Where Are the Millionaires Going? // The Global Movement of Wealth - Real Estate Without Borders

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[00:02]
A
Welcome back to Real Estate Without Borders. Today we're going to be talking about smart money. Have you ever heard of the term smart money? It's, it's usually used for like, you know, following in investor capital into, into trades in the stock market. But we're going to talk about it in a global context in where millionaires are leaving and where they're going. So we're going to talk about the biggest inflows and outflows of high net worth individuals around the world. And I'm not going to lie, a couple of these surprised me, honestly.
[00:35]
B
So attracting capital, that's my, that's my hashtag. My, my most searched thing on, on Grok recently is attracting capital because I know we'll get into it, but there's a few places like Italy that are doing different things to attract capital.
[00:53]
A
Well, yeah, Portugal, Portugal now has like doubled down on their attempts to kind of get rid of a lot of the wealth that's moving there because there's been consequences for locals who actually vote in elections and get pissed off. And so other countries are doing things and you know, we've talked a lot about Dubai here. We're going to have some Dubai experts on the show. But Dubai has been a big one that we're, you know, where you're seeing a lot of millionaires moving to. So that's a little teaser that's on the list. But why don't we, I have something.
[01:23]
B
Sorry, I, I was, I was looking at this the other day. You probably know maybe a little better than me, but so houses, this is, we're just jumping into it because I gotta get it off my head if I don't. Okay. House purchases by Foreigners accounted for 5.15% of the total first quarter of purchases. The lowest relative weight since the record of quarter since the second quarter of 2021 for purchases in Portugal. So it's interesting because like all we hear is all these foreigners buying up real estate in, in Portugal.
[01:55]
A
Yeah.
[01:55]
B
But according to this study it's, it's the lowest in four years. It's only 5% of homes went to non Portuguese buyers. So anyways, I thought I'd just, just hammer it right there.
[02:09]
A
No, I mean these are important things, right. Because countries have to balance the, their outcome. Their goal is to attract capital. Right. But they're, the consequences of that are that capital buys real estate and when they buy real estate that means that locals get out priced out of. I mean you saw this in Canada where Canada. And Canada's on this list by the way it's number four on the list, I think. But you know, Canada had a, had to ban foreign buyers of real estate because they were being too competitive against locals. And so Canada has banned foreign buyers since like 2021, 2023. Sorry. And other countries aren't doing that. UAE is a good example. So 128,000 millionaires will relocate this year and 6,700 of them are jet setting to Dubai. And the question is why? Right, well we know, we've talked about it a couple of times on the show when we have had Henley on. Tax structure is very favorable. It's a really beautiful place to live. It's very modern. The entire city was built in like the last 30 years. Very metropolitan, it's warm, right. There's a lot of business opportunity there. But, but Dubai hasn't really been dealing with the same problems like Portugal, Spain etc, where people are revolting against, you know, the, the government attracting all this foreign capital. And I think a big reason for that is Dubai is very good at building, right? They're building a ton of new units and they're doing precon. So they're selling units to investors and migrants and the supply is meeting the demand. Right. And Dubai would be one of the, actually the places that really felt, felt this decline during the Global Financial Crisis 2008, similar thing was happening. Not to say that we're going to see a comparable decline or anything anytime soon. Although you know, the economy does look, there's a lot of question marks right now. But a big reason that Dubai kind of felt that whiplash down after skyrocketing during the global financial crisis was because when more and more capital is moving there, they're building more and more to house that capital. Right. To house all those people that are moving there. And real estate is really long run construction and so it's really easy to overshoot or oversupply, right? Because you know a hundred thousand people are moving there and then you build 100,000 units. But then the economy crashes at some point between when you started those units and when you plan to finish. And only 50,000 of those hundred thousand actually can still afford to show up. And that creates this, this problem. But today Dubai hasn't really had. There's no real risk of that taking place as it, as it appears right now because they're moving so much capital there. But also there's no risk of these negative externalities like we're seeing in Spain and Portugal. I mean house prices are going up a little bit there, but not not like massively to the point where again, people are protesting like Spain and Portugal.
[05:13]
B
Right. I, I was actually just checking out. I know we're kind of, I'm jumping all over the place here. But. But one of the world's fastest growing wealth markets. Okay, a review of the top 10 fastest growing wealth markets over the past decade. Okay. There's Montenegro is growing the fastest from 2014 to 2024.
[05:34]
A
Is that a percentage of total though?
[05:36]
B
Yeah, percentage of total makes sense.
[05:38]
A
Yeah. Because it probably wouldn't have a big.
[05:40]
B
No, it's like 2800 millionaires USD million plus compared to like the UAE is 130. Yeah. You're on the same thing as me.
[05:48]
A
124. Millionaire growth.
[05:50]
B
Crazy.
[05:51]
A
So as a percentage of total. So Dubai is growing the, the most number. So like if, if I go to that thing that I just posted on Instagram, that visual there. Let me just switch tabs.
[06:03]
B
Yeah, pull it up. I'm going to find out more about Montenegro here.
[06:08]
A
Yeah. So let's, let's just kind of review this list actually real quick. So you've got. We'll go from the top. So the top gainers of high net worth individuals moving to these countries. Okay. UAE is leading by a very large margin. 6,700 people, 6,700 millionaires or high net. High net worth individuals move to the UAE USA.
[06:38]
B
Is this in 2024 alone?
[06:40]
A
2024, yeah.
[06:41]
B
6700 millionaires now. Crazy.
[06:44]
A
You know, you never know because in the like with the UAE thing a lot of people are just moving. And Henley talked to us about this Basel when he came on, he, he had mentioned how, you know, people aren't living there full time per se, they're just moving their economic life to a place like uae, Portugal to get the tax benefits.
[07:02]
B
Right.
[07:02]
A
And they'll spend obviously whatever the required amount of time is there. But I mean people who are like, if you're a, you know, you'd qualify for a high net worth individual. You're not really in any place that long to be honest. Right. You're moving around a lot. You're traveling, business, etc, Right. You know, got to go to Art Basel, got to go to yacht, yacht month or whatever. Yacht week, you know. Yeah. Whatever it is. Right. You got to go to all these different things wherever. You know, you gotta go to Con. Con Film Festival. You got to go to F1, blah, blah, blah. Right.
[07:31]
B
Busy people.
[07:32]
A
Yeah.
[07:33]
B
So that's cool though because I, I think now maybe because it's just, maybe it's because we're getting older, and maybe because we're. We're slowly getting more successful, but like this. I feel like this has been talked about for a long time, obviously, but this is becoming so much more prevalent now more than ever. And that episode, if you guys missed it, was incredible with. With Henley and partners with Basil. It's becoming, like you said, it's super, super common for people to be exploring different citizenship and passport options, not necessarily just to live, but to relocate for different. Whatever your reason may be. You know, I think when people like the whole. The cool thing about the show is to open people's vision and concept and open their mind to understanding that people can move and get different citizenships and obtain different citizenships for. For tax purposes, for. For quality of life, doesn't mean they're up and living in that country. And I think that's a foreign concept to a lot of people to. To be like, oh, I. I have to exit Canada and then go to Dubai. It's like, no, you don't have to exit anything. You can have multiple passports, multiple citizenships, and you can move and. And collect these for different reasons. Right. Obviously, Dubai is being, you know, top of the charts for. For wealth.
[08:48]
A
But anyways, yeah, so. So now that you're, you know, you're kind of back on Dubai, and I forgot to go through the list. I said I would, but then I started rambling on about Dubai. So I know it's all good, man. I mean, it is what it is, right? So let's get to the list, because we promised you all this list. So top five, UAE, 6, 700. USA, 3,800. So, you know, about 60 of what UAE is getting. Singapore, 3,500. Canada. This is the one that really surprised me because, you know, we live in Canada and we hear that people want to leave, right? They want to go to the US they want to go to Dubai, they want to go other places because they don't feel their capital is respected here. But it appears that global capital is still moving into Canada. And we'll talk. I think there's some clues as to why in the list of the top losers, which we'll get to in a second. And right behind Canada is Australia, with 2500 people moving to 2500 millionaires moving to Australia. Now, if we look at the top losers, two of the countries on this list are the two biggest sources of capital migration into Canada. So we can, you know, we can kind of surmise why Canada might be seeing this huge benefit. So top losers, China, lost 15,200 millionaires.
[10:04]
B
Okay, that's crazy.
[10:06]
A
Yeah, I mean, you know, they are, they're an openly socialist country. They tend to nationalize big companies, right? Like so, you know, the government will take large companies to, you know, to deliver the social benefit. And at the same time like if you actually really unpack this, go all the way back to like Karl Marx and his, his thoughts around like how to, how to run like a sort of communist system, they've sort of tried to subtract the idea of like a revolution. So like right in, in, in Marxist theory, you know, capital communism had to be built on the, off of the back of a capitalist system where you see capitalism run more and more and more to the point where it becomes so disparate, right? Where there's so many rich people or so few rich people that have so much wealth and so so many poor people that have no wealth that there's a revolution, right? An uprising of the poor people and they want to redistribute that wealth and that's how it leads to communism. But he, but Marks Marx probably gives one of the most glowing reviews of capitalism. Like I know a lot of people you smack about Karl Marx and communism etc, but most people haven't really read like he's, he was, he was a very good analyst and gives an exceptional review of, of, of capitalism. And China has sort of reserved, I think it's seven special economic zones sezs and that's where there's, there's, you're seeing these huge growth in these major metropolitan areas where they allow capitalism to take place in those markets for, for the, you know, kind of the argument is a limited period of time and then things get socialized or, or things get socialized out of those special economic zones. If like a con, if a company becomes too big, it gets socialized. Right. So that's all of that to say. And, and I've kind of forgotten to do the, the, the next four on the list on this one as well. You know, I talked a little bit about the uae. Why is China leading this, this list here? Probably because a lot of millionaires are afraid of having their, their wealth taken from them and it kind of, you know, for them defeats the purpose of spending all the time and energy to build a business. So that's probably why you're seeing a lot of, a lot of wealth leaving a country like China. UK is number two on the list. 9,500 millionaires leaving. That one actually surprised me as well. I mean, I guess like there's stuff.
