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Investments for High Income Earners

This article will look at some investments for high income earners.

If you want to invest as an expat or high-net-worth individual, you can email me (advice@adamfayed.com) or use these contact options.

Important Information

Kindly note that the information provided within this article is for educational/informational purposes.

None of this should be taken as actual investment advice solely based on the information.

Isn’t it accurate?

To put it simply, it is always accurate.

I always strive to provide accurate and up-to-date information to my readers.

At the same time, complex matters such as investment decisions may not be taken based on what you read online.

Different types of people have different financial situations, goals, incomes, etc.

Based on that, no single type of advice can prove to be suitable for all people.

It is wise to contact your financial professional before making any investment-related decisions.

If you find it hard to acquire the services of a financial planner/wealth manager for your investments, feel free to contact me.

For DIY investors, I strongly suggest extensive research before getting into investments.

Investments for High Income Earners

In some of my previous articles, I have discussed the importance of a person’s risk tolerance.

While investing, risk tolerance plays a significant role, whether it is for asset allocation or investment approach.

People with a higher risk tolerance can go ahead with aggressive investment strategies.

Aggressive investment strategies involve assets or investment vehicles that offer higher returns.

At the same time, the risk associated with these assets or investment vehicles is also high.

People with a lower risk tolerance can usually go ahead with conservative investing strategies.

These involved investing in fixed-income or low-risk assets such as bonds, bank deposits, etc.

The age, net worth, and income of a person play an important role while determining their risk tolerance.

Let us take a look at a few representative examples that include these factors to have a better understanding.

Example 1:

Imagine that there was a person named Tom, who is 25 years old and earns a high income.

Tom generally has the risk tolerance needed for aggressive investing strategies.

This is because he’s still young and can cope with the losses that may incur from the investments.

The case would be different if Tom was earning a low or medium level of income.

In such a case, it is wise for Tom to go ahead with conservative investments as he finds it hard to sustain risks.

Example 2:

Now, let us assume that there was a person named John who was 50 years old and had a higher income.

John does not have the same level as Tom even if both of them earned the same amount of money.

That’s why John would profit from investing using conservative strategies.

John should stay away from a risky approach toward investments as he’s nearing his retirement.

He should not risk the few years left to gamble in the hope of getting a fortune.

Example 3:

Let us imagine that there was another person named Jacob who was around 40 years old and had a higher income.

Jacob is not young as Tom, and at the same time, he’s not nearing his retirement like John.

This means Jacob could benefit from an aggressive strategy, or he could opt for stable and low-risk investments.

What type of strategy he chooses is dependent on his personal choice along with some contributing factors.

Alternatively, Jacob could go ahead with a mixed investment strategy with a diversified portfolio.

The portfolio can consist of risky investments and low-risk investments in a single portfolio.

Why am I saying this?

To describe the investment vehicles that are suitable for high income earners, I explained these examples.

Now, the investment opportunities that I’m going to explain are best for people like Tom and Jacob.

But people like John should focus on a conservative strategy with more assets such as:
Cash-related products
Debt instruments
Fixed-income securities
Large-cap funds
Large-cap stocks

People who come under the age category of John may also go ahead with slightly risky investments such as ETFs, mutual funds, etc.

Once again, I suggest a low-risk strategy, but it depends on the investment objectives of the individual.

There are several investment opportunities available for high income earners, as I have explained below.

I could not cover the entire topic within a single article, and because of that reason, I am describing the main features, pros and cons, and what I think.

Based on this information, I believe that investors may be able to make informed decisions regarding their investment choices.

First of all, let us start by discussing these specific high-income earners.

High-Income Earners or High Earners, Not Rich Yet (HENRYs)

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In 2003, Fortune Magazine provided an article describing “High Earners, Not Rich Yet”, also called, “HENRYs”.

The income bracket determined for these people at that time was around $250,000 to $500,000.

However, a significant portion of this income would be depleted for expenses, taxes, schooling, housing, etc.

In much simpler terms, these are the people who are not rich at the time but are going to be rich soon.

Countries such as the USA, Switzerland, Luxembourg, and so on are said to have more high-income earners.

In most cases, a high-income earner’s expenses are targeted toward their lifestyle rather than savings/investments.

It also depends on the geographical location where the high-income earner is situated.

For example, earning $250,000 a year may be a high income in certain parts of the world.

