I was going to make a related point. To get into the $100K-200K range, all you need is hard work. Study in school, do well on your standardized tests, get into a good college, pay attention to salaries when choosing your major, show up for on-campus interviews, and do your job well when you're hired. It's not hard to be making six figures a few years after graduation on this plan.
But to break the 99th percentile - I think that was $342K/year for 99.5th percentile of single filers - you need to take on some risk. Like forgoing your income for a few years to found a company. Or taking on a lower salary and the risk that you'll be laid off in a year and getting a job at a startup. Or putting up your own money to invest in one. Or taking on high-visibility, high-impact projects that may fail - often at the cost of your regular duties - within your day job.
For people whose whole life has been a steady upwards progression, risk is scary. It often looks impossible. And so they're stuck at a point in life where they know people who have vastly more money than them, but they don't understand how or are unwilling to achieve that.
Purely anecdotal, but many such risk-takers that I have known were able to mitigate their risk because of familial support mechanisms. Which is to say that while a certain amount of hard work and courage is crucial, it doesn't hurt to have rich parents.
>> mitigate their risk because of familial support mechanisms
Or society support mechanisms - many ppl in say Scandinavia use the two or more years of high unemployment benefits to start a business risk-free. Actually in Norway, to stimulate entrepreneurship, they would pay those benefits for the 1st six month of new company operation (to the owner).
"I think that was $342K/year for 99.5th percentile of single filers - you need to take on some risk"
I don't think this is true - all the traditional "low risk" professions have this ability: doctors, dentists, lawyers, investment bankers and fund managers. $300k+ is not unusual for a mid-level person in these industries. Senior people in these industries will hit $1m+ pretty easily without having taken on any significant personal risk. A lawyer 3-4 years out from law school in a large firm is going to be sitting on $200k+ already.
Yes, in the financial context they have a low risk profession. They can have greater than 90% confidence that if they do the same thing they did the previous year (likely, working very hard at a task they are very skilled in), that they will earn about the same amount they earned that year, usually adjusted up for inflation. Do you disagree, or are you using some other definition of risk?
If you don't know much about a given job it looks low risk. But a successful doctor, etc. have taken many risky decisions, with not enough information.
Bearing in mind that we are talking strictly in the financial sense — and not, for example, about risky medical decisions — can you explain what you're talking about further? What major risky investments do doctors make on a regular basis?
1. "But to break the 99th percentile - I think that was $342K/year for 99.5th percentile of single filers - you need to take on some risk. Like ... taking on high-visibility, high-impact projects that may fail - often at the cost of your regular duties - within your day job."
This is the OP.
2. Taking a bad important medical decision will have bad financial consequences - lower reputation, not so good references, patient complains leading to big losses of time - lower income in the future. Also there's stuff like which team do you join, what new technical skills do you get, which part of the world you work in. You take a lot of risk, you can expect higher rewards on success.
Personal risk, yes. Malpractice is covered by insurance. Bankers risk their clients' money, not their own (for the most part). As long as they perform their job competently, there is little risk compared to an entrepreneur who has had to quit their job and invest their personal funds into their venture.
Really? How about the risk, that one won't be able to complete his degree, after investing a lot of money and time? Or that he'll make a mistake, which will get him blacklisted from good jobs.
One knows all the risks involved in his job, and few in other's jobs.
But to break the 99th percentile - I think that was $342K/year for 99.5th percentile of single filers - you need to take on some risk. Like forgoing your income for a few years to found a company. Or taking on a lower salary and the risk that you'll be laid off in a year and getting a job at a startup. Or putting up your own money to invest in one. Or taking on high-visibility, high-impact projects that may fail - often at the cost of your regular duties - within your day job.
For people whose whole life has been a steady upwards progression, risk is scary. It often looks impossible. And so they're stuck at a point in life where they know people who have vastly more money than them, but they don't understand how or are unwilling to achieve that.