In Norway, Everyone Is A (Paper) Millionaire

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With most governments struggling to balance their budgets by taking money from residents through higher taxes, it is refreshing to hear about one that is doing just the opposite. On Tuesday, January 9th, the world woke up to the news that every Norwegian, right down to the newest born, was worth a million Kroner or about $164,000 USD - at least on paper. This was not a cruel joke on the residents but a reality that has come about thanks to the financial savvy of the country's government.

The path to this amazing prosperity began in 1969 when oil was discovered in the North Sea, off the coast of Norway. This helped transform the Nordic country into the world's seventh biggest oil exporter and second largest natural gas exporter. But instead of squandering away the hefty taxes (78%) collected from oil refiners, in 1990, the government decided to tuck away the surplus wealth into a sovereign fund. Called Government Pension Fund - Global, it was established to secure the future of all its residents.

Thanks to astute investments, soaring oil prices and the fact that annual withdrawals from the fund are restricted to 4% of the fund's total asset value, it has now ballooned to a massive 5.22 trillion kroner or $828.66 billion. Divide that wealth amongst the approximately 5,096,300 Norwegians and everyone is suddenly a millionaire!

This is the first time the diversified fund which owns about 1% of the world's stocks, as well as bonds and real estate from London all the way to Boston, has reached this milestone. However, the people of Norway are not clamoring to get their hands on the wealth. They are perfectly content to be paper millionaires and let the funds grow, so that the future of their children and grandchildren can be secure.

Abu Dhabi in the UAE has a similar fund that is believed to be worth $627 billion. However, given that the true number has never really been revealed, the number could be a lot higher. The US State of Alaska has also accumulated $47 billion for its residents, who are already benefiting from it via an annual dividend distribution.

Resources: dailymail.co.uk,news.yahoo.com

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115 Comments
  • TheBrainiacWednesday, September 26, 2018 at 1:45 pm
    Nevermind, this article is super old. Forget everything I said. Lol
    • TheBrainiacWednesday, September 26, 2018 at 1:44 pm
      Guys, if every citizen in Norway was rich. Then money would lose it's value. They are playing a risky game. Let's be glad things are the way they are.
      • student1Sunday, December 4, 2016 at 12:53 am
        answer for question 1: the government decided to put the taxes for the citizens in their bank account.
        • sushi321
          sushi321Tuesday, April 26, 2016 at 4:37 pm
          wow
          • BobWednesday, April 20, 2016 at 4:16 am
            I want it
            • Lizzy .38Saturday, March 19, 2016 at 2:04 am
              libby is a good
              • libbySaturday, March 19, 2016 at 1:44 am
                l love my mum and curt
                • nikukyu
                  nikukyuWednesday, December 17, 2014 at 2:36 am
                  That's so awesome but if everyone was rich the money would lose its value. Or maybe not. I'm not really sure...
                  • genius1326
                    genius1326Saturday, July 25, 2015 at 6:44 am
                    You are correct. That was what happened to Germany after WWII.
                  • nikukyu
                    nikukyuWednesday, December 17, 2014 at 1:48 am
                    I'm not even good at monopoly :(
                    • dumbhumbugmum45
                      dumbhumbugmum45Monday, June 23, 2014 at 3:50 pm
                      I have a friend that lives in Norway hes rich I want some of his money so he gave me 50k!