Yet, it may not be enough for a lavish lifestyle in some parts like New York City.

Most of these high-income earners often seek a luxurious lifestyle rather than paying attention to their financial profile.

However, with the right type of budgeting, saving, and investing, these high-income earners have a great potential for becoming rich sooner than usual.

Types of Investments for High Income Earners

Now, let us talk about the best investment opportunities available for high-income earners.

The investment vehicles that I am about to mention have different types of risk levels.

Therefore, while making a portfolio, you can decide which to choose and which to avoid based on your goals or preferences.

Retirement accounts

You may feel that a retirement account may not be the best way for an individual to save towards their retirement.

If you are not in your late 20s or early 30s, then it is definitely a good idea to have a look at these.

Retirement accounts usually come with tax advantages might mostly be during retirement.

Additionally, there is a scope for some other benefits with a retirement account for a high-income earner. Some of them are:
Higher limits for contributions
Employer matching contributions
Reduced current taxes
Asset protection
Retirement savings incentives
A secure retirement

Based on the country you are living in or working in, the retirement accounts may differ.

Let us have a look at some of the retirement accounts in countries with high-income earners.

  • United States

The retirement accounts available in the United States are given below:
401(k) is an employer-sponsored retirement plan.
Individual Retirement Account (IRA) is a personal retirement account with tax advantages.
A simplified Employee Pension (SEP) IRA is a retirement plan for self-employed individuals and small business owners.
Solo 401(k) is a retirement plan for self-employed individuals with no employees.
Roth 401(k) is an employer-sponsored retirement plan with after-tax contributions.

  • Luxembourg

The retirement accounts available in Luxembourg are as follows.
Luxembourg Pension Savings Account (Compte Epargne Pension) is a tax-advantaged savings account for retirement.
Luxembourg Pension Insurance (Assurance Pension) is a voluntary insurance product including a pension component.
Luxembourg Pension Fund (Fonds de Pension) can be set up by employers or other organizations.

  • Australia

The retirement accounts available in Australia are as follows.
Superannuation is an employer-sponsored retirement plan.
A self-Managed Superannuation Fund (SMSF) is a type of private pension fund managed by individuals or small groups

  • Germany

The retirement accounts available in Germany are listed below.
Riester-Rente is a government-supported private pension plan.
Rürup-Rente (Basis-Rente) is a private pension plan with tax advantages.
Betriebliche Altersvorsorge (bAV) refers to company pension plans.

  • Switzerland

The retirement accounts available in Switzerland are given below.
Pillar 1 is a government-run first pillar of the Swiss pension system (AHV/AVS).
Pillar 2 is an occupational pension (BVG/LPP) provided by employers.
Pillar 3 is a voluntary individual pension plan (often called 3a and 3b).

  • Norway

The retirement accounts available in Norway are as follows.
Folketrygd is a public pension system.
Occupational Pension (Tjenestepensjon) refers to the pension plans offered by employers.
Individual Pension Savings (IPS) refers to voluntary retirement savings accounts.

  • Austria

The retirement accounts available in Austria are given below.
Betriebliche Kollektivversicherung (BKV) is a company collective insurance pension plan.
Pensionskasse is an occupational pension fund.
Pension Fund Savings (Vorsorgekasse) refers to voluntary retirement savings accounts.

  • The Netherlands

The retirement accounts available in the Netherlands are as follows.
Algemene Ouderdomswet (AOW) is a state pension.
Pensioenfonds is an occupational pension fund.
Individual Retirement Savings Accounts (Lijfrentespaarrekening/Lijfrentebeleggingsrecht) refers to voluntary retirement savings accounts.

  • Belgium

The retirement accounts available in Belgium are as follows.
Employers’ Pension Schemes (Pensions Complémentaires d’Entreprise) refer to the occupational pension plans.
Régime Individuel de Pension (RIP) refers to individual pension plans.
Pensioensparen refers to voluntary pension savings accounts.

  • France

Given below are the retirement accounts available in France.
French Public Retirement System (Sécurité Sociale) is the state pension.
Plans d’Épargne Retraite (PER) refers to voluntary retirement savings accounts.
Plans d’Épargne Entreprise (PEE) are the company savings plans for employees.
Plans d’Épargne pour la Retraite Collectif (PERCO) refers to the collective retirement savings plans.

Always pay attention to the details like availability, eligibility, and terms and conditions while choosing one.

