Billionaire Cities Strategy

Scott Galloway shares his investment strategy focused on high-end real estate in cities where the ultra-wealthy concentrate, driven by growing income inequality.

The Billionaire Cities Investment Strategy

• Focus on buying property in the five places where billionaires want to live:
  • Dubai
  • London
  • Palm Beach
  • Aspen
  • New York
• These locations are constrained in development and supply
  • "They're not making any more beachfront real estate in Palm Beach"
  • "Manhattan is constrained"
  • "Aspen is almost impossible to develop in"
  • "London is constrained and I think London is a super city"

Why This Strategy Works

• Income inequality has gone "batshit crazy" in the US and globally
• The number of millionaires in the US has doubled since 2020
• Billionaires have increased from 500 to 2,500 in ten years
• Anyone worth more than $50 million will likely own a home in one of these five places
• These properties serve as both investments and lifestyle assets

Benefits of This Approach

• Properties can be leveraged (though Galloway doesn't do this personally)
• They provide a "psychic benefit" by making it harder for his children to avoid him
  • "I wanna try and figure out an investment strategy that makes it hard for my boys to avoid me"
• When not living there, the properties can be rented out
• Real estate isn't marked to market daily, reducing psychological stress
  • "I like the idea of being in investments that aren't marked every day"

Broader Investment Philosophy

• Residential real estate is one of Galloway's preferred investments
  • Can be leveraged 5:1
  • Can be depreciated 2-3% per year regardless of actual value
• Recommends geographic diversification beyond just US markets
  • Believes the US will "go flat for the next decade"
  • Has been "massively transitioning" US holdings to Asian and European markets
  • Only invests in companies with at least 50% of business abroad

The "Transnational Oligarch" Theory

• Believes a small cohort of "transnational oligarchs" (the 0.1%) is emerging
• These ultra-wealthy individuals have:
  • Access to influence and deal flow
  • Their own schools and rights
  • Ability to relocate if threatened
  • Decreasing vested interest in their host nations
• This trend drives demand for luxury properties in these five key cities