If you read enough personal finance forums then it becomes clear that many people in the United States think that $100 000 is the magical number which guarantees that you don’t have to worry about money. This made me wonder however, what’s the equivalent number in Estonia.
How many people in the US make 100K?
Essentially I did some digging through Wikipedia to verify some numbers that I’ve seen floating around forums. The info is a few years old, but salaries haven’t really increased that much in the past few years so the % of people who receive 100K salaries is unlikely to have increased noticeably. As the US Census Bureau information says, less than 7% of people make more than $100 000 per year.
This salary is generally attributed to only a few fields. It generally includes doctors, lawyers, IT, CEO/COO/CIOs, engineers, bankers etc. This means that it is a salary that isn’t really reachable just through working hard – you have to work in the right field, you have to climb the corporate ladder and it’s also associated with ridiculous working hours.
The Estonian equivalent to 100K
I did some digging in the Statistics Agency web and I looked up information about Estonia in 2010 so it would be comparable. The Agency shows information by deciles, so I can get the number for the top 10% of Estonian salary earners, which will be roughly usable. As it turns out, the top decile of Estonian salary earners make 1400€+ per month. Average salary in 2010 was 820€. Currently it’s 986€, so a 20% increase. Assuming that the top 10% have increased their salaries 20% as well then the cutoff would be 1680€, if their salaries have increased by 30% then it would be 1800€+.
Honestly? I was very surprised. I expected it to be way higher. Even a 1800€ gross salary is 21600€ per year – only roughly $30 000! Also, a 1800€ gross salary comes to less than 1400€ net. I’m not even sure what to conclude from that. One thing that would make sense is that the salary inequality is a lot lower in Estonia than I assumed. It might also mean that it’s just the top two-three deciles which are closer to one another than I expected.
I definitely agree that looking at the current situation in Estonia a 1800€ gross salary wouldn’t really force you to worry too much, but overall it’s way harder to build wealth on a salary like that than it is with a $100K salary in the US. This leaves a bleak conclusion – becoming rich in Estonia just off your salary is a ridiculous dream.
P.S. If anyone can dig up more recent statistics about Estonia, I’d be happy to hear them!