It occurred to me while writing my bestselling personal finance book, Buy This Not That, that a good percentage of you are HENRYs. A HENRY is a “high earner, not yet rich” consumer who is on the path to financial freedom.
HENRYs mostly earn six-figure incomes who also save and invest aggressively. However, HENRYs often don't feel rich compared to others. As a result, HENRYs are often a little anxious about their current status in society.
Nobody really feels sorry for HENRYs given their plentiful opportunities to make a fortune. Perhaps the only thing keeping a HENRY from achieving their lucrative destiny is grit.
Definition And Examples Of HENRYs
The acronym first originated in 2003 when it appeared in a Fortune article written by Shawn Tully. The definition of HENRY, “high earner, not rich yet” helped define the hoards of gung ho workers trying to climb the corporate ladder.
These workers often attend good schools and join industries such as technology, management consulting, investment banking, law, and medicine. As a result, they end up making more money than the average person. However, given many of these high-paying jobs are located in expensive cities, they often don't feel like they are getting ahead.
HENRYs are usually under 40 years old, but can really be of any age. The older you are as a HENRY, the more financial help you probably need. In terms of income, HENRYs are often defined as making at least $100,000 a year.
Coastal City HENRY
HENRYs in expensive coastal cities often make between $150,000 – $300,000 a year. The dual-income household income range for a HENRY couple is generally between $200,000 – $700,000. Yet, even on this income level, they still have to carefully watch their expenses.
I once wrote a popular post entitled, Scraping By On $500,000 A Year: Why Some High Income Earners Can't Escape The Rat Race. It has literally been read by over 100 million people.
The couple with two children that is highlighted in the article is a classic example of a Coastal City HENRY. They have two six-figure jobs, two children in private school, a $1.8 million home, and not much cash flow leftover (~$7,000 a year). The 1,000+ comments are pretty entertaining.
Most Coastal City HENRYs are also likely pursuing a Fat FIRE lifestyle as opposed to Lean FIRE. After all, most people want to maintain their lifestyle in retirement. Living off a six-figure income while working for decades and then dropping down to a five-figure income in retirement isn't ideal.
After some calculation and feedback from many Coastal City HENRY households, I believe a family of four in an expensive city needs to earn about $300,000 – $350,000 to live a relatively middle-class lifestyle. As such, this is the investment income range I'm consistently shooting to earn today.
Once a Coastal City HENRY earns more than $500,000 as a couple, they are entering what most Americans would consider rich. Today, an individual needs to earn more than $500,000 to achieve a top one percent income.
Heartland (Sunbelt) City HENRY
In contrast to a Coastal City HENRY, a Heartland City HENRY is someone who doesn't live in an expensive coastal city like San Francisco, Los Angeles, San Diego, Seattle, New York, Boston, Washington D.C, and Miami. Philadelphia and Miami are still relatively cheap. But costs are going up.
A Heartland City HENRY individually earns between $100,000 – $200,000 or usually up to about $300,000 as a couple. After about $300,000, a Heartland City HENRY is considered rich, given the median house price often costs less than 3X the HENRY household income.
Thanks to positive demographics, technology, and lower taxes, the demand for real estate in heartland cities is going up. Therefore, Heartland City HENRYs might start feeling squeezed if their incomes aren't going up even faster.
What HENRYs Complain About The Most
The #1 complaint by those who classify themselves as “high earners, not rich yet” is high taxes. Given HENRY's main source of income is W2 income, they are taxed at the highest marginal rates possible. If a HENRY doesn't particularly like their job, their dislike for taxes will be even higher.
For example, we learned in a previous post how Goldman Sachs analysts were absolutely miserable working 100-hour weeks. All of these analysts out of college are considered HENRYs. If they stick with banking for 10 years, they will likely be multi-millionaires. The main problem they face is lasting long enough to get rich.
A Coastal City HENRY is most at risk of paying more taxes under the Biden administration. Biden wants to raise taxes on individuals making over $400,000 and households making over $450,000.
Increasing taxes at these income levels seems reasonable to pay for all the increased government spending. However, try telling that to someone who hates their job and has a lot of student loan debt.
Left Work Partly Due To Higher Taxes
One of the reasons why I was happy to leave finance in 2012 was because I may have faced a 39.6% marginal tax bracket in 2013+. When you're already exhausted, the last thing you want to do is pay more taxes. So instead of complaining, I chose to do something about my situation.
In comparison, Heartland City HENRYs are in better shape when it comes to taxes. Not only do they live in relatively lower-tax states, they aren't making a high enough income to be subject to higher marginal federal tax rates.
Heartland cities should continue to attract people who hate taxes the most. You've already seem some very rich people such as Elon Musk and Larry Ellison relocate away from California due to high taxes and over-regulation. However, these two are obviously not HENRYs! They are two of the richest people in the world.
If you want to invest in a long-term trend, I'd invest some money in heartland / Sunbelt real estate through Fundrise. Fundrise manages over $3.5 billion in assets in private real estate funds that invest in the Sunbelt region where valuations are lower and yields are higher.
There is a long-term demographic shift towards lower-cost areas of the country thanks to technology and work-from-home post pandemic. As a result, I think Sunbelt real estate will outperform. If you are a Coastal City HENRY, diversifying to the Sunbelt makes sense.
When Does A HENRY Finally Start Feeling Rich?
Sooner or later, the angst HENRYs feel about not feeling rich should begin to dissipate. The more wealth they accumulate, the more settled they will feel.
For Coastal City HENRYs, the first stage in feeling more settled is when they achieve a $3 million net worth. A minimum $3 million net worth provides the lifestyle and buying power of a $1 million net worth from decades ago. At this level, you have the option to take things down a notch or negotiate a severance, which provides peace of mind.
If you are a Heartland City HENRY, then a net worth between $1 million – $2 million should provide for the same type of relief. Although, you would have to remain in a heartland city to maintain such a level of comfort. Whereas a Coastal City HENRY has more flexible to relocate to increase their buying power.
If you want to feel really rich, then you'll need to couple your high net worth with a job that provides meaning and purpose as well as have friends and family who love you. In 2024, according to Knight Frank, a top one percent net worth in America begins at $5.8 million.
Having Passive Income Makes You Feel Rich
The other indicator for when a HENRY can shed the monicker is when their after-tax passive investment income can cover their base level expenses: food, shelter, transportation, and clothing. Once the basics are covered, they should feel much better about their financial situation as well.
Any more income and wealth is just running up the score. However, a HENRY will sometimes look to the mega-millionaires and billionaires and wish they had more. It’s always comparing for more.
Perhaps what annoys a HENRY the most is seeing people who are less educated than them making more money. A good example is a HENRY slaving away at McKinsey & Co. while their high school friend who got C grades makes a fortune off cryptocurrency or a small business.
