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No, we’re not asking for your name. And we assure you, we’re not trying to offend you.
HENRY isn’t an insult; it’s a term used to describe a specific group in the personal finance realm. If you have a decent income but feel like you’re not accumulating enough wealth, you might fall into the HENRY category.
What exactly is a HENRY?
HENRY stands for “High Earner, Not Rich Yet.” However, the definition of high earning can vary depending on the source.
According to discussions on Reddit, HENRYs are individuals who earn substantial incomes, typically ranging from $250,000 to $500,000, but have not saved or invested enough to be considered wealthy.
Trevor Ausen, a certified financial planner, mentions that HENRYs often have net worths ranging from negative due to student loans or early career expenses to around $1 million in assets.
Having an income or net worth exceeding these figures leans towards being considered “rich.”
Who typically fits the HENRY profile?
HENRYs are often professionals in business, medicine, law, or technology with equity compensation, as noted by Ausen.
Many reside in high-cost regions like New York or the Bay Area, where accumulating wealth can be challenging despite a high income due to the elevated living expenses. They are typically in their 20s, 30s, or 40s.
In some instances, HENRYs are trailblazers in their families in terms of earning a higher income, which may bring added pressure to financially support relatives and establish generational wealth.
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How can you determine if you fall into the HENRY category?
Now that you have an understanding of what a HENRY is, let’s explore whether you fit the description.
“If you’re earning a good income but still struggling financially, you might be a HENRY,” remarked Flavio Landivar, a CFP based in Miami, Florida.
You could be considered a HENRY if:
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You earn an above-average income, typically in the low to mid six-figure range.
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You reside in a high-cost area.
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You spend a significant portion of your income on expenses like housing, student loans, child care, and discretionary items.
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You don’t feel financially secure.
However, not all HENRYs fit the same mold.
While some struggle to build wealth due to student loans or high living costs, others are diligent savers, as mentioned by Ausen.
“They might have only recently started earning a high income and have not had enough time to accumulate assets and savings to be considered wealthy,” he explained.
Ausen noted that his HENRY clients often have excess cash. After maxing out their retirement accounts, they fail to invest their surplus in other avenues.
If you find yourself hoarding cash in a savings or checking account, you may exhibit characteristics of a HENRY.
“While the importance of having an emergency fund is undeniable, beyond a certain point, it becomes less efficient,” Ausen pointed out.
What are the priorities of HENRYs?
Similar to most individuals, HENRYs desire increased wealth and financial freedom. Conversations online often revolve around lifestyle inflation, career advancement, investment opportunities, and strategies to minimize tax liabilities.
HENRYs seek quick advice and assurance that they are making sound financial decisions.
“These young professionals are settling into their careers, taking on more responsibilities, and have less leisure time than before,” remarked Yesenia Realejo, a CFP at Tobias Financial Advisors.
“They may be starting families, purchasing homes, saving for their children’s education. With so much on their plates, they may be saving but lacking a clear financial roadmap.”