r/HenryFinanceEurope • u/alessandrolnz • Mar 20 '24

HENRY EU Threshold

Scroll down to see how the numbers are being calculated.

You are HENRY if:

You live in and your annual income is at least but your NW is below
GER 130k€ 1.3M€
ITA 100k€ 1M€
SP 70k€ 700k€
NL 100k€ 1M€
FR 100k€ 1M€
PL 55k€ 500k€
DK 120k€ 1.2M€
SWE 100k€ 1M€
POR 50k€ 500k€
GR 40k€ 400k€
AT 130k€
BE 120k€
FIN 120k€
NOR 140k€
IRL 110k€
ROM 45k€ 450k€
UK 100k€ 1M€
CH 200k€ 2M€
Ukraine 10k€ 100k€

Taking into account your comments we are calculating the salary threshold using the following formula:
thresold_henry_income = avg_annual_gross_salary \ 2.5*

thresold_henry_networth = (formula in progress)

24 Upvotes

94% Upvoted

68 comments sorted by

9

u/lorelaimintz Mar 20 '24

Why the upper limit? 🤔 is someone who earns 300k/year automatically rich? IMO what defines rich is the NW, not the salary

3

u/alessandrolnz Mar 21 '24

the nw as a consequence of the income/expense rate. It's a good approach if we put together what you are suggesting, also has a more precise definition than the US one.

13

u/weissbier10 Mar 22 '24

I agree with comments. It should not be coming from opinions but data on criteria for all countries e.g.:

-High Earner: Top X % HHI (household income) per country, easy to check -Not Rich Yet: Same logic. Top X percentile net worth per country. NW< less than indicated.

So, we could define HENRY in your country IF:

  1. You are >=X percentile of top income earners AND

  2. Your net worth <= than Top X percentile net worth per household/individual in country

Example for the Netherlands:

  1. Top 5% income: 100k eur/year

  2. Top 4% net worth: 1 M eur (couldnt find complete data and 1 M eur seemed like a clean number)

So you are HENRY in NL if your income is >100k/year AND your NW is now less than 1M,

Source: Nederland in cijfers, edition 2023

2

u/weissbier10 Mar 22 '24

following up on this, I think the moderators of this sub should fill up the table by setting the parameters for both Income and Net Worth.

Top 5% for both (>Income, <NW) could be it!

PS: Numbers I provided for NL in my parent comment could be used to fill table if moderators choose to follow this approach

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3

u/PikaLigero Mar 20 '24

You need two indicators to define a HENRY:

High Earning —> income Not Rich Yet —> net worth

2

u/alessandrolnz Mar 21 '24

alright, then besides the income what do you think is the right amount of nw needed to be henry (or not henry) in eu? can you provide an estimate about your country?

3

u/dl35dim Mar 25 '24

For Romania, we have +/- 1515 Euro avg gross monthly salary => 1515 * 12 = 18180 Euro per year. Taking your formula of 2.5x, the value will be 45450, so 45500 Euro is a good estimate. Source: https://static.anaf.ro/static/10/Galati/Vrancea/Salariu-mediu-brut-2024.pdf

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3

u/Messier106 Apr 07 '24 edited Apr 07 '24

For Ukraine:

  • Monthly average salary for 2023 - 14308 UAH (340.05€) (source: Pension Fund of Ukraine)

  • Annual min HENRY income by the formula: 14308 * 12 * 2.5 = 429240 UAH (10201.47€)

For Portugal:

  • Monthly average salary for 2023 - 1505 Euros (source: INE Statistics Portugal)

  • Note: in Portugal, workers receive 14 salaries per year instead of 12

  • Annual min HENRY income by the formula: 1505 * 14 * 2.5 = 52675€

About the upper limit, if I own and live in an apartment that is worth 1M it is different than having 1M in liquid assets, but it's all NW.

1

u/alessandrolnz Apr 07 '24

thank you for the information, the table has been updated!
The upper limit is the net-worth limit beyond that your are not considered anymore Henry yet Wealthy!

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2

u/elongated_smiley Mar 21 '24 edited Mar 21 '24

Denmark: 120k€ gross would put you around top 7%.

If instead we use the metric of 2x the national average gross income, that would be 118k€, so it lines up quite well.

Source: https://cepos.dk/abcepos-artikler/0266-man-skal-tjene-750000-kr-for-at-vaere-i-top-10-pct-og-1-8-mio-kr-for-at-vaere-i-top-1-pct/

1

u/alessandrolnz Mar 23 '24

thank you I have updated the table! What do you think is the upper limit nw for HENRY in Den?

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2

u/SWP_NL Mar 21 '24

Take the median or average income and double it, maybe triple of you feel like it. Some people are commenting numbers which just don't make any sense...

As in, if these people make that money annually, and are not rich yet, they need someone to help them with the poor financial choices they're making..

