Key takeaways
- A high-net-worth individual is typically defined as someone who has liquid assets of between $1 million and $5 million, although there's no firm definition of the amount as some institutions may define the range differently.
- High-net-worth individuals often bank with private banks or wealth management firms and may have access to additional services beyond banking and investing.
- Net worth is calculated by adding up assets and subtracting liabilities, and can include real estate and investment accounts.
- Becoming a high-net-worth individual takes hard work and smart financial management, but anyone can improve their financial standing through budgeting and saving strategies.
A high-net-worth individual, or HNWI, might be defined differently among certain financial institutions. But in all cases, a high-net-worth individual is someone with a large amount of wealth.
Typically, a high-net-worth individual has assets of between $1 million and $5 million. Those with multi-million dollar fortunes, generally assets of at least $30 million, are sometimes identified as ultra-HNWI (UHNWI). The term “net worth” factors in liquid or investable assets.
High-net-worth individuals often bank at a private bank or with a wealth management firm.
At both types of institutions, high-net-worth individuals may be offered additional services beyond banking and investing. These can include trust services and estate planning, often using a team approach.
How net worth is calculated
A person’s net worth is determined by adding the person’s assets and subtracting any liabilities.
Rick Zimmerman, former senior vice president of private banking and commercial lending at Capitol Bank in Madison, Wisconsin, now retired, notes that assets include:
Regarding real estate, the mortgage balance subtracted from the value of your home counts toward your net worth.
“In the investment world [a high-net-worth individual] generally refers to liquid assets,” says Pamela Chen, CPA, CFA, chief investment officer at Refresh Investments LLC in Santa Monica, California. “So it would be investment accounts and banking accounts.”
What are the benefits of being a high-net worth individual?
As a high-net-worth individual you might be able to get higher annual percentage yields (APYs) on your savings account. You’ll likely qualify for lower rates on loans and might have access to unique products or services. You might also have a representative and team that works with you.
HNWI key statistics
The 14th Global Wealth Report from UBS projects that global wealth will increase by more than a third (38 percent) in the next four years. (The report defines ultra-high-net-worth individuals as those with $50 million or more in liquid assets.)
Insights from this report include:
- Global wealth declined in 2022. It’s the first reduction in global wealth since 2008.
- The report projects there will be 86 million millionaires and 372,000 UHNWIs by 2027.
How do you become a high-net-worth individual?
Becoming a high-net-worth individual could take many years. In most cases, hard work, saving and investing play a significant role.
Or under the right circ*mstances, such as these, it could almost happen overnight.
- Inheritance
- Winning the lottery or other prize
- Life insurance
- Winning a lawsuit
- Getting married
- Selling a business
- Capital gain
- Earning a very high salary or bonus
While most people likely won’t be considered high-net-worth individuals, just about anyone can use smart budgeting and saving strategies to improve their financial status over time.
Bottom Line
In today’s society, high-net-worth individuals are generally defined as those with a net worth of between $1 million and $5 million, and often have access to financial services beyond traditional banking and investing services at commercial banks and credit unions. In most cases, becoming a high-net-worth individual takes hard work, saving and smart financial management, but with determination and the right circ*mstances, it’s possible. While not everyone may reach this status, anyone can improve their financial standing through various budgeting and saving strategies.
FAQs
Typically, a high-net-worth individual has assets of between $1 million and $5 million. Those with multi-million dollar fortunes, generally assets of at least $30 million, are sometimes identified as ultra-HNWI (UHNWI). The term “net worth” factors in liquid or investable assets.
What is considered a high net worth individual? ›
High-net-worth individual (HNWI) is a technical term used in the financial services industry to designate individuals who maintain liquid assets at or above a certain threshold. Typically, these individuals are defined as holding financial assets (excluding their primary residence) valued over US$1 million.
What is a certified high net worth individual? ›
Currently, the financial thresholds to qualify as a high net worth individual are to have received income of £100,000 in the previous financial year, or to have £250,000 worth of net assets throughout the previous financial year.
Is a net worth of $400,000 good? ›
People tend to underestimate “high net worth,” citing $400,000 as the median average, which is significantly less than the broadly accepted definition of a HNWI: someone with at least $1 million in liquid assets. Getting clarity on your net worth is an important step toward financial wellbeing.
