Transcription
Is the United States becoming a country that people leave? For more than a century, the story was pretty simple. People moved to the United States. They didn't leave it. My ancestors, the last of them, moved to the United States in the early 1900s from places like Norway and Lithuania, earlier from Wales and Scotland and other places. People just moved to the United States. Like that was the marketed place to go.
But now something unusual is happening. Americans of all socioeconomic classes are moving abroad in numbers we haven't seen in literally generations. Not just one or two, but like multiple generations. Some are wealthy entrepreneurs that are going to places like Singapore or the Gulf or even random places like Paraguay to build their companies. Others are retirees stretching social security in Mexico or Albania. That's one of the big ones that's up and coming. Students are enrolling at European universities because tuition costs less than a year at even a US state school. Somehow all your tax dollars at work.
There isn't just one political tribe fleeing the country. And it's certainly not just people like myself who left the United States and gave up US citizenship, one of a couple thousand that year. You're seeing more and more people for all different sorts of reasons that are leaving. So the real question isn't whether Americans are leaving. The question is why. Not just wealthy people who want to reduce their taxes. We help people do that. Guilty as charged. Or people who can barely afford to live in their own country. They're also moving. But like, why are people all across the political spectrum suddenly believing that life might be better somewhere else? And what does that say about the future of the American dream? I imagine it says much of what we've been telling you for many years here, which is that the American dream is dead.
So let's go through the facts here. The big takeaway, of course, is a record number of Americans are leaving. Now, there are two categories here. The first is people who are just physically moving somewhere else. That was me many years ago. Kept the US passport. It used to be easier to just be a perpetual traveler, just going from country to country on a passport. You can still do that today, but what you really can't do in many countries today is live somewhere full-time on your passport. So, Mexico, for example, if you used to come and get six months, leave for a day, come back, that's kind of ended. And so, when Americans are leaving these days, generally, I think that the correct advice would be: figure out where you want to live, whether it's one place, two places, five places, get residence permits in those countries. And so a lot of Americans are just saying, "Hey, you know, I can't afford to live in my own country anymore. I'm going to move to, you know, Ecuador." That was a big one. Obviously, a bit more violence in Ecuador now, but like Ecuador was a place where, like, hey, you would show them that you had just a very small amount of money coming in every month. They would give you a residence permit. You could live there as long as you want. You'd stay a US citizen. And some of those folks would come back, "Hey, when I turned 80 years old, I'll come back for my Medicare."
You also see people like me who just give up US citizenship and then therefore make it pretty difficult to come and live in the US for the rest of their lives. Both of those numbers are going up. Obviously, the number of Americans who are just going somewhere else as Americans is a much, much, much higher number. What we are seeing in the US though is for the first time, net migration, i.e., how many people come in versus how many people go out, may be negative. Probably the first time since the Great Depression that's actually happened. It was like the one thing that the US was supposed to be this special country that, unlike places in Europe that had a sort of brain drain. You know, the British would go somewhere else, or the Irish moved to the UK, you know, a generation or two ago, or, you know, people from Portugal would move somewhere else, or, you know, wherever people were moving. Eastern Europe has seen their populations decline since the 1990s. That was the thing that the US was supposed to be better at was like, hey, because of immigration, we have this advantage and our country will always be exceptional. Will always be prosperous and therefore like, I don't really need to go where I'm treated best because the US will always be great. Well, now that advantage has been taken away. Net migration may actually be negative.
I've told you anecdotally about this where I meet people from all over the world, including countries that, you know, you hear mentioned in the US discourse, Nicaragua, El Salvador, for example. I know Venezuelans and Colombians. And what we're hearing is, as their countries either become better or they have more options of other places to live, they are less interested in going to the US. I look at people in Asia and South Asia and Eastern Europe, and obviously, this maybe stalled for a while, but, you know, ever since the advent of the Gulf and these easy residence permits and jobs and being able to start a company with, you know, zero or low tax in places like Dubai, they're like, "Why do we want to go to the US anymore? We'd rather go to Dubai. It's a better lifestyle." And so, kind of these advantages that the US has have been chipped away at.
