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Ultra High Net Worth or High Net Worth

hutch x chris   by Hutch Ashoo and Chris Snyder · Updated April 26, 2024 · 8 min read ✦

So what defines ultra high net worth? An individual may be categorized as an Ultra-High-Net-Worth Individual (UHNWI) when their net worth surpasses a defined threshold, typically exceeding $30 million and potentially reaching up to, but not exceeding, $100 million. This categorization signifies a significant level of wealth and access to specialized financial services and investment opportunities.

That’s you. An ultra-high net worth individual. And here’s what makes you very different. Your financial picture and life goals are radically different from everyone else. Yes, that includes high net worth individuals. High net worth individuals have a net worth of less than $10 million. What you need. What’s important to you. How you spend your time.

You can download the ultimate guide for investors with $10+ million liquid investable portfolios here.

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STRATEGIES FOR FAMILIES WORTH $5 MILLION TO $500 MILLION

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.

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The World of Ultra-High Net Worth: Unveiling the UHNWI

The World of Ultra-High Net Worth: Unveiling the UHNWI

A UHNWI stands as a type of wealthiest person having accumulated a colossal amount of their wealth or financial success. Defined as individuals with a net worth beyond $30 million mark, UHNWI are amongst the crème de la crème in asset accumulation. Further, 60% of them are living in the United States as financial industry, this making the United States of America the most dominant country among all the financial establishments around the world. Among all various asset classes, wealth in residential real estate mainly accounts for the leading source of wealth for this group, which often denote a major part of the entire net worth of the group.

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Understanding Ultra-High-Net-Worth Individuals (UHNWIs)

The vast majority of the stage are males over 50. The gender breakdown for this group appears to be changing too. As many of them are predominantly women in the under-50 age group – 13.9% for women as compared to 10.2% for men.

Examples of UHNWIs

It is worth to mention that Elon Musk or Bernard Arnault, the richest people, on the Earth, took the first place depending on the day. Jeff Bezos is the well-known billionaire with the amount of money estimated to be $152 billion. Berkshire Hathaway and Bill & Melinda Gates Foundation are other bigger instances of UHNWIs, like Warren Buffet and Mr. Gates. Women’s group will also have Arwyn Christy Walton (Walmart), Jillian Jane Lauder (Estee Lauder), Kay Piety Ronda Stryker (Stryker Corp.), and the Mars sisters.

How the UHNWIs Invest

How the UHNWIs Invest

UHNWIs could have about $1 million free of debt. Mostly, they allocate the major portion of their investments in financial assets by means of well-designed investment portfolios that are aimed at exploiting those investment opportunities that arise or eliminate those that do not meet their objectives. These portfolios could have a combination of stocks / bonds / funds and alternative investment like real estate property. One instance investment strategies is when Mark Zuckerberg, deemed an ultra-high-net-worth individual (UHNWI), purchased a 37 million-dollar ranch in Hawaii to be a part of his overall portfolio that involves real estate in some way.

 Benefits Afforded to HNWIs

Upper-class (HNWIs) individuals could obtain a wider range of financial services unlike those with a little amount of money. This may consist of the opportunity to engage with the wealth management firms that are designed to manage the complex financial portfolio types and also take advantage of the tax advantages that are readily available to minimize their tax worries. Another benefit for which HNWIs may avail is the retirement plan teamed up with their specific objectives and requirements. Also, they frequently have access to the ability to participate in direct investment in other assets, including hedge funds, private equity, as well as venture capital, which can generate higher returns but involves higher risks.

Wealth management firms: These companies render themselves to HNWIs with customized guidance on personal finance and investment management. They can assist clients with their numerous tasks multi-functionally, like portfolio management, risk management, asset allocation as well as plan for the estate.

Tax advantages: HNWIs may be entitled to receive certain tax deductions and credits that are usually limited to a lower-income segment of the population. Differential tax treatment provides the opportunity for them to make potentially more savings on their tax and retain more of their earnings.