What is a high net worth individual in the world? ›
There are some well-known names atop of the world's list of ultra-high-net-worth individuals, including all of the world's billionaires. Jeff Bezos, Bill Gates, Elon Musk, Mark Zuckerberg and Mackenzie Bezos are all ultra-high-net-worth individuals.
What net worth puts you in the top 1%? ›
The top 1% of household net worth in the U.S. was just shy of $13.7 million in 2023. An individual would have to earn an average of $407,500 per year to join the top 1%. A household would need an income of $591,550. The median household income was $74,580 in 2023 and $45,440 for individuals.
What is the net worth of the top 2% of Americans? ›
Top 2% wealth: The top 2% of Americans have a net worth of about $2.472 million, aligning closely with the surveyed perception of wealth. Top 5% wealth: The next tier, the top 5%, has a net worth of around $1.03 million. Top 10% wealth: The top 10% of the population has a net worth of approximately $854,900.
What is considered a high net worth individual in the United States? ›
A high-net-worth individual is typically defined as someone who has liquid assets of between $1 million and $5 million, although there's no firm definition of the amount as some institutions may define the range differently.
What salary is considered high-net-worth? ›
Types of High-Net-Worth Individuals (HNWIs)
An investor with less than $1 million but more than $100,000 is considered to be a sub-HNWI. The upper end of HNWI is around $5 million, at which point the client is referred to as a very-HNWI. More than $30 million in wealth classifies a person as an ultra-HNWI.
What personal net worth is considered wealthy? ›
According to Schwab's 2023 Modern Wealth Survey, Americans perceive an average net worth of $2.2 million as wealthy. Knight Frank's research indicates that a net worth of $4.4 million is required to be in the top 1% in America, a figure much higher than in countries like Japan, the U.K. and Australia.
The most recent data from the Fed's Survey of Consumer Finances took a snapshot of the American public at the end of 2022. At that point, a net worth of $3,795,000 was enough to put you in the top 5% of all American households. If that number has your head spinning, there are some important details you should consider.
What is the net worth of the top 1% in 2024? ›
In the United States specifically, the forthcoming 2024 wealth report by Knight Frank reveals that individuals aiming to join the prestigious top 1% now need to possess a minimum net worth of $5.8 million. This marks a notable 12% increase from the previous year's requirement of $5.1 million.
What net worth is considered upper class? ›
With that in mind, a net worth of $604,900 would put you in the upper 25% of American households and having $1 million or more should make you firmly a member of the upper class. Of course, it's important to remember that net worth is calculated by adding up your assets and then subtracting your liabilities.
What is considered very high net worth? ›
Very-high-net-worth individuals.
VHNWIs are people or households who hold liquid assets valued between $5 million and $30 million.
What is a respectable net worth? ›
Determining what your net worth should be at any age can be a bit tricky, and it depends on your income. Say you're 30 years old and your income is $50,000 per year. Your net worth should be $150,000, according to this formula. A $25,000 salary at age 30 would mean an ideal net worth of $75,000.
What is a wealthy high net worth individual? ›
High net worth individuals, often referred to as HNWIs or HNIs, are individuals who have a significant amount of wealth and financial assets. These individuals are typically defined as having a net worth of at least $1 million, excluding the value of their primary residence.
What net worth is considered rich for a single person? ›
Someone who has $1 million in liquid assets, for instance, is usually considered to be a high net worth (HNW) individual. You might need $5 million to $10 million to qualify as having a very high net worth while it may take $30 million or more to be considered ultra-high net worth.
What salary is considered high net worth? ›
Types of High-Net-Worth Individuals (HNWIs)
An investor with less than $1 million but more than $100,000 is considered to be a sub-HNWI. The upper end of HNWI is around $5 million, at which point the client is referred to as a very-HNWI. More than $30 million in wealth classifies a person as an ultra-HNWI.
What is a good net worth for a person? ›
Determining what your net worth should be at any age can be a bit tricky, and it depends on your income. Say you're 30 years old and your income is $50,000 per year. Your net worth should be $150,000, according to this formula. A $25,000 salary at age 30 would mean an ideal net worth of $75,000.