I'm going to tell you what specifically you should do and what you should know about this. The first thing you should know: if your country's advantage that was supposed to make it better than all the other western countries at kind of maintaining its edge is being chipped away and people really don't want to move there anymore and successful people like myself and maybe you decide, "Well, we also aren't getting our money's worth here." What happens to that country? Because the truth is, we're not just talking about adventurers anymore. I still do enjoy living in the frontier. I didn't move to London. I didn't move to Frankfurt. I didn't even move to Singapore. What we're seeing now is, yeah, there's historically been people like me, whether it's, you know, backpacking hippies or whether it's the seven-figure nomad capitalists as I've talked about, but now it's families relocating abroad because you see in many parts of the world great international schools, including, if you're more conservative, they have more conservative schools. We've also had more progressive clients that want to go to Europe and see more, you know, have more progressive education. So, families are moving abroad, mid-career professionals are leaving, students and retirees are leaving. Kind of the entire spectrum is leaving.
And so I read an article in the Wall Street Journal recently that said, you know, Americans are leaving and the American dream basically is dead. Things contributing to that: remote work has been unlocked. And obviously, we're seeing remote work pulled back in some cases, but if you can make money online through freelance work, if you have a company that is that's flexible with you or a small business like ours, or if you run your own show, people can travel. One of the things that I've seen change in the last number of years is when I first started it was, "Hey, Andrew, you know, I I have a peanut packing uh factory and, you know, I I got to work on training as manager for three years and then I can go." And what I saw, you know, in more recent years was people realizing with AI and, you know, the internet and everything, it's easier to affect those transitions. And people said, "Hey, I I can go in six months." And so we're seeing how it's easier to go. And, you know, what I would say is if your country's been successful because it was hard for people to leave because the technology didn't allow it, and then the minute the technology allows it, they go, that's a problem.
What also, we've talked about this many times, is when the people who are coming in are people from primarily very poor countries who simply need economic opportunity. Yes, that was the what built the entire United States, but in this day and age, it doesn't really indicate strength of the country. I'd rather be Singapore or the UAE bringing in highly talented professionals and entrepreneurs. The fact that housekeepers, listen, I respect, I respect anyone who works hard. I don't care if you're a housekeeper or not, but from a from an economic standpoint, housekeepers wanting to come to your country isn't really a great indication it's great. It just means like they think they can make more money doing housekeeping in your country. They're not building the next, you know, big business in Singapore or in Dubai. And so what we're seeing now is a lot of countries that are competing for uh Americans. Europe is aging. They need taxpayers. Look at Spain. There's half a million, pretty much all illegal aliens. "Please come and work in our country." You're seeing more digital nomad visas, including in countries in Europe. You're seeing more competition for talent, including China, by the way. I mean, basically everything the US has done well that they're abandoning, China is stepping in and saying, "Oh, yeah, you you have a STEM degree. Please come here. We'll we'll roll the red carpet for you."
And what I've told you for some time is you're going to see more small countries. They're going to try and establish themselves as "we're the leader in this niche." Could be AI, could be STEM, could be robotics, could be any number of things. And you're going to see more countries. It's not just be one country that's going to dominate everything anymore. If you work in robotics, there might be one country that steps up, or crypto. There were a handful of countries that stepped up with tax breaks and and incentives to come there. And so with all these things happening and with the quality of living in the places where I go, Malaysia, Colombia, Georgia, you wouldn't live there when I was born, but you would live there now. You'd have a nice life. I think more people are realizing, "Why do I want to live in the US?"
My father taught me something very powerful during the global financial crisis, and we've talked about it before. He said economies are hurt at the margins. So, you know, you think for a recession, you know, people think you need like 50% unemployment. You just need a couple percentage points increase. You know, for a depression, I mean, during the Great Depression with none of the alleged safeguards that these countries have today, unemployment was like 24%. Three out of four people had a job, but there was a literal depression with, you know, people queuing up for food. And so, the same thing happened during the GFC. A big percentage change in home ownership, but it had a big impact on the entire economy and the banks and all the all the things that underpin the the economy. And so what happens if more Americans start moving because the word gets back? The same word that's gotten back in in the UK where I subscribed to a couple of UK newspapers. "Bloody hell, before that, every day was some newspaper talking about how everybody seemingly in the United Kingdom was moving to Dubai. Everybody was going to Dubai." And so when that becomes the narrative, now I always said, "Why is it they're all going to one place?" Nomad Capitalist has helped our clients move to something like 31 or 32 different tax-free countries. Those are numbers they gave me a while ago. Why would you all go to Dubai? But that aside, once that narrative starts getting out, what you're seeing in the US is actually worse because I've been reading for years what this Wall Street Journal article said is, yeah, you've got people going to Ecuador. Maybe they don't feel safe in Ecuador anymore. Now they're going down to Paraguay, or maybe Colombia is more of interest, or maybe El Salvador now feels safer, so they go there. So, you know, people may not stay in the same place.
