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
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.
What qualifies as a high-net-worth individual? ›
A high-net-worth individual (HNWI) is a person with typically at least $1 million in liquid financial assets. An ultra-high-net-worth individual has a net worth of more than $30 million.
What net worth is considered upper class? ›
The upper class has an average net worth of $793,120 to $2.65 million, while the lower class has $16,900. The middle class ranges from $58,550 to $300,800. You can grow your net worth by saving and investing consistently, investing in the stock market, and being careful about taking on debt.
What net worth is considered rich? ›
For example, individuals with $1 million in liquid assets are generally classified as having a high net worth. To be considered very high net worth, one might need assets ranging from $5 million to $10 million, while an ultra-high net worth status could require $30 million or more.
What is a respectable net worth? ›
Net worth is the difference between the values of your assets and liabilities. The average American net worth is $1,063,700, as of 2022. Net worth averages increase with age from $183,500 for those 35 and under to $1,794,600 for those 65 to 74. Net worth, however, tends to drop for those 75 and older.
How many people have $10 million dollars? ›
According to Credit Suisse wealth report 2021, there are slightly over 1.4 million Americans have a net worth of over 10 million USD. How many people in the US have a net worth of 1 million?
What is the net worth of the top 2? ›
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- People with the top 1% of net worth in the U.S. in 2025 will have $11.6 million in net worth.
- The top 2% will have a net worth of $2.7 million.
- The top 5% will have $1.17 million.
- The top 10% will have $970,900.
- The top 50% will have $585,000.
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 net worth is considered elite? ›
There is another level of financial elite within the 1% called ultra-high net work individuals, or UHNWI. In the U.S., it may take you $5.81 million to be in the top 1%, but it takes a minimum net worth of $30 million to be considered among the ultra-high net worth crowd.
What percentage of retirees have $2 million dollars? ›
According to EBRI estimates based on the latest Federal Reserve Survey of Consumer Finances, 3.2% of retirees have over $1 million in their retirement accounts, while just 0.1% have $5 million or more.
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.
Does net worth include home? ›
Household wealth or net worth is the value of assets owned by every member of the household minus their debt. The terms are used interchangeably in this report. Assets include owned homes, vehicles, financial accounts, retirement accounts, stocks, bonds and mutual funds, and more.
What percentage of retirees have $3 million dollars? ›
Specifically, those with over $1 million in retirement accounts are in the top 3% of retirees. The Employee Benefit Research Institute (EBRI) estimates that 3.2% of retirees have over $1 million, and a mere 0.1% have $5 million or more, based on data from the Federal Reserve Survey of Consumer Finances.
What is a good net worth to retire? ›
By age 40, you should have accumulated three times your current income for retirement. By retirement age, it should be 10 to 12 times your income at that time to be reasonably confident that you'll have enough funds. Seamless transition — roughly 80% of your pre-retirement income.
What is good net worth by age? ›
Average net worth by age
| Age by decade | Average net worth | Median net worth |
|---|
| 40s | $713,796 | $126,881 |
| 50s | $1,310,775 | $292,085 |
| 60s | $1,634,724 | $454,489 |
| 70s | $1,588,886 | $378,018 |
4 more rowsA 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.
What net worth qualifies as top 1? ›
In the U.S., it may take you $5.81 million to be in the top 1%, but it takes a minimum net worth of $30 million to be considered among the ultra-high net worth crowd. As of the end of 2023, this ultra-high net worth population is on the rise, reaching 626,000 globally, up from just over 600,000 a year earlier.
What is a high-net-worth individual bank? ›
HSBC. HSBC's Private Banking services are designed for high net worth individuals and families with complex, international financial needs. The bank's global presence and expertise make it an attractive choice for clients with assets and business interests in multiple countries.
What is a certified high-net-worth individual? ›
A certified high net worth individual
have an annual income in excess of £100K or. have net assets in excess of £250K beyond your pension fund assets and your private residence.
What salary is considered rich for a single person? ›
If you make at least $173,000 at age 30, you re considered rich. At age 35, if you make at least $291,000 you are considered rich. And if you make at least $388,000 a year at age 40, you are also considered rich.