[12:26]
B
Is that what's going on with that?
[12:26]
A
Yeah, it's a lot of politics. I think a lot of people, like, just not happy with the way that the economy is being run there. There's not a lot of economic promise in the country, to be honest with you. And so. But I think that that one would be similar to a place like Canada. Number three on the list, India 4. 300 millionaires left India, 1200 left South Korea, and a thousand left Russia. Now, going back to kind of why Canada and Australia are seeing so much inflow. China and India and the UK are actually top three or, or top, let's call top five inflow or feeder countries to a place like Canada and Australia. So that makes sense, right?
[13:05]
B
That makes sense. I think that's one of the comments actually on your, on your post. It's surprised to see the inflow to Canada, but like you said, if that's an inflow from these major countries, that makes complete sense.
[13:16]
A
Yeah. 100.
[13:18]
B
Brazil. Brazil's down 800. What are some other, like, ones on this list that, that maybe stand out to you a little bit? Italy is up 20. What is that? 2200.
[13:27]
A
Yeah, yeah.
[13:28]
B
For Italy. No. Compared to country size 100.
[13:30]
A
And like, you know, we talk a lot about how, you know, Portugal's kind of clamping down on a lot of the things that we talk about in this show. But, and, and probably a big portion of why you're seeing a lot of wealth move to places like Italy and Greece is because they don't have those limits yet, but they do have the sunshine all year round, the beautiful views, etc. And so you are seeing more and more wealth move to places like Italy and Greece rather than places like Portugal because you're, you know, these limitations are doing their job. They're dissuading people from wanting to move there. Interestingly, 400 millionaires moved to Japan. That one kind of surprised me because Japan doesn't really do immigration. So it's like, what, what's causing that? Right. But a lot, it looks like people are looking for, like, quality of life. Switzerland. 1500. Switzerland's obviously a very obvious one, but, you know, 1500 millionaires moved to Switzerland. Switzerland has always been a place where a lot of millionaires would go.
[14:21]
B
Yeah, of course. Interesting. Like, I think, I mean, this is a telltale sign of maybe where to, to start looking. Right. I mean, I, I'm, I'm fairly bullish on Italy only because we had our guest on here who got me all fired. Up on Italy. But, you know, I, I think as an investor looking globally, this is something to really look into because obviously, you know, you want to go where, where capital is being attracted to. Do you want to. Do you want to cover this list from Henley and Partners about the fastest growing by percentage, by millionaire growth?
[14:52]
A
Yeah, let's do it. Yeah. So. So we just covered the raw numbers. Now let's look at the relative numbers. Right. Because like, while it matters how many are moving there, it also matters what percentage of existing millionaires is moving there. Because that's kind of like your relative growth. Right. Magnitude rather than just sheer number or volume. So Montenegro, like you said, 124. So Montenegro leads on a percentage basis. UAE 98. So almost doubling of the number of millionaires in, in the UAE. And this is over the last 10 years. So since 2014, 130,000 millionaires moved to the UAE in the last 10 years.
[15:33]
B
And then there's Centi. Millionaires 325. That's 100 million plus net worth.
[15:38]
A
And billionaires 28.
[15:41]
B
Crazy.
[15:42]
A
But us, us leads in billionaires, 867 billionaires moved to the U.S. wow. Like, if you, if you can sort this list here, I can sort the list on. On billionaires, billionaires. And this is interesting, right, Going back to the China thing. And this could be. Oh, this is just wealth stats as of. So this isn't how many move there, this is how many are there. So US leads the world in billionaires 867. China 278. India 114.
[16:09]
B
Wow.
[16:10]
A
And those are the three biggest markets in the world. Right. So that would make sense. Like it's easier to. It's easier to become a billionaire when you have a big market to sell to. In centimillionaires, the US leads 10,000. China has 2, 200. And India has 992 again. And then UAE is third or is fourth on, on these lists as well. So you've got basically the list for both billionaires and sentimillionaires. US China, India, UAE IT leads. And same thing for millionaires. U. S, China, India, U.A.E.
[16:39]
B
You know what?
[16:40]
A
Poland, I was just gonna say for the, for the, the fifth most millionaires.
[16:45]
B
We wanted to do it. We want to do an F on Poland just because of what's going on there.
[16:48]
A
But yeah, well, their GDP per capita, like Poland is like the Poland's GDP per capita story is just absolutely wild. I'm gonna pull it up.
[16:54]
B
Yeah, pull it. What's. I'm Going to check it out right now. But what's, what's the immigration policies around Poland? I'm assuming it's strict. I think it is, yeah.
[17:06]
A
They've been pretty, pretty strict about immigration and they also like, they're obviously seeing a big gain from, from joining the eu. Right. So you know, they were kind of like more Eastern bloc manufacturing, more like hard trades. And so they've been providing a lot of goods and cheap labor to the EU and pulled that whole kind of country up out of the, out of kind of like the lower middle class and into the higher, upper middle class.
[17:30]
B
Right.
[17:31]
A
Their pace of growing their GDP per capita has outpaced, I think almost everyone in the world because they haven't been adding a ton of people to the country like a lot of other European countries are because they're dealing with this demographic collapse. They're trying to backfill with immigration. Poland's really been focusing on improving the productivity and, and the growth of the economy on a per person basis. And so they're not trying to grow the economy by growing the number of people there.
[17:57]
B
Interesting.
[17:57]
A
And it's like, it's, it's just like it's, it's absolutely wild. Like there's so many articles on Poland's golden age of growth. It's called here, if you look at like Poland, the pink line here by comparison to everybody else. Like just look at, and that's comparing it to other kind of Eastern bloc or, or like Germany and, and the IMF forecast is that Poland just going to continue to skyrocket. Like it's a, it's a, it's a country that is just.
[18:19]
B
What are they, What's Poland like? No, okay, I got this. Okay, hold on. Before I get carried away with questions for you. The immigration playbook. So how do I get in here? Let's see. There's no golden visa they offer. No. Yeah, I don't think they got much man in terms of like getting in there. Unless you're a highly skilled professional and you have like a super rare job. I don't think it's hard to get in here or hard to. There's only, it's easy to get in here, to be honest.
[18:48]
A
No, but yeah, they, they like there was a, there was a trade block like in post Soviet, like Eastern Bloc in, in Europe where they had like in the 1990s and that, that collapsed in the 1990s and Poland started to kind of reorient their trade towards the rest of Europe.
[19:10]
B
Right.
[19:10]
A
They're next to Germany and Germany is one of the biggest economies in the world. Right. So that's their main trading partner today. And, and German companies can get labor sort of like in the U.S. like the, you know, U.S. auto manufacturers will buy or will build a lot of cars in Mexico as an example, because they can get cheaper labor. Right. That's how it was. But now Poland's really actually been pulling themselves up similar to the way that China and India like China did over the last 20 years. And India, I mean China accomplished one of the most amazing things in, in global history, which was to pull a billion people out of poverty and into the middle class.
[19:43]
B
Right.
[19:44]
A
And, and India is now kind of undergoing the same thing. Right. And after the, the revolutions and, and the, the collapse of the trade bloc, unemployment was a huge issue in Poland in the 90s and you saw like, that's why you see a lot of Polish immigrants in the U.S. and Canada. Right, right. But for the people who stayed, I mean now, you know, you kind of wait it out. The next generation looks really promising for a country like Poland. And I think it's now the sixth largest economy in, in the eu, whereas.
[20:11]
B
Poland is not sixth largest.
[20:12]
A
Yeah, I think so. Yeah. Yeah, six, six largest in the, in the eu.
[20:16]
B
Wow.
[20:17]
A
By nominal GDP and fifth largest by gdp. So nominal GDP is.
[20:24]
B
A Polish, you need a Polish realtor, Polish developer to reach out to us here and, and get us some facts on, on Poland.
[20:32]
A
Yeah, why don't we just get a Polish real estate expert on here and let's get it, talk about it. Let's see.
[20:38]
B
You, you and I, every time we have an idea of this, we're going to have somebody on the show next week, so stay tuned because we don't we act, we're actors here. That's crazy, man. Well, good for Poland. I think it's kind of cool what they're doing. It's kind of like the opposite of what we're doing in Canada to an extent.
[20:55]
A
But yeah, yeah, I, I, I think it's a really fascinating case study and like what it looks like where you still have kind of some of those elements of the, you know, socialists kind of like Eastern bloc philosophy where they have welfare system, really advanced public welfare system, but they've integrated kind of more philosophies of more modern, modern capitalism in their integration in the EU and you know, they've really been pursuing this more liberalization of the economy. Not to, you know, kind of use the word liberal in the context that a lot of people but you know, you know. Well, you Go kind of more. It's funny because, like, people associate the word liberal now with like very leftist policies, but the word originally came from this, like American liberalism, you know, economic school of thought. And that's kind of what I mean is like free market, right. So they, you know, when you have a more socialist country, the government wants to centrally plan the economy, right? So they want to say, oh, this person trades with this person and this, you know, like that's, that's kind of how the whole thing works. They distribute the, the things within an economy. And now they've really actually liberalized the economy and made it more free market. But they still have that advanced welfare system similar to a place like you're mentioning, like Canada or. But I think Canada's kind of welfare system is actually really crumbling. Like health care is really hard to get. You know, people who are on social assistance, et cetera, can't afford stuff. Similar kind of thing happening in the US And a lot of countries that are further along in the cycle that Poland is trying to do. So I think they have to be careful, try and learn from a lot of these countries that are, that are, you know, centuries ahead on, on that system like the UK where again, you're like the disparities become so extreme that there's, there's like legitimate fear. I mean, in the, in Canada, there was a, There was literally a report from like the RCMP and somebody else that they were worried that peop. Canadians would like, revolt once they realized how poor they were. Right. Did you see that?
