High net-worth individuals
I’ve encounted this euphemism for “rich people” at least five times this week. It’s not exactly new; I’ve heard it occasionally for the last few years. But I don’t know where it came from, or how long it’s been gaining traction around the memosphere.
This morning’s appearance came in a Variety article about Radar’s Ted Field acquiring roughly $600 million in financing:
The financial partners in Radar’s fund are a combination of equity financiers and high net-worth individuals, including JP Morgan & Co., D.E. Shaw & Co., Kevin Flynn, the Rothman family, Cardinal Growth, GE Capital, US Bank, CIT and Mercantile Bank.
Kevin Flynn is an individual. The Rothman family presumably counts — though technically, they’re not an individual. You or I would just call them rich, wealthy or loaded. So why doesn’t Variety?
My theory is that super-rich people are actually a bit embarrassed by their vast wealth. “High net-worth individual” is a way of obfuscating and distracting from the dollar signs. Don’t judge me; I have a condition. It’s scientific. It’s treatable: “Oh, I’m not rich. I just have a high net worth.”
To refer back to the old-school SAT analogies:
alcoholism::disease
wealth:: high net worth
My friend Chuck is a VP at a bank that specializes in high net-worth individuals. (Which, to be fair, makes a lot more sense than banking for the poor and indigent.) When I ask him about his job, Chuck uses the HNWI term a lot, generally to protect the anonymity of his clients. Hearing him talk about it, one realizes that vast wealth is like a supertanker; it’s actually kind of a pain in the ass to move it around.
The only time it gets awkward with Chuck is when he refers to, “high net-worth individuals such as yourself.” I can never tell if he’s being generous or deluded. My net worth is high compared with, say, a Kentucky coal miner. But I’m not looking for places to park $600 million. “High” is clearly a relative term.
Which leads to my second hunch: “high net-worth individual” was coined because there’s a vast realm between millionaires and billionaires, and you need something to call these people.
The film industry increasingly calls them partners, because they’re bankrolling many of the super-budgeted movies filling our megaplexes. But I wonder if we’ve lost something by reducing our tycoons and barons to mere high net-worth individuals. Great wealth is supposed to invoke romance, intrigue and familial drama, not spreadsheets and hedge funds. Just by giving it a new term, they’ve taken away half the reason to be rich.
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November 13th, 2006 at 10:10 am
I think that “rich” is a mindset; someone can meet this criterion simply by having a posh accent, designer clothing, and a well-known zip code. The “high net worth” moniker specifies exactly what kind of loaded we’re looking at: a large bank account. And as you surmise, the HNW title is to distinguish between uber-millionaires and lesser millionaires.
November 13th, 2006 at 10:27 am
If you ever feel disenchanted with your high net worth status, John, feel free to give me some of that money.
November 13th, 2006 at 11:08 am
More troubling to me is the “expansion of the middle class.” Not the idea of moving more low net-worth individuals into the middle class, but the expansion of the top end of the range. The other day, a reporter on the Market Place morning report referred to those making $200K-500K annually as “middle class.” Where I come from, those are rich folks.
November 13th, 2006 at 11:28 am
I figured the term came from the banking/investment industry in order to have a term to refer to their target market in a way that didn’t seem crass.
Plus, it’s more descriptive than “wealthy” or even “rich”. While “high” could mean anything, the term does focus on net worth, something that’s less open to interpretation than “wealthy” or “rich”.
I know a person, for example, who has all sorts of stuff. He lives in a million dollar home (and in Texas, this is still impressive), drives a high-end Mercedes, and lives the life of the priviledged. However, he’s got so much debt, he actually has a relatively low net worth. If he lost his high-paying job, he’d be on the streets within months.
By the standards of most, that guy is rich or wealthy. He has nice stuff and lives high on the hog. He does not, though, have a high net worth, and it would be largely wasted effort to attempt to peddle high-end investment products to him.
November 13th, 2006 at 12:45 pm
Is the “Kentucky coal miner” hypothetical a reference to “The Amazing Race”? You’ve mentioned liking that show before.
November 13th, 2006 at 1:06 pm
“Just by giving it a new term, they’ve taken away half the reason to be rich.”
Is that so bad?
November 13th, 2006 at 2:21 pm
Ryan makes a really good point: You can appear rich, without having any actual money. Banks are looking for people with actual money.
I had a similar realization while at USC Film School. There was a homeless person collecting change at a freeway on-ramp, and I thought: mathematically, he has more money than I do, because I have thousands of dollars of debt.
Not that I’d trade places with him. The reality of money is that it’s not just what’s in your wallet, but your ability to get more when needed.
November 13th, 2006 at 3:00 pm
Don’t knock banking for the poor and indigent. It just won Muhammad Yunus and Grameen Bank the Nobel Peace Prize.
November 13th, 2006 at 3:32 pm
haha –
Dude, I think microlending is awesome on multiple levels. I think it’s a model for socio-economic revolution. But I don’t think it’s what American banks are thinking when they ask, “Hmm, how should we make money?”
Kevin Kelly has a big post about it today on his kk.org blog:
http://www.kk.org/cooltools/archives/001484.php
Joe P. –
Yup, I’m ref-ing my favorite gold-hearted yokels.