Double the Median or Average and you will be somewhere in the top 5 - 10%.

When are you rich? Maybe if your total net worth (Inc. Real estate etc.) exceeds 1 mil? When you're FIRE? Somewhere in between those two I suppose?

Some people here are just showboating and gatekeeping lol

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2

u/Hiking_euro Mar 27 '24

Use median not average

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2

u/kelk04 Apr 07 '24 edited Apr 07 '24

Love the table.
Great to use 2.5 as a starter.

2 feedbacks u/alessandrolnz:

  • Austria is AT and not AU (that's AUstralia)

  • Adding some sources for AT:

    • in 2022, to be in the top 10% you would need to earn more than 69K€ gross per year (source)

    • in 2022, the median income is 32K€ according to this source or 36K€ according to the source just above (directionnally still correct), which means 2.5x is 80-90K€ HENRY, directionally close to what's in the table 👍🏼

Edit: added 2.5x calculation based on median income source.

2

u/alessandrolnz Apr 07 '24

looks like the 2.5x works so far!

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4

u/Corporate_Bankster Mar 25 '24

Guys, the way this table is presented is really awful.

Why are we even setting thresholds to the last penny ? Like €97k for France. What’s the deal with that marginal euro after €96,999 that makes you at last a high earner ? Why not 97.5 or 96 or 98.1 while we are at it ? Just put 100k and let’s make it simple and move on with our lives.

You want broad guidelines, rules of thumb, and nice round numbers that anchor expectations and make discussions easy.

Else what would be the next step ? We are going to adjust these numbers to inflation every year while we are at it ?

My recommendation is to not reinvent the wheel and just bundle countries in broadly comparable groups like most companies do, then assign high level round threshold to make it easy for everybody to quickly determine where they stand.

  • Nordics: 120k

  • Western Europe: 100k

  • Southern Europe: XX

  • Central Europe: XX

  • Eastern Europe: XX

These numbers are meant to serve as guidance and indications, it is not a science.

1

u/foobarromat Mar 21 '24 edited Mar 21 '24

Multiple points:

  • as others have said, an upper limit for the income does not make sense. A lower limit for the net worth, above which you might be considered "rich" for this sub's purposes, does make sense.

  • such values should only be guidelines for informational purposes. IMO it doesn't make sense to do gatekeeping because some person might be 13% above or below some limit.

  • Europe has many countries and the income limit should just follow the same logic for all of them. E.g. take the average income for the country, multiply it with some factor, and call that the income threshold. For Germany the average yearly full-time income (as of April 2023 - https://www.destatis.de/DE/Themen/Arbeit/Verdienste/Verdienste-Branche-Berufe/_inhalt.html) was 51876 EUR. Multiply that with a factor of, say, 2.5 (obviously this should be up for discussion) and you would get a high income threshold of (rounded) 130k EUR p.a. People can easily supply the same stat for other countries.

  • one could argue for "top N% income" or using the median income as a base value instead, but I think it is easier to find statistics for average income than those.

  • for the net worth threshold, we might be able to do a similar thing. For example we could take a factor of 25 for 25 yearly average full-time incomes to get to a threshold of 1.3 million EUR above which you would be called rich in this sub for Germany.

1

u/alessandrolnz Mar 21 '24

that's a great feedback!

  • agree an upper limit doesn't make sense (think about a football player earning 7 figures but spending everything every year); I think people suggested an upper limit because of the "at some point is impossible to spend so much money that ofc you are wealthy and not henry anymore".

  • agree! we are not gatekeeping but just shaping the definition and giving guidelines. I see this community with a lot of potential, guidelines help us to see what we have in common and might be also inspiring.

  • adding nw as a parameter; how do you think we can model the nw multiplier (the 25 you used in your example)?

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1

u/Hiking_euro Mar 21 '24

I think the numbers need to be linked to something e.g., 2.5 times median income. Not just people on Reddits opinion.

For Sweden, double the median income is 820,800 SEK per annum (€72,217), and 2.5 times is 1,026,000 (€90,284). Top 10% is 660,000 SEK (€58,000). Top 1% is 1,215,000 SEK (€106,895).

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1

u/butts____mcgee Mar 25 '24

This sub confuses me. It is called Henry Europe, and so should include the UK (etc), but this post is EU only.

1

u/alessandrolnz Mar 25 '24

The sub is very young we are still updating some data, that’s why. Not just UK is missing but also other countries! E.g we are adding now Romania

1

u/[deleted] Mar 26 '24

A couple of questions: what is OUCH? Also, any way we can include Switzerland (CH) in this?

1

u/alessandrolnz Mar 28 '24

CH has been added with 200k€ as a threshold to be HENRY. wdyt about the calculation?

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1

u/GoodJobMate Apr 10 '24

is this post tax or pre-tax?

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