Correct... and that rule of thumb factors that into account.
If we assume 4 hours a day, five days a week, 50 weeks a year of billable time you'll need to up the rate to make that amount as in-your-pocket cash.
50 * 5 * 4 * 120 = 120,000.00
If you are working backwards from a fixed salary you have to also add in the dollar value of additional taxes and insurance, plus whatever other benefits you might be getting.
$120K salary at a regular job > $120K in paid invoices from clients.
If you're a consultant or contractor or whatever, even if you work 8 hours a day they are not all billable hours. There's the tedious business work to look after (record keeping, business development, etc.)