What is a High Net Worth Individual?
A high net worth individual is a person with large personal financial holdings. Traditionally the term used was millionaire, but in recent years the term high net worth individual has become the descriptor of choice. A high net worth individual has financial assets worth more than US$1 million.
High net worth is used to describe financial assets, discounting real-estate. This makes a large difference in the number of people who may be classed as high net worth individuals: in 2003 there were nearly 2.2 million people in the United States who would be classified as having high net worth, while over 7.9 million people had assets including real estate worth in excess of a million dollars. In addition to the category of high net worth individuals (HNWIs), there is a second category, called ultra-high net worth individuals (UHNWIs), comprised of people with financial assets in excess of US$30 million. In the global population, this second category makes up approximately 1% of the total high net worth population.
The prestige once associated with being a high net worth individual has diminished somewhat in the past few decades, as this level of wealth becomes more and more common, particularly in the United States. Throughout the United States, one may find entire neighborhoods populated solely by high net worth individuals, and in some sectors of the business world it is not uncommon for the average employee to be propelled to high net worth status by their yearly income. With the depreciation of the dollar against many foreign currencies, large sections of foreign populations were also raised to the status of high net worth individuals simply as a result of the relative value of their wealth.
In addition to the advancement of a large sector of people to high net worth status, a not-insubstantial number of people have reached levels of "super millionaire" or "billionaire", both of which act to leave "normal" high net worth individuals feeling as though they are in a lower class. As of 2005, there were more than 600 US-dollar billionaires in the world, with the top 34 having in excess of US$10 billion. With wealth at these levels, entire tiers of luxury exist that are inaccessible to those high net worth individuals having only a few million dollars at their disposal.
Companies exist which cater exclusively to high net worth individuals and their lifestyles. Everything from personal real-estate, jewelry brokers, kidnap and ransom insurance, yachting, and financial investment has specialists who devote themselves to high net worth or ultra-high net worth individuals and their specific needs.
Written by Brendan McGuigan