Below is a Wall Street Oasis forum comment that perfectly encapsulates how HENRYs feel about others less smart than them.
HENRYs Cause Their Own Problems
Although HENRYs work hard for their money, they also spend a lot more than the average person as well. It is partly due to poor spending habits that they find themselves dissatisfied with their financial progress.
Instead of being happy with their existing house, they want to upgrade to a forever home. Instead of being happy with a Toyota Highlander, they want to drive a Mercedes G550. Although a local public school is well-rated and free, a HENRY might opt to send their child to private school.
Given the types of spending choices HENRYs make, very few people care about their struggles. For all intents and purposes, they are leading very comfortable lives. HENRYs will also eventually be rich if they keep saving and investing. Therefore, HENRYs must keep their complaints to themselves by being stealth.
If you were to ask a typical HENRY whether they would classify themselves as poor, rich, or middle class, they will predominantly say middle class. This is despite the fact the median household income in America is roughly $70,000.
Below is a typical HENRY budget for a family of four making $400,000 living in an expensive city. Hopefully, Biden really does stick to raising taxes on married couples making over $450,000. If so, this couple is safe. If not, they will simply have to cut costs or work harder to get rich.
Mass Affluent Or Aspirational Class
Finally, HENRYs can also be considered part of the mass affluent or aspirational class. Those in the mass affluent or aspirational class are top 20% income-earners. They are highly coveted by any type of money management firm because these firms want to grow with their clients.
We all aspire to be fitter, richer, happier, and healthier. Therefore, being a HENRY should put you in a good position to achieve better things. I don't think it's a derogatory term by any means. In the meantime, try to be mindful of being a high earner. Not everybody can earn multiple six figures.
As one of my favorite Chinese proverbs goes, “If the direction is correct, sooner or later you will get there!”
Related: The Median Net Worth For The Mass Affluent
Recommendation For Building Wealth
Stocks are volatile compared to real estate. Therefore, if you want to dampen volatility, diversify your investments, and build wealth at the same time, invest in real estate. Real estate is my favorite asset class to build wealth.
The combination of rising rents and rising capital values is a very powerful wealth-builder. By the time I was 30, I had bought two properties in San Francisco and one property in Lake Tahoe. These properties now generate a significant amount of mostly passive income.
My favorite real estate investing platform is Fundrise. With over $3.5 billion in assets under management and over 500,000 investors, Fundrise is the leading, vertically integrated real estate platform today. Investors can invest in their diversified real estate funds with as little as $10.
Fundrise primarily focuses on single-family, multi-family, and build-to-rent properties in the Sunbelt. With lower valuations, higher yields, and strong demographic shifts, Fundrise investments are in the sweet spot of a positive long-term trend. Come check out what they have to offer.
For accredited investors who are able to invest $10,000 – $25,000 per deal, check out CrowdStreet. CrowdStreet has a direct-to-sponsor model where investors invest directly with the real estate sponsor, thereby improving efficiency and communication. Further, investors are not charged a fee to invest. Instead, the fee is borne by the sponsor.
There is a “fanning out” of the American population as remote workers look to save money. The global pandemic has helped accelerate this trend as many companies have permanently allowed their workers to work from home.
Reader Questions And Action
Readers, are you a HENRY? If so, do you feel angst about not yet being rich? What income and net worth levels do you consider captures most HENRYs?
For more nuanced personal finance content, join 65,000+ others and sign up for the free Financial Samurai newsletter and posts via e-mail. Financial Samurai is one of the largest independently-owned personal finance sites that started in 2009.
You talk about young families a lot as you’re lucky to have one! What advice do you have for many of us 60+ single HENRY’s living in ridiculously tiny studios in NYC, who have <1m net worth, looking at our W2 paychecks showing almost half gross take-home, and admiring those with multiple rental properties until you hear the stories of nightmare renters who end up squatting while you bleed money and sanity trying to get them out? I know, you’re going to say Fundrise… but having lost money to “creative investment schemes” in the past, we are all leery.
Some general guidance gif those of us with a way shorter horizon very welcome …
Hi Senior Henry!
The good thing about being single with no kids is that your monthly burn rate is very low. Therefore, I would continue to develop a good relationship with your landlord to keep your rent low, and use your free time to make a side income.
Being a parent for the past five years, I really miss all that free time I had to do side hustles or do fun things. There’s so much money to be made outside your day job nowadays!
Sam
Not sure why so many of the HENRYs in high-tax coastal states elect to pay a wealth advisor 75-100bps to put them into taxable investments before maxing out 401(k)s, IRAs, etc. Even once those are maxed out, they can still utilize insurance/tax wrappers for less than 75bps/year and invest in the exact same investment allocation tax-free.
When you do the math, the wealth/financial advisor model loses every time on an after-tax basis.
Early 30s HENRY in high cost coastal city. Married + 1 child. NW of ~$2mm. Annual cash income of $850k + $2-$300k of carry. Most of asset base is in public equities, real estate PE (single asset, no dissimilar from fundrise with 1.5-2.0x MOIC targets) with a potpourri of other items (GP commit, crypto, etc.). Own single family home in high $2mm FMV with high $1mms of IO mortgage left. Fully maximize all tax advantaged retirement account each year (401k, mega roth, 529, etc.).
Net worth creation seems very difficult given frequent calls on cash from taxes, GP commitments for funds and upkeep. Definitely do not live frugally but also not an intensely luxurious lifestyle (no business class travel, luxury German cars, etc.). Seems bizarre that it just “feels” like we’re covering lifestyle at this point but may just be relative.
Pretty huge income for your age.
And capital calls should just be viewed as net worth neutral to net worth positive over time.
Any suggestions on how to leverage the earnings to accelerate net worth growth? Life still feels very “rat-race”-ish.
Besides generally investing, I would carve out 10% of your earnings and invest it in the most speculative investments you like.
Further, I think buying one property, renting it out after 3-5 years, and buying another does wonders.
Do you think about carving out 10% of earnings as net or gross? Does net for you include after other calls on cash (e.g. tax, tax advantaged retirement accounts, etc.)? Not trying to overcomplicate things but 10% of net vs. 10% of gross can be very different numbers… especially as a W2 employee.
Start small and work your way up.
Do you live in Scarsdale and are you my neighbor?
Making $250k in KY. Bought a house in 2012 for $204k and net worth now about 2 million. Our cars were 30k and 36k both new 4 years ago.
Biggest obstacles to building wealth for me was paying back large loans for my professional degree and being taxed based on high income in years where I was negative or low net worth. Childcare has also cost me over $200k. I’m a big believer in focusing on what you can control and not worry about other people… or keeping up with the Joneses.