Additionally, you should contact your financial advisor or any similar professional before getting a retirement account.

Such a professional will assess your scenario and provide advice regarding whether or not you should get one.

Real Estate

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Investments for High Income Earners 6

If done properly, real estate investing will prove to be extremely helpful in achieving your goals.

There is a wide array of choices on how you can get involved with real estate investments.

It is also a great way of diversifying your investment portfolio regardless of the type of investment.

Some of the possible ways of real estate investing include:

  • Residential properties

Multiple types of properties fall under the category of residential real estate properties such as:
Multifamily properties
Individual apartment flats
Apartment complexes

By buying a residential real estate property, you can generate income in the form of rent.

Alternatively, you can stay in that property which would avoid the necessity of renting a house elsewhere.

It would also be an asset that would increase the value of your net worth if the housing market had a price hike.

  • Commercial properties

There are different types of commercial properties in which you can invest or buy, which include:
Office buildings
Retail spaces
Shopping malls
Industrial properties

When you buy a commercial property, you can obtain income by offering the property for rent or lease.

Compared to residential properties, commercial properties are known to offer higher returns.

  • REITs

REITs are companies that own, manage, or invest in income-generating properties of different sectors.

REITs can either be publicly traded or private, which means, you can buy them like stocks or they may have limited access.

With REITs, you can get exposure to the real estate market without having to actually own property.

With REITs, investors are able to generate profits in the form of dividends.

  • Real Estate Crowdfunding

With real estate crowdfunding platforms, investors can pool their funds and invest in a project.

Such projects or ventures can be involved with residential properties or commercial properties.

This type of investing approach allows an average investor to get exposure without the necessity for a lot of capital.

  • Flipping

Most people might already be familiar with real estate flipping, where the property is bought and sold for a higher price.

For this, the investor needs to have a good understanding of real estate market trends and renovation-related aspects.

Note: Although real estate investments are known to be among the best investment assets, they do carry a certain level of risk.

It is important to understand your risk tolerance before getting into real estate investing.

If you want to have a detailed explanation of real estate investments, clock on the links provided below.

Real Estate Investments explained

Should you invest in Serviced Accommodation?

Brokerage Accounts

Brokerage accounts are an efficient way of investing in various investment vehicles.

These are offered by online brokers and trading platforms and are also called online trading accounts.

With these, high-income earners get access to investment vehicles of different risk levels.

Some of the mainstream investments that can be accessed with brokerage accounts are:
Mutual funds
Contracts for difference (CFDs)

Investors with a higher risk tolerance may opt for derivatives of high-risk investments.

On the other hand, investors with a conservative approach can go ahead with low-risk assets.

These include low-risk stocks, ETFs/mutual funds with low expense ratios, bonds, etc.

It is a good idea to invest in financial instruments that come with brokerage accounts. But it is wise to go for these after you maxed your retirement accounts or other tax-advantageous plans.

Brokerage accounts have different types of fees associated with them, which are specified under two categories.
Trading fees
Non-trading fees

Trading fees are those directly associated with trading/investing like spreads, commissions, etc.

Non-trading fees aren’t directly linked with trading/investing, which include account fees, deposit/withdrawal fees, management fees, etc.

If you are a beginner, you should always pay attention to the fees so that you may get better returns.

Additionally, you may also be liable to taxes on the capital gains and dividends that arise from the investments.

However, the tax liability on these investments is based on the investor’s country.

Make sure that you have a diversified portfolio instead of staying invested in a single asset class.

With this type of diversification, you can offset the risk associated with investing in a single asset class.

Diversification mitigates the risk of sector-specific or market-specific changes that may affect a person’s portfolio.

Additionally, try opting for international investments so that you mitigate the geographical conditions that affect investment.

Alternative investments

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A wide array of investments can be accessible by high-income earners, which include:
Private Equity
Venture capital
Hedge funds
Private debt
Structures products

Based on various contributing factors, alternative investments are risky compared to mainstream investments.

They also lack a secondary market which poses liquidity issues when in need of capital.

Another major issue is that normal investors can’t access bigger investments such as private equity.

That’s why you should always consider investment advice from a financial professional.

They can assess your financial profile and suggest investment opportunities based on your goals and situation.

I’ve provided extensive information on different types of alternative investments.

That specific information on alternative investments accessed by clicking on the links given below.

