High Net Worth: What It Means to Be a HNWI
A high net worth individual is a person with $1 million to $5 million in liquid assets.
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Many people use net worth — the number you get when you subtract your debts from your assets — to measure wealth. But what number do you have to reach to become a high-net-worth individual, and what exactly does that status mean?
What is a high-net-worth individual?
Most experts agree that a high-net-worth individual — or HNWI — is someone who has between $1 million and $5 million in liquid assets.
However, there’s no official definition. Financial institutions and businesses often set different thresholds for high net worth. One indicator is assets exceeding $1 million, not counting a residence. The $1 million mark is a common benchmark for accredited investor status, Jovan Johnson, a certified financial planner, said in an email interview. Accredited investor status is required to trade private, riskier investments.
What assets count toward a high net worth?
Typically, high net worth is calculated using only liquid assets. These assets include money in a checking or savings account, certificates of deposit, stocks, bonds, 401(k)s, IRAs, or anything that can be converted into cash relatively easily.
Tangible assets — including personal residences, jewelry and collectibles — generally aren’t factored into the equation.
“On the stock market, you’re getting value in real time, where a piece of art would take a long time to actually be vetted and valued or appraised at a certain price,” says Sara Lovell, a CFP and co-owner of 21 West Wealth Management in Irvine, California.
How does having a high net worth impact your financial life?
High net worth unlocks exclusive opportunities. Some banks and other financial institutions require a minimum account balance to qualify for special products or services, such as private banking and wealth management.
Another advantage for HNWIs is simply having more money to save and invest, said Johnson, owner of Piece of Wealth Planning in Atlanta.
“It reduces financial stress and opens up flexibility,” he said. “Whether that’s being able to weather emergencies, take calculated risks, or support your children and future generations. It gives you more levers to pull when facing financial decisions.”
But that also creates complexity. A higher net worth can make handling finances more confusing and stressful.
For example, if you are an entrepreneur and your business is growing, you might have to hire more staff, Johnson said.
If you’re managing multiple rental properties or you have a large investment portfolio, you might need a wealth advisor.
Lovell says many of her high-net-worth clients have a dedicated financial team consisting of a certified public accountant, estate attorney and financial advisor who can tailor strategies to their specific situations.
How do you become a HNWI?
High net worth can be achieved through high income, savings and investments or gained through circumstances like an inheritance. Having minimal debt is usually a factor as well. So paying down debt can help grow your net worth.
Chelsea Ransom-Cooper, a CFP and chief financial planning officer at ZenithWealth Partners in New York, says she encourages clients who aspire to be HNWI to focus on their two rates of return — their savings rate and their growth rate.
“Put more aside in savings and try to get as close as possible into that 20%-25%,” she says.
If you are starting later in life, you have to save more aggressively, she says.
For growth rate, Ransom-Cooper says, think about how much of your money you’re investing in a diversified portfolio, especially if you’re making a high income. I
“It’s important to give money to future you,” she says. “You can’t spend it all on today you.”
How many people are actually high net worth?
Most people don’t have a net worth in the millions. To put it in perspective, the median American net worth is $192,700, according to the most recent Survey of Consumer Finances from the Federal Reserve Board.
“You have the middle class, which over time become the high-net-worth, everyday millionaires. But typically that’s in retirement,” Johnson said. “During working years, it’s very hard to reach that level to be considered high net worth.”
Still, Johnson said he thinks more people have become HNWI in the past few years, particularly entrepreneurs and tech workers.
The number of HNWI in the U.S. rose from nearly 15.4 million to about 22.4 million, between 2017 and 2024, according to Statista. And the number is expected to keep growing.
That doesn’t surprise Johnson.
“Individuals who owned investments, rental properties, or scalable businesses have generally seen their net worth increase,” he said. “That said, rising inflation and interest rates have made it harder for many not already in the HNWI category to make financial progress, and in some cases, they've lost ground.”
How high is your net worth?
Net worth is calculated by subtracting all liabilities from all assets. Enter your values in the calculator below to find your number.