{"id":12254,"date":"2024-07-10T08:00:20","date_gmt":"2024-07-10T00:00:20","guid":{"rendered":"https:\/\/www.infinitysolutions.com\/?p=12254"},"modified":"2024-07-08T14:04:32","modified_gmt":"2024-07-08T06:04:32","slug":"financial-planning-problems-six-figure-salary-and-broke-youre-a-henry","status":"publish","type":"post","link":"https:\/\/www.infinitysolutions.com\/blog\/financial-planning-problems-six-figure-salary-and-broke-youre-a-henry\/","title":{"rendered":"Financial planning problems: Six-figure salary and broke? You&#8217;re a HENRY"},"content":{"rendered":"<p><em>If you earn six figures and still feel constantly broke, you\u2019re a HENRY. A financial adviser can help you take control of your finances and make you rich!<\/em><\/p>\n<h2><strong>What is a HENRY?<\/strong><\/h2>\n<p>Does your household earn between $100,000 and $250,000 yet you constantly feel broke? Then you are a HENRY: High Earner Not Rich Yet.<\/p>\n<p>The term HENRY, invented by financial journalist, <a href=\"https:\/\/fortune.com\/2019\/10\/24\/henrys-high-earning-not-rich-millennials\/\">Shawn Tully<\/a>, was coined to describe well-off middle-class families who have high expenses combined with a heavy tax burden and feel they will never be wealthy.<\/p>\n<p>Increasing numbers of people, often millennials, are, on paper, enviably affluent but have little accumulated wealth. And that\u2019s what HENRYs need to work on.<\/p>\n<h3><strong>Not rich YET<\/strong><\/h3>\n<p>The \u2018y\u2019 is the part of the acronym that is key here. Not rich YET. But the potential is there.<\/p>\n<p>First, let\u2019s consider what \u2018rich\u2019 really means. For the vast majority of the world, a six-figure salary automatically puts you into the rich bracket.<\/p>\n<p>But the rich is really about net wealth. This is the value of your assets minus the value of your liabilities. To calculate it, you take the value of everything that you own including cash in the bank, properties you own, stocks, shares, etc, and take off any amounts that you owe (mortgage, credit card debt, car loans etc). That will tell you how much you are actually worth.<\/p>\n<p>If you\u2019re not worth much right now, the good news is that with a six-figure salary, there is a lot you can do to increase your net wealth over the long term. But you do need to have a plan that involves saving and investing.<\/p>\n<p>Here\u2019s some practical, actionable advice to start building wealth to become truly rich.<\/p>\n<h2><strong>Financial planning for HENRYs \u2013 eight tips to make you rich<\/strong><\/h2>\n<h3><strong>Tip 1: Save before spending<\/strong><\/h3>\n<p>Often our ability to save simply comes down to habit. Adopting a \u2018save before spending\u2019 mindset is a fundamental shift that is the first step for HENRYs who yearn to be rich. It simply involves prioritising savings and investments by setting aside a predetermined portion of income immediately after receiving it, rather than waiting to see what remains at the end of the month. Because the save-after-spending approach clearly isn\u2019t working!<\/p>\n<h3><strong>Tip 2: Automate savings and investments <\/strong><\/h3>\n<p>You need to be disciplined and consistent about saving, and that becomes much easier if you automate it each month. Automation takes disposable income out of circulation and reduces the temptation to overspend on non-essential items.<\/p>\n<h3><strong>Tip 3: Spend mindfully<\/strong><\/h3>\n<p>Remember when you didn\u2019t have a six-figure salary and your disposable income was significantly less? You probably thought more carefully about splashing the cash. As earnings increase lifestyle inflation occurs: we spend more simply because we can.<\/p>\n<p>If you really want to free up money to build wealth, return to mindful purchasing and make some spending compromises. Do you really need another pair of designer shoes? Could you compromise on that top-of-the-range car? Is a business class seat really necessary for that short-haul flight?