Decoding HENRYs: Unveiling the High Earners Not Rich Yet Phenomenon

Decoding HENRYs: Unveiling the High Earners Not Rich Yet Phenomenon

Oscar Casas, CFP®, CRPC®, MPAS®, ABFP℠ 

Are you a “HENRY”? High Earners, Not Rich Yet (HENRYs) is a term used to describe people who have the potential for high future wealth, but currently have assets tied up in lifestyle expenses. So why do so many HENRYs feel they have little to no actual wealth? Let’s unpack this new phenomenon and how HENRYs can work to turn their current wages into long-term assets.

What Are HENRYs?

Shawn Tully was the first to coin the term “HENRY” in a Fortune magazine article back in 2003. Standing for “high earners, not rich yet,” HENRYs consisted of predominantly young professionals earning $250,000 to $500,000.

Despite high wages, more than half of Americans making over $100,000 admit to living “paycheck to paycheck.” HENRYs may have high incomes, but they’re spending it—not saving it—which explains why they’re “not rich yet.”

Common Experiences of HENRYs

Why exactly do HENRYs struggle to accumulate wealth? Most HENRYs experience some combination of the following:

High Debt

Many HENRYs battle factors like credit card debt or lingering student loan debt. As a result, a larger portion of their income is funding their debts rather than accumulating wealth.

High Expenses

HENRYs have historically been the target of luxury brands that raise household expenses. But more recently, inflation has made it difficult for even high-wage-earners to cover household expenses.

Lack of Savings or Investments

Younger generations simply aren’t investing correctly, or enough. Additionally, many are spending their wealth rather than saving or investing it.  

Lifestyle Inflation

Inflation has touched on every aspect of consumer culture. But for HENRYs, inflation has made it harder to enjoy lifestyle trends, such as designer clothing, gourmet coffees, or dining out. 

Challenges Faced by HENRYs

HENRYs face both financial and social challenges that contribute to their unique financial situation.

Student Loan Debt

As of 2023, the average student loan debt was $38,290. With terms lasting as long as 20 years, even high-wage-earners can be saddled with significant debt and high interest rates. These debts often prevent HENRYs from meaningfully saving money.

Housing Costs

Skyrocketing housing costs have made it challenging for HENRYs to set aside more for savings. Even rent prices are sufficiently high to prevent HENRYs from making inroads in terms of savings and investments.

Pressure to Keep Up With the Joneses

Not long ago, Americans spoke of “keeping up with the Joneses,” their next-door neighbors. Now, young adults feel the pressure to keep up with social media influencers and their broader peer group—which can translate into overspending.

How Tranquility Path Can Help HENRYs

Does any of this sound familiar? If so, Tranquility Path can help. We can develop strategies for HENRYs that include:

  • Saving aggressively
  • Investing wisely
  • Managing debt effectively
  • Long-term financial guidance

Long-term financial planning can help you identify your most important goals and develop strategies to help you accomplish them. These strategies include setting clear objectives and developing a diversified investment portfolio. 

Find a Personalized Approach

Tranquility Path Investment Advisors, LLC specializes in retirement planning and offers a personalized approach designed to align our clients’ financial goals with their lifestyle choices. Whether you’ve already started planning or have yet to put strategies in place, we encourage you to reach out to us today for a no-obligation conversation to discuss your goals and see if we can help. 

About Oscar

Oscar Casas is the chief executive officer at Tranquility Path Investment Advisors, an independent Registered Investment Advisor firm dedicated to putting their clients first, always. Oscar has over a decade of experience helping clients plan for a confident retirement. He is known for being an empathetic and compassionate listener and for prioritizing his clients’ needs and goals above all else. He acts as a coach, advising his pre-retiree and retiree clients through all the ups and downs on their financial journey. He loves that he has the opportunity to make a difference in people’s lives and take some of the stress off their shoulders. 

Oscar has a bachelor’s degree in finance, a master’s degree in personal financial planning, and is a CERTIFIED FINANCIAL PLANNER™, Chartered Retirement Planning Counselor℠, Master Planner Advanced StudiesSM and Accredited Behavioral Finance Professional℠ professional.  When he’s not working, you can find him enjoying the outdoors with his three children. He is an avid tennis player who also loves golf, the beach, snowboarding, traveling, and volunteering with the Scouts.

About the Author

Join Our Mailing List

Get regular financial and market insights from our team.

Get Started

Take the first step toward a more confident retirement.

Schedule a complimentary discovery call to talk about your current financial picture, your long-term retirement goals, and ask initial questions.