Retirement planning: Due to the bigger size of the HNWI’s wallet, the income planning for HNWIs is usually more complicated than for others. This group could have multiple income streams coming from investments, pensions, as well as Social Security benefits and consequently more estate planning aspects that have to be incorporated in their retirement planning.

Direct investments: HNWI individuals may well belong to the group of investors whose asset size meets the minimum investment requirements to get involved in alternative investments, namely hedge funds, private equity or venture capital. Such ventures could produce substantially high returns, but they are, additionally associated with more risks that conventional investments such as stocks and bonds.

 Special Considerations

The Americas (North America and South America) account for more than 10% of the total HNW population, with 7.4 million in North America, 4.5 million in South America with China, Japan, Germany, and the UK accounting for the most mixed populations.

Types of High-Net-Worth Individuals (HNWI)

A sub-sub-HNWI person will purse a range between $100,000 and $999,999 while the one millions’ and over purse bracket will be occupied by an HNWI individual. High-Net-Worth Individuals (HNWI) with around USD 5 million belong to the upper end of the spectrum. And with more than $30 million, you belong to the UHNW class, people with more than $5 million are often called VHNWIs to stand for the very high net-worth individuals.

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The 10 ultra-rich cities with the greatest mass of extreme wealth.

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1. Washington, D.C.

Population of UHNWIs with primary or secondary residences: 5,732

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2. Chicago

Number of UHNW individuals with a primary or secondary residence: 6,506

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3. Singapore

Number of UHNW individuals with a primary or secondary residence: 7,471

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4. Beijing

Number of UHNW individuals with a primary or secondary residence: 8,923

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5. San Francisco

Number of UHNW individuals with a primary or secondary residence: 9,221

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6. Miami

Number of UHNW individuals with a primary or secondary residence: 10,831

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7. Los Angeles

Number of UHNW individuals with a primary or secondary residence: 13,194

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8. Hong Kong

Number of UHNW individuals with a primary or secondary residence: 15,175

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9. London

Number of UHNW individuals with a primary or secondary residence: 15,907

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10. New York

Number of UHNW individuals with a primary or secondary residence: 21,714

Ultra High Net Worth or High Net Worth 3 Things That Matter

Ultra High Net Worth or High Net Worth? 3 Things That Matter

The development over time for the economy has been driven by the demand to have greater customization options for the wealthy.

More the Wealth, Greater Needs for Different Types of Services are Driven by Growing Demand.

By discovering the value of one’s self, the directions of your goals will become more defined.

What is to ultra rich people?

Generally, ultra high net worth individuals’ recommendations by most wealth advisors indicate that wealth of their clients starts at the cost of $30 million.

You may also be curious to know:

How many people in the world are ultra-high net worth?

According to published data, 11.8 million American households in the US are considered high net worth. These households correspond to three percent of the US population. Also, there are 33 million UHNW individuals worldwide, half of them living in North America.

This amount of wealth requires the services of a skilled wealth manager who can customize a financial plan to each individual’s needs and wants.

Those differences are the subject of this post.

Consider this:

Have you recently heard the financial ‘gurus’, and discovered that the information they gave sounded like to have no connection to your case whatsoever?

Ah, and here are all the journalists, bloggers and experts speaking to all of the world, trying to talk to as many people as they can in some way that they may better listen. However, after they do that, they will be in a state of inferiority in which you are more important for them.

Do you think we need to make a presentation about how much efforts have to be taken in getting rid of credit card dues? Can you imagine surviving on candy bars and video games? Or making car loan payments each month? For example, whether to start investing or what are the things you need to do to have a great credit? No – this is not the type of problems everybody would be worried about the ones who enjoy the beauty of the luxurious life.

Knowing that what you experience is perfectly alright will help you manage your emotions better in such circumstances. So, inappropriately it is not, because it is a good thing its absolute waste of your time. You need something more. Lastly, you need to get to know yourself, because things make sense once you know “why” you are.

