Published in September of 2007, this article for Barron’s introduced some unique research findings on a subject that had been ignored, despite the huge amount of research into issues of migration. Of course, we are talking about “relocation”, not “migration” (seeking citizenship in a new nation), but migration is the common term used and I tried to introduce relocation as a better way of putting it. In any event, this article led to the CNBC interview with Erin Burnett and a follow-up study done in 2009, also to be included in this section of Future Brief.
I preferred my title for this article, “The Silent Migration”, but my editor chose to use “A New Life in Panama?” instead. That was his prerogative.
A New Life in Panama?
By Bob Adams
IT WAS JANUARY OF 2006 AND COLEY WAS 39. He had written and asked if he and his friend Jon could talk to me about their idea of setting up an investment operation in Panama to work the Central American region on behalf of U.S. investors. So there I was sitting in a local restaurant, surprised that two young professionals with young families were seriously thinking of quitting their well-paid positions in the U.S. to start a business a few thousand miles away. Today, they are the owners of Latin American Venture Partners, successfully living with their families and working from their offices in Panama.
I’ve lived and worked overseas for four decades and have traveled to more than forty nations. My interest in moving to Panama was not related to retirement, though some retirement Websites that focus on Panama introduced me to the country.
After visiting and getting to know Panama, I appreciated that most of these Websites provided very little real information. So I set up my own Website, RetirementWave.com, to offer a view of the country without any commercial motivation. I saw it as a simple public service and I didn’t waste any money promoting it.
I would have been happy to help a few dozen people get a clearer idea of the country; 200,000 visitors and 2,700 members later, I find myself with an unpaid job that takes a lot more of my attention than I ever imagined. The real surprise, though, is that more than 20% of my “Retirement Wave” members are in their 20s, 30s and 40s. They are not thinking in terms of retirement. They are interested in relocating to or investing in Panama.
They are part of a silent emigration of Americans, retirees and more, seeking to live and work in other nations — and not just the wealthy nations of Europe.
How many? A State Department survey of its embassies and consulates in 1999 suggested a total of 4.1 million Americans living overseas at that point, but there’s little good data. So my company, New Global Initiatives Inc., hired Zogby International to do surveys of adult Americans on the subject of relocation outside the U.S. With more than 115,000 respondents, we have the largest and, as far as we know, the only database on this topic.
We didn’t focus on Panama or Central America; we collected information on every global destination. In refining our survey results, we first eliminated anyone relocating for less than two years, and anyone relocating because of the requirements of the government, the military or their jobs. We did include people who are not relocating but are seriously considering purchasing a vacation home or other property outside the U.S. This group is likely to include many who will later choose to relocate.
These results project the results of the surveys onto the entire U.S. population. The numbers are for households, not individuals.
- 1.6 million U.S. households have already made the decision to relocate. That figure has remained stable over the year and a half during which seven surveys were conducted.
- Another 1.8 million households are seriously considering relocation and are likely to do it.
- 7.7 million households are “somewhat seriously” considering relocation and “may” do it.
- Nearly 3 million households are seriously considering the purchase of a vacation home or other property outside the U.S., and another 10 million are “somewhat” seriously considering it.
Adding it up, almost 10% of U.S. households are looking at leaving the country, and another 10% are considering living outside the country part time. This silent emigration is ignored by nearly every population analyst.
These would-be emigrant households plan to spend an average of $260,000 on the purchase or construction of a house, and they plan to spend at least $36,000 annually on living expenses outside the U.S. In total, they represent the emigration of hundreds of billions of dollars a year from the U.S. economy.
The largest group actually having made the decision to relocate is in the households where the adults are 25 to 34 years old. Blame it on outdated 20th-century thinking, but I assumed this age group would be too busy establishing families and career paths to pull up stakes and move out of the country. Wrong. When it comes to a serious interest in buying a property outside the U.S., that youthful age group dominates. A lot of Americans are at various stages of considering relocation or buying property overseas, but the 25-34 age group is the one putting down the bucks to do it.
There will be plenty of social, economic, political and plain old-fashioned business consequences to this silent migration. The cost to the American economy could be more than just financial: Young Americans push new ideas into society. They build new companies and create new jobs. Stay-at-home Americans will be poorer without them, unless the country keeps the emigrants connected to the U.S., supports them and gets benefits from their movement into the new global culture.
BOB ADAMS is CEO of New Global Initiatives, a consulting firm in Bethesda, Md., that specializes in advice about emerging markets.
Copyright © 2007 Dow Jones & Company, Inc. All Rights Reserved. Republished with permission.