Some people earning $100,000 or more say the benchmark for financial success has changed

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They are young, successful and earn a lot of money. Some call them HENRY, short for “high earners, not yet rich.”

Usually in their twenties and thirties, these young people earn more than $100,000 a year. The median household income in the United States is around $70,000 a year, according to 2019 census data.

While some people may believe the HENRYs are living the American dream, experts say their six-figure salary might not go that far when you factor in student debt, rent and personal expenses.

A recent study revealed that 70% of millennials live paycheck to paycheck, a larger share than any other generation. 33% of millennials live paycheck to paycheck and struggle to pay their bills.

In interviews with ABC News, some HENRYs said that even though they weren’t quite there yet, they could understand why many others felt that way.

Ben Gaut, 33, works as a technology consultant in Atlanta. He said that being in the so-called HENRY group was a “position [he] always wanted to be in it. However, he says the “not yet rich” part was not something he expected to be delayed.

For Gaut, much of that lag is due to his six-figure student loan debt.

“I don’t want to make a mistake,” he said. “But there’s still work to be done to achieve those goals that I had built in my mind about what would happen at that time.”

“If that’s how I feel right now…oh my God, what’s someone on the poverty line?” said Cowles. “What is someone who wins 30, 40 [or] 50,000,000 a year and also living in Brooklyn — how do they feel? »

The average student debt in the United States is nearly $40,000 per person, according to EducationData.org.

Priya Malani is the founder of Stash Wealth, a financial planning firm that works exclusively with the HENRYs. She says they usually have double that amount in student loan debt.

“The average HENRY comes to us with about $80,000 in student debt,” she said. “They have accumulated more degrees, they have been in school longer and therefore they are more in debt.”

Courtnie Nichols, 34, doesn’t have high student debt, but even with the combined $300,000 salary she and her husband earn each year in Virginia, they feel they need to be careful with their money .

“I own my own business. My husband has a high net worth on his own with his job. So when you look at all the tangibles on paper, it’s like, ‘Oh, they’ve got a lot of money’,” she said. “But, for example, six years ago we were hit with a tax bill of almost $10,000. … We had an emergency fund. But now it’s like our entire emergency fund is gone, wiped out with a single tax bill. So now we start again. It’s as if, as soon as… you take a few steps forward, you take a few steps back.

The HENRYs who shared their stories with ABC News said they were not looking for sympathy and recognize they are better off than so many struggling Americans. But many said they felt the benchmark for upward mobility had changed.

“Funny thing is, I spend more on rent than I would on a mortgage. Because my debt-to-equity ratio is based on my student debt, so I’m kind of in the trap of spend more money on a wonderful place to live, but I don’t accumulate equity, so I’m in this kind of position that seems…difficult, it’s hard to accept.”

consumer price index, which measures what consumers pay for everyday goods and services and is often seen as a barometer of inflation, has jumped 5% in the past 12 months – the biggest increase since August 2008.

Another factor is the exorbitant cost of living. The median price of a home in the United States has soared 23.4% in just one year, and it’s especially high in cities where many HENRYs live, according to the National Association of Realtors.

The median price of a home in the San Francisco metro area is $1,200,000. In Los Angeles, it’s $682,400; in New York, it’s $514,200; and in Washington DC, it’s $498,100, according to the National Association of Realtors.

There is also a desire among high earners to enjoy certain luxuries alongside their hard work, although not all spending is driven by the desire to follow the success of others. There are certain social elements, like “FOMO” or “fear of missing out”, the culture.

“At 30, you would think that in our peer group, we are at the top of the totem pole. But that’s not the case in our circle of friends,” Nichols said. “But we’ll be like, ‘We have a healthy income, we’re building, but we’re not quite there.'”

A phenomenon known as “lifestyle creep” occurs when people’s lifestyles change as their income increases, and certain luxuries a person used to enjoy turn into their perceived needs. .

“The truth is, even when you cut back, there’s still that level of almost anxiety,” Cowles said.

Malani said young people may see friends buying houses or upgrading their cars, for example, but don’t realize they may be dealing with credit card debt.

“So you just think, ‘Wow, if they can do it, I should be able to do it too,’ and it becomes this cycle that’s very, very hard to break,” Malani said.

Jennifer Castillo is a 34-year-old lawyer and blogger from Washington, D.C. She goes by the name HENRY, bringing in around $130,000 a year. She said she hadn’t felt financially squeezed yet and was looking to redefine some of the more negative connotations associated with the HENRYs.

“I’m so happy to kind of embrace the title HENRY because it speaks to the potential of your own particular financial goals, of what you want your wealth-building legacy to be,” she said.

Although her online persona shows her living the high life, she said there was a story behind every post. For example, she pointed to a Gucci belt, saying she had planned to buy it for two years.

“When you look at my Instagram or look at my blog, it might seem like I kind of subscribe to this ‘buy it, I’ll do anything’ lifestyle,” Castillo said. “But it’s really a highlight. … Nothing I buy is on a whim. I am always planning my purchases. I always save for them.

For Castillo, the upcoming birth of her first child is her financial priority, she said.

“I think the biggest change in my budget will be that I’m going [have] much less money in my fun account,” she said. “I’ve looked at the costs and child care is expensive, nannies are expensive. For example, all the child care options that I have – I work full time – are expensive. So… that’s where the sacrifice will be located.

Experts say financial advice can also make a huge difference. Nichols contacted Stash Wealth last year. Now she knows where every dollar goes.

“I know each month how much I can spend with my credit card. As with the exact penny, I know what leeway we have,” she said.

No matter how they got there, the HENRYs who shared their stories believe financial freedom is within their reach.

“My favorite part of the acronym is the ‘not yet rich’ part,” Castillo said, “because it speaks to the future potential of someone making a lot of money.”

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