[22:50]
B
No, no. Yeah, I, that sounds about right though, to be honest.
[22:55]
A
Yeah. So I think. Yeah, really fascinating.
[22:59]
B
Anyway, I have a question like, I'm curious your thoughts on. Because as we, when we talk about attracting capital, we always get both sides of the argument. You know, we get people that are in favor of it and we get a lot of people who are super against it. And I think most people don't really know like the full story. The reason I brought up at the very beginning of that, that Portugal stat is because I think people hear about attracting capital and millionaire migration and they immediately think of all the negative things depending on what type of situation they're in them. And they all think of all this negativity around, you know, oh, it's going to drive up the prices, it's going to do this, it's going to do that, it's going to be so bad, you know, and then in reality they drop these, these stats about, you know, only 5% of owners in Portugal are foreign Buyers, but they still, it seems to be the most prevalent talked about thing. You know, what are like in your opinion, what are some of the, the, the cons, the pros and the cons, I guess of, of that millionaire migration and attracting capital. I know there's a million, and I'm not asking you to like name them all but like you know, the.
[24:06]
A
Yeah. So the pros would be that, you know, you bring rich people to your country, typically they stay rich in your country, they spend more money, they grow businesses there. Like that's kind of the idea behind wanting to bring wealth into your country is we want to bring people who will help build our economy up. So that's kind of the pro, right? There's, there's a bunch of other ones but like that's really the main idea behind it. The consequence is they have way more buying power. Like it exacerbates disparity. Right. So it, it, that's the second time.
[24:33]
B
We use this word. This. Let's get it, let's get a definition.
[24:36]
A
Yeah. So causes problems between like, or it makes the gap between the rich and the poor worse, right? Because if you're bringing more richer people then there's more higher concentration of wealth at the top. And what that does is it, it disproportionately negatively impacts people who don't have wealth. Because now all of a sudden, and Portugal, let's use Portugal as an example, all of these domestic Portuguese people are competing with millionaires for houses in these areas, right. And now all of a sudden, and we saw this in Canada as well, right? Like 2016, 17, there was a ton of Chinese capital moving to Canada and the 905, like all of the suburban areas around the, around the gta, around Toronto and Vancouver as well, regular people couldn't afford houses because they were competing with rich Chinese people.
[25:28]
B
Am I, am I wrong to think I might get some heat for this one? But am I wrong to think like those people probably wouldn't be buying the houses that those people are buying anyways?
[25:40]
A
No, I don't think you're wrong in that.
[25:42]
B
You know. Yeah, like I do, don't get me wrong obviously that more the wealthy people come, they're going to buy up more properties, going to take away all the properties from some of the local people. But I, on that same note, I also think that maybe those people probably wouldn't be buying those properties anyways. Kind of.
[26:02]
A
Does that mean no, I think you're right to be honest. Like, I think that it depends though, right? Because in Canada, like the idea was that. And in the US like the idea was that middle class people could afford nice houses. Like, that's really the American dream and the Canadian dream. And so I don't know, like guys like you and I, or you know, people who are a little like friends of ours who are sort of in the upper middle class, right. Making a couple hundred grand a year, whatever they are now, they can't afford these houses that are whatever, a million bucks or for sure, you know, so.
[26:35]
B
That'S what I mean. I think it affects, I think it affects people like the upper middle class.
[26:39]
A
Right. But it doesn't affect the people at the bottom. Yeah, I think you're, you're probably right. Yeah, but the, but countries like the, the reason why you want to like as a, as an economy or as a country government want to balance or, or like do policies that favor the lower middle class or, or poor people is because there's way more of them and eventually if they get pissed off enough, they have a revolution. Right? Right. That's how there's this whole. One of my favorite podcasts, I've mentioned this a couple of times on the show, but Mike Duncan's Revolutions podcast, it always happens over and over, right? It's a cool, really cool history podcast, but always happens over and over. You get, you know, you get enough poor people and you take enough away from them and you distribute too much wealth to the rich people. The poor people eventually mobilize and attack the rich people because they're pissed off. And like, you can see this sentiment taking place in a lot of capitalist economies right now. So that's the risk that, that some, some of these governments are trying to balance.
[27:38]
B
I think the one, the one thing that I may be overlooking is some of these, you know, wealthier people that are looking for real estate investments in these areas are, are maybe looking to invest and when they're investing there, they're investing to potentially rent out the property. And maybe like, for example, I'm assuming the people that are renting out the, you know, buying these luxury properties and turning them into rentals are turning those into like Airbnbs or short term rentals, which could maybe in the long term really affect like the local rental market, which those bottom or like, you know, the, the lower middle class people would be into. So by taking away more of the supply, it can cause issues in the rental side of things, which I, or, or increase rental prices which would really affect the lower middle class, which I, I understand. And something that maybe I overlooked Because I wasn't really thinking about the rental market because if these, I'm assuming they're not all coming there just to buy and live like we talked about. Right. Most of these people are probably relocating capital, relocating for whatever. You know, we actually, there was kind of, there was a lot of reasons why people would relocate or not relocate in general, but you know, get different passports and citizenships. But I think that would tie back into them buying investment properties which would then have an effect on the rental market which would then have an effect on the lower middle class, which is something that I probably overlooked. But also like these people, the, the, the wealth migration of millionaires moving to these places would in some cases, but not all increase jobs. But like it's interesting because I don't know the numbers on this, I'm just fully talking to talk, but I, it's like I would assume the people that are the millionaires that are moving to, to the U.S. are there to bring business and maybe create jobs for people. Whereas the people in the high net worth individuals that are moving to like Portugal, Italy, I don't really think they're there to create any sort of wealth for anybody else other than just themselves.
[29:39]
A
Yeah, I mean you could be right. Right. Like I do think that there is a difference based on. And this is why you like Canada is a really good example of this. Like that's a really good way of thinking about it. People move capital to the US because they're, they can amplify the impact of their capital. Right. Or, or whatever they're going to do, they're going to invest it in whatever the local economy has available for them to make, to make money. And so in a place like the US where the majority of the wealth is concentrated in business, then you can, you know, it'll grow the business economy. But in a place like Canada, we don't have like, you know, TSX is like smaller than like some companies.
[30:17]
B
Yeah.
[30:18]
A
Market caps. Right. Canada has like, you know, a handful of banks, telcos. Like it's a very market. You can't come to Canada if you're a billionaire and start your own bank or whatever. Right. In the US you can do that. Right. And so what do you do? Well, you buy real estate because that's where the major concentration of our wealth is in a country like Canada. And the same thing is true in places like Portugal or Australia. And then you started seeing this huge increase in property values, whereas in the US you haven't really seen that. You have seen some increase in property Values, but it's not related to foreign capital. Actually, foreign capital is decreasing as a share of total buyers in the market. It's related to interest rates being too low for too long. And in Canada, it's kind of the same thing. We saw that. So you saw your domestic buyers getting really cheap debt and getting jacked up on cheap debt, but, and they were competing with this huge inflow of foreign capital. So you're absolutely right. Like, people who are moving capital to a place like the US are probably doing it for different reasons than people moving capital to a place like Canada. As an example.
[31:20]
B
Yeah, I, I, I, I, I just have this, I like to see like a number on, I don't know if there's a, you got to have some charts on this, dude. But I feel like this, the people that are going to the US are, are genuinely going to build businesses and, and create jobs, whereas the other places are, are just real estate investing, which would then have a ripple effect on, on things like the rental market and all that kind of stuff, which is kind of interesting.
[31:42]
A
For sure. Totally. Anything else we want to go through here or should we wrap this one up?
[31:51]
B
Let's wrap it up. I think we have some good points here. I think it's cool to see where people are going. Look, if you're an international investor, obviously you want to analyze that's, I always say this on every episode, but this is what we're doing is we're just helping you understand how to make a very educated decision. Go and invest globally. Because there's so many different factors you have to understand and analyze before you pull the trigger on something like this. And, and understanding which countries are actively attracting capital is very important, especially if you're in real estate investing. Because if you're buying to get rentals, you're buying to for whatever reason, real estate wise, you know, obviously you want to go to a place where, where they're attracting millionaires. It's definitely an upside 100%.
[32:31]
A
Yeah, I, I would say so. It's worth paying attention to what these people are doing. The reason we're talking about where millionaire capital is going is because that's at your smart money indicator, right? Where are the rich people going? And if you want to see the economies that are likely to get pulled up by the economic activity that they bring, like we just described, it's worth paying attention to what they're doing. I think that's it. Leave us a review. Text this episode to your mom and your friends who are thinking about moving to other places, and we'll see you next week.

