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How to Leave HENRY Behind — Once and for All


Everyone has their own idea of what it means to be “rich.” If you ask five different people to define being rich, you’ll probably get five different answers. 

While being rich is often associated with how much money an individual or family makes, it’s usually more accurate to measure wealth based on the assets accumulated. This is because being wealthy really has little to do with income. Or put another way, it’s not a matter of how much money is earned — it’s a matter of how much money is saved and invested well.

High Earners Who Aren’t Rich

A financial acronym has arisen to describe higher earners who don’t have significant assets: HENRY, which stands for High Earner, Not Yet Rich. HENRYs are individuals and families that earn between $250,000 and $500,000 a year but haven’t yet been able to accumulate enough assets to be considered rich by most people’s definition. 

According to a survey conducted by Nielsen Global Consumer Insights, one out of four families earning $150,000 a year or more is living paycheck to paycheck. In addition, a survey conducted by found that about the same percentage of families with this level of income has less than $1,000 in total savings.

Of course, inflation is one reason why a six-figure income doesn’t go as far today as it did a generation ago. The cost of everything from bread, milk and eggs to automobiles, healthcare and new vehicles has soared. In some high-cost cities like New York and San Francisco, a low six-figure annual income is barely enough for some families to meet their basic living expenses.

Leaving HENRY Behind

In order to break out of the HENRY rut, you must focus on building your net worth. An indicator of your overall financial health, net worth is measured by subtracting your liabilities from your assets. Liabilities are everything you owe, including your home mortgage and consumer debt, while assets are everything you own, such as property and savings and investment accounts, including retirement accounts.

Here are four steps to help you build net worth and leave HENRY behind once and for all:

  1. Reduce your liabilities. Closely examine the liabilities side of your personal balance sheet and devise a plan to reduce and eliminate your liabilities as soon as possible. The most common liabilities for many people are:
  • Outstanding credit card debt
  • Personal loans, such as automobile loans
  • Student loans
  • Home mortgage

Start by focusing on high-interest debt like credit cards and personal loans. Next, attack any student loan debt that you might have. When all of these debts have been eliminated, you might want to consider making extra payments on your mortgage each month in order to pay it off early. Owning your home free and clear will increase your net worth by eliminating what might be your biggest liability.

  1. Lower your expenses. One of the best ways to get a handle on expenses is to create a household budget. One side of your budget will list all of your monthly fixed expenses, such as your mortgage or rent, utilities (including cell phone data), car and health insurance, car payment, and food and other groceries. The other side will list all of your monthly income, including your salary, bonuses and any other sources of income such as alimony or government payments like Social Security.

Next, add a monthly allowance for discretionary expenses, such as entertainment and eating out, to your fixed expenses. If your total expenses exceed your income, look for areas where you can cut back, starting with discretionary expenses. For example, you might need to eat out less often and watch more Netflix instead of going out to the movies. If this still doesn’t balance your budget, you might have to take more drastic action, like moving to a less-expensive home or driving less-expensive cars.

  1. Boost your income. In today’s gig economy, there are lots of potential ways to earn more income. For example, maybe you can sell items online, such as on or Perhaps you can start a part-time business on the side by doing freelance work or offering consulting services. 

Or maybe you can offer pet-sitting and dog-walking services in your neighborhood. You might even consider taking a second job on a part-time basis — for example, by working evening hours at a retail clothing or big-box department store. 

  1. Grow your assets. Once you have adjusted your budget so that your monthly income exceeds your expenses, you can start saving and investing excess income in order to grow assets and build your net worth.

It’s generally a good idea to start by investing in tax-advantaged vehicles, including retirement accounts like IRAs, 401(k)s and simplified employee pension plans (or SEPs). After you have contributed the maximum amount you can to these each year, you can fund taxable brokerage accounts or look into other types of investments like real estate, collectables and precious metals as vehicles to help grow assets over the long term.

Give us a call if you have any questions about these and other strategies for building net worth.


The commentary is limited to the dissemination of general information pertaining to Frontier Wealth Management, LLC’s (“Frontier”) investment advisory services. This information should not be used or construed as an offer to sell, a solicitation of an offer to buy or a recommendation for any security, market sector or investment strategy. There is no guarantee that the information supplied is accurate or complete. Frontier is not responsible for any errors or omissions, and provides no warranties with regards to the results obtained from the use of the information. Nothing in this document is intended to provide any legal, accounting or tax advice and Frontier does not provide such advice. This information is subject to change without notice and should not be construed as a recommendation or investment advice. You should consult an attorney, accountant or tax professional regarding your specific legal or tax situation.