These high earners think earning $750,000 doesn’t make them rich. Here’s why

Forget the supposed security of a six-figure salary. A growing group of wealthy workers known as HENRYs (“high earners, not rich yet”) say earning $750,000 per year isn’t enough to live a life free of money worries. These individuals with high incomes but low savings do not see themselves as rich—although their income and standard of living are way above most of the world’s.

Business journalist Shawn Tulley coined the acronym back in 2003, and wrote recently that adjusted for inflation, today’s HENRYs earn between $375,000 and $750,000 annually. And how much wealth do you need to be considered rich to HENRYs? If wealth isn’t defined by income alone but rather, as Tulley explains, by net worth in savings of cash, stocks, bonds, and home ownership, one would need roughly $4.5 million in net assets to qualify as “rich” today.

The Bureau of Labor Statistics estimates that the average American earns just $48,060 per year. And while it may seem outrageous for HENRYs to make so much money without considering themselves rich, this demographic may help us better understand the current economic landscape.

Fast Company spoke with experts about why HENRYs—and their financial expectations—keep growing.

The growth of HENRYs

The term HENRY has gained popularity in recent years as high earners face a range of financial pressures and wield immense purchasing power, says Gideon Drucker, CEO of Drucker Wealth, a financial firm that specializes in managing HENRY wealth.

Consider a couple in their late thirties who live in New York, have two kids, and earn a combined income of $600,000. Despite their substantial earnings, they juggle high-cost expenses they deem necessary: private school tuition, expensive rent in an in-demand neighborhood, and saving for college tuition and retirement.

HENRYs are essentially the “working rich,” relying on high earnings rather than accumulated wealth, says Drucker, adding that their high earnings potential and aspirational lifestyle make HENRYs a lucrative market segment.

“They’re making enough money that they’re not worried about the day-to day—they have enough money for their travel plans, going out to eat, going out to concerts, or, if you’re a little bit older, for the kids’ school, the kids’ camps,” he explains. “The idea of a HENRY is that you haven’t yet reached that point of feeling as prepared as you’d like to be for your financial goals in the future.”

The characteristics of HENRYs

All HENRYs have three characteristics: They feel that they have little to no wealth, they have a greater-than-average income, and their savings are basically nonexistent, according to the Corporate Financial Institute.

Drucker emphasizes that the term is not strictly defined by income, but rather about having aspirational financial goals, yet feeling unprepared for the future. He says he has HENRY clients making anywhere from $250,000 to $900,000 per year.

“They absolutely define themselves as HENRYs, because they make a lot of money, but they have three kids, and they have private school tuition, and they have camp, and tutors, a big mortgage,” Drucker says of couples making closer to $900,000. “They feel like they’re still building their wealth, and it’s going to take a few years to get there.”

Many of Drucker’s HENRY clients are in their late thirties or early forties and are high-income professionals in tech, media, and finance. Their financial goals include buying homes, planning for early retirement, and managing high living expenses.

HENRYs are generally well-educated, often holding master’s degrees or higher in technical fields, according to market researcher Pam Danziger, author of Meet the HENRYs: The Millennials That Matter Most to Luxury Brands.

Danziger says this demographic tends to place greater value on experiences over material possessions. For instance, HENRYs often prioritize investments such as education for their children over luxury purchases like high-end cars. However, they also often aspire to own a second home.

According to Danziger, HENRYs tend to lead a “stable, normal American lifestyle,” which often involves being married, having children, and owning a home. She describes herself as a typical HENRY. She says she and her husband live a “a very upper-middle-class life” in a Pennsylvania suburb, where they raised their children, sent them to private schools, bought them cars, and paid their college tuition in full.

At one point, they owned a large home with a hefty monthly mortgage payment that made them feel like their house “owned them.” Eventually, Danziger and her family downsized to a smaller home, which they own in full.

“We made decisions for the future of our children, the future of our family,” says Danziger, reflecting a long-term focus that many HENRYs maintain.

The challenges of HENRYs

According to Drucker, the biggest challenge HENRYs face is their lack of a comprehensive financial plan to build wealth. In his book, How to Avoid H.E.N.R.Y. Syndrome, he defines the “syndrome” as the feeling of being stuck in the day-to-day financial routine, where individuals are able to cover their expenses but feel they are not making meaningful progress toward their long-term financial goals.

“If you’re pulling $40,000 a month, you might have no idea how much of it you’re spending. That might be fine for today, because obviously that’s enough money to get done whatever you like,” Drucker says. “But if you’re making $40,000 and spending $32,000, well, are you actually building up enough wealth to one day retire and maintain your lifestyle?”

Drucker’s solution to HENRY syndrome lies in organization and clarity. He encourages HENRYs to set financial goals, track cash flow and spending, and automate savings.

Today, HENRYs face more complicated economic conditions than high earners in the past. According to Tulley, whereas baby boomers and older Gen X HENRYs benefited from favorable stock and housing markets, today’s HENRYs will likely pay more of their salaries toward mortgage payments and property taxes due to elevated prices and interest rates. As a result, Tulley says “it’s highly unlikely” today’s home-owning HENRYs will pocket the same kind of investment gains as their predecessors.

“It’s really about this dichotomy of feeling totally comfortable with your money in the moment, but feeling a little bit unsure of where you spend in relation to your future goals,” Drucker says. “You can do everything you want day-to-day without any real financial worry or stress, but you still feel like you need to do more in order to become financially independent.”