Alternative Investments – Part 1

Alternative Investments – Part 2

Financial Tips for High-Income Earners

There are a few things to be taken into consideration for high income earners to grow their wealth.

As I said before, high-income earners can become rich people by making the right financial decisions.

First of all, it is important to start paying attention to your finances if you haven’t started it till now.

Remember that the hard things to do today will have the best results tomorrow.

Importance of frugal living

One of the major drawbacks of high-income earners’ mindset is that they compare themselves with high-net-worth individuals.

Those who already accumulated wealth from their previous generations have considerable assets.

For example, a person with a high net worth may already have a villa or a supercar.

Let us assume that your friend has a beach-front villa in Malibu that costs around $10 million.

You don’t need to compete with them and get one for yourself as well.

Remember that if you buy a luxurious villa, you may incur losses in the form of a mortgage.

This could potentially set you back by hundreds of thousands of dollars by the time you finish paying off the mortgage.

Meanwhile, you start investing and get a diversified portfolio, you could buy that villa without a mortgage.

You may even have some additional money with you at that time, which can secure your future.

Therefore, having a long-term approach and implementing frugal living can be advantageous.

For this, you need to have a budget for your expenses and avoid things you want but don’t need.

Cash flow and budgeting

Maintaining a healthy cash flow can be a great aspect that’ll help you maintain your financial situation effectively.

As I said previously, living on a budget and investing for the future can help you achieve things over the long term.

It is okay to live frugally now so that you can have your dream lifestyle in the future.

While creating a budget, consider all your income streams and investments to have a better plan.

Tax management

Whether it is investments or retirement accounts, make sure you are taking advantage of the tax scenario.

Always utilize tax-advantaged retirement accounts to reduce your tax liabilities.


While constructing an investment portfolio, diversify your investments as much as possible.

This could help you mitigate the risks involved with sector-, market-, and location-specific conditions.

If you have a higher risk tolerance, try adding traditional investments as well as alternative investments.


Calculate the total amount of debt you have and prioritize planning to pay it off as early as possible.

Once you are cleared off of your debt, you can make the most of your investments or your financial situation.

Credit cards, lines of credit, and loans are effective for managing your financial situation.

But you should use them wisely instead of spending them on unnecessary habits/possessions.

Stay updated

Always have a keen eye for market trends and investment products that can provide more returns.

At the same time, be attentive to the tax rules so that you may not be liable for higher taxes because of the changes in the tax system.


Get the necessary insurance policies, which include life insurance, health insurance, disability insurance, and liability insurance.

This could help you protect yourself as well as your family in the event of unexpected situations.

Financial professionals

Working with financial professionals such as investment experts or financial advisors is extremely beneficial.

Regularly monitor your investments

If you are a DIY investor, it is essential for you to regularly monitor your portfolio and make changes whenever necessary.

Based on your financial goals, you may be required to make changes now and then.

Emergency fund

Having an emergency fund will help you in a situation where there may be a possibility for unforeseen events.

Therefore, it is always essential to keep some money parked in bank products that can be accessed easily.

Yes, not just investment products, but it is good to have some cash or cash-related assets.

This could specifically be used in times of emergency as it can be liquidated easily.

Bottom Line

Anyways, it isn’t always easy for a person to take care of all these aspects by themselves.

For example, as a high income earner, you may not have the necessary time or expertise to take care of your investments.

For instance, a cardiac surgeon may not be informative about investing, nor may they have the time necessary.

In such circumstances, it is wise to acquire the services of a financial professional for your investment needs.

I helped numerous people achieve financial freedom by catering to their investment needs.

If you need the services of a wealth manager and don’t know where to find someone, you are in the right place.

Feel free to contact me to find out whether you can benefit from the best-in-class solutions I have to offer.

Having said that, I think that the information provided in this article was helpful to you.

Pained by financial indecision? Want to invest with Adam?

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Investments for High Income Earners 8

Adam is an internationally recognised author on financial matters, with over 760.2 million answer views on Quora.com, a widely sold book on Amazon, and a contributor on Forbes.

This website is not designed for American resident readers, or for people from any country where buying investments or distributing such information is illegal. This website is not a solicitation to invest, nor tax, legal, financial or investment advice. We only deal with investors who are expats or high-net-worth/self-certified  individuals, on a non-solicitation basis. Not for the retail market.



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