Your Salary Is Not Your Net Worth

Your salary is what comes in. Net worth is what stays. The gap between those two numbers — in a year, over a decade — is the actual story of your financial life, and it has almost nothing to do with how much you earn. And yes, that was an em-dash. Proudly.

The person making $90,000 a year and keeping $15,000 of it is building something. The person making $200,000 a year and spending $198,000 of it is building a lifestyle that requires $200,000 a year to maintain, which is a very different and significantly more precarious situation unless you are certain of your professional trajectory.

The salary feels like the metric because it's the one that changes when you get the raise. It's the number that impresses yourself at tax time, like, oh you made THAT?. It is nice when it goes on the mortgage or HELOC application. Like, you've arrived.

Net worth is the number that determines whether you have options when new management comes in, the job disappears, or the industry shifts, or you simply want to leave before the organization decides to make that choice for you. Not that that would ever happen.

The salary is the income. The net worth is the power.

High salary, low net worth: you desperately need the job to maintain the life. And you will suck up and say the stupidest shit to maintain said life.

High salary, high net worth: you can afford to be selective about which job you cling to, or whether you need to cling to anything. You can actually not say stupid shit (though you likely still will on occasion).

The crux: the difference in those two positions is not income. It's trade offs between comfort and what you know you need to do to get where you want to be.

It's the decision about what happens between the income arriving and the month ending with a move in the right direction.

Even if it seems small. It is still forward movement.

Make the decision.

Then make it again.

Every month.

Start there. Everything else waits.