We have all heard of millionaires, billionaires and their exotic lifestyles. However, more recently, the term “High Net worth Individual” (HNWI) is being used to describe a person with a high net worth. In the majority of cases, these individuals have reached the status of being HNWIs by amassing wealth. Mostly these rules have been handed down to them over generations. A study of their activities and their system of working makes for a fascinating study.

Classification:

- A HNWI is one who has financial assets worth more than $1 million. This figure does not include the first piece of real estate owned by the individual. This qualification by itself makes quite a difference to the number of people classified as HNWIs. In the United States alone, in 2003, more than 7.9 million people had assets including real estate of over a million dollars. If the real estate assets are excluded, the figure drops drastically to approximately 2.2 million. The aura attached to being a HNWI has dimmed somewhat in recent times due to the sheer numbers attaining the exalted status of HNWI. In the United States, the yearly income of a large group of employees in the business world is enough to earn them the status of HNWIs. In addition, with the depreciation of the US dollar against many foreign currencies across the world, large swathes of people in these countries have become eligible for this status.

- UHNWI or Ultra High Net worth Individual is a person with financial assets over $30 million. This group is approximately 1% of the HNWI population of the world.

- Another classification used to describe such persons is “super millionaire” or “billionaire.” This category may well consider they to be superior to HNWIs! A survey revealed that there were more than 600 billionaires in the world in 2005. Of these, the wealthiest 34 had assets of more than US$ 10 billion. This category has access to luxuries that are out of reach to even the HNWIs.

Lifestyles:

With so much disposable wealth, an entire industry has spawned to meet the requirements of the “rich and famous”. Specialists cater to their needs for prime real estate, financial investments, yachting, designer jewelry and clothing. Their lifestyles are the envy of many a lesser mortal. You can catch a glimpse of them on television, wearing designer clothes and accoutrements, driving Porsches and Ferrari s and living in grand mansions with long, winding, tree-lined driveways.

Needless to emphasize, HNWIs know something about making money which most of us do not. They earn their millions by sticking to simple rules and formulae that have stood the test of time. These are things like compounding, intrinsic value and economies of scale. Besides, they have knack of landing deals that get them money!

Alexander Gordon is a writer for http://www.smallbusinessconsulting.com - The Small Business Consulting Community. Sign-up for the free success steps newsletter and get our booklet valued at $24.95 for free as a special bonus. The newsletter provides daily strategies on starting and significantly growing a business.

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High Net Worth IndividualsBy Alexander Gordon We have all heard of millionaires, billionaires and their exotic lifestyles. However, more recent...