It’s a good idea to live below your means early on if your goal wealth building. For me, amassing some wealth was more about financial security than material things. I plan to keep working, but I like the peace of mind of knowing I’m not solely financially reliant on my current career.
It is interesting to hear people in a seemingly better financial situations than myself way they have trouble affording vacations or kids’ college. I’ve got three kids and take one or two vacations annually. Their college is a few years off, but I don’t forsee that being an issue either.
What professional degree did you get?
Making $250K in KY is like making $500K+ in SF. So life has got to be pretty comfortable now yeah?
PharmD although I don’t have a traditional job. Yeah, that’s household earned income although my wife works part-time. And I agree, cost of living is a major factor.
Still, I think people have to make the choice for their personal situation as far as balancing wealth building vs lifestyle spending.
The nicer houses in my school district easily reach the 700k to 1.3mm range though. And there’s plenty of estate style setups or horse farms that extend up into to the millions.
A family in this specific area with our income typically buys in the 400k to 800k range. However, early on, I placed a higher emphasis on fully funding our tax advantaged retirement accounts while paying down student debt. The stock market has fared well since then so we’ve been lucky in that regard.
HENRY is a new term to me as well. Puts things in perspective and helpful to see relativity across the U.S. and even internationally.
Have always felt uneasy about how I stack up… as I was younger it was ego, and as I’ve matured, it’s more about being financially independent. Have been in Healthcare tech for 20 plus years and always wanted to have other avenues of income but bailed out of all of the side hustles I “almost” participated in – real estate, rentals, small business investment. Apparently I am following in my father’s ultra conservative footsteps. He paid cash for everything. Warned me of the pitfalls of credit. My parents retired very comfortably and still live conservatively.
It does not help that I happen to live in one of the top wealthiest counties in the country even though it is a low cost of living Midwestern city. I live in a great neighborhood, Blue Ribbon public schools, and relatively low cost of living. I live in one of the most affordable subdivisions in the area – homes are approx 500-700k avg. Adjacent subdivisions all around us have homes in the 1-2m range.
Married – 49 and 47 – wife left high paying corporate gig in our early 30’s to go back to graduate school to do something meaningful. This made me realize that happiness along the way is part of the goal. Finding happiness is sometimes a skill you have to learn… or at least I did. I certainly was all drive early on with ambition to climb as high as I could. I dialed that back as I decided in my mid 30’s to turn down a few career opportunities and promotions that required moves to coastal or more expensive cities. The constant acquisitions, layoffs, re-orgs of corporate world and uncertainly of being a W2 employee made me uneasy. Although I survived all of those scenarios, I don’t like the feeling of not being in control.
I chose to want to be around to raise my 2 boys, coach them in sports, and control my travel more. I was on a plane every week for better part of 2 decades. We have sacrificed a lot of earning potential but I honestly would not trade it. It worked for us. While we are somewhat surrounded by some very wealthy people, we seem to fit in culturally even with some of the disparity. We all have enough $ to do the things we want to do and often together.
-250-300k combined income (she works part time as a school psych)
-Paid 385k for house in 2007 – now worth 600k – owe 80k – cld have paid off but interest rate is 1.875%
-Drive a 7 year old BWM – bought 1 year old 15k below sticker with 7k miles on it.
-Wife has a Highlander
-No debt other than mortgage
-Kids are 14, 16 – put away close 50k each in 529’s – but (knock on wood) scholarships may be in the picture
-approx keep around 100k in liquid
-NW around 2.5-2.6M
-vacation often while kids are still living with us but mix of affordable trips with maybe one
more expensive trip every year. We mapped out how many Spring Breaks, Summer vacations, etc we have left with them and have planned that out. Hard to believe empty nesting in 5 years.
-1.5M in retirement
Have just started feeling like I can breath a bit financially – the market run in the past 7 years has helped that I’m sure but hard to believe we are this blessed but can still feel uneasy about our financial well being!
All of your perspectives are very interesting and helpful!
Thanks all!
J
Sam,
I liked the part about comparisons. The DOGE thing was overstated and the small business understated: hard work IS the key.
$2.5 million is a lot of money from a job, but a scrappy entrepreneur with a crew of welders, electricians, or running a construction business could make several times that number with much less education.
That is, for now (until the government regulates entrepreneurship into oblivion and only Harvard MBA’s are able to open lemonade stands).
All the best.
My husband and I are Henry’s. We make about $520k combined in the SF Bay Area in banking. We have NW of $4.2mm – about $2.5mm in retirement accounts and a home worth at least $2.3mm with $600k mortgage. We live comfortable but 3 kids are in public schools, we just started saving for college a year ago (oldest is 7th grade), and can only afford one vacation per year. We have to budget when it comes to big ticket items like furniture. So we don’t feel rich. We are expecting larger than normal bonuses this year and plan to start buying real estate. I don’t think I will feel rich until I have enough passive income to cover our basic living expenses. Also, we want to save another $500k for college costs.
It’s so interesting to see what it’s like to be an American HENRY as compared to our situation. Me and my fiancee are Dutch HENRY’s, living in Amsterdam. I am 35 and make EUR 115k, my girlfriend is 27 and makes 85k EUR. We’re deep in the rat race and Amsterdam is the equivalent here of the ‘coastal’ areas in the US. It puts us here in the 0,5% for households of all ages in the Netherlands. Our combined net worth is now probably around EUR400k. Key difference here is that our highest tax rate for income is 50%, but our healthcare costs are only EUR1500 each per year. For both of us there is a big upside possible in income the next years (I have a chance of making partner at my firm or elsewhere, she is without a doubt going to ‘global’ at her pharmaceutical company – if only one if succeeds that would already put our combined income at EUR 400k).
We’ve mostly been working and partying up until the pandemic, living the moment and never really caring about our (financial) future. The pandemic changed that. I never invested or saved anything before the pandemic, living paycheck to paycheck. Because I spent everything, I didn’t feel rich. The lifestyle I thoroughly enjoyed. That’s probably rich. I was inspired by Financial Samurai/Sam’s posts. We took control of our financial situation (pension savings, real estate investments, other after tax investments) and bought a new ‘forever home’. We’re ready to start a family soon and we’re looking forward to that. At times now we do feel rich (thanks to Sam!), but me personally I still feel middle class. So I guess we’re still HENRY’s, but we are on the right track.
Good to sow your wild oats as they say here in America! Eventually, most people settle down and want something different in life. I’m happy to have had my phone in my 20s and 30s. But as a parent now, life is much different with different priorities.
It is actually more understandable not to save much money in Europe given the stronger social safety net. It is more rational to spend more of your money. Just like with some who have pensions and don’t bother saving as much while working. But eventually, everything is rational long-term. And we do what we can to make the most of our lives!
