The individual with ultra-high net worth (UHNWI) is defined as someone who possesses a net worth of $30 million or more. Their net worth consists of investable assets and liquid assets.
How does a person with ultra-high net worth operate?
The term “ultra-high-net-worth individual” (UHNWI) refers to someone whose net worth exceeds $30 million. This wealth may include a range of assets such as cash, stocks, bonds, investment funds, and other investable and liquid assets.
Individuals with ultra-high net worth may have earned their wealth through business or investments, or they may have inherited their wealth from a family member.
Some companies track the number of people with a net worth exceeding $50 million. According to a report from the financial services company Credit Suisse, there were over 140,000 individuals in the United States with this level of wealth or more in 2021.
Examples of ultra-high-net-worth individuals
Given the minimum criteria to qualify as an ultra-high-net-worth individual, all well-known billionaires qualify. This includes Jeff Bezos, Bill Gates, Warren Buffett, Larry Ellison, Steve Ballmer, Mark Zuckerberg, Sergey Brin, Elon Musk, and Larry Page.
The above list comprises individuals who achieved their billionaire status by founding successful companies. Many of the wealthiest families in the world have built their fortune by establishing large and successful companies. Others may join the list through successful investments.
Owning businesses and real estate is common among ultra-wealthy individuals. Others also achieve ultra-wealth status through an investment strategy involving the stock market or early investments in startups.
According to data from the global real estate consultancy Knight Frank, there were 610,569 ultra-high-net-worth individuals worldwide in 2021. According to Forbes magazine, these are some of the wealthiest people in the world classified as ultra-high-net-worth individuals.
Ultra-high-net-worth individuals vs. the average person
Data from the U.S. Census Bureau indicates that the average household has a net worth of $46,870, excluding home equity. This means that ultra-high-net-worth individuals have a net worth at least 640 times greater than the average household.
Individuals in the top 0.1% of wealth in the United States hold most of their assets in corporate securities, mutual fund shares, and private companies. Meanwhile, the bottom half of the wealth distribution derives their wealth from real estate and durable consumer goods.
Ultra-high-net-worth individuals vs. high-net-worth individuals
While ultra-high-net-worth individuals hold a net worth of more than $30 million, many others meet the criteria for wealth. Many financial institutions consider anyone with a net worth of $1 million or more as a high-net-worth individual.
High-net-worth wealth categories
High-net-worth individual $1 million
Ultra-high-net-worth individual $30 million
Note: Once an individual has a net worth of $1 million, they are considered high net worth. They need to have at least 30 times that amount to achieve the “ultra-high” designation.
Once a person has investable assets worth at least $1 million, they can work with most financial advisors and investment services. However, a small part of the elite investment world, including hedge funds, private equity, and venture capital, may be reserved for those who meet the criteria of ultra-high-net-worth investors.
What
What does this mean for individual investors?
With an average net worth of about $47,000 (excluding real estate equity), the typical family in the United States cannot invest like high-net-worth investors. Investors with tens of millions of dollars have access to a range of investments that others do not.
For example, many investments and investment products deemed risky by government regulators require you to be an accredited investor to participate. Accredited investors are individuals who have a net worth of at least $1 million, excluding their primary residence, or an annual income of at least $200,000 for the past two years. Some investment professionals may also qualify.
Examples of investments that high-net-worth individuals can take advantage of that most families cannot include hedge funds, early investment in private companies, land, commercial real estate, and expensive artwork.
If you are an investor with low wealth, you can work with a financial planner to devise a strategy for reaching high-net-worth status. It can be significantly challenging to achieve high-net-worth status if you start with low net worth. Look at your options for investing, starting a business, saving, and more; even if you have low net worth, you can be financially stable throughout your life.
Frequently Asked Questions (FAQs)
How much money do you need to be classified as a ultra-high-net-worth individual (UHNWI)?
According to typical banking and financial institution definitions, a high-net-worth individual must have $30 million or more in investable and liquid assets. This includes cash, stocks, and other investment assets.
How many ultra-high-net-worth individuals (UHNWI) are there in the world?
As of 2021, there were over 600,000 ultra-high-net-worth individuals, an increase of 9.3% from 2020. The largest regions for these families are North America, Asia, and Europe.
Source: https://www.thebalancemoney.com/what-is-an-ultra-high-net-worth-individual-5197864
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