Doing Well, But Not Feeling Rich? You're a 'High Net Worker'

NEW YORK (MainStreet) – What do you call someone pulling in an incredibly comfortable salary, but sitting on assets that fall just short of “rich?” Financial advisors call them “high net workers,” and they have all the headaches of high net worth with almost none of the benefits.

Financial firm EverBank coined the term “high net worker” to describe folks who are affluent enough to need private banking services, but not affluent enough to fall into the high-net-worth category. On average, they're 41 to 63 years old, they work more than 50 hours a week, they're in households making roughly $374,000 a year and they have $750,000 to $1 million in investable assets. They're also far more likely to be in health care, finance or science, technology, engineering or math careers than the rest of the population.

“Many of the individuals known as high net workers have substantially developed since the recession,” says Frank Trotter, executive vice president of EverBank. “By primarily working in STEM occupations they have been a segment who have benefited from those parts of the economy that have recovered well. In addition, to the extent they have homes and equities, both asset classes have done very well in the past five to seven years.”

But high net workers also extremely conservative investors (69% label themselves as such), despite being in the middle of their peak earning years, desperately in need of a financial advisor (31% never used one, but 91% see the merits of their services) and loath to retire. On average, 13% say they'll never stop working. A full 23% of those making $500,000 a year or more and investing upward of $2.5 million say they'll stay on the job.

“These folks are usually concerned with advice of concern to younger people, such as college funding for children, and protecting the family with insurance coverage,” says Eric Meermann, certified financial planner and portfolio manager with Palisades Hudson Financial Group in Scarsdale, N.Y. “Protecting the income stream of one or both earners in the family is an important consideration, not just with life insurance but also disability.”

As a result, high net workers are five times more likely to invest in a 529 plan for their child's college fund than the average U.S. worker. Considering half of American families haven't put aside any money for college, as Sallie Mae discovered last year, they're well ahead of the curve.

“In terms of saving for their children’s education this does appear to be a priority that they understand and execute on,” Everbank's Trotter says. Looking at the median net worth one might think that a majority of their current savings might be earmarked for education.”

They're also twice as likely to invest in their company's 401(k) as the average American and three times as likely to put money in the stock market. But where the latter is concerned, high net workers are still a bit rattled after the recession and aren't quite ready to wholeheartedly trust the market. Despite huge gains in the U.S. stock market during the economic recovery, almost half of high net workers cling to the somewhat outdated notion that their best investment returns over the next five years will come from Asia.

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