Meet the HENRYs: The millennials making 6-figure salaries who have 'pleasure funds' and enough money to travel - but still say they feel broke
- HENRYs are a group of people, mostly millennials, who earn between $100,000 and $250,000 but feel broke, reported Melkorka Licea for The New York Post.
- Short for High Earner Not Rich Yet, the term HENRY was originally coined by Shawn Tully for Fortune Magazine nearly 20 years ago.
- Millennial HENRYs have a penchant for a lavish lifestyle, but when combined with student-loan debt and living costs, there's not much money left over for wealth building.
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What do you call a millennial who makes between $100,000 and $250,000 but still feels broke?
That would be a HENRY, which stands for High Earner Not Rich Yet, according to Melkorka Licea for The New York Post. Shawn Tully first invented the acronym for Fortune Magazine back in 2003, but it now characterizes a certain group of six-figure-earners who are mostly millennials, Licea wrote.The HENRYs Licea spoke to all have expensive habits: staying at luxury hotels, taking international vacations, owning and/or renting two homes, signing up for Classpass (which can cost as much as $180 per month), or having a "pleasure fund" for fun activities.
HENRYs won't sacrifice this lifestyle, according to Licea, even if it requires budgeting in other areas: They'll shop at budget stores like Forever 21 or TJ Maxx and vacation using credit card points if it means more money for travel.
"They're people who want to get their financial s--- together, but still keep their avocado toast, SoulCycle, and boozy brunch lifestyle," Priya Malani, founding partner of financial planning firm Stash Wealth, which caters to HENRYs, told Licea. She said most of her clients live in New York, work in tech or engineering, earn $180,000 annually, and have an average of $80,000 in student loan debt.
Between the upkeep of a lavish lifestyle, living costs, and debt, millennial HENRYs are left feeling like they live from one paycheck to the next, Licea wrote.
The "working rich"
There are three traits that characterize a HENRY, according to David Wealth Management: a higher than average income level, little to no savings, and feelings of low material wealth.
Investopedia calls HENRYs the "working rich" - if they stop working, they won't be rich. More of their earnings go into costs than wealth-building investments, "leaving them feeling like they are more like regular people slaving for a paycheck than the wealthy 1% in America," Investopedia stated. "These high earners are expected to have much the same lifestyle as wealthier compatriots but they do so by sacrificing their ability to amass wealth."That might explain why 38% of millennials earning $100,000 or more a year think they're middle class, according to an INSIDER and Morning Consult survey. About 23% of millennials think they're upper middle class, and only 6% think they're affluent.
However, out of the 1,207 millennials surveyed, only 125 millennials both earn more than $100,000 and answered the question about which class they identify with, making it a small sample size to be taken with a grain of salt.
The Pew Research Center defines the US middle class as people earning two-thirds to twice the median household income, which was $60,336 in 2017. That means middle-class American households were earning about $40,425 to $120,672.
Meanwhile, a family in the US needs an annual income of $421,926 to be in the top 1% of earners, according to data adapted from an Economic Policy Institute report originally published in July 2018. But the minimum income needed to be in the top 1% in every state ranges anywhere from $255,000 in Arkansas to more than $700,000 in Connecticut.
That said, where a HENRY lives plays a significant role in their financial situation: Location affects how far any earner's dollar stretches, how much they're taxed, and how they're influenced by their surrounding millennial peers.