high networth individuals

Definition of High Networth Individuals (HNWI)

The idea of high Networth individuals is a strange concept. There are plenty of people who have a net worth of $1,000,000 and under who would never identify as a high net worth individual, and many people who have a net worth of $1,000,000 and over who would not identify as such.

To complicate things further, what is considered high net worth can vary from country to country.

Key Takeaways

  • A high net worth individual is somebody with at least $1 million in liquid financial assets.
  • HNWIs are in high demand by private wealth managers because it takes more work to maintain and preserve those assets.
  • These individuals are also eligible for enhanced and improved benefits.
  • In 2020, the United States had the most HNWIs in the world, with over 6.5 million people.
  • A very-high-net-worth individual has a net worth of at least $5 million, while an ultra-high-net-worth individual is defined as having at least $30 million in assets.

high net worth individuals

Understanding High-Net-Worth Individuals (HNWIs)

Individuals are measured by their net worth in the financial industry. Although there is no precise definition of how wealthy someone must be to fit into this category, high net worth is generally quoted in terms of having liquid assets of a particular number.

The exact amount differs by financial institution and region but usually refers to people with a net wealth of seven figures or more.

As noted above, people who fall into this category have more than $1 million in liquid assets, including cash and cash equivalents.

These assets do not include things like personal assets and property, such as primary residences, collectibles, and consumer durables.

HNWIs are in high demand by private wealth managers. The more money a person has, the more work it takes to maintain and preserve those assets. These individuals generally demand (and can justify) personalized services in investment management, estate planning, tax planning, and so on.

As such, a high-net-worth individual classification generally qualifies people for separately managed investment accounts instead of regular mutual funds. This is where the fact that different financial institutions maintain varying standards for HNWI classification comes into play.

Most banks require a customer to have a certain amount of liquid assets and/or a certain amount of depository accounts with the bank to qualify for special HNWI treatment.

HNWIs are also given more benefits than those whose net worth falls under $1 million. They may qualify for:

  • Services with reduced fees
  • Discounts and special rates
  • Access to special events

Types of High Networth 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 then referred to as a very-HNWI. More than $30 million in wealth classifies a person as an ultra-HNWI.

The very-high-net-worth individual (VHNWI) classification can refer to someone with a net worth of at least $5 million. Ultra-high-net-worth individuals (UHNWIs) are defined as people with investable assets of at least $30 million. This, of course, excludes personal assets and property, collectibles, and consumer durables.

How to Become a High Net Worth Individual

The path to becoming an HNWI necessitates a strong dose of financial discipline. In general, an individual achieves high-net-worth status by consistently investing and decreasing household debt.

“Most clients that I see that are in the high or ultra-high category have sold a business or had a large liquid event in their life,” says McClain Culver, a wealth strategy specialist at UBS in Atlanta.

If you haven’t had a large liquid event in your life, don’t worry. With discipline and the right investing strategy, you can build a high net worth even if you don’t have significant resources right now. The key is to follow these two approaches:

Use Time to Your Advantage

The sooner you start investing and the longer you remain invested, the higher the potential for return—thanks to the magic of compounding returns.

This phenomenon, more commonly called compound interest, enables you to grow exponentially larger sums over long periods of time. That’s because each time you earn interest or return, it raises the base amount your future interest or returns are calculated from. This results in an ever-larger engine of wealth creation.

While the stock market may look pretty volatile over the near term, it has consistently delivered impressive returns on investment over the long haul. Take the benchmark S&P 500 index, which has provided average annual returns of about 10% over the past 100 years, despite wars, pandemics, recessions, and the Great Depression.

Become a Disciplined Investor

Setting up a systematic investment strategy and putting in money every month can provide a highly positive investment outcome over time.

For example, a 25-year-old needs only to save $158 per month to have $1 million at age 65—assuming a 10% annual return on investment.

“At 35, the number is $442 per month, so the benefits of investing early matter,” says Bonnett. “Saving in a 401 (k) or Roth IRA each and every month is a perfect example of achieving HNWI status slowly and steadily.”

Read | Defining an Ultra-High-Net-Worth Individual

HNWI Statistics at a Glance

There’s no doubt that the HNWI trend is in full swing as Americans continue to grow their assets. These statistics bear that sentiment out.

•  In 2019, the U.S., Japan, Germany, China, and France were the top five countries by total HNWIs, according to Capgemini’s World Wealth Report. The U.S. claims the most HWNIs, and 62% of the world’s HWNIs live in the U.S., Japan, Germany, and China.

•  According to Spectrem Group, in 2020, 11.6 million American households held a net worth of between $1 million and $5 million (excluding the value of their primary residence). That figure was up 5.5% over the prior year.

•  Spectrum also found that the number of U.S. ultra-high-net-worth individuals—they count UHNWIs as owning between $5 million and $25 million (excluding the value of their primary residence)—grew by 21.3% in 2020 to a total of 1.8 million households.

Read | Jim Simons Hedge Fund | Renaissance Technologies

What Benefits Do HNWIs Get?

HNWIs are typically eligible for individually managed investment accounts rather than traditional mutual funds. They are also in high demand by private wealth managers. These individuals generally require personalized services in investment management, estate planning, tax planning, and other areas.

Which Countries Have the Most High-Net-Worth Individuals?

The countries with the most HNWIs are the United States, Japan, Germany, and China, in that order. These countries account for around 63 percent of the world’s HNWI population. In 2020, the U.S. There were about 6.58 million HNWIs in Japan, 3.54 million in Germany, 1.53 million in China, and 1.46 million in China.


A high Networth individuals is defined as having financial instruments worth $500,000. As of June 2020, there are approximately 13 million HNWI’s around the globe.

The United States had the highest number of HNIs (4700m) of any country, while New York had the most HNIs (348k) of any city.

According to the Capgemini 2016 world wealth report, an additional class is defined as those who have more than $300,000,000 in liquidity and savings assets.

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