How I Invest My $200,000 Salary (Step-by-Step Breakdown)

I Make $200,000 a Year — Here’s How I Invest It

I wasn’t always a high earner. My first job out of college paid $15 an hour. But over the years, I worked my way up, lived frugally, and made investing a priority. Today, I make around $200,000 a year — and I’ve built a $1 million net worth by age 35.

Here’s exactly how I invest my income now.

1. Max Out Tax-Advantaged Accounts First

Before anything else, I max out the retirement accounts available to me:

  • Thrift Savings Plan (TSP) — I contribute the max $23,000/year to my government 401(k)-style plan. It’s all in a low-cost index fund.
  • Roth IRA — I contribute $7,000/year. I like the tax-free growth and access to principal if needed.
  • Backdoor Roth for My Wife — Same deal — $7,000 in her account as well.

That’s $37,000 off the top going to retirement. I treat it like a non-negotiable bill.

➡️ Related: Why Maxing Out Your 401(k) Is One of theSmartest Moves You Can Make

2. Invest in Rental Real Estate

Real estate helped accelerate my path to $1M. I own three income-generating properties now – two are rented to long term tenants in a high cost of living city and one is a short term rental cabin.

Some of my extra cash each year goes toward:

  • Paying down the mortgages
  • Upgrading the properties to increase value and rent
  • Saving for the next down payment

This isn’t passive — but it’s been worth it. My rate of return has been consistently over 15% for the last 7 years.

➡️ Related: Why I Think Buying a Home Is (Almost Always) Better Than Renting

3. Use Taxable Accounts for Long-Term Growth

After tax-advantaged accounts, I put money in a regular brokerage account:

  • Mostly low-cost ETFs (like VTI and QQQ)
  • A few speculative plays (Google, TSLA, etc.)
  • No day trading, no meme stocks, no FOMO

I aim to invest at least $3,000–$5,000/month in this account, depending on how much I save that month.

4. Avoid Holding Too Much Cash

I don’t keep a huge cash pile. Just one month of expenses in checking, and about three months in a high-yield savings account. Everything else is working for me — earning dividends, growing, or generating rent.

Too many people I know are letting inflation eat away their savings.

➡️ Related: What to Do With Your First $10,000 in Savings

💸 Where My $200,000 Actually Goes: Full Breakdown

People love to hear real numbers — so here’s a simplified breakdown of where my $200,000 salary goes each year. Basically I use $72,000 ($6,000 per month) for living expenses and everything else goes to taxes and investments.

This isn’t a budget I stick to rigidly — some years I invest more in real estate, others I load up on ETFs. But on average, this is the blueprint that helped me hit $1M by 35 and aim for $10M by 50.

Final Thoughts

Making a high income helps — but it’s not enough. I’ve seen high earners spend everything they make and end up with nothing.

It’s the investing habits that matter most.

Whether you make $40K or $400K, the principles are the same:

  • Spend less than you earn
  • Automate your investing
  • Stick to long-term, low-cost strategies

That’s how I grew from $15/hour to $1M — and how I’ll get to $10M next.

📌 Want to Start Today?

If you’re ready to invest but don’t know where to begin, check out this post:
➡️ If You Only Do One Thing — Invest $100 in a Total Stock Market ETF