The Language of Wealth

Welcome to Financial Fluency - your weekly guide to mastering financial English, learning how money works, and making confident financial choices.

In this issue:

• A Look at the Markets: Performance October 2025

• The Language of Wealth

• A Note About Financial Fluency Frequency

• We value your feedback

• Word of the Day: Family Office

• Interactive Quiz

• Whenever you are ready, here is how I can help you

A Look at the Markets: Performance October 2025

Vanguard FTSE All-Word ETF (Accumulating)

It's been a very good month for the Vanguard FTSE All-World ETF with a gain of just over 3%. It should be noted that investors in Euros did better with this index than investors in USD this month due to the weakening of the Euro against the US dollar. However, for many months this year the opposite has reduced the performance in Euros. Investors should expect that these effects will even out over time.

iShares Core S&P 500 UCITS ETF (Accumulating)

A similarly good month for the iShares Core S&P 500 UCITS ETF with an increase of nearly 3.5%. Again this was better for Euro investors this month.

Vanguard EUR Corporate Bond ETF (Accumulating)

As expected, the Vanguard EUR Corporate Bond ETF is less volatile but delivered a respectable 0.66% return for October.

Bitcoin Monthly Performance $BTC.X ( ▼ 1.74% ) 

Bitcoin suffered a 3.7% loss in October, only the 3rd time October has been a losing month in Bitcoin history. Bitcoin has dropped further in the first week of November but, so far, this remains in line with normal Bitcoin volatility, even during bull markets.

The Language of Wealth

Understanding the levels of net worth

Last week, I returned from organising an automotive event in Provence that finished in Monaco.

To most of us, the wealth on display in Monaco feels like a different world. The financial services industry doesn't call these people 'rich' or 'millionaires' - they use precise classifications: High Net Worth Individuals, Very High Net Worth Individuals, or Ultra High Net Worth Individuals. These labels determine banking relationships, investment access, tax planning strategies, and even residency options.

Understanding this vocabulary matters for anyone working in international business contexts, luxury services, or wealth management.

How to Measure Net Worth

Net worth is defined as the sum of your assets (houses, cars, investments, savings) less your debts (mortgage, loans, credit card loans).

For most of us, this is a straightforward calculation and something I suggest doing at least annually. Depending on your result, you might even qualify as a 'millionaire' on paper, if your net worth exceeds 1 million pounds, euros or dollars.

However, the term 'high net worth individual' has an important distinction.

Defining High Net Worth Tiers

When banks and institutions calculate high net worth tiers, they only include liquid financial assets.

Liquid means that an asset can be quickly converted to cash without significant loss of value. Financial assets primarily include highly liquid investments such as stocks, bonds, and cash. Investment property is often included despite being less liquid, as it typically appreciates and generates rental income. Importantly, this excludes primary residences and depreciating assets such as cars (some collector cars may be exceptions) and yachts.

Think of it as assets that either grow in value or generate income.

The Tiers in Dollar Values

There are 4 tiers that are widely used in the investment industry, as follows:

Language note: The abbreviation HNWI is pronounced as individual letters: "H-N-W-I", not as a word. In professional contexts, we say "high net worth individual" or "HNWI client". For couples or families, use "high net worth household" or "high net worth family".

Why Do People Care?

These terms are more than just vanity.

As you progress through the tiers, you have access to more financial products. Many hedge funds require $1 million minimum investments (HNWI). Private equity funds often require $5-10 million (VHNWI/UHNWI). Certain alternative investments are restricted to "accredited investors" (US term) or "sophisticated investors" (UK term) - regulatory classifications that roughly align with HNWI status.

For UHNWIs, family offices create entirely customised wealth structures.

Conclusion

The precise vocabulary around wealth classifications matters in professional contexts.

Whether you're working in luxury goods, wealth management, real estate, private banking, or high-end services, these terms appear constantly in professional English. Understanding the distinctions between HNWI, VHNWI, and UHNWI - and what they actually measure - demonstrates competence and credibility in international business environments.

It may also guide you on your own investment journey.

As always, none of this is financial advice. Everyone should invest according to their personal circumstances, risk tolerance and financial goals.

A Note About Financial Fluency Frequency

As we move towards the winter months, Financial Fluency will be shifting from weekly to monthly publication. I have several exciting new projects launching in a few weeks, plus I'm preparing for an important work trip to the USA.

What this means for you:

• Financial Fluency moves to monthly – arriving on the first Friday of each month at 8 am CET

• Business Fluency continues on the first Wednesday of each month at 8 am CET

I'll reassess the frequency in a few months once my current commitments are complete. Thank you for your understanding, and I look forward to continuing this journey with you!

We Value Your Feedback!

Your opinion helps us improve and lets you suggest topics or ask Business English questions for future issues.

Word of the Day: Family Office

Family Office - compound noun - a private wealth management company that serves ultra high net worth individuals or families, providing comprehensive financial services including investment management, tax planning, estate planning, and sometimes lifestyle management.

Context and Usage:
A family office is essentially a private company dedicated to managing the complex financial affairs of a single family or small group of families. Unlike traditional wealth management, which offers standardised services to many clients, a family office provides bespoke solutions tailored to one family's specific needs. Family offices typically require at least $30 million in assets to justify their operational costs (UHNWI).

Note:
There are two main types: single-family offices (serving one family) and multi-family offices (serving several unrelated families to share costs). The term "family office" appears frequently in discussions about UHNWI wealth management and is standard business English vocabulary in private banking contexts.

Common Collocations:

Establish a family office - create a private wealth management company
Many entrepreneurs establish a family office after selling their company for over $100 million.

Single-family office - serving one family exclusively
The single-family office employed 15 staff members to manage investment, legal, and tax matters.

Multi-family office - serving several families to share costs
Multi-family offices allow families with $30-50 million to access family office services at lower cost.

Family office services - comprehensive wealth management offerings
Family office services include investment management, tax planning, estate planning, and philanthropic advisory.

Family office model - the structure and approach to private wealth management
Transitioning to the family office model gave them greater control over investment decisions and privacy.

Run a family office - operate private wealth management operations
Running a family office requires expertise in investments, legal matters, tax planning, and family governance.

Business Example:
After the technology company sale netted $200 million, the founder established a single-family office in Monaco to manage investments, coordinate tax planning across multiple jurisdictions, and oversee the family's philanthropic foundation.

Professional Context:
Family offices represent the highest tier of wealth management infrastructure. While mass affluent investors use retail banks and HNWIs work with wealth managers, UHNWIs often justify the significant expense (typically $1-3 million annually) of operating their own family office for the privacy, customisation, and control it provides.

Interactive Quiz

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Disclaimer:

This newsletter is for informational and educational purposes only and should not be construed as financial advice. The information contained herein is generic and does not take into account your individual financial circumstances. You should always consult with a qualified financial professional before making any investment or financial decisions.

Additionally, the authors and/or publishers of this newsletter may hold investments in securities or other financial instruments mentioned herein. These are included for illustrative purposes only and should not be taken as a recommendation to buy or sell such securities or financial instruments.