HNWI: What Are They and What Are Their Spending Habits?

Are you considered a high-net-worth individual (HNWI)? More importantly, if you’ve reached that level, can you maintain it—and if you haven’t yet, what steps can help you get there?

According to recent data, approximately 11.8 million households in the United States qualify as high-net-worth individuals (HNWIs)—representing around 3% of the population. Notably, this group accounts for about 40% of the total millionaire population worldwide.

If you fall into this category, understanding how to manage your wealth effectively is essential. This article outlines key insights on high-net-worth individuals, including:

• What qualifies someone as an HNWI
• Common characteristics of HNW individuals
• Spending trends among HNWIs based on recent data

Let’s explore what it means to be a high-net-worth individual and how it may shape your financial future.

What Is a High Net Worth Individual?

Let’s start with the basics—what exactly qualifies someone as a high-net-worth individual (HNWI)? Traditionally, an HNWI is defined as someone who holds over $1 million in liquid investable assets. In the U.S., approximately 11.8 million households meet this threshold, representing about 3% of the population. This relatively small percentage suggests that high-net-worth individuals often share specific financial behaviors and lifestyle characteristics.

While some may inherit wealth, many HNWIs in the U.S. are self-made—having built their fortunes through entrepreneurship, strategic investing, or career advancement. Those with $5 million or more are commonly referred to as very high-net-worth individuals (VHNWIs), and individuals with $30 million or more in liquid assets fall into the ultra-high-net-worth (UHNW) category.

What Are the Characteristics of HNWI?

High-net-worth individuals (HNWIs) often share distinct characteristics that enable them to grow and preserve their wealth effectively. These attributes go beyond just investment acumen—they reflect strategic thinking, discipline, and access to expert financial support. Below are some common traits seen in HNW individuals:

1. Willingness to Take Calculated Risks

Many HNWIs understand that wealth accumulation involves stepping out of one’s comfort zone. They’re often open to calculated risk-taking, balancing aggressive strategies with measured asset protection. They may blend both active and passive investment approaches to pursue growth while preserving capital.

2. Emphasis on Diversification

HNW individuals typically distribute their wealth across asset classes such as equities, bonds, real estate, and alternative investments. This diversification helps mitigate risk and promotes more stable returns, especially in volatile market cycles.

3. Partnership with Financial Professionals

Managing significant wealth often requires a team-based approach. HNWIs frequently work with specialized advisors who offer insight into complex areas such as:

• Wealth management
• Estate planning
• Tax strategy
• Insurance planning
• Investment advisory

These professionals provide the guidance necessary to help high-net-worth individuals make informed decisions tailored to their evolving financial goals. Looking for expert support?

4. Proactive in Seizing Opportunities

Rather than waiting for ideal conditions, HNW individuals are known for their decisiveness. They proactively identify and evaluate investment and business opportunities that align with their objectives, often leveraging expert input to stay ahead of market trends.

5.    Cost-Conscious and Efficient

While focused on growth, HNWIs are also strategic about managing costs. They actively seek ways to optimize taxes, reduce investment fees, and structure their expenses efficiently. This may include:

• Favoring long-term over short-term capital gains
• Maximizing retirement and healthcare accounts
• Engaging in charitable giving with tax benefits
• Leveraging tax-loss harvesting and other planning tools

What Are the Spending Habits of an HNWI With $1 Million in Liquid Assets?

Spending habits among high-net-worth individuals (HNWIs) often defy expectations. Despite having substantial wealth—typically $1 million or more in liquid, investable assets—many of these individuals exhibit financial behaviors that emphasize practicality, cost-consciousness, and long-term planning.

Here are a few notable trends seen among HNWIs:

1. They Shop Secondhand—Strategically

While it might be surprising, many wealthy individuals enjoy shopping at flea markets and thrift stores. For some, it’s about finding unique items; for others, it’s a way to control unnecessary spending. IKEA founder Ingvar Kamprad famously stated that he often purchased clothing from flea markets—highlighting that value-driven decisions can apply at any wealth level.

2. They Prefer Major Retailers for Everyday Needs

Contrary to the assumption that luxury brands dominate their shopping habits, a significant portion of HNWIs prefer mainstream retail stores for daily purchases. Data shows that:

• 33% of multimillionaires shop at Walmart
• 61% visit Home Depot
• 50% enjoy shopping at Costco
• Over 40% make regular purchases from Target

This reflects a balanced mindset—splurging selectively, while choosing affordability for day-to-day needs.

3. They Use Coupons and Discounts

Another unexpected trait among HNWIs is frugality. According to research, 47% of households with millions in liquid assets use platforms like Groupon. In fact, these households are twice as likely to redeem coupons as families earning under $35,000 annually. They recognize that saving on regular expenses creates more flexibility for strategic investing and long-term planning.

Additional Examples of HNWI Spending Discipline:

• Warren Buffett continues to live in the modest home he purchased in 1958 for $31,500.
• Amancio Ortega, the founder of Zara, dines in the company cafeteria with employees.
• Azim Premji, chairman of Wipro, drives a used car and emphasizes energy conservation to staff.

These examples underline a critical point: wealth accumulation and preservation often stem from disciplined habits, not just high income.

Wrapping It Up

High-net-worth individuals (HNWIs) often share key financial behaviors that distinguish their long-term success—from strategic risk-taking and smart diversification to careful spending and proactive cost management. These characteristics play a significant role in preserving and growing their wealth over time.

If you’re navigating wealth decisions at this level, understanding your options is only the beginning. Finding the right planning partner who can help align your financial strategy with your goals is a critical next step.

To explore how to take the next step with clarity and confidence:

Whether you’re evaluating your current financial plan or beginning to build a new one, PillarWM Finder helps you connect with experienced wealth advisory services tailored to your unique needs.