and you can get an offer in minutes.