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As the middle-class market continues to stagnate, HENRY—high-earner-not-rich-yet—households represent the best prospects for many financial products and services. Understanding HENRYs represents a potential growth opportunity for the industry, because these households have both sufficient disposable and sufficient discretionary income to spend, save, or invest.
In 2012, we defined HENRYs as households with a primary (unretired) head between the ages of 20 and 70 with a total household income between $100,000 and $249,999. For a sharper analysis, we've refined HENRYs to be households with a head between the ages of 25 and 59, with incomes between $100,000 and $249,999, and a net worth of $500,000 or less.
How are HENRY households managing? Better than many households but, overall, not well. The market-segment size shows very modest growth. Between 2012 and 2016, the total number of HENRY households has increased by only 1 million. During the same period, the total number of US households has increased by 6.4 million. Household growth is insufficient to provide sales volume to financial-services providers—industry competition for HENRYs will be fierce.
Adjusting for inflation, HENRYs' mean net worth is slightly lower in 2016 ($192K) than it was in 2002 ($194.3K). Growth in inflation-adjusted mean household income is unexceptional (from $123.3K to $139K). Not surprisingly, not all HENRY households are equally attractive. Segmenting HENRYs into younger and older households increases understanding of this population. Households' financial needs, products, channel preferences, and attitudes differ depending on Life Stage. To learn more about HENRYs, please contact us.
See the October 2012 MacroMonitor Market Trends Newsletter, Much Ado about HENRY.
In the hypercompetitive retail market, read What Do HENRYs Want? (Unity Marketing).
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