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Are You a HENRY?

Financial Planning

Are you among a growing group of people in the U.S. who have a high household income, yet whose savings never seem to grow significantly year after year? 

Believe it or not, there is a name for people like you, and there is a very good chance that you might be a HENRY. HENRY stands for "High Earners, Not Rich Yet," and it is just the newest socio-economic acronym from a long list of media catchwords. You may remember the popularity of terms like YUPPIES (Young Urban Professionals) or DINKS (Dual Incomes, No Kids) couples. But what in the world does this term mean?

Defining HENRYs

The definition of a HENRY tends to be much more fluid than similar acronyms and can change based on who you are asking. The confusion usually centers on exactly how much a household needs to earn before it qualifies as a high "high-earner," and the acceptable age range necessary for categorizing someone as a HENRY.

Although most people place the household income of HENRYs somewhere between $250,000 - $500,000 some financial experts lower the threshold to a mere $100,000 a year in earnings. This lower income requirement greatly increases the number of potential HENRYs.  

The most popular definition of HENRY includes only those born between 1981 and 1996; a group commonly known as Millennials. But, again, there is disagreement about whether it is appropriate to restrict the term to a single generation. Some people prefer to adopt a more inclusive definition of the term, pushing the top end of the age bracket to 55.  

While some conditions of HENRYism which are debatable, some aspects are generally agreed upon. It is these core characteristics which unities all HENRYs regardless of age or income level. These traits are:

  1. A higher than average income level
  2. Little to no savings
  3. Feelings of low material wealth despite income level, leading some financial experts to dub these individuals "the working rich" — those who must continue to work potentially long hours despite high-earning careers.

The History of HENRYs

The term HENRY first appeared in a Fortune Magazine article in 2003. In the original article, the writer, Shawn Tully, used the term, HENRY to describe those individuals who would be the ones who were most affected by the alternative minimum tax, or AMT. Since that time, the definition has been expanded and the list of problems facing HENRYs has grown. 

Regarding HENRYs and Finances 

HENRYs have it tough. They work long hours and earn a good salary, but have little to show for it. This is mostly due to HENRYs having to pay a huge percentage of their income as taxes and by spending the majority of the rest on ballooning day-to-day expenses. As a result, instead of living like the top 1 percent of earners in the U.S., which they are, HENRYs wind up feeling the same as any other wage slave. 

There is a way out. HENRYs have the ability to build wealth and they can do without earning a higher salary. All they need is a smarter approach to money management. 

If you are a HENRY we would look forward to talking with you about getting more out of your money and your life.

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This content is developed from sources believed to be providing accurate information. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.