By the time you’re done with this article, you’ll be surprised on what subject matters you hadn’t realized before, including educating you on your needs and in a more productive and fulfilling manner.

Let’s break this down:

There are at least three distinct differences that set you and anyone with ultra high net worth apart from everyone else.

These differences have a profound impact on things like:

  • Managing your investments
  • Creating estate plans
  • Minimizing taxes
  • Allocating your assets to protect your wealth from sudden market crashes.

In addition to the 3 differences you’ll find in this article, you can find much more depth in our signature work, 7 Secrets to High Net Worth Investment Management, Estate, Tax and Financial Planning, you can get your free copy here.

Just so we’re clear:

We at Pillar Wealth Management exclusively serve with high net worth and ultra high net worth investors possessing $5 million to $500 million in liquid assets. If you are a client who is interested to find a well-qualified team of wealth managers, please use the link below to book a free hardworking consultants.

Having this in mind, the understanding of the nuances between the residents who have a high net worth and the ultra high net worth residents of your city or state now is the next stage.

Here are three of them:

Higher Wealth Demands Greater Customization

1. Higher Wealth Demands Greater Customization

At least – it should.

Seriously:

If you have $10 million as your accessible funds, then your investment plan should not be merged with people having even less than 1% of that. Also, let me say, I do not mean this with the idea of being ‘better’ than people who have less money. It’s simply a reality:

With great wealth comes great complexity.

Click to Tweet: With great wealth comes great complexity.

You need customized investment planning. If you don’t get it, you put your assets at unnecessary risk. The scale of loss you face if you do it like everyone else far outweighs that of others. For example, suppose two investors lose 33% of their portfolio value in a market crash, such as the one caused by the coronavirus.

An ultra high net worth investor who had $75 million will lose $25 million. A more typical investor who has $200,000 will lose $67,000. Now, losing $67k is no picnic if all you have is $200k, so let’s not minimize that.

But let’s get real:

Losing $25 million simply does not compare. This is generational wealth. To learn more about how a wealth manager can prevent this from happening, order a free copy of our book, 7 Secrets To High Net Worth Investment Management, Estate, Tax and Financial Planning

Here’s the frustrating part:

An ultra high net worth investor should not be exposed to this much risk. Ever.

But cookie-cutter financial plans from big banks, Wall Street, and discount brokers have driven us to write this post to warn and educate ultra high net worth families about the devastation such losses would inflict.

Pillar Wealth Management adopts techniques that bring in a solid portfolio and virtually vague losses are very difficult to present. We have published the article in which you will find more information on how to lift your portfolio up. Have a look at it by clicking here!

Sometimes we’ve witnessed the uneducated capital investors withdraw as much as two-thirds of their capital after market crashes due to unprofessional financial planning from other entities.

Can you imagine?

The significant market headache for wealthier individuals and their ultra wealthy counterparties is at odds.

Here’s the good news:

Customized financial planning – based upon your goals and preferred lifestyle outcomes – offers the greatest potential for long term financial stability.

Very few financial advisors offer 100% customized financial planning, even to ultra high net worth investors. They will tell you they do. But it’s not at the level you are expecting, and that’s why you never quite feel like you’re in the right place when you’re listening to the ’experts’ talk.

It’s in your best interest to talk with someone who does both: expertly advises high net worth clients and offers custom wealth planning services.

To understand the importance of custom wealth management in more detail, we recommend reading our free book.

A call to Hutch Ashoo, CEO and Co-founder of Pillar Wealth Management, would be a good first step if you want to see how fully custom financial planning looks and feels when it is created for someone with ultra high net worth. Our firm does nothing but custom wealth planning for high and ultrahigh net worth investors.

Higher Wealth Means Greater Need for Additional Services

2. Higher Wealth Means Greater Need for Additional Services

Many wealth managers set minimum requirements on who they will work with. Pillar Wealth Management requires a $5 million minimum. Why? Part of the reason is because the array of services you need increases with greater wealth.

