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- American millionaires are moving overseas, and it's not to dodge taxes, a consultancy firm says.
- They're trying to future-proof their wealth, fearing crime and instability in the US, per the analysis.
- Net inflows of wealthy people into the US fell to 1,500 in 2022, down from a peak 10,800 pre-pandemic.
America is losing its millionaires.
The net inflow of high-net-worth individuals to the US plummeted 86% in 2022 from peak pre-pandemic levels, falling to just 1,500 people, according to a new wealth report by London-based consultancy Henley & Partners.
That's compared to a net inflow that fluctuated between 6,400 and 10,800 wealthy people a year from 2013 to 2019.
A key impetus for this change has been disillusioned American millionaires looking overseas for opportunities, wrote Mehdi Kadiri, the head of North America at Henley & Partners, in the report published on Wednesday.
"Americans are currently experiencing their own bleak 'winter of discontent,'" he wrote for the firm, which tracks investment migration trends.
Many have been driven away by mounting calls to tax the rich, political tensions in the US, unpredictable markets because of the war in Ukraine, rising crime rates and gun violence, and conflict over societal issues like gender equality and racism, Kadiri added.
America's rich who want more options are now migrating to countries like Portugal, Malta, Spain, Greece, and Italy, which offer golden visas and migration programs, he wrote.
But millionaires opting for a second passport isn't a matter of avoiding taxes, Jeff D. Opdyke, an investment expert who covered finance for 17 years at the Wall Street Journal, wrote in the report.
They're simply chasing the American Dream elsewhere, he wrote.
More investors, C-suite execs, and entrepreneurs are migrating to future-proof their wealth, "seeking greener pastures for investment and business growth, safer destinations to raise their families," Opdyke added.
"For more than half a century, Americans defined, lived, and exemplified the American Dream that so much of the emerging world looked to and thought: 'One day, that'll be me!'" wrote Opdyke. "But today, for many, the American Dream is on life support."
Henley & Partners said one of the measures it uses to gauge the health of a country's economy is its middle class — which has been shrinking in the US.
At the same time, the middle class is growing outside the US, with nearly 430,000 new consumers joining the middle class in the developing world every day, Opdyke wrote added. That's the equivalent of adding 20 New York Cities to the US economy every year, he added.
"We've already topped out in terms of the number of Western consumers who will ever exist," Opdyke added. "Europe and Japan are aging, and their demographics point to a declining consumer base."
"Migrants have been flocking to the USA for centuries in search of their 'American dreams' of living and working in a free, democratic, and safe country," wrote Kadiri. "But change is in the air."