Summary6 min read

Real Estate Without Borders: Episode Summary

Title: Where Are the Millionaires Going? // The Global Movement of Wealth
Host: Real Estate Without Borders
Release Date: June 27, 2025

Introduction to the Global Movement of Wealth

In this insightful episode of "Real Estate Without Borders," hosts A and B delve into the intriguing trends of millionaire migration worldwide. The discussion centers around the concept of "smart money," traditionally associated with the stock market, but redefined here in a global context to explore where high net worth individuals (HNWIs) are relocating and the implications of these movements.

Top Destinations for Millionaire Migration

United Arab Emirates (UAE):
The UAE, particularly Dubai, emerges as the leading destination for millionaires, with 6,700 HNWIs relocating in 2024 alone. This surge is attributed to favorable tax structures, modern infrastructure, business opportunities, and effective management of foreign capital. Dubai's ability to balance infrastructure development with demand ensures that oversupply risks remain minimal, differentiating it from other markets like Portugal and Spain.

Notable Quote:
A at [06:03] states, "UAE is leading by a very large margin. 6,700 high net worth individuals move to the UAE in 2024."

United States:
Following the UAE, the USA attracts 3,800 millionaires. The influx is driven by the country's vast market opportunities, the ability to scale businesses, and a diverse economy.

Singapore:
Singapore also hosts a significant number of HNWIs, with 3,500 individuals moving there, leveraging its strategic location and robust economic framework.

Canada and Australia:
Canada and Australia round out the top destinations, welcoming 3,800 and 2,500 millionaires respectively. Contrary to common perceptions, Canada continues to attract global capital despite its own challenges, while Australia benefits from its stable economy and quality of life.

Notable Quote:
B at [06:37] remarks, "Canada had to ban foreign buyers of real estate because they were being too competitive against locals."

Top Countries Losing Millionaires

China:
Leading the outflow, 15,200 millionaires are leaving China. The primary reasons include fears of wealth confiscation, restrictive government policies, and economic uncertainties.

United Kingdom:
The UK sees 9,500 millionaires departing, driven by political instability and economic dissatisfaction.

India, South Korea, and Russia:
India loses 4,300, South Korea 1,200, and Russia 1,000 millionaires. Factors include political climates, economic policies, and societal changes.

Notable Quote:
A at [10:04] explains, "China has reserved special economic zones where capitalism thrives, but overall, high net worth individuals fear their wealth might be taken."

Emerging Markets and Notable Trends

Montenegro:
Montenegro is highlighted as the fastest-growing wealth market over the past decade, with a 124% increase in millionaires. This growth is significant both in absolute numbers and as a percentage of its total population.

Italy and Greece:
Italy experiences a 20% increase (2,200 millionaires), while Greece also sees growth. These countries attract wealth due to their appealing climates, cultural richness, and fewer restrictions compared to places like Portugal.

Japan and Switzerland:
Japan surprisingly gains 400 millionaires, likely driven by quality of life improvements, despite its traditionally strict immigration policies. Switzerland continues to be a magnet for HNWIs, drawing 1,500 millionaires with its stable economy and luxury real estate market.

Notable Quote:
A at [13:28] notes, "Places like Italy and Greece are attracting more wealth because they don't have the same limitations as Portugal."

Poland: A Case Study in Economic Growth

Poland is discussed extensively as an exemplary case of rapid economic advancement. Over the past decade, Poland has become one of the EU's largest economies, driven by strategic integration with the EU, focus on GDP per capita growth, and robust industrial development.

