Total investable assets refer to the total value of financial assets that an individual can invest. It is an important indicator to evaluate personal wealth and investor identity. However, total investable assets have specific calculation methods and do not simply equal total assets. This article will analyze the definition, calculation methods, and significance of total investable assets, and teach you how to evaluate personal wealth more accurately based on total assets.
Total investable assets generally do not include real estate and durable consumer goods
The definition of total investable assets is not equivalent to total assets. It focuses more on liquid financial assets that can be easily invested. According to the standards of financial institutions, total investable assets generally only include cash, deposits, stocks, funds, bonds, insurance, bank wealth management products and other financial products. Illiquid assets like real estate and durable consumer goods such as cars and furniture are often excluded.
Criteria for high net worth individuals and ultra high net worth individuals are based on total investable assets thresholds
Many institutions and reports classify high net worth individuals (HNWI) and ultra high net worth individuals (UHNWI) based on total investable assets thresholds. For example, Capgemini defines HNWI as those with investable assets over US$1 million. Knight Frank defines UHNWI as those with investable assets over US$30 million. The standards emphasize total investable financial assets rather than overall net worth.
China’s high net worth population is about 1 million based on total investable assets
According to various reports, China has about 1 million people that qualify as HNWI based on the $1 million total investable assets threshold. This includes 654,000 HNWI estimated by Knight Frank and over 1 million HNWI estimated by Capgemini. The $1 million threshold is higher than typical standards in China of RMB 10 million total assets. So the population of high net worth individuals based on total investable assets is smaller.
Focus on total investable assets rather than total assets to evaluate wealth accurately
In summary, total investable assets is a more accurate indicator of personal financial strength compared to simple net worth. It focuses on liquid assets available for investment. When evaluating your wealth, net worth and housing should be considered as well. But the amount of total investable assets is key to determining if you meet HNWI and other wealth standards. Focusing on growing your investable assets is crucial for strengthening your financial position.
Total investable assets is an important indicator for classifying investor identity and evaluating personal wealth accurately. It has specific definitions and calculation methods that focus on liquid financial assets rather than overall net worth. In China, there are about 1 million people that qualify as HNWI based on the $1 million total investable assets threshold.