You’ve heard it all before. You meet a fellow agent or advisor at an event. You start talking shop. They explain, “My business is built around providing products and services to High Net Worth individuals.” Maybe they mention they are looking for wealthy prospects. But what does “wealthy” mean?

Forget HNW and Wealthy

We use the expressions “Wealthy” and “High Net Worth” all the time. It’s industry jargon that the public doesn’t identify with easily. “High Net Worth” sounds like “More money than you’ve got.” In large parts of America, considering yourself “wealthy” comes across as arrogant.

A senior executive at a NYSE-listed firm suggested an alternative. “Use the word successful instead,” he said. You work with successful individuals and business owners. Most people consider themselves successful at something. Few people consider themselves a failure.

What Does Wealthy Mean?

We start by building a grid using the words: assets, cash flow, high and low. This gives you four possibilities: 

  • High Assets, High Cash Flow: They’ve accumulated money and have more coming in through salaries and bonuses. These include:
    • Senior officers at listed public companies: They are senior enough to be listed in their annual report. You would be surprised how many publicly traded companies are in your area.
    • Established Successful Business Owners: Certain local, privately held businesses are cash cows (dry cleaners), high volume (liquor stores) or bill services hourly (plumbers).
    • Highway Construction: You’ve complained about the cones on highways while stuck in traffic. Business owners who are concrete and paving contractors, along with other professions in heavy construction, often do quite well for themselves. Projects are usually funded by the state or federal government.
    • Fast Food Franchises: Business magazines occasionally list the top brands and average per store revenue. Often they reinvest in their business by opening new outlets.
  • Low Assets, High Cash Flow: They make a great living but haven’t saved a lot yet. Their cash flow is excellent, allowing them to invest monthly. They often work for someone else
    • Medical Profession: Nursing is often the most popular job for college graduates in most metro markets. You would be surprised how much they earn. Then there are doctors, of course.
    • Accountants: Often in the top five most popular professions. On average their salary is similar to nursing.
    • Plant Managers: It’s not glamorous but it pays well and often fits in the top five.
    • Licensed Professions: Engineers, attorneys and other high earners usually require state licenses. They are easy to track down.

  • High Asset, Low Cash Flow: This is the old money in your area. Streets are named after them. They are leading voices in the community. The money may be tied up in land, foundations or trusts, so they have lower cash flow and are often considered “cheap.” They are often philanthropists.
    • Museums and Cultural Institutions: They are often donors at higher levels and active members.
    • Historical Societies: The kinder, gentler sibling to museums. Attracts the established families into informal settings.
    • Libraries: Starting with Andrew Carnegie, the wealthy have always been interested in libraries as a way of making knowledge accessible to everyone.
    • Zoos and Botanical Gardens: The wealthy are often kind to animals and want to provide green spaces for urban dwellers. Don’t forget the SPCA and parks.

The fourth category on the grid isn’t of interest to you. Low asset, low cash floweither represents people who might act as if they have money, living a lifestyle funded by debt, or they had money but spent it. It’s been said the first generation makes the money, the second attempts to hold onto it and the third loses it.

Your Additional Fourth Category

What about people who don’t neatly fit into a box? These people are “under the radar.” They make money legally yet maintain a low profile. Some examples are:

  • Certified Government Contractors: Selling products and services to the federal government is big business.
  • Farm Subsidy Recipients: The federal government sends a lot of money to farmers. Who gets how much is part of the public record.
  • Layoffs: People leaving their jobs often have a rollover to consider. Worker Adjustment Retraining Notifications (WARN) give advance notice of layoffs announced in your area.
  • Business Incubators: Some startups make it big. They often get going in local centers where new businesses share office equipment and space.
  • Private Foundations: Many individuals have set up their own vehicles for funding various charities on an ongoing basis.
  • Religious Institutions: The clergy isn’t a career path to wealth in this life, yet parishioners often approach their leader for financial advice. They need a “safe set of hands” to help these people.

“Wealth” is an often an overused and stereotyped word. Dig a little deeper and you will find there’s plenty of undiscovered wealth in your community.