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High Net Worth Individuals

Are you a high net worth individual? Building a high net worth usually involves some combination of hard work, generational wealth, professional success, and smart investment choices.

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7 Secrets To High Net Worth Investment Management, Estate, Tax and Financial Planning

The insights you’ll discover from our published book will help you integrate a variety of wealth management tools with financial planning, providing guidance for your future security alongside complex financial strategies, so your human and financial capital will both flourish.

Clients frequently share with us how the knowledge gained from this book helped provide them tremendous clarity, shattering industry-pitched ideologies, while offering insight and direction in making such important financial decisions.

The biggest Financial Planners' Mistake That Will Hurt Your Financial Security!
The biggest Financial Planners' Mistake That Will Hurt Your Financial Security!
How To Find Your GO-TO High Net Worth Financial Planner
How To Find Your GO-TO High Net Worth Financial Planner
How Pillar's High Net Worth Financial Planning Process Is Different
How Pillar's High Net Worth Financial Planning Process Is Different
Multi-Family Office For Ultra-High Net Worth Families
Multi-Family Office For Ultra-High Net Worth Families
Founder & Managing Member Pillar Wealth Management
Founder & Managing Member Pillar Wealth Management
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If you are among high net worth individuals with more than $10 million in liquid assets, we recommend reading our guide on selecting a financial advisor for managing assets between $10 million to $500 million. You’ll find a lot of useful information that will help you manage your wealth better and increase the value of your assets.

Pillar Wealth Management primarily works with high net worth and ultra-high net worth families with $5 million to $500 million in liquid assets. Our wealth managers specialize in money management and help you make better investment choices to grow your net worth. Click here for a free consultation session.

In this article, we will be answering questions like:

• Who are high net worth individuals?

• What is the net worth of the top 5%?

• Where do high net worth individuals hang out?

• What do high net worth individuals need to keep in mind for wealth management? Let’s begin.

What Are High-Net-Worth Individuals (HNWIs)?

There is no official or legal definition of high net worth, but the consensus is that individuals who own at least $1 million in investable assets are considered to have a high net worth. Investable assets, or liquid assets, do not include a home or other real estate; rather, they include assets that can be fairly easily converted to cash, such as stocks, bonds, and money market accounts.

Because financial advisors are paid a percentage of the value of the client’s assets, they appreciate having customers with a high level of liquidity in their portfolios.

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How to Calculate Your Net Worth    

To calculate your net worth, simply subtract the total value of your liabilities from the value of your assets. Liabilities are any kind of debt, loan, or mortgage. Assets include cash, gold, bank accounts, investments, and real property (home, cars, and collectibles).

Benefits of Having a High Net Worth

Having a high net worth means not having to worry about money. If you have a high net worth, you can live off your investments—assuming you aren’t too greedy and careless about expenses. Even with the safest investments, you can earn enough to live on without spending your capital.

If you want more luxury, you can invest in more profitable, albeit riskier, investments while keeping your retirement income secure.

Having a high net worth can give you access to investments not otherwise available. These are investments that require a large minimum placement. Investment firms may offer other perks, such as reduced fees and tickets to various events.

How Do I Become a High Net Worth Individual

With a high-paying job and a frugal lifestyle, where you save a lot of your income every month, you could accumulate $1 million over time. For example, if you earn $100,000 per year and save $25,000, you will have $1 million saved in 40 years—without earning any interest! If you invest that $25,000, you could have a lot more than $1 million.

Many high net worth individuals have built a business from scratch and then sold it, which can be done in less than 40 years if the business is highly successful.

Investing for the long term can yield astonishing results due to compounding (earning on your earnings), but it’s best to start accumulating savings early in life.

Saving something from every paycheck and controlling expenses will go a long way to accumulating wealth.      

Types of HNWIs 

Beyond high net worth, very high net worth individuals are those who have between $5 million and $30 million in liquid assets, whereas ultra-high net worth individuals have over $30 million in liquid assets.

Then, there are accredited investors, defined as individuals with income exceeding $200,000 in each of the two most recent years and a reasonable expectation of the same income level in the current year, or individuals with a net worth that exceeds $1 million or with assets under management of $1 million, excluding their primary residence.

Accredited investors have the legal right to buy securities that are not registered with regulatory bodies such as the SEC. They also have privileged access to venture capital, hedge funds, and transactions involving complex and riskier investments and instruments.

HNWI Statistics

Recently, Bernard Arnault and Elon Musk were jostling for the position of richest man in the world, each with around $200 billion (depending on the performance of Tesla stock).

The richest woman in the world is Françoise Bettencourt Meyers, with over $90 billion.

The 2022 World Wealth Report states that there are 22.5 million HNWIs and 220,000 UHNWIs, with $87 trillion in wealth.

The top five countries with the most HNWIs are the US, Japan, Germany, China, and France. The top five countries with the most UHNWIs are the US, China, Germany, Canada, and India, with each individual having a net worth of at least $50 million.

In 2022, the number of HNWI grew by 1.7 million (7.8%), and global wealth increased by $6.4 trillion (8%).

