The Most Important Part of HENRY Is “Yet”
A high income gives you the capacity to build wealth. What happens next depends on what you do with it.
Ah! I recently learned a financial acronym I somehow had never heard before: HENRY.
High Earner, Not Rich Yet.
How did I miss this one?
It's an insightful one because high income doesn't guarantee wealth—it gives you the capacity to build it. Two households can earn roughly the same amount for 15 or 20 years and end up in completely different places financially.
One may carry high-interest debt, invest inconsistently, keep expanding their lifestyle, or never quite know where all the money is going.
Another household may increase saving and investing as income rises, put safeguards around the money, make thoughtful decisions about major expenses, and give growth enough time to do its work.
That's what makes the word “yet” so interesting to me. High Earner, Not Rich Yet sounds temporary. But the “yet” is not automatic.
There usually isn't one dramatic decision that determines whether someone eventually becomes wealthy. More often, it's a long series of fairly ordinary decisions, made over and over again.
And honestly, a lot of wealth building is pretty boring:
living below what you could spend
making sure unexpected expenses do not repeatedly set you back
paying attention to expensive debt
consistently putting money toward the future
increasing those amounts when income increases
investing consistently and appropriately
giving those investments time
And for couples, it is making enough of those decisions together that one person is not unknowingly working against what the other is trying to build.
A lot of the couples I work with earn good incomes. What I see is that earning well can give you amazing options, but it can also hide problems for a long time because there is enough money coming in to keep everything moving.
Let me be clear: lifestyle growth is not automatically a problem. Some of the reason we work hard and earn more is so that life can get better. The question is whether all of the increase gets absorbed by the lifestyle, or whether some of it is also being used to build the future.
You may even be thinking, High earner? Definitely not me.
Maybe. But income has a funny way of feeling ordinary once you've had it for a while, especially when your lifestyle has grown right along with it. What used to feel like a luxury becomes part of the new baseline and is hard to unwind.
That's why income by itself doesn't tell us everything. And here's some encouragement: if a high income does not guarantee wealth, a more modest income does not automatically keep you from building it.
Personal finance is a little bit like the tortoise and hare. Someone earning more may have greater capacity, but if most of that income keeps getting absorbed while someone else consistently lives below their means and invests over time, the eventual outcomes could look very different from what their incomes would have suggested.
So...back to HENRY. The acronym uses the word “rich,” but I tend to think more in terms of wealth. For most of us, building wealth happens slowly, intentionally, and through decisions that don't feel especially exciting in the moment.
I think the most important part of HENRY is not “high earner.”
It is the “yet.”
Because what that “yet” eventually becomes depends a lot on what you do now.
Keep building,
Dee
P.S. If you and your partner are earning well but aren't sure whether you're making the most of what you have, we can talk through that…