<\/p>\n<h3><strong>Tip 4: Get compound interest working for you <\/strong><\/h3>\n<p>A disciplined saving strategy will not only help you to accumulate wealth but give you the ability to leverage the power of compound interest, allowing your savings to grow exponentially over time. It\u2019s a <a href=\"https:\/\/www.infinitysolutions.com\/uncategorized\/compound-interest-and-financial-planning-let-your-savings-snowball\/\">powerful force<\/a> but it needs time to do its magic so the sooner you work on freeing up money to save, the sooner you\u2019ll get rich!<\/p>\n<h3><strong>Tip 5: Reduce high-interest debt<\/strong><\/h3>\n<p>Compound interest can be a force for good but it\u2019s a major obstacle to building wealth if it\u2019s working against you. When you have high-interest loans or credit card balances, compound interest is a <a href=\"https:\/\/www.infinitysolutions.com\/blog\/financial-wellbeing-challenge-compound-interest-friend-or-foe\/\">formidable foe<\/a>, so paying off these debts should be a priority for HENRYs.<\/p>\n<h3><strong>Tip 6: Ensure your investment strategy is tax-efficient<\/strong><\/h3>\n<p>Tax mitigation can be an important factor in accumulating wealth over the long term. By ensuring your investment strategy is tax-efficient, you can maximise your returns and retain more of your earnings. Take advice on how to optimise your savings and investments for tax efficiency to enhance your overall investment returns and build wealth more effectively over time.<\/p>\n<h3><strong>Tip 7: Work with a financial adviser<\/strong><\/h3>\n<p>A financial adviser is your key to putting a tax-efficient financial plan in place. If you are an expatriate in Asia, you\u2019ll probably need advice on cross-border planning and investing and our advisers have a wealth of experience with that. They will also help you define your saving and investment goals and carry out in-depth <a href=\"https:\/\/www.infinitysolutions.com\/blog\/the-benefits-of-cashflow-analysis-in-financial-planning-for-expats-in-asia\/\">cashflow analysis<\/a> to show you exactly when you will become \u2018rich\u2019, whatever that means to you! Seeing the figures down in black in white will provide the motivation you need to put your savings and investment plan into action and stick to it.<\/p>\n<h3><strong>Tip 8: Protect your wealth <\/strong><\/h3>\n<p>Once you start to accumulate wealth, you need to protect it so that life\u2019s curveballs \u2013 such as redundancy or serious illness \u2013 don\u2019t derail your get-rich plan. Your financial adviser can help you put the necessary <a href=\"https:\/\/www.infinitysolutions.com\/personal-solutions\/life-insurance\/\">insurance<\/a> \u2013 life, health, critical illness \u2013 in place so that your savings are protected.<\/p>\n<p>***<\/p>\n<p>You may not feel rich right now but with a comprehensive financial plan, you can transform your high earnings into lasting wealth.<\/p>\n<p><a href=\"https:\/\/www.infinitysolutions.com\/contact\/\">Contact us today<\/a> and make it happen!<\/p>\n","protected":false},"excerpt":{"rendered":"<p>If you earn six figures and still feel constantly broke, you\u2019re a HENRY. A financial adviser can help you take control of your finances and make you rich! What is a HENRY? Does your household earn between $100,000 and $250,000 yet you constantly feel broke? Then you are a HENRY: High Earner Not Rich Yet.&hellip;<\/p>\n","protected":false},"author":2,"featured_media":12256,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false},"categories":[5,153,6,45,69],"tags":[],"class_list":["post-12254","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-savings","category-blog","category-expatriate-financial-planning","category-investment-management","category-financial-planning","category-5","category-153","category-6","category-45","category-69","description-off"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Financial planning problems: Six-figure salary and broke? You&#039;re a HENRY<\/title>\n<meta name=\"description\" content=\"If you earn six figures and still feel constantly broke, you\u2019re a HENRY. 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