Who Are High Net Worth Individuals?

High net worth usually refers to people having over $1 million in liquid assets. Liquid assets refer to assets that can be easily converted into cash. These include cash, cash equivalents, stocks, mutual funds, and accounts receivable.

As a high net worth individual, you can also access specialized services offered by investment banks, wealth managers, and asset management companies. These services are designed to help you sustain and grow the value of your assets, protect your legacy, and plan for retirement.

Choosing the right financial advisor to work with is very important here. If you need help on that front, we recommend reading our guide on how to choose a financial advisor for individuals with $5 million to $500 million in liquid assets.

What Is The Net Worth of the Top 5% Ultra-high Net Worth Individuals?

Now that you know who high net worth individuals are, let’s take a look at how many people in the world fall in this category. Even more so, what is the net worth of the top 5% of high net worth individuals in this category?

According to a 2019 report, over 46.8 million people in the world held assets worth $1 million. 40% of these individuals lived in the United States. As far as the net worth of the top 5% is concerned, this answer can vary depending on the age group you belong to.

As per a report, you will be in the top 5% of the world population if you have the following net worth as per your age:

– Ages 18 – 34: $278,000

– Ages 35 – 44: $1.13 million

– Ages 45 – 54: $2.18 million

– Ages 55 – 64: $4.40 million

– Ages 65+: $3.51 million

If we narrow it down further to the top 1%, here’s the net worth you need to have to fall in this category:

– Ages 18 – 34: $998,000

– Ages 35 – 44: $2.65 million

– Ages 45 – 54: $12 million

– Ages 55 – 64: $14.5 million

– Ages 65+: $12 million

If you belong to any of these two categories, it is essential to seek tailored wealth management solutions that put your interests first. That’s precisely what we offer at Pillar Wealth Management. If you happen to be among high net worth individuals, click here to arrange a free consultation with us.

Where Do High Net Worth Individuals Hang Out?

So far, we have discussed who high net worth individuals are and the average net worth of people in the top 5% and 1% categories. Now, let’s tackle another question: Where do high net worth individuals hang out, and what do they do? It depends on their interests.

Most high net worth individuals and families enjoy such things as traveling, experiencing new places, or collecting art. You’ll find them hanging out on yachts, playing golf, skiing, or at art exhibitions. As far as hobbies go, high net worth individuals may like riding horses or collecting watches or other items they deem valuable. They tend to own residential properties in places like Boca Raton, Florida, Big Sky, Montana, Los Angeles, California, and more. Research suggests that these individuals are also six times more likely to shop at upscale apparel outlets, indulge in home renovations, and shop for furniture.

They also enjoy fine dining, and their most popular travel destinations include New Zealand, Australia, Oceania, Europe, and Asia.

What Do High Net Worth Individuals Need to Keep In Mind for Wealth Management?

Being rich isn’t all fun and play. High net worth individuals also have to work hard to sustain the lifestyle they desire and retire comfortably. If you happen to be a high net worth or ultra-high net worth investor, we recommend reading our guide on how to improve portfolio performance to make this happen.

Whether you are a part of the high net worth club or expect to enter it soon, we recommend all people with a sizeable number of liquid assets to keep the following in mind:

Make Smart Investment Choices

If you understand things like the time value of money, you’ll know that you need to invest your liquid assets to grow in value. Your investment choices mainly depend on your wealth management goals and your age.

At Pillar Wealth Management, we offer customized investment management that helps you achieve your goals. Still, to give you an overview of what smart investment choices entail, we recommend that you always diversify your investment portfolio. What does it mean to diversify? Diversification refers to investing your liquid assets across different capital assets to reduce your risk.

Each asset type represents a certain level of risk. Its performance is influenced by different variables. If you want to be a high net worth investor, it can be hard to avoid these risks altogether. What you can do is diversify your assets. This way, if a particular set of conditions hurts one asset type, they may not have the same impact on the other asset type.

There are 3 asset types you can invest in if you want to diversify. These are stocks, bonds, and cash. These assets behave differently from each other, and how you allocate your money among them can reduce the damage caused to your investment portfolio under less-than-ideal market conditions.

For instance, stocks offer high returns, but they are also very volatile. On the other hand, bonds are fixed-income securities that are less risky. The same applies to cash or cash equivalents. These assets have low returns, but they also help control your portfolio risk.

How do you decide which stocks or bonds to add to your investment portfolio, though? You work with a suitable financial advisor. Click here to read our guide on how to find a financial advisor for investors with over $10 million in liquid assets.

Control Your Costs

Cost control is an essential part of wealth management. You can earn high returns, but you could lose a significant sum of your profits to investment costs and taxes if you are not careful.

Some of the costs you need to watch out for here include:

– Capital gain taxes

– Costs of active vs. passive management

– Commissions

– Bond sale spread

– Internal expenses

Tax-loss cultivation

– Service fee

Let’s elaborate on some of these costs to understand how they can affect your returns. Take capital gain taxes. There is a significant difference between the tax rate of short-term and long-term capital gains.