Notable Quote:
A at [17:05] shares, "Poland's GDP per capita story is just absolutely wild. They're focusing on improving productivity and economic growth per person."

Pros and Cons of Millionaire Migration

Pros:

Economic Growth: HNWIs inject capital into local economies, fostering business development and job creation.
Market Expansion: Increased investments can lead to the expansion of industries and infrastructure.

Cons:

Economic Disparity: The influx of wealthy individuals can exacerbate income inequality, making housing unaffordable for locals.
Housing Market Pressure: High-end real estate purchases by foreigners can drive up property prices, as seen in Canada where foreign buyers accounted for 5% of home purchases but significantly impacted housing affordability.

Notable Quote:
A at [24:35] remarks, "Bringing more rich people means more concentration of wealth at the top, which disproportionately negatively impacts those without wealth."

Impact on Housing and Local Economies

The discussion highlights how HNWIs often invest in luxury real estate, sometimes converting properties into short-term rentals like Airbnbs, which can reduce the availability of long-term housing and increase rental prices. This phenomenon particularly affects the upper middle class, who find themselves priced out of desirable markets.

Notable Quote:
B at [25:28] observes, "Millionaires buying luxury properties can take away properties from local people, affecting the upper middle class."

Strategic Considerations for Investors

For international investors, understanding the movement of HNWIs is crucial as it serves as a "smart money indicator." Investing in markets attracting wealthy individuals can signify future economic growth and real estate appreciation. However, investors must also consider the potential social and economic impacts, such as housing affordability and local market dynamics.

Notable Quote:
A at [32:31] concludes, "What we're doing is helping you understand how to make a very educated decision. Go and invest globally... understanding which countries are actively attracting capital is very important."

Conclusion and Forward Look

The episode wraps up with a reaffirmation of the importance of monitoring global wealth movements to make informed real estate investment decisions. Hosts encourage listeners to consider both the opportunities and challenges presented by millionaire migration, emphasizing the need for strategic analysis in international investing.

Final Thought:
A and B emphasize that by keeping an eye on where the wealthy are moving, investors can better predict and capitalize on emerging real estate markets poised for growth.

Key Takeaways:

UAE and USA are the top destinations for millionaire migration, driven by favorable economic and tax environments.
China and the UK are prominent sources of millionaire outflows due to political and economic concerns.
Emerging markets like Montenegro and established ones like Switzerland continue to attract significant HNWI populations.
Economic impacts of HNWIs include both positive growth and negative effects on housing affordability and economic disparity.
Strategic investment requires a nuanced understanding of these global wealth movements to maximize returns and mitigate risks.

Notable Quotes with Timestamps:

[06:03] A: "UAE is leading by a very large margin. 6,700 high net worth individuals move to the UAE in 2024."
[10:04] A: "China has reserved special economic zones where capitalism thrives, but overall, high net worth individuals fear their wealth might be taken."
[13:28] A: "Places like Italy and Greece are attracting more wealth because they don't have the same limitations as Portugal."
[17:05] A: "Poland's GDP per capita story is just absolutely wild. They're focusing on improving productivity and economic growth per person."
[24:35] A: "Bringing more rich people means more concentration of wealth at the top, which disproportionately negatively impacts those without wealth."
[32:31] A: "What we're doing is helping you understand how to make a very educated decision. Go and invest globally... understanding which countries are actively attracting capital is very important."

This episode provides a comprehensive overview of the current trends in global wealth migration, offering valuable insights for investors looking to expand their portfolios internationally. By highlighting both the opportunities and challenges associated with millionaire migration, "Real Estate Without Borders" equips its listeners with the knowledge needed to navigate the complex landscape of global real estate investing.

