Celebrating 25 years

Read about our history

What is a high-net-worth individual and how do you become one?

Key points

  • Net worth is a metric that gives a snapshot of your bigger financial picture.
  • HNWIs are those with between £1 million and £5 million in liquid assets.
  • Investments and compound interest play a crucial role in building wealth in the long term.

Net worth is a marker. It shows where you are on your financial journey.

But what happens once your net worth reaches a certain threshold? In that case, you may be considered a ‘high-net-worth individual’ or HNWI for short.

Read on to learn more about this elite group and the steps you can take to join the illustrious HNWI club. But first, we need to understand what net worth is.

What is net worth?

Our income alone is not a clear representation of our overall financial health; it only paints part of the bigger picture.

However, there is a metric that can provide a better snapshot — net worth.

In basic terms, net worth is how much money you have in real terms. It acts as a marker for where you are on your financial journey and helps you gauge progress towards goals.

Working out your net worth is simple. First, you add up the total value of your assets, including cash, investments, real estate, and so on. Next, you subtract anything you owe, such as debts, mortgages, etc.

And that’s it. The number you are left with is your total net worth.

What is a high-net-worth individual?

High-net-worth individuals, or HNWIs, are defined by their net worth and the liquidity of their assets.

Generally, HNWIs have a net worth between £1 million and £5 million in liquid assets. The amount you need is debatable and can vary, but the distinction between liquid and illiquid assets is important.

Liquid, or investable, assets are those that can be quickly converted to cash. Examples include investments, bank or savings accounts, and bonds.

Illiquid assets are the exact opposite. They are assets that take time to convert to cash, including property and exotic investments such as antiques and cars.

HNWIs typically have unique needs and financial goals. This is why they often used specialised wealth management services to help them protect, manage and continue to build wealth.

HNWIs by numbers

A report by Capgemini shows there are just over 19.5 million HNWIs globally. There are currently 2.86 million HNWIs in the UK, which is predicted to rise to 4.24 million by 2027.

While the number of HNWIs in the UK is predicted to increase over the next three years, separate data from the Office for National Statistics (ONS) paints a different picture.

Those between 55 and State Pension age were the most well-off, with a total median wealth of just over £553,000. However, their net financial wealth was just over £15,000. In comparison, the total and net financial wealth for those in the 25-34 age group was £76,800 and £400, respectively.

That leaves us with one question to answer. How do you become a high-net-worth individual?

How to become a HNWI

The formula for becoming an HNWI is simple in theory. But in practice, it requires a little more thought and plenty of consistency.

While the path to wealth is not a linear one, there are some points to consider:

Investing in the stock market

Most experts agree that investing in the stock market is one of the most effective ways to grow wealth and hedge against inflation, and it’s easy to see why.

The S&P 500 has returned just over 10% per year on average for nearly a century. Meanwhile, Vanguard data show that the FTSE All-World Index has delivered an annual average return of 9.3% since 1993.

While investing can yield fantastic results, it’s essential to have a strategy that fits your needs, goals and risk tolerance.


Another point that most experts agree on is the importance of building a diverse investment portfolio.

This means investing in a range of companies, asset types and industries to spread the risk. In other words, not putting all of your eggs in one basket.

Take advantage of compound interest

The magic of compound interest cannot be overstated when it comes to increasing your wealth.

Think of compound interest like a snowball rolling down a hill. The longer it rolls, the more snow it picks up and the bigger it gets.

In financial terms, it allows your wealth to grow exponentially over a long period. Here is an example to illustrate the power of compound interest.

Let’s say a 25-year-old has an initial savings of just £400 and plans to invest £200 monthly for 40 years. Assuming a 10% annual rate of return, they will have a balance of £1,080,326 by the time they reach 65.

Use our compound interest calculator to see how it could benefit you.

Compound Interest Calculator

5 years
Compound Frequency
Future Balance

Finding the right fit

There is no blueprint for achieving a high net worth. While investing may not lead to HNWI status, it does provide excellent potential for increasing net worth over time.

Speak to an investment expert who can help you find the right strategy that aligns with your goals and attitude towards risk.

Already a HNWI? As wealth grows, so does the need to manage and protect it effectively.

Wealth management is a holistic service. It is designed to help across all aspects of your financial life. Read all about our wealth management services to learn more.

Holborn Assets is a leading wealth management and financial services provider. We have helped thousands of people reach their financial goals. Speak to us today and find out how we can help you reach yours.

Ready to chat with
a specialist?

Get started

You may also be interested in

interest rates

Interest rates: what are they, and how do they work?

Key points: Interest rates show the cost of borrowing and how rewarding it is to save. Inflation is the rate at which the price of goods and services increases over...

Read more
Double tax agreements explained

Double tax agreements – what are they and how do they affect expats?

Key points Double tax agreements prevent you from being taxed twice on the same income. The UK has the world’s largest network of double tax agreements. Double tax agreements provide...

Read more
Investment funds

Investment Funds: What you Need to Know

Key points Investment funds pool money from multiple investors to buy assets. Funds offer a passive and active option to cater to different goals. Investment funds offer a straightforward way...

Read more

What is a high-net-worth individual and how do you become one?

Key points Net worth is a metric that gives a snapshot of your bigger financial picture. HNWIs are those with between £1 million and £5 million in liquid assets. Investments...

Read more