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Furthermore, the nature of one's income can dramatically alter the perception of net worth. If Mike Ferrucci's earnings are derived from a salary, his net worth might be indicative of a steady, reliable accumulation of wealth. Conversely, if his income is tied to commission or business profits, his net worth could be more volatile, swelling in prosperous years and contracting during leaner times. The distinction between gross income and disposable income is also relevant. High earnings do not always translate to high net worth if those earnings are offset by a correspondingly high cost of living or aggressive spending habits. The preservation of wealth is often as important as its generation, and the maintenance of a $200 thousand net worth requires a constant balancing act of earning, saving, and prudent spending.
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