Wealth migration can indicate the health of a country’s economy or its citizen’s unrest, and special attention is often paid to its millionaires. There was a notable 80% drop in net inflows of millionaires to the United States in 2022, according to a key finding from a report by Henley & Partners, a UK-based consultancy that specializes in investment-based residencies and citizenship, researched in partnership with the South African-based global intelligence firm New World Wealth.
The 2023 USA Wealth Report found only 1,500 moved to the United States, compared to the years 2013 through 2019, when the range was 6,400 to 10,800 net inflows annually. (Net migration is calculated as the difference between high-net-worth individuals moving to the USA versus those emigrating abroad, according to the report.) Studying such preferences of millionaires is considered one of the barometers of the health of a country, and, of course, a millionaire’s investment in their locale helps the economic region.
The report also revealed that there is a significant internal movement of high-net-worth individuals currently underway within the United States into cities such as Austin, Scottsdale, Greenwich, and Miami, which are gaining millionaires, and higher than usual outflow from Los Angeles, Chicago, and New York City. The Big Apple, however, is still ranks highest in the top five cities of wealth in the United States with 340,000 millionaires, 724 centi-millionaires and 58 billionaires followed by The Bay Area, Los Angeles, Chicago and Houston.
Researchers point to the global and local political turmoil as one of the main causes of the migration shifts, with political polarization between Democrats and Republicans, the widening wealth gap and pressure to increase taxes on the rich, rising crime rates, gun control debates, gender inequality and racial discrimination key topics of unrest. Market volatility and supply chain and energy price issues were also mentioned as causes of a sentiment that “Americans are currently experiencing their own bleak ‘winter of discontent.’” Of course, tax incentives, lower cost of living and climate often play their part.
Where are they moving?
It’s a no-brainer that wealthy talent is sought after. Imagine how much impact a few millionaires could make in country such as Malta, the world’s tenth smallest country. And now that people can work remotely, the world is their oyster, or, at least their living room.
In Europe, Portugal and Malta score the highest in geo-preferences when it comes to applications filed through Henley & Partners, with US citizens applying most for the Portugal Golden Residence Permit Program, followed by Malta’s Granting of Citizenship for Exceptional Services by Direct Investment. Through these programs, people can make country-specific investments in real estate (the most popular option), bonds or business and earn the right to live, work, retire, and access social programs there. Although gaining citizenship in Portugal is more complex than residing there, various websites cite that access to healthcare comes with legal residency in the country, and Portugal was ranked third by the World Healthcare Organization for medical innovation and patient care, and its medical system is low cost, if not free. (Two-thirds of the United States’ millionaires are in the 60-79 age group, and Portugal’s population of people over 65 is about 22.1%, compared to most of Europe’s 20.6%.) Since Malta is an island nation located in the center of the Mediterranean Sea, its climate and coastline are remarkable, but travel is more limited than Portugal. Still, it grants full citizenship by a certificate of naturalization to expats and their families who contribute to the nation’s economic growth following a 36-month residence period.
Perspective
Although it may seem the United States is hemorrhaging millionaires, the U.S. still continues to be the home country for most of the world’s wealth, with 770 billionaires and $65 trillion held in private wealth, according to data by New World Wealth.
“America is in a league of its own, with three times the total wealth of China and seven times as many dollar millionaires (as at December 2022). Perhaps most importantly, wealth per capita levels in the USA are 12 times higher than in China. Wealth per capita (average wealth per person) is arguably the best indicator of the financial health of an economy,” according to the report.
Part of the American Dream is owning a second home, and U.S. hotspots for the wealthy’s second residences are currently Miami, The Hamptons, West Palm Beach, Napa and Aspen, according to the report. Top hotels are The Breakers in Palm Beach, the Bellagio in Las Vegas, the Plaza in New York City, the Beverley Hills Hotel in California and Fisher Island Club in Miami Beach, Florida.
Education and Industry
Researchers found that 35% of U.S. centi-millionaires (those with $100 million or more) are graduates of “just eight schools, namely Harvard, MIT, Stanford, the University of Pennsylvania, Columbia, Yale, Cornell, and Princeton,” with Harvard topping the list at 7% and MIT and Stanford tied at 5%.
Financial and Professional Services outflanked other sectors for creating 28% of centi-millionaires, followed by the technology sector at 14% and real estate and media/entertainment tied at 8% according to the report.
Top factors that encourage wealth in a country include safety, growth in key sectors such as tech and manufacturing, developed neutral media, robust ownership rights, a highly developed banking system and stock market and competitive tax rates, according to the report.
By Christine Giordano