The tax rate for long-term capital gains is between 15% and 20% for high net worth investors. In comparison, short-term capital gains are taxed at 35% to 37%. So, if you are opting for active investing techniques to buy and sell assets within a year, you could lose a lot of money in taxes. At Pillar Wealth Management, we recommend balancing your short-term and long-term capital gains to increase your returns while controlling your tax burden.

Understanding how these costs work is also a great way of finding the right financial advisor. Most financial advisors are unable to tell you how much money you’ll be paying for investment management. This is mainly because they are unaware of hidden costs. Unfortunately, that lack of awareness can hurt your net worth.

If you want learn more about how to reduce these costs, we recommend ordering a free hardcover copy of our book – The Art of Protecting Ultra-High Net Worth Portfolios and Estates – Strategies For Families Worth $25 Million To $500 Million.

Manage Your Risk

As we mentioned in an earlier section, all investments pose a certain amount of risk. Learning how to manage this risk is an essential part of wealth management. We already discussed diversification, but there is so much more you can do to control your risks.

For starters, we recommend working with a financial advisor who utilizes historical data for understanding market trends and can use this information to help build your portfolio. It also depends on how far back this historical data goes. Many financial advisors only have 20, 30, or 40 years of market data at hand.

However, a 30-year-old data set would not account for major events such as World War II or The Recession of 1953. Understanding how these events can impact your investment portfolio can make a big difference to your risk management.

At Pillar Wealth Management, we utilize data sets going back to 1925. We use this historical data to conduct portfolio stress tests that involve over 1,000 scenarios. This allows us to understand how your portfolio might suffer during an economic crisis and prepare countermeasures to minimize the impact.

If you want to learn more about risk management for high net worth individuals, click here to arrange a free consultation with us.

Stay Objective and Make Data-driven Decisions

High net worth individuals also opt for evidence-based investing over emotional investing. Evidence-based investing allows you to make investment decisions based on research, historical data, and education. On the other hand, emotional investing is driven by sentiments. For instance, if you hear any unpleasant news about a company’s CEO, you may assume this can impact the value of its stock. As an emotional investor, you may choose to sell this stock quickly to safeguard your investment.

Now, suppose you were right. The company’s stock price does dip briefly. However, two months later, the CEO announces his plans for expanding the company’s operations and exploring new regional markets. When this happens, the stock price rises again. If you sold your stock, you cannot capitalize on this increase in the stock price.

At Pillar Wealth Management, we keep a close eye on political changes and shifts in the economic conditions of the country. However, we also focus on market trends and the historical data we have at hand to make decisions that can protect your net worth. 

Learning how to remain steadfast in the face of bad news is the mark of a good investor. Click here to learn more about other critical shifts you can make to improve your portfolio.

Get In Touch With Pillar Wealth Management Today

We hope you found this blog useful for understanding what high net worth individuals are. If you happen to be a part of the club, get in touch with us today.

Our team at Pillar Wealth Management has over 60 years of combined experience in wealth management. We believe that all high net worth individuals need specialized wealth management solutions that cater to their needs, account for risk, and increase their returns. If you are tired of the same cookie-cutter solutions offered by most other investment advisors, reach out to us for a free consultation. We can discuss your investment goals and prepare a portfolio that helps you lead the life you desire.

Click here to talk to one of our wealth managers today! 

Frequently Asked Questions

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A high net worth individual has liquid financial assets whose value is at least $1 million, assets such as cash, bank accounts, money market funds, stocks, and bonds.

Someone has a high net worth in 2022 if they have liquid financial assets whose value is at least $1 million, which are assets other than real property such as homes, boats, or airplanes.

In the US, a rich individual is someone whose assets are worth at least $1 million. Their assets include real property as well as cash, bank accounts, money market funds, stocks, and bonds.

In the US, a high-net-worth individual is someone whose financial assets are valued at $1 million or more. There are approximately 22 million such individuals in the US.

An affluent individual is simply wealthy, rich, or well-off and lives a comfortable lifestyle, whereas a high-net-worth individual has at least $1 million in liquid assets.

In 2021, there were 7.4 million HNWI in the United States, according to Statista.com, including such people as Alice Walton ($65 billion) and Jeff Bezos ($171 billion).

There are more high net worth individuals in the United States than in any other country, followed by China, Germany, France, Canada, Japan, and India.

A rule of thumb is to take your age, divide it by 10, and multiply that by your gross annual income. So, if you’re 60 years old and your income is $75,000, your net worth should be $450,000.

The average net worth for US households is $750,000, with a median of $121,000. The median for American households where the head of household is over 75 years old is $250,000.

In the US, the net worth of the top 1% is $10,815,000.


To be 100% transparent, we published this page to help filter through the mass influx of prospects, who come to us through our website and referrals, to gain only a handful of the right types of new clients who wish to engage us.

We enjoy working with high net worth and ultra-high net worth investors and families who want what we call financial serenity – the feeling that comes when you know your finances and the lifestyle you desire have been secured for life, and that you don’t have to do any of the work to manage and maintain it because you hired a trusted advisor to take care of everything.

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