Definition of High Net Worth
High net worth describes individuals whose total assets minus liabilities exceed a substantial threshold. In the United States, the Securities and Exchange Commission commonly classifies a high-net-worth individual as someone with at least $1 million in liquid financial assets, excluding the primary residence. Globally, institutions such as Credit Suisse and Knight Frank use higher thresholds, often starting around $1 million in investable assets, to define this category.
How Net Worth Is Calculated
Net worth equals total assets minus total liabilities. Assets include cash, investments, real estate, and business interests. Liabilities include mortgages, loans, and other debts. High net worth therefore means a large positive balance after subtracting what is owed from what is owned.
Why the Term Matters
High net worth status affects access to exclusive financial services, such as private banking, wealth management, and certain investment products. It also influences tax planning, estate strategies, and eligibility for specialized lending. For regulatory purposes, the label helps determine reporting requirements and investor accreditation status.
For more detail on regulatory definitions, see the U.S. Securities and Exchange Commission.
