Understanding 7 Figures: Beyond the Hype

You’ve probably seen terms like “7 figure coach” or “7 figure business owner” pop up on LinkedIn or social media. It sounds impressive, but what does “7 figures” actually mean? Simply put, "7 figures" refers to a number between 1,000,000 and 9,999,999. It’s a way of saying a sum that includes seven digits, typically used to describe income, revenue, or net worth.

Breaking Down What "7 Figures" Means

Numerically, "7 figures" represents a value between one million and just under ten million. For example:

6 Figures: $100,000 to $999,999 (a notable but modest income level).
7 Figures: $1,000,000 to $9,999,999 (a significant step into wealth).
8 Figures: $10,000,000 to $99,999,999 (a higher wealth category).
9 Figures and Beyond: Greater amounts, marking exceptional levels of wealth.

But when you hear someone describe themselves as a “7 figure” individual, it can mean several things—whether it’s their annual salary, business revenue, or investment portfolio. Let’s explore these different aspects in detail.

7 Figure Salary: High-Income Professions

A 7 figure salary means making at least $1,000,000 annually, which places an individual among the wealthiest earners. Professions that frequently see seven-figure salaries often require highly specialized skills, considerable education, or carry substantial risk and responsibility. Here are some examples:

CEOs of Major Corporations: Chief Executive Officers of large companies can often achieve seven-figure salaries when including bonuses, stock options, and other forms of compensation.
Professional Athletes and Entertainers: Top athletes, actors, musicians, and even social media influencers frequently earn seven figures through a mix of salaries, endorsements, and sponsorships.

It’s essential to remember that high earners also face significant tax obligations, which can reduce their "take home" pay considerably. For example, the highest federal tax rate in the United States in 2023 was 37%, applying to incomes over $578,125 for single filers. This means that although someone might have a 7 figure gross income, they won't keep all of it after taxes.

Managing a Seven-Figure Income

Individuals earning a seven-figure income—like $1,000,000 annually, which breaks down to roughly $90,000 per month—must think strategically about managing their wealth. Here’s a common breakdown using the popular 50/30/20 budget rule:

Needs (50%): $45,000, which could cover mortgage payments, utility bills, insurance, and other basic living costs.
Wants (30%): $27,000, allocated towards entertainment, luxury goods, vacations, and other discretionary expenses.
Savings and Investments (20%): $18,000, focused on retirement funds, investment portfolios, and setting aside funds for future financial stability.

High earners often work with financial advisors to maximize savings, minimize taxes, and diversify investments. Common tools for managing finances include apps like Mint, YNAB (You Need A Budget), and Personal Capital for tracking spending and monitoring investments effectively.

7 Figure Business Owners and Entrepreneurs

When business owners refer to themselves as “7 figure entrepreneurs", it can mean a few different things, like revenue, profit, or even equity value.

7 Figure Revenue: This refers to the total sales generated by a business. However, revenue doesn’t always mean profit. As the saying goes, “Revenue is vanity, profit is sanity, and cash is reality". A business that earns $1,000,000 in revenue but spends $1,200,000 isn’t exactly thriving.
7 Figure Profit: A business with seven-figure profits is highly successful. Profit can be calculated in different ways, like gross profit (revenue minus direct costs) or net profit (after all expenses). Sometimes, businesses use EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) to demonstrate profitability.
7 Figure Valuation: Entrepreneurs sometimes refer to the valuation of their business as being “7 figures", but this figure can be quite subjective. A business that makes $10,000 in profit could be valued at $1,000,000 if the right multiplier is applied, depending on industry standards and growth potential.

Property Investors and Seven Figures

Another common reference is that of “7 figure property investors". This could refer to different metrics, such as:

7 Figure Income: The total rental income received from properties owned.
7 Figure Property Value: The combined value of a property or portfolio, whether purchased outright or financed. For example, a property worth $1,000,000 might have a mortgage covering part or all of the cost.
7 Figure Equity: This represents the portion of property value that is free from debt, giving a clearer picture of an investor's actual financial stake in the portfolio.

Budgeting and Investing Strategies

Managing a seven-figure income or business requires strategic planning. The 50/30/20 budgeting rule can help allocate income effectively. Financial tools and advisors can also help navigate the complexities of taxation, investment diversification, and spending control. Here are a few essential tips:

Tax Planning: With a seven-figure income, taxes are a significant concern. Working with an accountant or tax advisor can help minimize tax liabilities, ensuring deductions are maximized.
Investment Diversification: High earners often look for ways to diversify their income through real estate, stocks, bonds, and alternative investments like venture capital or cryptocurrencies.
Retirement and Future Planning: Consistently contributing to retirement accounts, including tax-advantaged accounts like IRAs or 401(k)s, helps secure long-term financial health.

Final Thoughts

When people talk about “7 figures", it’s important to understand the context. Whether it’s income, business revenue, or property value, the term indicates a significant amount of money—but it’s not without its complexities. Income taxes, business costs, and investment risks all play a role in what a “7 figure” reality actually means.

Ultimately, achieving a seven-figure income or valuation is a major accomplishment, but understanding the finer details—like taxes, investments, and budget planning—helps ensure that such wealth is managed effectively. Remember, while it’s easy to be impressed by what people say on social media, real financial success is built on strategy, consistency, and a clear understanding of what those numbers actually mean.

Please note that Plisio also offers you:

Create Crypto Invoices in 2 Clicks and Accept Crypto Donations

12 integrations

6 libraries for the most popular programming languages

19 cryptocurrencies and 12 blockchains