We are definite HENRYs, but what keeps us from feeling really rich, despite a $450k/year salary in a moderately-expensive city are:
1) 3 beautiful, wonderful kids, 2 of whom are special needs. Therapy, shadows, tutoring, add up, but are worth it and we are lucky to be able to afford it;
2) Adoption costs for two of our beautiful, wonderful children (that we had saved for, but at the expense of other things) and, before that, out-of-pocket fertility treatments;
3) Not-over-the-top private school, due to belief in small class sizes, nurturing environment, freedom from overbearing government rules, flexibility, parental involvement, etc.–a blessing in COVID, when our kids were able to be in school basically the whole time;
4) Charity. We give tens of thousands per year in not only tax-deductible contributions, but also directly to individuals in our community that we know are in need–no tax break, but the direct benefit to society is worthwhile;
5) Health-care costs. My husband is an owner in his company and I don’t qualify for health insurance through my job, due to being part-time (in order to be available to said three children), so we spend $30k/year on health care. High-deductible plan with no employer contribution. We truly just think of it as catastrophic health insurance, there in case of a major health incident, but basically pay out-of-pocket for most health care costs;
6) Stress about whether said special-needs kids will ever be able to live independently or will need a trust or live with us forever;
7) Gifts and hosting–I love giving gifts and hosting friends and family at our house. It brings me a lot of happiness, so I do it; and
8) Trips to visit far-away family.
Otherwise, we live far, far below our “means”, driving old paid-off cars, cook mostly at home, do a lot of thrift-store shopping and live in a lovely home that we would qualify for at 1/3 of our income. So, we do FINE, will be easily able to retire someday (I can’t imagine having to spend a fraction of what we do now once/if kids are independent), continue to save 60k/yr for retirement, live well and happy, but due to uncertainly about future expenses, I don’t know when we will ever feel really rich!
You guys are amazing! Anybody who adopts are the best people on earth. Thank you and bless your family!
DFW area Henry. Lived in coastal areas previously but central for the past 10 years. 54 year old, wife 47. My two kids are grown with one in law school mostly on scholarship. Wife’s children are off to college on their father’s dime although we provide some support.
Combined W2 income is $400k+. Passive income approx $170k annually on top of earned income (70% in IRA). $4.7M net worth (75/25 split between brokerage/IRA).
$5M feels like getting to the less worry point. I’d like to start working a lot less in the next few years but will continue as long as I am enjoying it. $200k in passive income feels safe to me on top of my small $750/month pension and social security when time comes in order to not feel beholden to W2 income.
That’s a nice passive income figure. Can you share its source? I’m always looking for more PI ideas.
Hi Sam,
The PI is primarily from investments. Two different accounts: One follows a high dividend income method that is diversified 40% (preferreds, baby bonds, short-term fixed income, cash) 30% (REITs, CEF’s, diversified income ETF’s) 30% (Quality dividend stocks and stock funds). Approx $2 million
The second account is more conservative and not focused on income as much with 10% Growth; 30% munis & muni CEFs; 40% utilities, buy-write, and REIT funds; and 10% solid MLPs, and 10% cash. Appro $2 million
I probably have too much cash and ultra short bond funds but this seems to work.
Thoughts?
We are considered HENRYs by your definition but sending our kids to public schools. They are good enough but not great. That said, the top students are just as good as your typical good private school student. Many of my siblings and friends went to public schools and went on to “top” colleges and then to HENRY jobs mentioned. We plan the same for our kids and are saving for these expensive private colleges accordingly.
For me, I didn’t feel wealthy until $5M in NW vs the $3M cited.
I remember doing a survey once and the top vote getter was $5M minimum. $3M per person, $5M for a couple. So you’re in the ballpark.
Heartland HENRY, living in the Twin Cities MN suburbs. Wife and I combine to make just over $250k/year. I’m 35 she’s 36 and we have 2 kids (4 yo and 2 yo with special needs).
This year we became debt free minus our mortgage. Bought our house in 2014 for $312.5k (worth about $450k-ish now). Combined household net worth of about just over $1M.
Definitely feel middle class for some reason. We both drive used cars, have a reasonably priced house but nothing fancy, and take about 1 vacation per year while staying with family. Would love to find a way to feel as rich as I am, but also think that if I stay on my path, I’ll feel that way when I’m 40.
Biggest thing on our mind now is whether to stay in our reasonably priced house, or upgrade to a $650k-$750k house.
The time to own the nicest house you can afford is when your kids are still at home.
Check this post out: https://www.financialsamurai.com/the-best-time-to-own-the-nicest-house-you-can-afford/
Bless your little ones!
Thanks Sam! You’ve given me a lot to think about with that article. Once daycare expenses go away (next year my daughter goes to kindergarten) we will definitely be more flush with cash (although were not doing bad now).
Where do you find property insurance on a house like that for only $1560?
You can try PolicyGenius. Lots of affordable homeowners insurance quotes.
It really depends on local. My Sister is in FL, insurance is $4k a year for a heartland priced house (somewhere between 300-500k).
Great article so many impressive responses especially from younger folks doing so well here! We are an older Henry couple combined earning $325k age 56 and 63 living on expensive east coast city in boston . Though I personally have never made more than $150k , due to following advice from Sam and others here, we have combined net worth over $5 million plus a fully paid for home worth $1.5 million and no other debt
Much of this is due to returns in the stock market mostly in boring passive index funds , and I really follow Sam advice on staying in the market, living below one’s means and yet enjoying life and being very appreciative on how fortunate we are … as are many of the readers here
Keep up the great work Sam and congrats to many of you doing so well here with very impressive incomes especially at such young ages !
This post certainly hit home.
37 y/o. Married. Two kids (3 &1).
Single income family for now.
Northeast coastal city HENRY.
Income has increased in recent years (2019~$500k, 2020: ~$625k, 2021: ~$875k)
Net worth: $2.5mm (as follows)
Real Estate Equity: ~$1mm (two properties: primary residence and hybrid vacation/rental property)
401k/ IRA: $800k
Brokerage: $450k
Cash: $150k
Alternatives : $100k
About $2.2mm in mortgage debt. Realize this is high relative to net worth but am comfortable with it given income trajectory/level, low rates (2.25% and 2.75%) and the fact that we can always sell the vacation property to lower overall debt and increase liquidity.
I know on this trajectory we will “graduate” from being a HENRY shortly however currently feeling some of the angst in which most HENRYs experience. Also, always the risk you play the office politics wrong and your income changes drastically(W2 earner).
In my mind it will be between $4mm-$5mm net worth where I would start to feel like we “made it” and perhaps can take a deep breathe.
