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

Are you a high net worth individual (HNWI)? The real question is, can you retain high net worth if you already have it and can you reach that level if you’re not there yet?

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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.

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Founder & Managing Member Pillar Wealth Management
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According to a survey, 11.8 million households in the US can be considered high net worth families. This is equivalent to 3 percent of the entire population in the United States. It also makes up for 40 percent of the total millionaire population in the world.

If you are in the same category, we recommend you read our groundbreaking guide specifically written for those looking to invest between $5 million and $500 million. It discusses investment management, estate, tax and financial planning. 

The guide has everything a high net worth individual with $5 million in investable assets would need to find the right person for their wealth management needs.

Pillar Wealth Management works exclusively with high net worth clients who have $5 million to $500 million in investable assets. We have more than 60 years of combined experience and can help you optimally invest your wealth to secure your financial legacy. Talk to our wealth managers in a free consultation today!

In this article, we will discuss:

• What is HNWI?

• What are the characteristics of HNWI?

• What does an infographic HNWI spending look like?

Let’s begin.

What Is An High Net Worth Individual?

First things first, what is HNWI? Traditionally, a high net worth individual (HNWI) is defined as someone with over $1 million in liquid assets. As mentioned earlier, 11.8 million families in the US have 1 million dollars. Given that they make up only 3% of the US population, one can assume that they have some distinct characteristics and spending habits that have allowed them to amass such wealth.

Aside from generational wealth, there are many self-made millionaires in the US too. Individuals with $5 million in liquid assets are referred to as very HNWIs. Meanwhile, those with more than $30 million in liquid assets are considered ultra-high net worth individuals.

If you have over $5 million to $500 million in liquid assets then, we recommend checking out our guide on selecting the right financial advisor for managing your wealth.

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What are the Characteristics of HNWI?

All high net worth individuals have some common characteristics and attributes that enable them to manage their wealth and increase its value. Some of these characteristics include:

1. They are Willing to Take Risks

Everything that matters requires a certain level of risk. You need to be able to leave your comfort zone if you want to make it big. The same applies to high net worth investors. These investors are will to take an aggressive investment position to earn higher returns. They tend to make use of active and passive investment styles to secure their wealth while ensuring it also increases in value.

2. They Diversify their Assets

A high-net-worth individual understands the importance of diversification. They spread their assets across a combination of cash, bonds, and stocks. This allows them to limit their losses and ensure the sustainability of their returns amid volatile market conditions.

If you notice, a high net worth individual will be good at taking risks. However, they also make sure to diversify this risk. This allows them to invest smartly.

3. They Work With Financial Advisors

Being an HNWI doesn’t mean you have to know the ins and outs of investing. You don’t necessarily need to fly solo here. A high net worth individual usually has a team of advisors in place who can guide them on their investment choices, retirement planning, healthcare costs, and other financial decisions.

They can tap into the expertise of these individuals to make smart investment decisions and leverage market trends to increase their net worth. Depending on the value of their assets, a high net worth individual can work with one or more of the following types of people:

• Wealth manager

Tax planner

• Estate planning attorney

• Insurance brokers

• Investment brokers

• Investment advisors

If you have over $10 million in liquid assets, we recommend reading our guide on finding a financial advisor who can help you meet your investment needs.

4. They Know How to Make the Most of New Opportunities

Too often, you find yourself waiting around and not taking advantage of new opportunities. High net worth individuals don’t do that. They are always scoping out new business and investment opportunities that can boost the value of their investment portfolio and increase their wealth.

Once again, they don’t let the fear of failure hold them back and are able to take risks.

5.    They Control their Costs

One of the most common characteristics of HNWIs is that they keep a close eye on their costs. This includes, but is not limited to:

• Day to day expenses

• Investment costs

• Healthcare costs

• Tax costs

Controlling these costs has a significant impact on their net worth. Some of the ways they can control their investment and tax costs are:

• Choosing long-term capital gains over short-term capital gains

• Starting a new business from home

• Directing money to their healthcare savings account

• Maximizing on retirement benefits and employee benefits

• Making charitable contributions

• Maintain an optimal combination of active and passive investment styles

At Pillar Wealth Management, we take a highly strategic approach toward tax planning. Our wealth managers can help you make the most of tax minimization techniques and other tactics to reduce your costs. Click here to talk to one of our wealth managers today!

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

According to an infographic HNWI spending, high net worth individuals with over $1 million in liquid assets have a number of surprising spending habits. These include:

1. They Tend to Shop Second Hand

Surprisingly,a lot of wealthy people actually buy stuff from flea markets. They find it entertaining and cost-saving. According to the founder of IKEA, Ingvar Kamprad, everything he wears is usually from a flea market.