This is mind-blowing:

As part of our across-the-board fee of 1% (reduced for $10+ million clients), you would get all of the following white glove services at no extra charge:

Coordination of estate planning that minimizes taxes and protects assets from creditors

Quarterly updates, rebalancing, and portfolio adjustments

Friendly humans answer your calls or call back the same day

Insurance advice or counsel

Trustee selection & family governance assistance

Tax planning coordination with your tax advisor, accountant, and other key members of your team

M&A assistance for businesses

Manage family business succession

Help with debt consulting (lines of credit, mortgages, etc)

Assist with college education planning (such as 529s)

Set up assistance with aging parents and care-giving

Try getting even half of these from a typical financial advisory firm, big bank, or discount broker.

You won’t.

It’s just not their business model. Why? Because they serve the masses, and have designed their processes and methods around meeting the needs of a vast number of people, because most people have fairly similar needs when you boil it all down.

But not you.

Anyone with ultra high net worth will need most if not all of the highly specialized wealth management services listed above.

You are different. And you need a different level of service from a wealth management firm.

If you are interested in learning about how to find a financial advisor that can offer you this approach, click here to read our guide.

Knowing Your Worth Clarifies Your Goals

3. Knowing Your Worth Clarifies Your Goals

Let’s dream a little:

If you have $25 million upon retirement, you might set a goal to have $70 million remaining when you die so you can pass on an ultra high net worth legacy.

That’s just one dream. You could come up with a hundred more for each person, because everyone with ultra high net worth has a very different life situation.

Knowing your goals comes first, because that determines the customized investment plan you’ll use to reach these goals, and it will direct you to the additional services you’ll need to make it happen.

Are you getting the picture?

Do you see how all three of these reasons relate to each other?

The essence of being ultra-high-net-worth transcends mere possession of wealth or engagement in an opulent lifestyle. It permeates one’s very being.

The farther up that scale you go, the more services and customization you need in order to achieve your expanding set of goals and lifestyle dreams.

What’s possible for you is far beyond the comprehension of the average person, even someone with one or two million dollars. They’re still trying to figure out how to become ultra high net worth. You already are.

Ultra High Net Worth Individuals (UHNWI) Explained

Those in finance recognize as (UHNWIs) ultra-high-net-worth individuals those with unassailable $30 million in investable assets. The assets set themselves apart in the class of highly liquid assets, which can be quickly turned into cash in time of need. It’s a specific criterion that is used to identify and categorize UHNWIs in the broader financial universe.

Characteristics of UHNWI

Ultra High Net Worth Individuals seek to preserve and grow their wealth. Therefore, they watch and control their expenses and purchasing behaviors so that they can reinvest their earnings for growth.

UHNWI holders are extremely dependent on their investment strategists and advisors to implement the relevant investment tools in a way that brings out the best of their prosperity goals. While as fortunate as they could be, they are tied to worry and exercise extreme caution by their resources against any possible loss or decay induced by improper investments. The board of advisors, if they have been entrusted with that success that kind of wealth generates, they are mandated to develop strategies that minimize the tax exposure of that wealth.

Many UHNWI are self-made. They start and develop businesses that are successful.

Where do UHNWI Live?

The top 10 countries which are home to the most UHNW individuals are the United States, China, Japan, Germany, Canada, France, Hong Kong, the United Kingdom, Switzerland and India. The US alone factors in nearly one-third of the UHNWI population.     

UHNWI and Their Investments

UHNWI will diversify their holdings to control their risk. Therefore, they will invest a substantial part of their wealth in low-earning products such as CDs, bank accounts, and money market or mutual funds. Besides, they will also place more capital in alternative investments like cryptocurrencies. Next, their capital will flow into bonds, stocks and real estate as well as other valuable objects such as collectible and art pieces or vintage cars.

Authors

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.

More from authors.

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