Hardest part now is balancing enjoying the fruits of our labor but also avoiding too much lifestyle inflation. Our burn rate is probably too high but an income that supports it and YOLO. I tell myself we can always down shift if our situation changes.
Long time reader. Thoroughly enjoy the content. Have always appreciated the guidelines/ insights in which you offer. Over the years I have found I’m probably a touch more aggressive than what you lay out but this post feel spot on to our current situation.
Cheers
Great article! You are spot on about the biggest gripe being taxes. I pull in 1.1m pretax but I went 12+ years post college for research, med school, residency, fellowship and barely started earning this figure in my mid 30s (I’m late 30s now). Living in CA, and as a W2, my wife and I paid about 450-500k in taxes last year and really not looking forward to the bump up in taxes under Biden. Graduated med school with 200k loans (which is considered decent), but by the time I was done with training, ballooned to 300k. So we are not rich at all. We are so grateful for everything and feel blessed to be in our situation, we still feel that something is off about how much proportion we pay in taxes especially when the 20s and early 30s were sacrificed. This is why I highly value guys like you who provide excellent content to help us be wiser with our money! Thanks!
One edit though… You’re not rich “YET”!
$1.1 million income in your mid-to-late 30s is fantastic! And your student loans will be demolished in no time. After 20 years, I can’t imagine you guys not being deca-millionaires.
Great fortune awaits! Like, within 2-3 years.
Bro. You should move to TN, TX, NV, or FL. Those taxes are theft. Criminal.
haha. Agreed. And California still wants to raise even more taxes. But I feel committed to my job and the community that I work in, and my extended family all live in the area. And surprisingly, not sure if this type of income could be replicable in other states. My wife and I are looking to possibly go for real estate professional status to lower our taxes.
It does make me realize that working longer days or more days may have a countereffect in value too (meaning, more taxes for those extra hours/days). So starting to scale back in my late 30s to 4 days/week.
Great post, Sam. HENRY’s in Dallas, 40, no kids. House around 1.1, we owe 775, bought mid 2020. About 800 in investments. Gross about $325k but definitely don’t feel rich. Both in the level of flash Dallas likes to present that so far am not willing to keep up with (still rocking my 2006 Corolla and bought our 2018 Honda in cash) and more long term won’t feel comfortable until confident an unexpected health issue wouldn’t collapse everything, ie losing half of income while incurring 6 figure medical bills.
Hi Stephanie,
Ah, I love those older Corollas! I had a FX16 hatchback Corolla in college. Buying in mid-2020 was great timing, especially since Dallas real estate has done so well since. Congrats!
So long as you have disaster health insurance, you should be OK.
Sam
Henry are the best example why we need a wealth based tax. Super smart, hard working, productive people crippled by a society of consolidated assets among billionaires. The hoarding economy they call it.
The more you have, the more you pay. In today’s tax system, unfortunately, this means Henry’s are the billionaires and the billionaires are the poor.
I live in Norway. I am 36 years old, worth about 4 million USD net worth.
In addition to income tax, property tax, tax on goods etc. I have to pay a wealth-tax of 1.1% (44.000 dollars per year)
Even if I should lose my job and have no income, I still have to pay the 44.000 each year.
Because of the wealth tax many of Norways richest have moved their wealth, businesses and jobs out of the country.
In theory it might sound reasonable with a wealth tax, but in reality it does not work. This is the reason that most European countries don’t have wealth tax anymore.
I am surprised that some americans embrace this socialistic concept.
When individuals can build space stations, there’s not much reason they can’t be wealth taxed. Wanna move? Go ahead, everyone knows who you are. You can be taxed in whatever location you choose. If countries can agree on a minimum tax on corporations, they can do that for people worth $50,000,000 or more. Or less. It’s all a matter of choice. We have the tools in our grasp. Vote real people in to replace politicians. That’s probably the starting point. If we don’t we are going to get more and more inequality until the system, under pressure from scarcity, environmental change, and more pandemics buckles. When it buckles, it will buckle violently, and we will all wish for the old days of “high” taxes.
Can you share how the 1% wealth tax is administered every year?
How do they know your entire net worth? And how do they calculate it? For example, you could own a business where are you value it much lower than someone else. I’m assuming that most people would try to hide or lower their estimated net worth figures to pay less wealth tax?
Hi,
They tax all net worth over 200.000 USD.
The government has records of all personal wealth (Real estate, Bonds, stocks, bank accounts, cars etc)
Privatly owned bussinesses are valued on their net assets. Publicy listed companies however, are taxed on the traded value of the stock. For this reason some don’t wish to go public with their companies, since these trade at a considerable premium. This is a problem for tech-companies since they IPO at high multiples.
Fascinating!! There is no way this type of tax law would pass in America. It would be too much of an invasion of privacy and of our capitalistic DNA.
If you’d ever want to write a guest post about it, pros cons etc, I’d love to have it!
Implementing a sane wealth tax is no easy task. But the issue that Balta raised is still correct: the US tax structure is punitive to W2 income. Aside from the superstar athletes and other celebrities, the income of the 1% isn’t in that category and the richer you are, the easier it is to defer any tax bills till death or forever. (borrowing against assets, never have a realized capital gain is the easiest approach).
The 90-99% pay the highest rates and for the HENRYs in it that Sam describes, face the most anxiety because most of their wealth is derived from current year employer income. Esp for those of us in the tech sector, there is no guarantee of it continuing forever. Blowups like the DotBomb in 2001, or the ever present concern over ageism make it a rat race to get to that 3-5M comfort threshold Sam described. After that, if it all blows up, you can downsize spending, perhaps relocate to cheaper locale. Pre Covid, living in the expensive Coastals was the best way to get to that level. It likely still is, though the increased acceptance of WFH could backfire if it means lower salaries for all.
In contrast, for the truly wealthy (that last 0.1%), taxes are a nuisance you try to minimize. And since most income is passive, it doesn’t matter where you live.
My angst comes from being an older sorta coastal Henry (52 in Western Washington) with a potentially time-limited window to make more money due to declining health. I’ve got competing interests of wanting to make enough to enjoy some level of retirement soon, but also being able to have enough time left to enjoy some retirement!. I retired from the military 5 years ago, so have an ok pension, but nor enough to cover expenses plus the remaining mortgage. Net worth of just under $3M, with just under $1M equity and about $400k left on the mortgage. I like our current location, as I’m able to work in several different nearby hospitals in addition to my full time hospital gig. I’m hoping to continue to make hay while the sun is shining (~$500-600k annually), but dread paying even more taxes knowing that I haven’t met my goal of having $3M plus the house paid off. I’ve got 2 kids in state colleges as well. Part of the problem is that much of my net worth ($1.4M) is tied up in retirement accounts that I can’t really touch for another 7 years. This article spoke to me, and is nice to know that I’m not alone (even if I’m probably older than most HENRYs). Thanks!
