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

High Earners, Not Rich Yet (HENRYs) Explained in Less Than 4 Minutes

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A HENRY is a “high earner, not rich yet” consumer who enjoys an above-average income but is more inclined to spend than save or invest. 

HENRYs live well, better than most, but they don’t perceive themselves as being wealthy. In fact, they’re not in the upper echelon of earners. Find out more about what makes a HENRY.

Definition and Examples of HENRYs

The acronym HENRY has been around since 2003, when it first appeared in a Fortune article by writer Shawn Tully. It stands for “high earner, not rich yet.” Fresh life was breathed into the term in 2019 by writer Melkorka Licea in a New York Post article. 

The term initially tagged younger earners, and many HENRYs are young, but they can be any age. Their incomes and habits, rather than their year of birth, define them. They earn upwards of $100,000 to top incomes of $250,000. But they don’t believe they’re rich. HENRYs have little, if anything, in the way of savings. They spend freely, and they often find themselves living paycheck to paycheck despite their healthy incomes. 

An income of $250,000 is more than triple the top limit for being considered middle class, which is about $72,000 for an individual, using the latest available data.

Statistically, HENRYs tend to live in two-working-adult households with one child. They have college or advanced degrees, and they tend to work in upper-level management and executive roles, often in a finance field. 

HENRYs work hard for their money, but this demographic tends to spend it almost as soon as it hits their bank accounts. They typically buy items that lower earners would define as extravagant. They often find themselves eyeing the calendar in anticipation of that next paycheck. If you asked a HENRY to rate their financial life, they would probably classify themselves as firmly middle class. 

HENRYs often carry a significant amount of debt because they don’t stop at spending just their cash on the finer things in life. They tend to accumulate a good deal of credit card debt as well.

Add student loans still being paid to their credit card balances, plus mortgage and auto loan payments, and there’s not much left. It’s not that HENRYs don’t realize the importance of saving, but rather that they’re enjoying life to the fullest right now and figure they’ll deal with the unpleasantness of budgeting for savings later.

What HENRYs Mean for Retailers

HENRYs can be a goldmine for retailers, particularly those that sell luxury brands. It makes sense that their advertising is often geared toward this demographic because HENRYs significantly outnumber the ultra-rich, as well as the low- to middle-class consumers who can’t afford their products. 

The Conference Board indicates that about 40% of all consumer spending can be traced to HENRY purchases. Women control up to 80% of spending in HENRY households. These women also tend to be in their prime spending years, so they provide a bounty of opportunities to certain retailers.

Selling to HENRYs can be a bit of a challenge, however. Yes, they cherish the finer things in life, and yes, they’re willing to spend their money on them, but they still care a great deal about the value of what they’re buying. They want that Gucci purse, but they’d really like to steal it for $800 rather than $1,100. The brand name isn’t what they’re looking for so much as a great deal on that brand item. They also look for superior customer service. 

Selling to this demographic means giving them bargains, serving them well, and cultivating their loyalty. It can be a long-term commitment and pay off in the future because odds are they will earn even more as the years go by.

What HENRYs Mean for Investment Firms

Investment firms are the flip side of high-end retailers when it comes to receiving HENRYs’ earnings. This demographic isn’t particularly interested in earning even more money by investing what they have any more than they care much about currently saving what they’re earning. 

This isn’t to say, however, that some firms haven’t found a way to tap into this demographic. Some have even gone as far as to make HENRYs the core focus of their businesses. Drucker Wealth Management provides a “H.E.N.R.Y. Syndrome” line of services, for example. 

Key Takeaways

  • HENRY stands for “high earner, not rich yet,” and is typically a younger earner who enjoys an income of $100,000 to $250,000 a year.
  • HENRYs don’t consider themselves to be wealthy, and they have a reputation for being good bargain hunters.
  • Luxury-brand retailers tend to focus on this demographic.
  • HENRYs tend to spend first and delay saving or investing for later in life.