Why are rich Americans getting ready to leave the United States?

Wealthy Americans are preparing to leave the country but it's not for the reason that you think. The richest individuals in the United States are trying to get extra passports just in case they need to avoid a future crisis or protection while abroad. 

Henley & Partners is a leading global residency and citizenship investment law firm and noted in a recent report that wealthy households in the United States are increasingly on the hunt for a second passport or national residence. 

The nation's wealthiest are hedging their bets about the possibility of future financial risk, the Group Head of Private Clients at Henley & Partners Dominic Volek said according to a report from CNBC on the exodus of America’s rich. 

Volek explained the United States was still a “great country” with an “amazing passport” but he added that if he were a wealthy individual then he would want to “hedge against levels of volatility and uncertainty.” This concept makes sense. 

“The idea of diversification is well understood by wealthy individuals around what they invest. It makes no sense to have one country of citizenship and residence when I have the ability to actually diversify that aspect of my life,” Volek added. 

However, CNBC noted that wealthy individuals weren’t packing up and abandoning the United States just yet. Rather than renouncing their citizenship, rich Americans were shopping around for the passports that could best supplement their needs. 

Some of the top destinations for supplemental passports included countries like Portugal, Malta, and Greece. Maltese citizens can be obtained after investing €300,000 or about $320,000 into property, which has been a popular option for Americans.

“With Malta, you become a European citizen, with complete settlement rights across Europe,” Volek said. “So you can live in Germany, your kids can go and study in France and you have the right to live, work and study throughout Europe.”

Volek authored the Henley & Partners report that revealed there was a major increase in demand for additional passports among the richest individuals in the U.S. and the many reasons why that demand has increased is not surprising. 

“For American, British, and Israeli citizens suddenly unsure of their welcome abroad, supplementary passports provide vital flexibility,” Volek explained in his report before going on to explain what that meant to the world’s wealthiest. 

“With rising global instability, holding citizenship in another country, particularly one that is considered more neutral or politically benign, now provides a valuable back-up or alternative option,” Volek added. 

Henley & Partners isn’t the only global residency and citizenship firm that has noted the increase in those looking to acquire a second citizenship. International Living has also discovered a rise in the phenomenon but added it isn’t limited to the wealthy. 

“We have found a definite increase in interest in a second citizenship and passport," Ted Baumann, Chief Global Diversification expert at International Living, wrote to Newsweek in an email.  "It's not limited to high-net-worth people."

Baumann noted that finances played a big role for U.S. citizens looking to get a second passport. Some people want to move large amounts of money to foreign jurisdictions to hedge against the collapse of the dollar while others seek lower costs of living. 

“Healthcare, communication services, and other essentials are simply out of reach for more and more people '' in the United States Baumann explained, adding that political dysfunction was another major reason why U.S. citizens were moving abroad.

"The federal government is unable to legislate on anything," Baumann added. "So for these ordinary middle-class folks, moving abroad and becoming a citizen is a way to hedge against a political risk that has enormous financial implications for them."