Money also tends to migrate to where it is treated best and/or is safer.
The people that have money follow the same rules.
This is an important lesson for politicians to remember.
I was reminded of these truths when I came across a report by New World Wealth on "Millionaire Migration in 2015" that tracked the migration patterns of millionaires last year around the globe.
What countries are millionaires leaving and where are they going?
France and Italy saw a large exodus of millionaires. last year. Cultural tensions in both countries appear to be causing concerns among the wealthy about their safety. In addition, the redistributive rhetoric of President Hollande's Socialist Party has clearly caused concerns among that nation's richest residents. Lack of economic opportunities in both those countries are also cited as a reason for the out-migration.
China's migration is not really a large issue as that country continues to produce many more millionaires annually relative to those migrating out of the country. That is not the case in France and Italy.
On the other hand, 8,000 millionaires migrated to Australia, the United States gained 7,000 and 5,000 more millionaires ended up in Canada.
The 8,000 new millionaires who migrated to Australia were enough to boost that country's millionaires by 3% in just one year. Canada boosted its total by 2%. 7,000 new millionaires to the United States almost had no effect percentage wise. 4,180,000 millionaires call the United States home---the most of anywhere in the world. It takes #2 Japan, #3 Germany and #4 China added together to equal the number of millionaires in the U.S.
What cities saw the largest loss of millionaires in 2015?
No real surprise that Paris and Rome lead this list considering the numbers we saw above on France and Italy. Athens is also not a surprise considering the financial turmoil Greece is under.
However, it is interesting to see Chicago on this list. What are the reasons? Rising racial tensions and rising crime levels are deemed to be driving millionaires to leave the Windy City. Is it a coincidence that President Obama is not moving home after his term ends in January?
Why does the fact that millionaires are leaving a country (or a city or state) matter?
From the report...
Bad sign - millionaires are often the first people to leave. They have the means to leave unlike
middle class citizens.
Money outflow – when millionaires leave a country, they take large amounts of money with them
which impacts negatively on the local currency, local stock market and local property market.
Lost jobs - millionaires employ large numbers of people. Around 30% to 40% of millionaires are
business owners.
Lost revenue and tax – millionaires spend a lot of money on local goods and services and pay a
large amount of income tax.
Pensions & benefits - millionaires are not reliant on state pensions and benefits, which makes
them a relatively easy and cheap group to please.
Resilient – millionaires are resilient to economic downturns and can keep an economy going
during tough times.
Brain drain – millionaires are normally highly skilled and highly educated. Many are also
innovators.
It is easy for politicians to complain about the rich not paying their "fair share". However, they would be wise to consider this report...and the alternative.
What if the wealthy leave and take their money with them?
What do Paris, Rome or Chicago become without these people?
I assure you it is not something that anyone should care to see.
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