We’ve all heard it before—someone casually drops the phrase, “I make six figures,” as if it’s the ultimate badge of success. It sounds impressive, doesn’t it? But before you start measuring your own success against someone else’s income claim, there’s a critical follow-up question you should always ask:

“Is that your gross or your net?”

And if it’s their gross, the next logical question is:

“What did you actually net?”

Gross Income: The Illusion of Wealth

Gross income refers to the total amount of money someone earns before taxes, expenses, and deductions. For employees, this means their full salary. For entrepreneurs or business owners, this includes all revenue brought in—before factoring in costs like marketing, supplies, rent, insurance, or payroll.

Six figures gross may look good on paper, but depending on your tax bracket and business expenses, it can quickly shrink to something much less glamorous.

Net Income: What You Really Take Home

Net income is what you actually keep after taxes and expenses. This is the money that ends up in your pocket. It’s your true earning power—and the most important number when it comes to personal finance, budgeting, and lifestyle choices.

You could gross $150,000 a year and still end up with less take-home pay than someone grossing $80,000 but with fewer expenses and better tax planning.

Why Net Matters Most

At the end of the day, net income is the real measure of financial health. It determines your ability to save, invest, travel, pay off debt, and build a comfortable life. Focusing only on gross income is like judging a book by its cover—it might look great, but the substance inside could tell a different story.

Bottom Line

So the next time you hear someone say they make six figures, remember:
“Gross or net?” is the only question that really matters.
Because what you take home is what matters most.