The Smart Money Is Moving Abroad…
Recently I presented to an attentive audience at International Living’s Fast Track Europe conference in Albufeira, Portugal. As always, people were lined up five deep at my table after my talks.
Just like my consultation service, these conferences help me keep my finger on the pulse of IL subscribers. I know what concerns people have… and what’s motivating them to diversify outside the US or Canada.
Typically, “pull” factors dominate. People look for a more relaxed lifestyle, a warmer climate, or a reduced cost of living.
But now I’m seeing a new trend… an avalanche of “push” factors.
Consider Malcolm and Celeste (not their real names). Like many people, they’ve been thinking about moving abroad for years. They’ve just been waiting for the “right” time.
At my table at the Fast Track Europe conference, their faces betrayed concern.
“Our retirement accounts have lost nearly $500,000 in value since the beginning of the year,” said Celeste. “We’re not ready to start drawing that down yet, so hopefully it’ll recover, but our brokerage accounts have lost $200,000 as well. How can we get that money out of the United States as quickly as possible? We were gonna use it to buy a home in Europe.”
They hadn’t yet started an application for a Portuguese D7 visa, the one they wanted. Had they done so, they’d have been eligible to open a bank account there. Even so, transferring US money into one of those would require selling their stocks at a steep loss.
I suggested they hold off on liquidating any holdings until the dust settles. There was no way to know where markets were headed after the Trump administration announced massive tariffs on practically every country. Perhaps there’d be a bounce, I said, and then they could liquidate some of their holdings and move the money abroad.
I got back from Portugal late Tuesday night last week. Twenty-four hours later, a headline popped up on my cellphone saying Trump had reneged on his promise to “never” back down on tariffs. He had decided to delay them for 90 days.
US stocks immediately rebounded by nearly 10%. Was this the bounce Malcolm and Celeste were waiting for? Should they cash in now or wait for higher prices?
Honestly… I had no idea…
You see, the unexpected size of Trump’s tariffs and the impact on global trade, corporate profits, jobs, prices, and the economy was only part of the problem. Just as important is the immense uncertainty facing US businesses. That uncertainty is still very much with us.
As an economist by training, I pay careful attention to what businesspeople are saying about these matters.
For example, a national US news outlet ran an opinion piece by a small business owner. He explained how his business model worked, and how he was restricted to a narrow band of retail prices in order to make a profit. Trump’s tariffs would push him above and out of that range, so he’d have to shut his business down altogether. Besides his own losses, his suppliers and service providers would also lose his business.
Toward the end of the article, he speculated about what he would do if Trump reduced his tariffs.
“I don’t think it would matter. How can I justify taking the risk of placing new orders and investing in new capacity if I don’t know what the rules are from one day to the next? It’s just impossible to do business with that level of uncertainty. I don’t think I have any choice but to close down.”
This logic isn’t unique to small businesses. All US businesses are in the same boat. They don’t know how much their imported inputs are going to cost. They don’t know how much retaliatory tariffs are going to add to the price of their exports. They’re still expecting regulatory blowback and consumer boycotts from foreign governments and customers.
Given that, it makes no sense for US businesses to invest. Better to wait.
The bottom line is that we aren’t out of the woods yet. Things could stay the same, get better, or get worse. But one thing is certain: If a global life is in your future plans, you’re better off moving your money and wealth abroad as soon as you can.
Consult with me personally—and I can tell you the best ways to get started that are right for you.
Not signed up to Jeff’s Field Notes?
Sign up for FREE by entering your email in the box below and you’ll get his latest insights and analysis delivered direct to your inbox every day (you can unsubscribe at any time). Plus, when you sign up now, you’ll receive a FREE report and bonus video on how to get a second passport. Simply enter your email below to get started.
