What do high incomes, not yet wealthy, mean?
High income, not yet wealthy (HENRY) are individuals who currently have significant discretionary income and a high chance of being wealthy in the future. The term HENRYs was coined in 2003 Fortune Magazine article to refer to a segment of families earning between $ 250,000 and $ 500,000, but having little after tax, education, housing and family expenses – not to mention saving for an easy retirement. The original article in which the term “high income, not yet wealthy (HENRY)” appeared discussed the Alternative Minimum Tax (AMT) and how it hits this group of people hard. The term has since been used to describe a younger demographic in order to sell products and services to them.
Understanding high incomes, not yet rich (HENRYs)
The HENRY segment of the population was a hotly debated topic during the 2008 US presidential race. The Democratic Party has often classified households earning more than $ 250,000 as “wealthy” and “wealthiest Americans”. One problem with this classification is that it does not distinguish the cost of living in different parts of the United States. For example, $ 250,000 can go very far in Houston, but would not provide anything like a lavish lifestyle At New York. These high earners are expected to have roughly the same lifestyle as their wealthier compatriots, but they do so by sacrificing their ability to amass wealth.
Many professionals, including lawyers, doctors, dentists, etc., have the potential to be HENRYs due to the income range of their profession. The fact that a large part of their future wealth is projected from a six-figure income rather than from income-generating assets makes HENRY the “rich workers”, which means that they will not be as rich if they stop working. More of a HENRY’s income goes into costs than investment in wealth creation, which gives them the impression that they look more like ordinary people enslaved by a salary than the rich 1% in America.
HENRYs as main target for luxury marketing
The 2008 elections came and went, but the term HENRYs remained as a useful means of identifying a demographic group that is on the path to wealth but not quite there. Traders see a lot of potential in this transition phase where a rich future always adapts to a rapid increase in disposable income. The transition is considered to be the main opportunity for a luxury brand or service to integrate into the HENRY lifestyle and begin to build loyalty that will continue in the future. Since there are more HENRYs in the world than ultra-wealthy people, there is a deeper market there even if the product or services are a little cheaper. Marketers believe that HENRYs are more likely to be ambitious buyers, which means they are starting to buy the outward signs of the lifestyle that they hope one day will be able to fully afford.