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Transcript89 lines

[00:02]
A
Welcome back to Real Estate Without Borders. Today we're going to be talking about smart money. Have you ever heard of the term smart money? It's, it's usually used for like, you know, following in investor capital into, into trades in the stock market. But we're going to talk about it in a global context in where millionaires are leaving and where they're going. So we're going to talk about the biggest inflows and outflows of high net worth individuals around the world. And I'm not going to lie, a couple of these surprised me, honestly.
[00:35]
B
So attracting capital, that's my, that's my hashtag. My, my most searched thing on, on Grok recently is attracting capital because I know we'll get into it, but there's a few places like Italy that are doing different things to attract capital.
[00:53]
A
Well, yeah, Portugal, Portugal now has like doubled down on their attempts to kind of get rid of a lot of the wealth that's moving there because there's been consequences for locals who actually vote in elections and get pissed off. And so other countries are doing things and you know, we've talked a lot about Dubai here. We're going to have some Dubai experts on the show. But Dubai has been a big one that we're, you know, where you're seeing a lot of millionaires moving to. So that's a little teaser that's on the list. But why don't we, I have something.
[01:23]
B
Sorry, I, I was, I was looking at this the other day. You probably know maybe a little better than me, but so houses, this is, we're just jumping into it because I gotta get it off my head if I don't. Okay. House purchases by Foreigners accounted for 5.15% of the total first quarter of purchases. The lowest relative weight since the record of quarter since the second quarter of 2021 for purchases in Portugal. So it's interesting because like all we hear is all these foreigners buying up real estate in, in Portugal.
[01:55]
A
Yeah.
[01:55]
B
But according to this study it's, it's the lowest in four years. It's only 5% of homes went to non Portuguese buyers. So anyways, I thought I'd just, just hammer it right there.
[02:09]
A
No, I mean these are important things, right. Because countries have to balance the, their outcome. Their goal is to attract capital. Right. But they're, the consequences of that are that capital buys real estate and when they buy real estate that means that locals get out priced out of. I mean you saw this in Canada where Canada. And Canada's on this list by the way it's number four on the list, I think. But you know, Canada had a, had to ban foreign buyers of real estate because they were being too competitive against locals. And so Canada has banned foreign buyers since like 2021, 2023. Sorry. And other countries aren't doing that. UAE is a good example. So 128,000 millionaires will relocate this year and 6,700 of them are jet setting to Dubai. And the question is why? Right, well we know, we've talked about it a couple of times on the show when we have had Henley on. Tax structure is very favorable. It's a really beautiful place to live. It's very modern. The entire city was built in like the last 30 years. Very metropolitan, it's warm, right. There's a lot of business opportunity there. But, but Dubai hasn't really been dealing with the same problems like Portugal, Spain etc, where people are revolting against, you know, the, the government attracting all this foreign capital. And I think a big reason for that is Dubai is very good at building, right? They're building a ton of new units and they're doing precon. So they're selling units to investors and migrants and the supply is meeting the demand. Right. And Dubai would be one of the, actually the places that really felt, felt this decline during the Global Financial Crisis 2008, similar thing was happening. Not to say that we're going to see a comparable decline or anything anytime soon. Although you know, the economy does look, there's a lot of question marks right now. But a big reason that Dubai kind of felt that whiplash down after skyrocketing during the global financial crisis was because when more and more capital is moving there, they're building more and more to house that capital. Right. To house all those people that are moving there. And real estate is really long run construction and so it's really easy to overshoot or oversupply, right? Because you know a hundred thousand people are moving there and then you build 100,000 units. But then the economy crashes at some point between when you started those units and when you plan to finish. And only 50,000 of those hundred thousand actually can still afford to show up. And that creates this, this problem. But today Dubai hasn't really had. There's no real risk of that taking place as it, as it appears right now because they're moving so much capital there. But also there's no risk of these negative externalities like we're seeing in Spain and Portugal. I mean house prices are going up a little bit there, but not not like massively to the point where again, people are protesting like Spain and Portugal.
[05:13]
B
Right. I, I was actually just checking out. I know we're kind of, I'm jumping all over the place here. But. But one of the world's fastest growing wealth markets. Okay, a review of the top 10 fastest growing wealth markets over the past decade. Okay. There's Montenegro is growing the fastest from 2014 to 2024.
[05:34]
A
Is that a percentage of total though?
[05:36]
B
Yeah, percentage of total makes sense.
[05:38]
A
Yeah. Because it probably wouldn't have a big.
[05:40]
B
No, it's like 2800 millionaires USD million plus compared to like the UAE is 130. Yeah. You're on the same thing as me.
[05:48]
A
124. Millionaire growth.
[05:50]
B
Crazy.
[05:51]
A
So as a percentage of total. So Dubai is growing the, the most number. So like if, if I go to that thing that I just posted on Instagram, that visual there. Let me just switch tabs.
[06:03]
B
Yeah, pull it up. I'm going to find out more about Montenegro here.
[06:08]
A
Yeah. So let's, let's just kind of review this list actually real quick. So you've got. We'll go from the top. So the top gainers of high net worth individuals moving to these countries. Okay. UAE is leading by a very large margin. 6,700 people, 6,700 millionaires or high net. High net worth individuals move to the UAE USA.
[06:38]
B
Is this in 2024 alone?
[06:40]
A
2024, yeah.
[06:41]
B
6700 millionaires now. Crazy.
[06:44]
A
You know, you never know because in the like with the UAE thing a lot of people are just moving. And Henley talked to us about this Basel when he came on, he, he had mentioned how, you know, people aren't living there full time per se, they're just moving their economic life to a place like uae, Portugal to get the tax benefits.
[07:02]
B
Right.
[07:02]
A
And they'll spend obviously whatever the required amount of time is there. But I mean people who are like, if you're a, you know, you'd qualify for a high net worth individual. You're not really in any place that long to be honest. Right. You're moving around a lot. You're traveling, business, etc, Right. You know, got to go to Art Basel, got to go to yacht, yacht month or whatever. Yacht week, you know. Yeah. Whatever it is. Right. You got to go to all these different things wherever. You know, you gotta go to Con. Con Film Festival. You got to go to F1, blah, blah, blah. Right.
[07:31]
B
Busy people.
[07:32]
A
Yeah.
[07:33]
B
So that's cool though because I, I think now maybe because it's just, maybe it's because we're getting older, and maybe because we're. We're slowly getting more successful, but like this. I feel like this has been talked about for a long time, obviously, but this is becoming so much more prevalent now more than ever. And that episode, if you guys missed it, was incredible with. With Henley and partners with Basil. It's becoming, like you said, it's super, super common for people to be exploring different citizenship and passport options, not necessarily just to live, but to relocate for different. Whatever your reason may be. You know, I think when people like the whole. The cool thing about the show is to open people's vision and concept and open their mind to understanding that people can move and get different citizenships and obtain different citizenships for. For tax purposes, for. For quality of life, doesn't mean they're up and living in that country. And I think that's a foreign concept to a lot of people to. To be like, oh, I. I have to exit Canada and then go to Dubai. It's like, no, you don't have to exit anything. You can have multiple passports, multiple citizenships, and you can move and. And collect these for different reasons. Right. Obviously, Dubai is being, you know, top of the charts for. For wealth.
[08:48]
A
But anyways, yeah, so. So now that you're, you know, you're kind of back on Dubai, and I forgot to go through the list. I said I would, but then I started rambling on about Dubai. So I know it's all good, man. I mean, it is what it is, right? So let's get to the list, because we promised you all this list. So top five, UAE, 6, 700. USA, 3,800. So, you know, about 60 of what UAE is getting. Singapore, 3,500. Canada. This is the one that really surprised me because, you know, we live in Canada and we hear that people want to leave, right? They want to go to the US they want to go to Dubai, they want to go other places because they don't feel their capital is respected here. But it appears that global capital is still moving into Canada. And we'll talk. I think there's some clues as to why in the list of the top losers, which we'll get to in a second. And right behind Canada is Australia, with 2500 people moving to 2500 millionaires moving to Australia. Now, if we look at the top losers, two of the countries on this list are the two biggest sources of capital migration into Canada. So we can, you know, we can kind of surmise why Canada might be seeing this huge benefit. So top losers, China, lost 15,200 millionaires.
[10:04]
B
Okay, that's crazy.
[10:06]
A
Yeah, I mean, you know, they are, they're an openly socialist country. They tend to nationalize big companies, right? Like so, you know, the government will take large companies to, you know, to deliver the social benefit. And at the same time like if you actually really unpack this, go all the way back to like Karl Marx and his, his thoughts around like how to, how to run like a sort of communist system, they've sort of tried to subtract the idea of like a revolution. So like right in, in, in Marxist theory, you know, capital communism had to be built on the, off of the back of a capitalist system where you see capitalism run more and more and more to the point where it becomes so disparate, right? Where there's so many rich people or so few rich people that have so much wealth and so so many poor people that have no wealth that there's a revolution, right? An uprising of the poor people and they want to redistribute that wealth and that's how it leads to communism. But he, but Marks Marx probably gives one of the most glowing reviews of capitalism. Like I know a lot of people you smack about Karl Marx and communism etc, but most people haven't really read like he's, he was, he was a very good analyst and gives an exceptional review of, of, of capitalism. And China has sort of reserved, I think it's seven special economic zones sezs and that's where there's, there's, you're seeing these huge growth in these major metropolitan areas where they allow capitalism to take place in those markets for, for the, you know, kind of the argument is a limited period of time and then things get socialized or, or things get socialized out of those special economic zones. If like a con, if a company becomes too big, it gets socialized. Right. So that's all of that to say. And, and I've kind of forgotten to do the, the, the next four on the list on this one as well. You know, I talked a little bit about the uae. Why is China leading this, this list here? Probably because a lot of millionaires are afraid of having their, their wealth taken from them and it kind of, you know, for them defeats the purpose of spending all the time and energy to build a business. So that's probably why you're seeing a lot of, a lot of wealth leaving a country like China. UK is number two on the list. 9,500 millionaires leaving. That one actually surprised me as well. I mean, I guess like there's stuff.
