From HODL to HNWI: What’s a high-net-worth individual?

Becoming a billionaire is on the bucket list for six in 10 U.S. adults – and many believe it’s within reach. In fact, 44% of people say new opportunities like crypto could help them achieve their financial goals.

Whether or not money buys happiness, one thing’s clear: As your wealth grows, the way banks, financial advisors, and investment firms treat you changes. If you qualify as a high-net-worth individual, you've reached a status that opens new doors – but it also comes with unique responsibilities.

In this guide, we’ll explain what a high-net-worth individual is and what it means to belong to this financial tier.

What’s considered a high-net-worth individual (HNWI)? 

The one trait all high-net-worth individuals (HNWIs) share is that they’ve crossed into millionaire territory. Specifically, an HNWI has a net worth of at least $1 million in liquid or investable assets aside from their primary residence.

This doesn’t necessarily mean they have $1 million in cash, but they hold at least $1 million in assets that can be readily converted to fiat. This includes stocks, bonds, investment accounts, and, in some cases, business equity. If they can liquidate those assets – including investments and certain properties – and surpass the $1 million threshold, they're an HNWI. According to recent estimates, about 5.1% of the global population meets this criteria.

Some financial institutions may impose additional requirements for access to exclusive services, but generally, individuals with more than $1 million in investable assets can take advantage of premium investment opportunities and bespoke financial products. These may include access to private equity, pre-IPO shares, dedicated wealth advisors, or preferred rates on lending products. 

That said, HNWIs often face steeper tax obligations and more complex financial reporting requirements than non-HNWI individuals due to the size and structure of their portfolios.

Common characteristics of HNWIs

From savvy crypto investments to building a business, there are many ways to become an HNWI. But no matter how they get there, most HNWIs tend to share a few key traits:

• Highly liquid assets: HNWIs generally hold a substantial portion of their wealth in readily accessible assets like stocks, bonds, and cryptocurrencies. This liquidity gives HNWIs the flexibility to sell their holdings for at least $1 million.
• Sophisticated high-net-worth investments: Along with traditional investments, many HNWIs allocate capital to more advanced or exclusive financial vehicles. HNWI status often qualifies them as accredited investors, which opens the door to opportunities not available to the general public – such as private placements, hedge funds, and angel investing.
• Diversified portfolios: Rather than putting all their wealth in one investment, HNWIs typically spread their assets across different categories, including public markets, real estate, alternative investments, and private equity. This diversification helps balance risk while targeting both growth and income.
• Philanthropy: Many HNWIs contribute a portion of their wealth to charitable organizations, and their giving often increases as their net worth rises. According to reports, ultra-high-net-worth individuals or UHNWIs (more on those below) – those with $30 million or more – account for an estimated 38% of global philanthropic giving.

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High-net-worth vs. ultra-high-net-worth and very-high-net-worth individuals

As impressive as high-net-worth status may be, it isn’t the apex of affluence. There are additional levels of wealth that surpass HNWIs and place individuals in the highest tax brackets and financial circles.

Ultra-high-net-worth individuals (UHNWIs) 

UHNWIs represent the world's most financially elite investors, CEOs, and entrepreneurs – each with at least $30 million in investable assets. People who routinely make Forbes’ billionaires list, like Mark Zuckerberg and Jeff Bezos, qualify, though they far exceed that threshold. Currently, there are an estimated 500,000 UHNWIs globally, with the majority concentrated in North America, Asia, and Europe. Due to their immense wealth and influence, UHNWIs enjoy the greatest fiscal flexibility, but they also face the most complex tax structures and reporting requirements.

Very-high-net-worth individuals (VHNWIs)

VHNWIs don’t reach UHNWI levels of wealth, but they hold $5 million to $30 million in investable assets, placing them above traditional HNWIs. This category typically includes successful entrepreneurs, senior executives, and high-earning professionals who have accumulated substantial wealth through business ventures, investments, or inheritance.

HNWI and crypto assets: What are the connections and implications?

Cryptocurrencies represent one of the world’s most unique asset classes for wealth creation. Unlike many high-growth opportunities like private equity or hedge funds, digital assets like Bitcoin (BTC) and Ethereum (ETH) are open to everyday investors regardless of accredited status. This accessibility has allowed retail investors to enter a high-upside market, sometimes significantly earlier than their institutional counterparts. 

As access to crypto has expanded – both directly and through derivatives – more HNWIs have begun adding digital assets to their portfolios. Some surveys suggest that up to 71% of HNWIs already hold cryptocurrencies. This growing demand has led to a rise in specialized financial services tailored to managing crypto wealth. However, due to crypto’s evolving legal status and decentralized structure, HNWIs must carefully evaluate regulatory, custody, and tax considerations before investing.

Regulatory and tax considerations

Governments worldwide impose unique legal and reporting standards for digital assets, especially for HNWIs. To stay compliant with evolving tax rules and maintain accurate records of crypto transactions, many HNWIs rely on crypto tax software solutions like CoinTracker and personalized guidance from a certified crypto CPA.  

Investment strategy

While web3 offers high-reward opportunities, it also comes with distinctive risks, including extreme price volatility, 24/7 market activity, and a higher risk of fraud or scams. HNWIs often work with financial advisors to assess each asset's risk profile and build a strategy tailored to their broader wealth goals.

Market liquidity

Major cryptocurrencies like Bitcoin and Ethereum typically offer high liquidity across multiple platforms, but many altcoins and non-fungible tokens (NFTs) trade on thin order books with wider bid-ask spreads. HNWIs who invest in speculative crypto assets must account for price slippage and exit risk in their trading strategies. 

Philanthropy and crypto donations

HNWIs are already known for their charitable contributions, and crypto donations offer benefits like fast, direct transactions without intermediary fees. However, donors should also consider market volatility, proper asset valuation, and compliance with regulations such as anti-money laundering (AML) laws.

Enjoy concierge crypto tax assistance with CoinTracker Full Service 

The perks of being a high-net-worth individual are obvious – but they come with a catch, especially when digital assets are part of your portfolio. That’s why CoinTracker now offers Full Service, a concierge tax program designed specifically for crypto investors who want expert guidance. It includes optimized tax reporting and quarterly portfolio health checks to help you stay aligned with your financial goals.

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Disclaimer: This post is informational only and is not intended as tax advice. For tax advice, please consult a tax professional.