Money can't buy happiness, but it can certainly make life more comfortable and fulfilling. For many people, the pursuit of wealth is not only a means to achieve financial security but also a way to create opportunities and positively impact the world.
One popular tag given to the rich is High Net Worth Individuals (HNWIs). They are individuals who have accumulated significant wealth and represent the upper echelon of financial success.
If you're also looking to achieve financial success and become an HNWI, it's not just about the money. It's about adopting the right mindset, developing a strategic plan, and taking actionable steps towards your goals. With the right approach and a commitment to your financial success, becoming an HNWI is within reach. But who are HNWI? Let’s find out!
A High Net Worth Individual is someone whose financial assets exceed a particular threshold. Typically, this threshold is around $1 million or more in liquid assets, excluding the primary residence.
Liquid assets can include cash or investments that can be quickly and easily converted into cash. This includes assets such as certificates of deposit and government bonds but typically excludes illiquid assets like primary residences, fine art, and antiques, which are difficult to sell and can have volatile values.
While some lists of liquid assets may exclude stocks and bonds due to the potential for losses if sold at the wrong time, these types of investments are often included in the investment portfolios of high-net-worth individuals as they contribute to their overall wealth.
There is no official or legal definition of HNWI. However, financial institutions and businesses often set different thresholds for high net worth.
Financial institutions may use different criteria to designate high-net-worth individuals (HNWIs). For example, Capgemini's World Wealth Report broadly defines HNWIs as anyone with $1 million or more in investable wealth.
Capital Bank uses a three-pillar approach, including
However, meeting all three pillars is not always required to be considered an HNWI.
Some institutions may also distinguish between different tiers of wealth, including
The World Wealth Report provides net worth ranges for each tier:
According to Statista, India had over 278,000 high-net-worth individuals (HNWIs) in the financial year 2020 who owned financial assets worth at least one million U.S. dollars. The number of HNWIs in India has increased due to rising business opportunities, foreign investments, and new ventures.
In 2021, India had around 13,637 ultra-high-net-worth individuals (UHNWIs) with assets worth more than 30 million U.S. dollars.
The Capgemini World Wealth Report notes that nearly 63% of the world's HNWI population resides in the United States, Japan, Germany, and China.
The global HNWI population saw an 8.0% increase in assets in 2021, reaching $86 trillion in wealth, with North America leading the world in HNWI wealth at $27.7 trillion, followed by Asia.
Becoming a High Net Worth Individual (HNWI) requires a disciplined approach to managing finances and taking calculated risks. Here are some actionable steps you can take to become an HNWI:
Ready to start your wealth creation journey? Remember, it's not a one-time task but a journey that requires consistency and a long-term approach.
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