Net Worth = Assets – Liabilitiesįor example, consider a household with assets totalling $1 million, including home equity, vehicles, bank account balances, collectibles and investment accounts. The figure you end up with is your net worth. The formula is simply the total value of your assets minus all of your liabilities. Want to see if you fall into the high-net-worth category? Calculating your net worth is pretty simple. In addition, banks and investment management firms typically specify account minimums that make HNWIs eligible for more personal, specialized client services. The more liquid assets held by an individual or household, the more appealing the HNWI becomes to wealth managers, given they usually earn fees equal to a percentage of the total assets they manage. Financial services for HNWIs include investment management and tax advice as well as help with trusts and estates and access to hedge funds and private equity firms. Given their substantial assets, high-net-worth households require additional services from financial advisors and wealth managers. UHNWIs are people or households who own more than $30 million in liquid assets. VHNWIs are people or households who hold liquid assets valued between $5 million and $30 million. HNWIs are people or households who own liquid assets valued between $1 million and $5 million. There is no official or legal definition of the term, and the threshold for high net worth is generally understood to include liquid assets only-money held in bank or brokerage accounts-excluding assets like a primary residence, collectibles or durable goods.įinancial professionals break down the category into three classifications of wealth: An HNWI is a person who owns liquid assets valued at $1 million or more.
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