Meet the 'Henrys': The millennials making 6-figure salaries who have 'pleasure funds' and enough money to travel — but still say they feel broke (2024)

The Henrys who Licea spoke with had expensive habits, like 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, a founding partner of Stash Wealth, a financial-planning firm that caters to Henrys, told Licea. She said most of her clients live in New York, work in tech or engineering, earn $180,000 annually on average, and have about $80,000 in student-loan debt.

Between debt, living costs, and the upkeep of a lavish lifestyle, 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, little to no savings, and feelings of low material wealth.

Investopedia called Henrys the "working rich" — if they stop working, they won't be rich. More of their earnings "go into costs than go into wealth building investments, leaving them feeling like they are more like regular people slaving for a paycheck than the wealthy 1% in America," Investopedia said, adding that "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, an Insider and Morning Consult survey found earlier this year. About 23% think they're upper middle class, and only 6% think they're affluent.

However, of the 1,207 millennials surveyed, only 125 both said they earned more than $100,000 and answered the question about which class they identify with, making it a small sample size.

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 2016. That means middle-class American households were earning about $40,425 to $120,672 that year.

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 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 peers.

Read the full article at the New York Post »