This is a key point I want to give you. You may not move to your forever place. The world is changing. Your own country is probably not livable for the rest of your life. Why would you expect the place where you're going to be livable for the rest of your life? But, you know, I've read about, hey, you know, in Ecuador you can live, you know, in Cuenca and it's incredibly affordable. People go there, or they go to Thailand, or now I was recently in Cambodia, people are there, you know, beer is still 30 cents at the supermarket and you can have an incredible meal and you can hire people and everything's just very affordable. And Eastern Europe to a lesser extent, and so many places are more affordable for the people who are on social security. We had some guests at Nomad Capitalist Live, some speakers who they were really focused on Albania, and I've been telling you, Albania is kind of the the last great frontier in Europe. And so you have people who they're going to those kind of places. Then you have the wealthy folks. We're in South America. Maybe they're going to Uruguay. Great tax holiday for 11 years or even potentially longer. It's calm. It's quiet. It's safe. It's efficient. It's kind of, you know, the Switzerland of of South America. They're going to get golden visas in Europe. They're moving to places like Singapore or the Gulf, or increasingly they're even coming to places like Malaysia. So unlike the UK, which has gained this huge reputation for, with the current administration, "Everybody's leaving," the United States has these different niches. Some folks are focused on cost of living, others on safety, others on lifestyle, others on political fatigue.
If a country is losing both its talent and its retirees, the smart move isn't to panic. It's to have more optionality. And so when the most mobile citizens leave, that's one thing. But now we're seeing retirees, students, people who aren't inherently the most mobile. Once that happens, the system is more fragile for those who stay. This is sort of a different version of when New York City jacks up taxes on everybody for their property taxes and wants to jack up income taxes on the rich and the rich leave. What happens when everybody who's left isn't rich? Who pays for all the stuff then? The same thing to a different extent happens here is once everybody who can take their talents and their skills and their ideas and their businesses and their education somewhere else. Once a large number of those do it, and again, you don't you don't need a 100%, you just need that change at the margins. What happens and what gets more fragile for those who stay? And if you do stay, how do they get you? Look in California right now, they have this mansion tax in uh Los Angeles. It's like a six-figure sum just to get out of a house somewhere in Los Angeles. Hollywood, for example. More people are moving to Florida. More people are moving to Texas and and Tennessee and other places because, "Why do I want to just give away two or three or $400,000?" But those who do stay are going to increasingly suffer under that fragility because you're just going to have less and less talent, fewer and fewer wealthy people. This stuff happens to the margins. When your country is almost $40 trillion in debt to begin with, when deficits are now in the trillion, trillion-plus dollar range every single year, you don't have much room for air. And so if you are wealthy and you live in the United States, you're going to have a smaller talent pool at home. Weaker domestic demand over time because the people driving the domestic demand, whether we like it or not, in a K-shaped economy, they're the ones who are also mobile. And so these things have a snowball effect. How does the K-shaped economic recovery continue? And how does your business take advantage of those wealthy clientele if you're a business owner, if they're all moving somewhere else? And so you have a shrinking tax base, higher pressure on those who stay. These are all the problems you're going to face. 1% extra, 2% extra, 5% extra, 10% extra. These all have an impact.
What happens to the number of expats? Double because we're getting there. They don't have perfect numbers, but they are seeing a much greater number of people who are doing this. So, what I don't want you to do, here's the strategy. If you're a founder or an investor, don't assume US demand forever. Build international optionality. Structure your life and assets globally. And so, this all comes back to what we do here at Nomad Capitalist. And so if you want to stay and live in the United States, have bank accounts, have asset protection structures, have investments somewhere else.