Of course, we are not saying this is true for all rich people. Many of them also like to splurge and spend their wealth on expensive clothes and accessories. However, spending less on these items can do wonders for your daily and monthly expenses.

2. They Buy from Large Retail Stores

You may be under the impression that high net worth individuals shop from exclusive outlets. While this is the case for some, many individuals with a net worth of over $5 million prefer to shop at large retail stores.

33% of these individuals shop at Walmart. 61% of them buy from Home Depot, and 50% of them love shopping at Costco. Over 40% of individuals with $5 million in liquid assets also enjoy shopping at Target.

3. They are Highly Frugal and Use Coupons

You may think coupons are something that only the lower or upper-middle-class uses. However, this isn’t true. According to the infographic on HNWI spending, 47% of multimillionaires use Groupon on a routine basis. In fact, these households are 200% more likely to cash a coupon than families with an income less than US$35,000.

It’s safe to say, therefore, that these individuals are highly frugal. Here are a few other examples that can give you an idea about the spending habits of wealthy individuals:

• Warren Buffet resides in the home he bought in 1958. It cost him $31,500.

• The founder of Zara, Amancio Ortega, has lunch in the cafeteria with the rest of his employees.

The chairman of Wipro, Azim Premji, regularly tells his employees to conserve electricity at the office and turn off lights. He also drives second-hand cars.


How Can Pillar Wealth Management Help High Net Worth Individuals?

As mentioned earlier, Pillar Wealth Management works with individuals holding over $5 million in liquid assets. We offer a comprehensive solution to these families and individuals and take on a holistic approach toward wealth management. Our efforts can help them reach their goals, control their costs, and increase their wealth.

If you have over $5 million in investable assets, here’s what we can help you with:

1. Design and Manage your Portfolio

Pillar Wealth Management can help you design a robust investment portfolio that reflects your goals. We can choose the most suitable investment products that can add value to your portfolio while observing your risk.

We can also help you select between active and passive investment styles and take on a moderate to aggressive investment approach.

Besides this, our team can regularly evaluate your portfolio for changes. This is particularly important during periods of recession and other economic shifts that can cause financial markets to crash. When this happens, Pillar Wealth Management can revisit your portfolio and rebalance it to reflect:

• The current economic environment

• Your changing goals

• A shift in your risk appetite

To learn more, talk to a wealth manager at Pillar Wealth Management.

2. Manage Your Risk

Pillar Wealth Management specializes in risk management techniques. We use a host of techniques that can control your risk so that it stays within specific risk threshold levels. Our first task is to determine how much risk you are willing to take on. Once we understand this, we develop a custom approach that ensures your portfolio risk stays at an optimal level.

We utilize an Efficient Frontier that lets us optimize your risk and return. It ensures you are earning the highest possible returns without exceeding your risk threshold.

To learn about other techniques we use, get 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!

3. Aid You In Achieving Financial Serenity

Pillar Wealth Management doesn’t limit itself to developing a strategy for achieving your goals. We help you aim for financial serenity. In our experience, you don’t have to continue making risky bets just to grow your returns. Instead, we think long-term and focus on things that will ensure your peace of mind.

To understand this better, let us assume that you need a monthly income of $35,000 to live comfortably after you retire. Some wealth managers and investment advisors will push you to invest in retirement income sources that let you generate $45,000 or $50,000 per month. On the surface, it may sound great. After all, a little extra money is always good, right? Not necessarily. If you are earning more than you aimed for, there’s a good chance you are also taking on more risk. This could backfire, especially if you are holding too many volatile assets like stocks.

At Pillar Wealth Management, we develop your portfolio to reflect your exact needs. We will recommend areas that need improvement, but we leave the final decision to you. You get to stay in control. In doing so, you also get closer to achieving financial serenity.

We also suggest other shifts. To learn about these, click here to read our guide on 5 vital changes that all high net worth investors should make.

4. Ensure Proper Asset Allocation and Diversification 

We discussed the importance of diversification for high net worth families. Naturally, that’s something we focus on too. With Pillar Wealth Management, you can expect improved asset allocation based on:

• Your age

• Your risk appetite

• Your investment goals

• Your estimated retirement income

We also strive to allocate your assets in a way that drives optimal returns. To learn more, go through our guide on how high net worth individuals can improve portfolio performance.

Wrapping It Up

There are several characteristics of HNWIs that set that apart. They tend to make smart investment decisions, safeguard their assets and are unafraid to take advantage of new opportunities and take risks with a sound payoff. They also spend their money carefully and try and control their costs where possible.

If you happen to be an HNWI, talk to us today. Pillar Wealth Management works with families and individuals having $5 million to $500 million in liquid assets. We provide fiduciary advisory services that can help you secure your financial legacy. Talk to us today in a free consultation and find out how we can help you!


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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