High Earners Not Rich Yet (HENRY)

What Are High Earners, Not Rich Yet (HENRYs)?

High earners, not rich yet (HENRYs) are individuals who currently have significant discretionary income and a strong chance of being wealthy in the future. The term HENRYs was coined in a 2003 Fortune Magazine article to refer to a segment of families earning between $250,000 and $500,000, but not having much left after taxes, schooling, housing, and family costs—not to mention saving for an affluent retirement.

Understanding High Earners, Not Rich Yet (HENRYs)

Many professionals, including lawyers, doctors, dentists, and so on, have the potential to be HENRYs due to the income range for their professions. The fact that much of their future wealth is projected off of a six-figure income rather than income-generating assets makes the HENRYs the "working rich", meaning they won't be as rich if they stop working. More of a HENRYs earnings go into costs than go into wealth-building investments, leaving them feeling like they are more like regular people working paycheck-to-paycheck than the wealthy 1% in America.

Investment Strategies for HENRYs

HENRYs earn substantial wages but have few investments and meager savings. Developing better spending habits, increasing savings, diversifying investments, and taking advantage of tax credits and deductions can transform them from the "not right yet" to the "wealthy."

Tax strategies for high income earners

Because HENRYs are high wage-earners, they typically pay the most in taxes on income HENRYs should explore deductions and credits that reduce their tax obligations; less money for taxes means more money for investing.

What if I make high W-2 income like ($200K, $500K, $700K or more) from a profession like a doctor, dentist, or engineer, etc… and I don’t have a business. What options do I have to lower my taxes?

For non-business owners the options are limited, but there are some things you can still do if you qualify:

• Be willing to get educated on investing in certain tax advantaged asset classes.
• Act on the education after understanding the risks and rewards including the track record of the operators of the asset classes.
• Assemble a team of advisors with a winning record of advising on the subject.

We can determine if you qualify for these types of investments and connect you with people that can help increase your financial IQ about investing in these tax advantaged asset classes.

These strategies also work for business owners, not just high earning W-2 income earners.

We are not compensated from any investment choices you make, and we look forward to empowering you over your taxes and increasing your financial IQ along the journey.

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