What I've told you from living entirely outside of the United States is demand for US companies' products either for geopolitical reasons, pricing reasons, or just product reasons. We don't like the product as much. US products are less in demand, uh, particularly in Asia, but we're also starting to see it in Latin America, like in the automotive sector. Even in places like Canada and the UK, allies of the US, yeah, you know what? What we're bringing in more Chinese cars. We, you know, we'd rather work with them, or their cars are better priced. This idea that US demand is going to just, it's not going to happen forever. What does that have impact on the banks? I'm not saying your bank is going to collapse, but I'm saying is your bank going to be as competitive? Is it going to be as safe? Why not move some of that money to a place like a Singapore or a wealth haven in Europe or even a place where you might want to go and live? Let's say Uruguay as a wealth haven, or there's places in the Caribbean or the Indian Ocean like Mauritius that are smaller wealth havens, or you can diversify it in up-and-coming retail banks if you just want to get a foothold in. So we've talked about Georgia, for example, and and countries like that. You know, if you get a residence permit to live somewhere else, even if you don't live there, you can generally get a bank account. So diversify your money, but you also want to have places uh that you can go.
I do believe as this is happening on the other side, you are seeing other countries saying, "We like the US less." I forget the number, something like two-thirds of Germans now say, "We don't like Americans anymore." And you can say, "Who cares about the Germans?" And yeah, you know what, you're right, who cares what the Germans have to say about you, but what happens when that starts translating into policy? And again, it happens in the margin. A couple countries right now in Africa are saying, "We don't want Americans to come at all." Okay, you're not going to go there. What do you care? Well, until it starts, the scope creep starts. Until more countries want to keep you out, Americans are already locked out of a number of key banks. We help Americans open bank accounts around the world for their asset structures and for themselves all the time. It's not as easy as being from somewhere else. And it's a good idea to start doing it now.
This is the kind of slow decline that I've thought of in the US and I've been talking about it at home since the '90s when I was a kid. And it's ramping up. What do they say? Bankruptcy happens slowly and then all at once. You know what happens as this stuff hits just the right snowball effect to where the right amount of fragility happens for those who stay behind. You're going to pay more in taxes. They're going to make it harder for you to move your money out. If you think capital controls couldn't happen in the US, I think that's probably not, I think it probably could happen, but you want to have places for your money and you want to have places for yourself. Residence permits of where you can live when it gets bad because you're not going to wake up one day and say, "You know what? I want to move into Uruguay for the low taxes and the greater safety and being out of the blast radius and the freedom." If you don't know what that looks like and you don't already have the infrastructure set up, it's going to be harder for you to want to escape that fragility because you'll do what you what people have always said, which is, "I'll leave when things get bad enough." I've been watching for 40 years, things get worse and worse and worse. And some people are still saying, "Oh, I'll leave when it gets bad enough." When is it going to be bad enough?
One of the big triggers for me is a lot of folks are leaving. I believe the United States may be entering a talent and capital flywheel. Not a collapse. I'm not one of these guys like, "You'll be wiping your bum with US dollars." I know. But it's just going to be a continual decline and a structural shift. The geography of opportunity is fragmenting. Remember that the talent may be in one country, your customers may be in another, the capital another, and you living somewhere else. It's what we've been telling you for years. You want to go where you're treated best. You want to be distributed. Money, freedom, safety, all of that. That's what more Americans are doing all for their own reasons. But I predicted about 10 years ago the rise of the seven-figure nomad. That's now here. And if you don't become the seven-figure nomad, you're going to be the one stuck behind the fragile country that's paying more and absorbing the bill from everybody else who left.
If you're going to move, you might as well move. Don't move from New York to like Long Island. Don't move from Los Angeles to Nashville and then have to move back as we're seeing people because of culture shock. Go where you're treated best and find one or multiple places around the world where you feel at home, where you feel it. Do you feel at home in Nashville or you just go there for lower taxes? Find a place where you feel it. That's what Nomad Capitalist helps clients do every day is find those places for themselves and diversify. Not just move everything to Dubai, but actually diversify things all around the world.