Thanks for sharing! Are you a doctor who went from military doc to private practice doc?
Father Time comes for us all. It really can be a conundrum to figure out how to maximize our time left.
Yep, transitioned from being a military physician to being a civilian physician (in the same facility as a contractor), plus some side gigs about 5 years ago, so have only been making a better income for these past few years. I’m hoping to give it a go for another 4-5 years before at least transitioning to maybe one part time gig and/or retiring. A bit tough, as it’s now pretty impossible for me to get disability insurance or any additional life insurance, but thankfully we have decent healthcare covered, otherwise I don’t know that I’d be able to retire anytime soon.
52, earning half a million per year in a state with no state income tax and net worth 3 million, and a pension to boot; most MDs don’t enjoy pensions.
Are you attempting to retire early? If you maximize pretax savings, pay off your mortgage, invest after-tax, you’ll be worth 5 million or more by age 60.
How much are you aiming for? If you’re an OB/Gyn, you can ease into an office-only women’s health care practice and glide into retirement with no nights, no weekends, no call.
Thanks. I’m purely hospital based (peds critical care and peds hospitalist work), in a field where you have to work your tail off in order to come out ahead, since peds docs are generally paid less than most, if not all other specialties. I’m looking to have $3M total in investment assests plus the house paid off. I feel if I can hit that mark before age 60, I can throttle back to 1 part time position. If it takes me to 60 or later to get there, I’ll likely simply retire at that point. I’ve been maxing out a solo 401k from my 1099 work as well as maxing out a regular 401k from a W2 job for the past 5 years, as well as aggressively putting anything I can towards an aftertax investment account and my mortgage. Sadly, I’m only 1 person, and not in a line of work that allows for scalability- there are only so many hours in a day.
Interesting. I always am amazed at COASTAL vs non-COASTAL lifestyle and COL.
It’s crazy the difference between a P&G / GM heartland industrial engineer and a FAANG coastal software engineer.
in both cases, somewhere close to HENRY, but not always.
I used to think you skewed your numbers to the high side when it came to urban living in HCOL locations, and I apologize because you’ve backed them up. My hicksville environment had actually skewed my thinking badly instead of the other way around. It is just mind boggling how many highly paid younger adults still have to struggle because their expenses are so high and difficult to control. I won my first set of singles tennis the other day after two months of not being allowed to play!
I live in Western Massachusetts, so taxes are fairly high, but real estate is much more reasonable than Boston. On balance, probably close to a Heartland City.
I’ll make about $200K this year. I feel rich. That’s top 4 percent for my age. Depending on how you value some options/stock in a private employer I’m top 2 percent in networth for my age. That’s 2 standard deviations above the mean. 130 IQ is two std deviations above the mean, and will get you into Mensa. 6’4″ is two standard deviations above the mean, and you might not make center, but the NBA won’t kick you out over that. It’s a fairly standard metric for defining outliers, so I’m happy to label 2 standard deviations above the mean “rich” when it comes to money. Yep, the 1% is much higher, and the .1% much higher than that, and the .01% much higher than that. But top 20% is uncommon, and top 2% is quite rare in the scheme of things.
That’s how I’ve always tried to view wealth, anyways. It’s not that being able to do X,Y or Z makes you rich (retire early, have a nanny, send your kids to private schools, whatever). It’s that a couple percent of the population have at least $X, so that’s what being rich buys you. I’ve always been ahead of the curve for my age, so I’ve always thought of myself as at least wealthy, and at times rich.
How old are you? And do you have children?
Income by age or wealth by age is the way to look at things.
Kids will likely make you feel poor and motivate you to make more.
35, 3 kids. They certainly cost a few bucks, don’t they?
My aim is to pay for in state costs at a public university for each. If they want something more expensive they can get scholarships or loans. We read to them every night, show them love, show them the patience we can (I mean, we’re human..). My wife worked in the non-profit sector before and that’s…not exactly lucrative. So it was pretty easy financially to transition to her raising them full time. Again, a way in which I feel rich, having that as a choice. There’s always more we could do: private schools, expensive camps, trust funds. But just as with wealth, I figure I’m giving them more of a leg up then most children get.
Sounds like a good plan and arrangement!
$200,000 does seem like a good income if where you live is cheaper than Boston. I remember when I used to live in New York City. We all marveled at how cheap Boston was compared to Manhattan. It’s funny how everything so relative.
I’m a HENRY. 48, own a business, and clear just over $400k after taxes. I have one son, not married, and live in San Diego. First of the year I’ll be relocating to ID to get away from high CA taxes and be closer to my son.
While my net worth is over $1 mil invested, I don’t own a home and very seriously considering buying a place in ID, all-cash, in the $500k range (this money is sitting outside IRA and brokerage accts at the moment) . I’d like to do so to establish ID residency and then a year or two later, buy a $1 mil home in Ventura County (my hometown where all my family lives) and put down 20% and carry a mortgage. Idea is to split time, with the majority of it spent in ID so I can avoid CA income taxes but bring my son down to bond with his family (he’s 7).
What are your thoughts on this? My Dad just relocated to ID and rents a small 1br apartment for $800/mo. I’d like to stick him in my place which would be a 3bd/2ba home and have him pay the same rent to me but he’d have the place to himself while I use the $800 to pay property taxes and any maintenance on my fully paid for home.
The Ventura County property would be my nicer home ideally
Being closer to your children is always a good idea, especially if you can save money too.
Coastal HENRY turned heartland HENRY 5.5 years ago. 45yrs old, $2M net worth, house worth $1M, we owe $500K on at a low interest rate. Make $350K-$500K/yr. Our kids, 17, 15 and 9 respectively are expensive. Activities like ice skating (figure skating and hockey), swimming, acting, lacrosse add up. Putting all 3 through college and paying for weddings seems daunting, even with one 529.
Goal is to raise launch the kids off successfully, get to a $10M+ net worth w/$500K+ passive income and travel the world with my wife in our 50s-60s (glad we had our children young).
Have to get up and close a quarter tomorrow. Keep showing us the way and sharing Sam, you have changed my life over the last 5 years. Thank you!
But I have miles to go before I sleep…
Howdy AJ – May I ask whether you feel rich when you earn $350K-$500K a year? Just curious how much richer you feel after relocating.
I hear you on kid costs. Can be endless if we want it to be!