[12:26]
B
Is that what's going on with that?
[12:26]
A
Yeah, it's a lot of politics. I think a lot of people, like, just not happy with the way that the economy is being run there. There's not a lot of economic promise in the country, to be honest with you. And so. But I think that that one would be similar to a place like Canada. Number three on the list, India 4. 300 millionaires left India, 1200 left South Korea, and a thousand left Russia. Now, going back to kind of why Canada and Australia are seeing so much inflow. China and India and the UK are actually top three or, or top, let's call top five inflow or feeder countries to a place like Canada and Australia. So that makes sense, right?
[13:05]
B
That makes sense. I think that's one of the comments actually on your, on your post. It's surprised to see the inflow to Canada, but like you said, if that's an inflow from these major countries, that makes complete sense.
[13:16]
A
Yeah. 100.
[13:18]
B
Brazil. Brazil's down 800. What are some other, like, ones on this list that, that maybe stand out to you a little bit? Italy is up 20. What is that? 2200.
[13:27]
A
Yeah, yeah.
[13:28]
B
For Italy. No. Compared to country size 100.
[13:30]
A
And like, you know, we talk a lot about how, you know, Portugal's kind of clamping down on a lot of the things that we talk about in this show. But, and, and probably a big portion of why you're seeing a lot of wealth move to places like Italy and Greece is because they don't have those limits yet, but they do have the sunshine all year round, the beautiful views, etc. And so you are seeing more and more wealth move to places like Italy and Greece rather than places like Portugal because you're, you know, these limitations are doing their job. They're dissuading people from wanting to move there. Interestingly, 400 millionaires moved to Japan. That one kind of surprised me because Japan doesn't really do immigration. So it's like, what, what's causing that? Right. But a lot, it looks like people are looking for, like, quality of life. Switzerland. 1500. Switzerland's obviously a very obvious one, but, you know, 1500 millionaires moved to Switzerland. Switzerland has always been a place where a lot of millionaires would go.
[14:21]
B
Yeah, of course. Interesting. Like, I think, I mean, this is a telltale sign of maybe where to, to start looking. Right. I mean, I, I'm, I'm fairly bullish on Italy only because we had our guest on here who got me all fired. Up on Italy. But, you know, I, I think as an investor looking globally, this is something to really look into because obviously, you know, you want to go where, where capital is being attracted to. Do you want to. Do you want to cover this list from Henley and Partners about the fastest growing by percentage, by millionaire growth?
[14:52]
A
Yeah, let's do it. Yeah. So. So we just covered the raw numbers. Now let's look at the relative numbers. Right. Because like, while it matters how many are moving there, it also matters what percentage of existing millionaires is moving there. Because that's kind of like your relative growth. Right. Magnitude rather than just sheer number or volume. So Montenegro, like you said, 124. So Montenegro leads on a percentage basis. UAE 98. So almost doubling of the number of millionaires in, in the UAE. And this is over the last 10 years. So since 2014, 130,000 millionaires moved to the UAE in the last 10 years.
[15:33]
B
And then there's Centi. Millionaires 325. That's 100 million plus net worth.
[15:38]
A
And billionaires 28.
[15:41]
B
Crazy.
[15:42]
A
But us, us leads in billionaires, 867 billionaires moved to the U.S. wow. Like, if you, if you can sort this list here, I can sort the list on. On billionaires, billionaires. And this is interesting, right, Going back to the China thing. And this could be. Oh, this is just wealth stats as of. So this isn't how many move there, this is how many are there. So US leads the world in billionaires 867. China 278. India 114.
[16:09]
B
Wow.
[16:10]
A
And those are the three biggest markets in the world. Right. So that would make sense. Like it's easier to. It's easier to become a billionaire when you have a big market to sell to. In centimillionaires, the US leads 10,000. China has 2, 200. And India has 992 again. And then UAE is third or is fourth on, on these lists as well. So you've got basically the list for both billionaires and sentimillionaires. US China, India, UAE IT leads. And same thing for millionaires. U. S, China, India, U.A.E.
[16:39]
B
You know what?
[16:40]
A
Poland, I was just gonna say for the, for the, the fifth most millionaires.
[16:45]
B
We wanted to do it. We want to do an F on Poland just because of what's going on there.
[16:48]
A
But yeah, well, their GDP per capita, like Poland is like the Poland's GDP per capita story is just absolutely wild. I'm gonna pull it up.
[16:54]
B
Yeah, pull it. What's. I'm Going to check it out right now. But what's, what's the immigration policies around Poland? I'm assuming it's strict. I think it is, yeah.
[17:06]
A
They've been pretty, pretty strict about immigration and they also like, they're obviously seeing a big gain from, from joining the eu. Right. So you know, they were kind of like more Eastern bloc manufacturing, more like hard trades. And so they've been providing a lot of goods and cheap labor to the EU and pulled that whole kind of country up out of the, out of kind of like the lower middle class and into the higher, upper middle class.
[17:30]
B
Right.
[17:31]
A
Their pace of growing their GDP per capita has outpaced, I think almost everyone in the world because they haven't been adding a ton of people to the country like a lot of other European countries are because they're dealing with this demographic collapse. They're trying to backfill with immigration. Poland's really been focusing on improving the productivity and, and the growth of the economy on a per person basis. And so they're not trying to grow the economy by growing the number of people there.
[17:57]
B
Interesting.
[17:57]
A
And it's like, it's, it's just like it's, it's absolutely wild. Like there's so many articles on Poland's golden age of growth. It's called here, if you look at like Poland, the pink line here by comparison to everybody else. Like just look at, and that's comparing it to other kind of Eastern bloc or, or like Germany and, and the IMF forecast is that Poland just going to continue to skyrocket. Like it's a, it's a, it's a country that is just.
[18:19]
B
What are they, What's Poland like? No, okay, I got this. Okay, hold on. Before I get carried away with questions for you. The immigration playbook. So how do I get in here? Let's see. There's no golden visa they offer. No. Yeah, I don't think they got much man in terms of like getting in there. Unless you're a highly skilled professional and you have like a super rare job. I don't think it's hard to get in here or hard to. There's only, it's easy to get in here, to be honest.
[18:48]
A
No, but yeah, they, they like there was a, there was a trade block like in post Soviet, like Eastern Bloc in, in Europe where they had like in the 1990s and that, that collapsed in the 1990s and Poland started to kind of reorient their trade towards the rest of Europe.
[19:10]
B
Right.
[19:10]
A
They're next to Germany and Germany is one of the biggest economies in the world. Right. So that's their main trading partner today. And, and German companies can get labor sort of like in the U.S. like the, you know, U.S. auto manufacturers will buy or will build a lot of cars in Mexico as an example, because they can get cheaper labor. Right. That's how it was. But now Poland's really actually been pulling themselves up similar to the way that China and India like China did over the last 20 years. And India, I mean China accomplished one of the most amazing things in, in global history, which was to pull a billion people out of poverty and into the middle class.
[19:43]
B
Right.
[19:44]
A
And, and India is now kind of undergoing the same thing. Right. And after the, the revolutions and, and the, the collapse of the trade bloc, unemployment was a huge issue in Poland in the 90s and you saw like, that's why you see a lot of Polish immigrants in the U.S. and Canada. Right, right. But for the people who stayed, I mean now, you know, you kind of wait it out. The next generation looks really promising for a country like Poland. And I think it's now the sixth largest economy in, in the eu, whereas.
[20:11]
B
Poland is not sixth largest.
[20:12]
A
Yeah, I think so. Yeah. Yeah, six, six largest in the, in the eu.
[20:16]
B
Wow.
[20:17]
A
By nominal GDP and fifth largest by gdp. So nominal GDP is.
[20:24]
B
A Polish, you need a Polish realtor, Polish developer to reach out to us here and, and get us some facts on, on Poland.
[20:32]
A
Yeah, why don't we just get a Polish real estate expert on here and let's get it, talk about it. Let's see.
[20:38]
B
You, you and I, every time we have an idea of this, we're going to have somebody on the show next week, so stay tuned because we don't we act, we're actors here. That's crazy, man. Well, good for Poland. I think it's kind of cool what they're doing. It's kind of like the opposite of what we're doing in Canada to an extent.
[20:55]
A
But yeah, yeah, I, I, I think it's a really fascinating case study and like what it looks like where you still have kind of some of those elements of the, you know, socialists kind of like Eastern bloc philosophy where they have welfare system, really advanced public welfare system, but they've integrated kind of more philosophies of more modern, modern capitalism in their integration in the EU and you know, they've really been pursuing this more liberalization of the economy. Not to, you know, kind of use the word liberal in the context that a lot of people but you know, you know. Well, you Go kind of more. It's funny because, like, people associate the word liberal now with like very leftist policies, but the word originally came from this, like American liberalism, you know, economic school of thought. And that's kind of what I mean is like free market, right. So they, you know, when you have a more socialist country, the government wants to centrally plan the economy, right? So they want to say, oh, this person trades with this person and this, you know, like that's, that's kind of how the whole thing works. They distribute the, the things within an economy. And now they've really actually liberalized the economy and made it more free market. But they still have that advanced welfare system similar to a place like you're mentioning, like Canada or. But I think Canada's kind of welfare system is actually really crumbling. Like health care is really hard to get. You know, people who are on social assistance, et cetera, can't afford stuff. Similar kind of thing happening in the US And a lot of countries that are further along in the cycle that Poland is trying to do. So I think they have to be careful, try and learn from a lot of these countries that are, that are, you know, centuries ahead on, on that system like the UK where again, you're like the disparities become so extreme that there's, there's like legitimate fear. I mean, in the, in Canada, there was a, There was literally a report from like the RCMP and somebody else that they were worried that peop. Canadians would like, revolt once they realized how poor they were. Right. Did you see that?