November 13th, 2006 at 5:53 pm
Apologies for digressing, but there are a number of things that annoy me about Variety, and they have the unique ability to find something new to annoy me with every couple of weeks.
The first thing that really bit me was their seeming dislike for the word “the” in certain places.
“After a fierce bidding war with Fox, (the?) Alphabet has won the rights to the 20th Century Fox TV-produced laffer by stepping up with a six-episode commitment.”
“…Joel Surnow, Bob Cochran and Howard Gordon. (the?) Project is targeted for a fall 2007 debut.”
“Tentatively dubbed “The Call,” (the?) half-hour is a cross between “Emergency!” and “MASH,” with a dose of “Seinfeld” thrown in for good measure.”
“(The?!?!) Concept for “The Call” began with the Real Time production trio, Hemingson said, adding that 20th Century Fox TV toppers Dana Walden and Gary Newman “brokered the marriage” to bring him onboard.”
I’m no expert on English but that last example has become super-common for Variety, often starting paragraphs with “Studio has not reported earnings…” or “Network blah blah”.
Second was calling CEO’s and Presidents prexies. Third is calling television shows skeins. I am not the brightest person in the world but I’m not stupid either, and I had to look this crap up to find out what the hell a skein was, and there is no way that word fits.
November 13th, 2006 at 8:28 pm
I think magazine writers prefer “high net worth individuals such as” over “rich people like” largely because they get paid on each word.
November 13th, 2006 at 8:58 pm
I like Chris Rock’s description of the differences between “rich” and “wealthy”. Rich people have a lot of money to spend. Wealthy people OWN a lot of valuable things. High net worth is a term used to describe the latter. Bill Gates? He has millions of dollars in the bank, but he’s WORTH -billions- of dollars in stock. The problem is he cannot sell ALL of that stock at once, because there wouldn’t be enough people at one time wanting to buy it, and it would harm the stock’s value, so he can only sell stock bit by bit. Since we generally say “rich” meaning the amount of money a person has to spend, the term doesn’t really apply, because Bill Gates can’t spend billions of dollars at once, but he’s WORTH billions of dollars, as long as the value of Microsoft as a company remains steady. So he has an incredibly high “net worth”.
I know, it’s way too technical. I always call movie stars, music stars, and athletes “rich”, while I call CEOs and savvy businessmen “wealthy”. Rich people spend all of their money on stuff that loses value. Wealthy people spend a lot of their money on things that make them even MORE money.
November 13th, 2006 at 9:04 pm
Also, Jemaleddin, $250,000 to $500,000 can certainly be middle class. If ONE person makes that much money a year, and lives by themselves and are single, they are rich. If that person is married with two teenagers, has to save for those two teenagers’ college educations, as well as support his stay-at-home wife while she looks after the kids and household, while also saving for retirement, that money can go away REAL fast. Even if you live in a $250,000 house and drive an Accord, the money would get stretched thin.
November 13th, 2006 at 9:53 pm
My friend Chuck writes:
November 14th, 2006 at 2:31 am
” … I had to look this crap up to find out what the hell a skein was, and there is no way that word fits.”
Skein (coil of yarn) is really apt, I think. TV shows tell yarns but ones that just go on and on and on. Personally I kind of like rustic-type neologisms like this. They certainly beat jargony word-contructions, like ‘high net worth individuals’.
I don’t know if Variety came up with ‘helming’, with its nautical connotations. If you’ve got a crew someone’s got to be at the helm. ‘Thesp’ is another word Variety may or may not have popularized. I don’t know how actors feel about being called thesps, to me it sounds a tad condecending (but in a good-natured way). It’s like implying that actors take themselves and their Art much too seriously.
Skipping the definite article certainly makes for prose that’s more — I don’t know what to call it — direct or agressive. But I like the simplicity. Who needs detached definite articles anyway? English may just evolve in this directon over the next 100 years or so.
Personally I rather like the Variety style, I even find it funny. But it’s a bit like Gaudi. Gaudi’s buildings are really spectacular but fortunately there are relatively few of them in existence. It’d truly be awful if they were all over the place.
November 26th, 2006 at 3:49 pm
“high net worth individual” is a term professionals, such as “private wealth managers,” attorneys, CPAs, bankers, et.al. use when talking about clients whom they serve. These clients might be “trust fund babies,”(and there are a lot of them in Boulder,) or they might have earned it, married it or won it in a lottery. Does a character in a movie use the terms he really would use or the terms that the uninformed screenwriter or viewer uses? Should a hard rock miner use a “double jack” or a “sledge hammer?”
Writing about what you know does not mean it must be one’s own experience, exclusively, but knowing about what you write. It is not political correctness for a person who uses a wheelchair to “use a wheelchair” rather than being “confined” to one or “bound” by one. He does not sleep in it. Knowing the terms to “be in character” is the obligation of the writer.
The days of a stock broker being an “account executive” are days set in the 60s and 70s. A professional athlete or a 15 minute rock star might have a very large income for a few years but if she spends it as fast as it comes in, she is not a high net worth individual and needs basic budget advice, not a private wealth manager. F. Scott Fitzgerald didn’t really have it right. Most rich people are not like you and me with more money. Variety sometimes gets it right. Especially if the writer is a trust fund baby following her bliss.