Sure Sam – To some extent we feel pretty wealthy with that income here in the Central time zone. We eat out when we want, enjoy decent vacations (when work allows) and live in a very nice house with a great outdoor living space. When we moved here from the SF Bay, we first lived in a more modest home for 4+ years then upgraded at the start of the pandemic.
If I am being honest with myself, we don’t budget enough and spend a bit too frivolously, which is part of what makes us feel rich. We don’t carry any debt (except mortgage) and majority of our money is in the market. The older I get the more I want to budget more strictly, but justify that we are only 2.5 years from only having one child at home and that will be the time to consciously spend less. I guess we feel this is our last “hurrah” with our daughters and want to enjoy them while they are home with us full time.
I am fortunate to have a wife who always finds deal and does things very purposefully to save and spend wisely. For example, she bought several boxes of small Halloween toys years ago and we usually pull some from the attic and give those out each year instead of buying a bunch of candy, she also cuts all of our hair. She has gotten really good after watching youtube videos and years of practice. Thankful for her and know she contributes even though she doesn’t earn money.
You can travel the world with a lot less than a $10M net worth and $500k+ passive income, even with biz class and 4*+ hotels. The nice thing about just you and your wife traveling when retired is you can go “off season” or just off-season and spend 1/3 to 1/10th what it cost to travel in season (and its far less crowded with tourist!). And you can cherry pick which location you choose based on cost (eg: You are fine going to Paris, London or Prague for the month of April next year – see if one is stupidly cheaper than the other options and go with that one). Add in credit card “hacking” and playing the mileage/hotel point redemption game well and I expect to be able to spend 4-6 months a year globally traveling for about $30k-$40k/year in retirement – lower if you rent out your main home while traveling on airbnb/vrbo/etc.
Either way, you seem like you are on a good path!
HENRY’s in Denver.
Hardest part for us is striking a balance along the journey. It is pretty hard to be really disciplined and then turn it off or down after working so hard to get your income and savings up.
We adjusted where we are saving and now we just match 401k for employers, Backdoor Roth IRAs, HSA. Then dump all the rest into taxable or real estate.
Side projects has actually helped a lot too just for knowing we can make money outside of employers and its easier to spend it or YOLO invest it.
This helps me feel like I have an escape hatch. Since we front loaded retirement accounts we will have a cushy 60+ retirement.
Hard part now is deciding how much to consume today vs. save in the bucket that will bridge the gap until 60 and then spill over into 60+ with whatever is left…
Glad I purchased a great house before more coastal folk come in! Now if only I could figure out a way to hack the ski line crowds…
I struggle with the balance of spending and saving too. It’s why I’ve been writing more on taking things down at work and living it up more with one’s house.
Enjoy the journey!
Nice piece. Yes, the working rich. However, I think the picture is a bit better than your budget for $400 K Henry. Couple of comments: (1) 401k $39 K plus company match, say $12 k (2) mortgage payment portion to equity $40-50k g (3) $18 k 529 plan – That’s an increase in net wealth of over $100 K on $400 K. Still pretty good. Plus this budget reflects young kids with the cost of daycare / preschool. If they go public school, they can step up the savings. Last comment — $3 k in charitable giving. IMO – They can (and should) do more than that given their $400 K income and $2.0 million house.
Yes, the couple is definitely saving and building their net worth. But they still don’t feel rich yet.
What is your income and net worth? How much do you give to charity?
I’d argue the massive taxes paid is largely charity. For me it certainly is with no kids. I’ll pay > $400k in taxes this year, nearly all W2 income. Most charities waste the money at any rate.
I was a HENRY while in my mid-thirties. It just seemed that every emergency fund I saved was regularly wiped out by an emergency. Some thought I was lucky that only the fund got wiped out every time this happened, but it was still frustrating to run the Red Queen’s Race.
Post dot-com boom (I zigged before the bust), things started changing gradually and I was able to budget (and sadly, sometimes borrow) so I could travel. This turned into the best “investment” I ever made as I met my wife during my travels. She was an Olympic-level saver and pushed me to save to the point where I stopped being a HENRY. It always takes time to get out of this trap and it is frustrating as hell, but as they say: it does get better.
Why would you want Joe Biden to increase taxes?
How do we pay for all the stimulus spending deficit spending?
Still learning but it seems like modern monetary theory (MMT) suggests that sovereign governments overseeing a fiat currency do not necessarily have to find funding (ie. Offset spending with tax increases/spending cuts) for increased spending.
Sam- what are your thought on MMT? I am sure there is more nuance that I understand currently.
Don’t know what Sam thinks but MMT is just a fake way to justify unregulated gov’t spending on Social Engineering of gain of control over the population. A currency only works when the population trusts in it’s value. Gov;t cannot create that trust. Money only works when it is trusted by those using it.
If too much of this $ is in circulation and no one trusts that the Gov’t “backing it” is viable or able to honor debts; society gets hyperinflation. This is because the fiat is worthless in the eyes of the population.
This has happened dozens of times throughout man’s history. Nazi Germany and Zimbabwe are recent examples.
DO NOT TRUST THE SNAKE OIL SALESMAN HAWKING MMT.
Yup – MMT is playing with fire. We can abuse it a bit more than anyone else because of our reserve currency status but things can and do unravel quickly. There is no such thing as free money – and if a politician tells you there is – run as far from them as you can!
MMT is more than a little silly to the vast majority of economists.
But deficit spending by the federal really is not a big deal, and you don’t need MMT to arrive at that conclusion. Consider this address by Olivier Blanchard, perhaps the most conventional of economists, simply explaining the basic finance: if you live forever, your income almost always grows at a rate that well exceeds your borrowing cost, why is it a big deal that you have debt equal to one year of income?
https://www.aeaweb.org/articles?id=10.1257/aer.109.4.1197
There is a limit to deficit spending, it’s not clear what that limit is, but whatever it is, we are very far from it.
This is my 2nd favorite article you’ve written (following stealth wealth)!
The decision of coastal vs heartland is something it feels as though every American is recalculating as more jobs are now location flexible + employers being in a hiring crisis of having to provide as many options as possible to attract great talent.
Lifestyle creep seems to be the variable in all of this if the income streams stay relatively stable. If you can find ways to either live with less or live with what you have longer so long as it is functional (cars, phones, etc. resisting the upgrade phenomenon) FAT FIRE becomes more within reach.
It’s not easy though… I am 31 but admittedly I feel like a relic when I drive my Saab (2008 sans bluetooth). However, it’s hard to keep from grinning when I realize I haven’t had a car payment in years. Apparently, minimalism is in these days so I fall back at times when the societal pressure mounts.
That doesn’t stop me from going to Porsche to test drive as I am a car aficionado…but it does stop me from getting to the finance desk :)
Thanks for the great content. Always the one email in my inbox I look forward to.