[22:50]
B
No, no. Yeah, I, that sounds about right though, to be honest.
[22:55]
A
Yeah. So I think. Yeah, really fascinating.
[22:59]
B
Anyway, I have a question like, I'm curious your thoughts on. Because as we, when we talk about attracting capital, we always get both sides of the argument. You know, we get people that are in favor of it and we get a lot of people who are super against it. And I think most people don't really know like the full story. The reason I brought up at the very beginning of that, that Portugal stat is because I think people hear about attracting capital and millionaire migration and they immediately think of all the negative things depending on what type of situation they're in them. And they all think of all this negativity around, you know, oh, it's going to drive up the prices, it's going to do this, it's going to do that, it's going to be so bad, you know, and then in reality they drop these, these stats about, you know, only 5% of owners in Portugal are foreign Buyers, but they still, it seems to be the most prevalent talked about thing. You know, what are like in your opinion, what are some of the, the, the cons, the pros and the cons, I guess of, of that millionaire migration and attracting capital. I know there's a million, and I'm not asking you to like name them all but like you know, the.
[24:06]
A
Yeah. So the pros would be that, you know, you bring rich people to your country, typically they stay rich in your country, they spend more money, they grow businesses there. Like that's kind of the idea behind wanting to bring wealth into your country is we want to bring people who will help build our economy up. So that's kind of the pro, right? There's, there's a bunch of other ones but like that's really the main idea behind it. The consequence is they have way more buying power. Like it exacerbates disparity. Right. So it, it, that's the second time.
[24:33]
B
We use this word. This. Let's get it, let's get a definition.
[24:36]
A
Yeah. So causes problems between like, or it makes the gap between the rich and the poor worse, right? Because if you're bringing more richer people then there's more higher concentration of wealth at the top. And what that does is it, it disproportionately negatively impacts people who don't have wealth. Because now all of a sudden, and Portugal, let's use Portugal as an example, all of these domestic Portuguese people are competing with millionaires for houses in these areas, right. And now all of a sudden, and we saw this in Canada as well, right? Like 2016, 17, there was a ton of Chinese capital moving to Canada and the 905, like all of the suburban areas around the, around the gta, around Toronto and Vancouver as well, regular people couldn't afford houses because they were competing with rich Chinese people.
[25:28]
B
Am I, am I wrong to think I might get some heat for this one? But am I wrong to think like those people probably wouldn't be buying the houses that those people are buying anyways?
[25:40]
A
No, I don't think you're wrong in that.
[25:42]
B
You know. Yeah, like I do, don't get me wrong obviously that more the wealthy people come, they're going to buy up more properties, going to take away all the properties from some of the local people. But I, on that same note, I also think that maybe those people probably wouldn't be buying those properties anyways. Kind of.
[26:02]
A
Does that mean no, I think you're right to be honest. Like, I think that it depends though, right? Because in Canada, like the idea was that. And in the US like the idea was that middle class people could afford nice houses. Like, that's really the American dream and the Canadian dream. And so I don't know, like guys like you and I, or you know, people who are a little like friends of ours who are sort of in the upper middle class, right. Making a couple hundred grand a year, whatever they are now, they can't afford these houses that are whatever, a million bucks or for sure, you know, so.
[26:35]
B
That'S what I mean. I think it affects, I think it affects people like the upper middle class.
[26:39]
A
Right. But it doesn't affect the people at the bottom. Yeah, I think you're, you're probably right. Yeah, but the, but countries like the, the reason why you want to like as a, as an economy or as a country government want to balance or, or like do policies that favor the lower middle class or, or poor people is because there's way more of them and eventually if they get pissed off enough, they have a revolution. Right? Right. That's how there's this whole. One of my favorite podcasts, I've mentioned this a couple of times on the show, but Mike Duncan's Revolutions podcast, it always happens over and over, right? It's a cool, really cool history podcast, but always happens over and over. You get, you know, you get enough poor people and you take enough away from them and you distribute too much wealth to the rich people. The poor people eventually mobilize and attack the rich people because they're pissed off. And like, you can see this sentiment taking place in a lot of capitalist economies right now. So that's the risk that, that some, some of these governments are trying to balance.
[27:38]
B
I think the one, the one thing that I may be overlooking is some of these, you know, wealthier people that are looking for real estate investments in these areas are, are maybe looking to invest and when they're investing there, they're investing to potentially rent out the property. And maybe like, for example, I'm assuming the people that are renting out the, you know, buying these luxury properties and turning them into rentals are turning those into like Airbnbs or short term rentals, which could maybe in the long term really affect like the local rental market, which those bottom or like, you know, the, the lower middle class people would be into. So by taking away more of the supply, it can cause issues in the rental side of things, which I, or, or increase rental prices which would really affect the lower middle class, which I, I understand. And something that maybe I overlooked Because I wasn't really thinking about the rental market because if these, I'm assuming they're not all coming there just to buy and live like we talked about. Right. Most of these people are probably relocating capital, relocating for whatever. You know, we actually, there was kind of, there was a lot of reasons why people would relocate or not relocate in general, but you know, get different passports and citizenships. But I think that would tie back into them buying investment properties which would then have an effect on the rental market which would then have an effect on the lower middle class, which is something that I probably overlooked. But also like these people, the, the, the wealth migration of millionaires moving to these places would in some cases, but not all increase jobs. But like it's interesting because I don't know the numbers on this, I'm just fully talking to talk, but I, it's like I would assume the people that are the millionaires that are moving to, to the U.S. are there to bring business and maybe create jobs for people. Whereas the people in the high net worth individuals that are moving to like Portugal, Italy, I don't really think they're there to create any sort of wealth for anybody else other than just themselves.
[29:39]
A
Yeah, I mean you could be right. Right. Like I do think that there is a difference based on. And this is why you like Canada is a really good example of this. Like that's a really good way of thinking about it. People move capital to the US because they're, they can amplify the impact of their capital. Right. Or, or whatever they're going to do, they're going to invest it in whatever the local economy has available for them to make, to make money. And so in a place like the US where the majority of the wealth is concentrated in business, then you can, you know, it'll grow the business economy. But in a place like Canada, we don't have like, you know, TSX is like smaller than like some companies.
[30:17]
B
Yeah.
[30:18]
A
Market caps. Right. Canada has like, you know, a handful of banks, telcos. Like it's a very market. You can't come to Canada if you're a billionaire and start your own bank or whatever. Right. In the US you can do that. Right. And so what do you do? Well, you buy real estate because that's where the major concentration of our wealth is in a country like Canada. And the same thing is true in places like Portugal or Australia. And then you started seeing this huge increase in property values, whereas in the US you haven't really seen that. You have seen some increase in property Values, but it's not related to foreign capital. Actually, foreign capital is decreasing as a share of total buyers in the market. It's related to interest rates being too low for too long. And in Canada, it's kind of the same thing. We saw that. So you saw your domestic buyers getting really cheap debt and getting jacked up on cheap debt, but, and they were competing with this huge inflow of foreign capital. So you're absolutely right. Like, people who are moving capital to a place like the US are probably doing it for different reasons than people moving capital to a place like Canada. As an example.
[31:20]
B
Yeah, I, I, I, I, I just have this, I like to see like a number on, I don't know if there's a, you got to have some charts on this, dude. But I feel like this, the people that are going to the US are, are genuinely going to build businesses and, and create jobs, whereas the other places are, are just real estate investing, which would then have a ripple effect on, on things like the rental market and all that kind of stuff, which is kind of interesting.
[31:42]
A
For sure. Totally. Anything else we want to go through here or should we wrap this one up?
[31:51]
B
Let's wrap it up. I think we have some good points here. I think it's cool to see where people are going. Look, if you're an international investor, obviously you want to analyze that's, I always say this on every episode, but this is what we're doing is we're just helping you understand how to make a very educated decision. Go and invest globally. Because there's so many different factors you have to understand and analyze before you pull the trigger on something like this. And, and understanding which countries are actively attracting capital is very important, especially if you're in real estate investing. Because if you're buying to get rentals, you're buying to for whatever reason, real estate wise, you know, obviously you want to go to a place where, where they're attracting millionaires. It's definitely an upside 100%.
[32:31]
A
Yeah, I, I would say so. It's worth paying attention to what these people are doing. The reason we're talking about where millionaire capital is going is because that's at your smart money indicator, right? Where are the rich people going? And if you want to see the economies that are likely to get pulled up by the economic activity that they bring, like we just described, it's worth paying attention to what they're doing. I think that's it. Leave us a review. Text this episode to your mom and your friends who are thinking about moving to other places, and we'll see you next week.