Freedom to Move: Chasing the Elusive American Dream
Jeff D. Opdyke, Global investment expert for International Living who has been investing overseas for 30 years and is the author of 10 books on investment and personal finance.
Many Americans grew up swaddled in the American Dream. We could be anything and, with effort, build wealth, allowing us to live ‘the good life’ — vacations, cars, a suburban home. We Americans felt we were special — for a time. But that’s changing …
Since the end of World War II, the West — and especially America — has defined ‘consumerism’. It was America, after all, that planted the consumer flag when, across the 1950s and 1960s, our economy boomed, and our wealth exploded as our industries helped rebuild war-torn Europe and Japan.
That wealth fashioned the modern middle-class and what the world has come to know as the ‘American Dream’ — the chance to attain the prosperity and success that affords life’s many niceties. A comfortable living.
By the 1970s and 1980s, post-war Western Europe and Japan had fully emerged as consumer nations too, and had begun pursuing their versions of the American Dream. The dream might have looked and sounded a little different — Russell Hobbs dishwashers in the UK instead of Maytag and Kenmore in America — but the same trend was at play.
The flood of cash and the emergence of consumer credit afforded Western consumers anything and everything as our economies spawned legions of businesses and services to give us everything our hearts desired, at any time of day. Fast food around the clock. Hundreds of cable TV channels. Mini mansions in manicured suburbs. Cineplexes showing 10, 12, 20 movies. Department stores selling a little of everything, and supersized specialty stores selling lots of one thing — toys, electronics, home-repair supplies.
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!” But today, for many, the American Dream is on life support.
And in that, investors, C-suite execs looking for growth, and high-net-worth individuals intent on future-proofing their American lives are hunting for opportunities to go back in time metaphorically and replay the greatest investment trend history has ever known: the rise of the American Dream — elsewhere.
As the Pew Research Center reports, the American middle class is shrinking, now down to about 50% of the population, as both upper and lower classes expand due to wealth inequality. Little wonder, then, that increasing numbers of Americans are searching elsewhere on the planet for the American Dream we grew up with. Which helps explain the record numbers of US citizens expatriating or renouncing their citizenship.
An often-uninformed media like to play that off as an attempt to avoid taxes. To a small degree, maybe. But far more prevalent are investors and entrepreneurs seeking greener pastures for investment and business growth, safer destinations to raise their families, or second passport and alternate residence opportunities that afford everything from entrepreneurial advantages to wealth preservation strategies to better healthcare options.
At its core, then, this pursuit of the American Dream in new places — in diverse destinations such as Portugal, Malta, and both St. Kitts and St. Lucia — is a strategy focused simultaneously on risk-mitigation and opportunity enhancement. Create multiple bases of operation globally and you inoculate your family, your business, and your lifestyle against the black swans inherent in tying your world to a single set of national borders.
The data says this approach makes a lot of sense.
The global middle class today amounts to more than three billion people, over half of whom live in developing nations. Where once America and the West controlled 75% of global consumption, they now control roughly 60%. By 2030, estimates are they’ll control just 30%. From here on out, more than 90% of all population growth globally will happen outside Western borders.
We’ve already topped out in terms of the number of Western consumers who will ever exist. Europe and Japan are aging, and their demographics point to a declining consumer base. America will grow because of immigration, but that growth will never outpace population growth in the developing world.
Indeed, every day nearly 430,000 new consumers join the middle class across the developing word — three million a week, 155 million a year, every year through at least 2030. For perspective, that’s like adding nearly 20 New York Cities to the American economy, every single year.
This all means that the new consumer class rising up in non-Western countries will ultimately outnumber Western consumers by three billion or more. The American Dream that is floundering in its birthplace is being reconceptualized by the developing consumer class.
Reaching that base — rediscovering a semblance of the American Dream today — might well mean stepping outside of America’s borders and establishing yourself and your family elsewhere in the world.
This essay was first published in the USA Wealth Report. You can download the full report here.