The Old World vs. The New World

Let’s say you have $20 million or so in liquid assets and plenty more in various investments. You are doing alright. You can pretty much buy whatever home you want, whether as a primary residence, a weekend pied-a-terre, a vacation pad, or just another gem of a property that you cannot live without. For the same reason that you can buy whatever you like, you can buy it anywhere you want in the US or elsewhere around the globe, regardless where you work (if you still do). The world has never been more open and inviting.

So, if you were to lay a world-map flat on the kitchen table, what dot would you fancy as a continent, as a country, as a region, as a town, as a neighborhood… that you may wish to call Home? Remember, money is no object. Trophy properties, all over the world, are now quite similar in price, precisely because big money and communication no longer have frontiers. Gee, it’s a hard choice, so many temptations, and even with considerable means, you cannot buy them all.

To make your choice a bit easier, let’s list a few key benefits that you might seek or might make you tick:

  • Political stability
  • Growing economy
  • Business-friendly environment
  • Great potential appreciation
  • Clear title to 100% (land & improvements) of the property
  • Right to dispose of it anytime
  • Privacy
  • Access to the beach, or the mountain, the desert … (Starbucks?)
  • Terrific views
  • No or low income tax
  • No or low property tax
  • Warm sunny place

When you look closely at these key motivating factors, you suddenly understand why the world is shifting. No longer does money go to the same places for the same old reasons. There is a quiet but nonetheless merciless competition fast developing in between countries or towns of the New World (the emerging economic giants) and those of the Old World, the traditional/historical money hubs.

If you allow me to be somewhat arbitrary to make the point, I would range the following cities in the last category: New York, Paris, London, Miami, Los Angeles, etc. All are amazing places to live, work, visit and invest in. It has been the case for years, if not centuries, and they will probably forever remain vibrant and attractive to people and capital.

Now, let’s talk about cities in the first category. Many are flourishing, if not booming, often for different reasons, but they have one thing in common:  they are mega financial centers and represent an ever-growing magnet for investment. I am talking about Shanghai, Singapore, Hong Kong, Sao Paulo, Mumbai, Dubai, etc. BTW, they are also terrific places to visit or live in.

The money chase is on between the two worlds, and the New World is gaining momentum. Why? Mostly because people who have money want more of the same. Not only do they want to protect it from excessive taxation or other constraints, but they want that money to keep on growing, quickly & safely. If there is one place in the world which has been illustrating the phenomenon over the last decade, it has got to be Singapore, the City-State of 5 million which relishes its reputation of having the highest percentage of millionaires in the world.

Fourth leading financial center on the planet and home to over 7,000 multinationals from the US, Europe & Asia, the tiny State has been almost picture-perfect for the investor. The political regime has not changed since 1959 when self-governance was established. Security, stability and growth represent the program. There is no corruption, crime or drugs to speak of. On top of that, Singapore has some of the lowest taxes anywhere, whether for the “locals” or foreigners.

Granted laws can change, trends can be reversed and momentum, just like fashion, can fade away, but it would not be wise to disregard the importance of the money flux around continents & countries. We want/need our share of those fortunate buyers who can afford to purchase luxury homes on our shores. The competition is tough and getting tougher.