-A Heartland ATX Techie HENRY living in a DINK household
That’s cool you get to test drive Porsches! For some reason, I feel bad when it is a car of that expense. But I have no problem test-driving BMWs before. I guess the sales people don’t really care.
I’ve been wanting to buy my midlife crisis car for a while. But every time I think about it, I just think nah. A PITA to own two cars!
Thanks for reading!
Related: One Car For Dough, One Car For Show
Completely agree with both of you! We are minimum older dink couple age 56 and 63 combined earning $350k in expensive east coast city in boston.
While I personally have never made more than $150k, following Sam articles for many years has really helped! Currently have over $5 million in assets and own home outright worth $1.5 million .. and most of our net worth due to investing and gains in the stock market
Love cars too but always buy used and try to follow Sam advice .. currently have 2014 Audi rs5 convertible with dealers offering almost as much as I paid for it 4 years ago
Keep up great work Sam.. love your articles and readers input like this!
I am a Henry. Million dollar in investible. 1 million dollar home that I owe about 250k on. Wife and 2 kids. 38 years old. Heartland but a large expensive metro.
I own my own company. Im the C student guy. Clear about 300-400k a year as a single earner. I dont feel “rich” but I feel like I dont have to do anything I dont want to or I dont have to listen to anyone. Ever. That to me is rich. So, I guess I do feel rich but that is because I simply answer to no one.
I never took direction well…..
Very good! And I’m sure you could one they sell your business for big bucks as well right?
Sounds like you feel rich to me! I put the Heartland HENRY income limit at $300,000 for a reason. So at $400K, you should be feeling great!
That was true until last year. The influx of people from cali and nyc are real in nashville. Very very real. Over half of both of my sons classes this fall are california kids.
Almost every parent from there I talk to were cash buyers over asking and moved for school, taxes, safety and freedom. It is only speeding up it seems and everything has doubled over night.
And yes, could prob sell my business one day. I also havent been a henry long. I never made 6 figures until I was 33. I went from 75k to 250-300k range and never looked back
Similar here….made 6 figures the first time around the same age after being at $60k 3 years early and the next year was at $225k and very quickly around $500k now (upper 30s) – although did it through corp America rather than start my own biz. I definitely felt a LOT like a HENRY till recently, finally hitting a NW ~$2MM in a similar COL market to Nashville, also in the southeast. And yes, RE prices have gone nuts here the last 18 months with a lot of CA/NJ/NY people moving here, up 22% y/y with latest Case-Shiller index. Starting to feel a bit more wealthy though. My cash rental income will be ~$50k next year with total returns from investments probably around $200-$250k. My plan is to hang up the cleats when I get to $4-5MM or so.
Right on.
Maybe one reason for the angst is the fear that taking a break will negate everything we’ve worked for so far. We’ll be working at a Winnemucca car wash in our 60s despite the bloody years in college/tech/finance/etc. and the 33+% the country took won’t be coming back to us…so keep slogging we must. This may not be entirely rational, but fears aren’t.
A high income hasn’t exempted most of us from having a really odd last couple of years.
Combine pandemic fatigue with net worth angst, and it makes sense why the “Great Resignation” is rampant in this class too. If we’re going to work ourselves silly, might as well get a change of scenery, and maybe geo-arbitrate.
I would imagine that services provided by vacated jobs are still needed – prices will rise as qualified people are lured back/retained, or service quality will drop as underqualified people come into those positions…but that’s a topic for another day.
Pandemic fatigue for sure.
Not sure about net worth angst bc investments have done well. But if one starts comparing their wealth to the top 0.1%, then it’s tough.
Great article like always. This is a new term for me, but really defines the lifestyle and how my wife and I feel. We’re coastal HENRYs with no kids and often wonder how we would make it as our family grows
The only way is to find out! :)
And I’m sure he will definitely make it work on $300,000 plus a year. He just might not feel like you are getting as rich as you should.
If you know you want children, don’t wait. They are the most precious people on earth. So much work, so much worry, but also such a full heart you will have.
This is all so true, and I feel a lot of angst about this in NYC.
Even if I’m doing well relative to national statistics and think I should feel comfortable, I’m so discouraged as soon as I have to compete with others in the area for a house, a contractor, a car or anything major.
It’s so dissonant to be at the top of your age group while simultaneously falling behind those around you.
NYC is the KING city of feeling angsts, more than SF IMO bc there is such a massive concentration of finance people there and superstars from all walks of life.
San Francisco certainly has many tech tycoons. However, finance, management consulting, biglaw, is not ubiquitous here.
I really love New York City for six months a year. Simply the best.
As someone in this category at 35 years old, but living in MN, I would love to see your estimated Heartland budget. On a 400k joint income, our mortgage is only 500k on a home valued at 750k. I’m not sure what you would consider the coastal equivalent for housing, but 1.6M in MN is a mansion.
$1.6 million in San Francisco is a two bedroom or three bedroom small house in a average location that is 1500 ft.². Actually, if you can send me your budget in a spreadsheet and email it to me that would be great.
Do you feel angst on a $400,000 household income in the heartland? My limit for heartland HENRYs is $300,000. So I would think you feel pretty rich.
I just emailed you my spreadsheet. Its all relative. We don’t “feel” rich, but when you hear numbers like $60k as the median household income, you can’t help but feel blessed. We still think about money, and are cautious before making large purchases. The misconception is that 6 figures buys you Range Rovers and First Class travel. In reality, assuming one doesn’t wish to work until they die, 6 figures buys you nice used cars and economy plus.
Dang it, I am a HENRY, but for a guy keeping a household afloat on one income with a baby on the way, I feel good about my financial reserves. I make a six figure income, and while I bust my butt at side gigs outside of my full-time job, the rate of return on my investments does not make me feel desperate to feel rich. I am comfortable with my current trajectory and my HENRY-ness.
P.S. For your blind audience, would you mind providing brief summaries of the graphs you share? I sometimes miss out on what I am sure are excellent data points supporting your posts.
Congratulations on the baby Joe! And yes, I will definitely right description of the graphics for you. Thanks for bringing that to my attention. I will add descriptions on this post within 24 hours.
I am a Henry.
The problem is, as you say, that we want to FAT FIRE, not simply retire.
To do that, the number we need to hit is significantly higher than people expect to afford the lifestyle we are living.
Sure, I could supplement it with work of my choosing; however, the problem is I would have to be certain on how I could supplement it.
The goal is to be able to not make any money and still live the life we are living; though, I will supplement with many side pursuits when the time comes.
This is the first I’ve heard of HENRY before. Thanks for teaching me something new yet again! I can totally see how many people especially in coastal cities could fall into this classification. It’s expensive to live here even with six figure salaries!